GRPN Q2 Loss Narrower Than Expected, Revenues Miss on Local Weakness

Groupon GRPN reported an adjusted loss of 4 cents per share for the second quarter of 2026, narrower than the Zacks Consensus Estimate of a loss of 8 cents by 50%. This compares with earnings of 46 cents per share in the year-ago quarter. Revenues of $124.68 million fell 0.8% year over year and missed the consensus mark by 2.15%.

The revenue shortfall was concentrated in North America Local, where revenues declined 2% year over year. This was partly offset by International Local growth and continued customer gains.

Adjusted EBITDA was $14.8 million, down 4.7% year over year from $15.6 million.

Groupon, Inc. Price, Consensus and EPS Surprise

Groupon, Inc. price-consensus-eps-surprise-chart | Groupon, Inc. Quote

GRPN's Local Trends Weigh on Revenue

North America Local revenues declined 2% year over year, while Local billings decreased 1%. Softness in Health, Beauty & Wellness pressured the business, partly offset by strength in Things to Do and improving organic and managed channels. 

International Local revenues were stronger, increasing 8% year over year, while Local billings rose 2%. Excluding Giftcloud, International Local revenue advanced 9%, and billings increased 5%, helped by improved organic performance and more seasonally relevant supply across major international cities.

Groupon Builds Momentum in International Markets

Groupon's global billings declined 1% year over year, matching the revenue trend. The decline was also 1% on an FX-neutral basis, indicating that currency movements were not the primary factor behind the billings pressure. 

The product mix remained an important offset. Things to Do performed strongly, particularly tours, attractions and local activities. Beauty and Wellness was also a source of strength in July, with broad-based improvement seen across both North America and International markets.

GRPN's Customer Base Expands Despite Lower Units

Active customers grew 2% to 16.1 million during the second quarter. Growth was recorded in both North America and International Local categories, providing a favorable customer trend despite weaker transaction volume. 

Unit sales totaled 8.5 million, down 7% year over year. The decline reflected lower transaction volume in North America and international markets, partly offset by higher average order values as customers purchased higher-value local inventory.

Groupon Pushes Project Foundry and Personalization

Groupon continued advancing Project Foundry, its company-wide effort to make operations AI-native. AI now builds and optimizes tens of thousands of hyperlocal marketing campaigns, while engineering output per developer has more than doubled over the past six months. 

Organic revenues returned to growth in the second quarter and accelerated to double-digit growth in July. Managed channels continued improving, with revenue per send  up strongly. Groupon expects the new consumer platform to be fully migrated across every surface and geography by the end of the third quarter.

GRPN Maintains Cash Generation and Restructuring Plan

Free cash flow was $15 million compared with $25.19 million in the year-ago quarter, while operating cash inflow from continuing operations was $18.1 million versus $28.42 million a year earlier. 

Cash and cash equivalents stood at $226.3 million at June 30, 2026, up 0.4% sequentially from $225.5 million at March 31. Groupon recorded $3.2 million of restructuring charges in the quarter and expects the payroll actions to generate $20 million to $25 million of annualized cost savings.

Groupon Maintains Q3 and 2026 Outlook

For the third quarter of 2026, Groupon expects billings growth of 4% to 6% and revenues of $128 million to $130 million. Adjusted EBITDA is projected at $19 million to $21 million, while free cash flow is expected to be negative. 

The company maintained its 2026 outlook for billings growth of 3% to 5%, revenue of $513 million to $523 million and adjusted EBITDA of $75 million to $80 million. Free cash flow for 2026 is expected to be at least $60 million. The outlook implies second-half revenue growth of approximately 6% at the low end and approximately 10% at the high end, supported by easier year-over-year comparisons, additional marketing investment and increasing contributions from strategic initiatives.

Zacks Rank & Stocks to Consider

Groupon currently carries a Zacks Rank #3 (Hold). 

Some better-ranked stocks in the broader Zacks Consumer Discretionary sector are Newsmax NMAX, H World Group Limited HTHT and Viking Holdings VIK, each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Shares of Newsmax have returned 16.1% in the year-to-date period. Newsmax is slated to report second-quarter 2026 results on Aug. 13.

Shares of H World Group Limited have declined 9.9% in the year-to-date period. H World Group Limited is slated to report second-quarter 2026 results on Aug. 17.

Shares of Viking Holdings have returned 48.2% in the year-to-date period. Viking Holdings is slated to report second-quarter 2026 results on Aug. 19.

Zacks' Research Chief Names "Stock Most Likely to Double"

Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.

This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research