GRPN 10-K & 10-Q changes, risk factors and insider trading

•Current or futureFuture restructuring plans could be disruptive to our operations and adversely affect our results of operations and financial condition, and we may not realize some or all of the anticipated benefits of the plans in the time frame anticipated or at all.

•Our U.S. and international operations are subject to varied and evolving sociopolitical conditions as well as commercial, employment and regulatory challenges, and our inability to adapt to the diverse and changing landscapes of our U.S. and international markets may adversely affect our business.challenges.

•OurWe previously identified material weaknessweaknesses in our internal control over financial reportingreporting, and if we fail to maintain effective internal controls, it could impair our ability to report accurate and timely financial information and have a material and adverse effect on our financial condition and results of operations.

•We may be subject to breaches of our information technology systems, which could harmresult ourin relationshipsthe withunauthorized access to, or disclosure of, proprietary, confidential, or personal information relating to our customers, merchants, employeesemployees, and third-party business partners, subject us to negative publicity and litigation, and cause substantial harm to our business or brand.partners.

•We may have exposure to greater than anticipated tax liabilities, including the Italyforeign tax Assessment.assessments.

•We may not have the ability to raise the funds necessary to settle conversions of the 2026 Notes and 2027 Notes in cash, to repurchase the 2026 Notes and 2027 Notes upon a fundamental change or to repay the 2026 Notes and 2027 Notes in cash at their maturity (if not earlier converted, redeemed or repurchased), and our current outstanding and future debt may contain limitations on our ability to pay cash upon conversions of the 2026 Notes and 2027 Notes or at their maturity or to repurchase the 2026 Notes and 2027 Notes.

•The terms of the 2026 Notes and 2027 Notes could delay or prevent an attempt to take over our Company.

•The conditional conversion feature of the 2026 Notes and 2027 Notes, if triggered, may adversely affect our financial condition and operating results.

•The capped call transactions may affect the value of our 2026 Notes and our Common Stock.

Our strategy to return the Company to stabilized growth may be unsuccessful and may expose us to additional risks. If our strategy does not achieve its expected benefits, there could be negative impacts toon our business, financial condition and results of operations.

We arecontinue implementingto implement a strategy to become the trusted marketplace where customers go to buy local services and experiences and return the Company to growth.experiences. We intendare toexecuting execute our strategythis by building long-term relationships with local merchants to improve our inventory selection and by improving the customer experience through inventory curation and improved convenience in order to drive customer demand and purchase frequency.

ThereHowever, there are no assurances that ourthese actions will be successful in executing our strategy and returning the Company to stabilized growth. Our efforts may prove more difficult and costly than we currently anticipate. Further, we may not succeed in realizing the benefits of these efforts on our anticipated timeline or at all. In addition, as we implement our strategy,Specifically, the macroeconomic environment, including but not limited to,environment--including inflationary pressures, higher labor costs, tariff policy,or other trade policies, labor shortages, supply chain challenges and resulting changes in consumer and merchant behavior—may limit our merchants' ability to offer deals or service customers, and reduce consumer discretionary spending. These factors may make it more difficult to effectively execute our strategy, including to quickly test, learn and scale initiatives relating to improving inventory selection or improving customer experience. Even if fully implemented, our strategy may not result in a return to growth or the other anticipated benefits to our business, financial condition and results of operations. If we are unable to effectively execute our strategy and realize its anticipated benefits, it could negatively impact our business, financial condition and results of operations.operations could be negatively impacted.

Current or futureFuture restructuring plans could be disruptive to our operations and adversely affect our results of operations and financial condition,condition; and we may not realize some or all of the anticipated benefits of the plans in the time frame anticipated or at all.

In August 2022, we initiated a multi-phase cost savings plan designed to reduce our expense structure and align with our go-forward business and financial objectives. The cost savings plan included a restructuring plan and each phase of the restructuring plan was approved by our Board as follows: the first phase was approved in August 2022, the second phase was approved in January 2023 and the third phase was approved in July 2023. The implementation of the restructuring plan, including the impact of workforce reductions and other non-payroll cost savings measures could be disruptive to our operations, make it difficult to attract or retain employees, result in higher than anticipated charges, and otherwise adversely affect our results of operations and financial condition. In addition, our ability to complete thea restructuring plan and achieve the anticipated benefits from the plan within the expected time frame, or at all, is subject to estimates and assumptions andthat may vary materially from our expectations,expectations includingdue as a result ofto factors that are beyond our control. Furthermore, following completion of theany restructuring plan, our business may not be more efficient or effective than prior to implementation of the restructuring plan.

Our operating results may vary significantly from quarter to quarter due to the rapidly evolving nature of our business and otherseasonal reasons.fluctuations. We believe that our ability to achieve and maintain revenue growth and profitability will depend, among other factors, on our ability to:

•respond to macroeconomic challenges, including but not limited to, inflationary pressures,volatility, higher labor costs, labor shortages, supply chain challenges and resulting changes in consumer and merchant behavior and the ability to optimize our supply to take into account consumer preferences at a particular point in time;

•maintain our current relationships with or attract new vendors, suppliers andsuppliers, service providers and strategic partnerships on agreeable terms;

•respond to continuous changes in consumer and merchant use of technologytechnology, including AI;

•optimize and diversify our traffic channels;channels.

Our U.S. and international operations are subject to varied and evolving sociopolitical conditions as well as commercial, employment and regulatory challenges, and our inability to adapt to the diverse and changing landscapes of our U.S. and international markets may adversely affect our business.challenges.

Our operations require management attention and resources and also require us to localize our services to conform to a wide variety of local cultures, business practices, laws and policies.laws. OurWe operationsface aresignificant subjectoperational torisks numerousin risks,these includingmarkets, the followingspecifically:

•Gross billings is the total dollar value of customer purchases of goods and services. Gross billings is presented net of customer refunds, order discounts and sales and related taxes. The substantial majority of our revenue transactions are comprised of sales of vouchers and similar transactions in which we collect the transaction price from the customer and remit a portion of the transaction price to the third-party merchant who will provide the related goods or services. For these transactions, gross billings differs from Revenue reported in our Consolidated Statements of Operations, which is presented net of the merchant's share of the transaction price. Gross billings is an indicator of our growth and business performance as it measures the dollar volume of transactions generated through our marketplaces. Tracking gross billings also allows us to monitor the percentage of gross billings that we are able to retain after payments to merchants. However, we are focused on achieving long-term gross profit and EBITDA growth.

•Units are the number of purchases during the reporting period, before refunds and cancellations, made either through one of our online marketplaces, a third-party marketplace, or directly with a merchant for which we earn a commission. We do not include purchases with retailers using digital coupons accessed through our websites or mobile applications in our units metric. We consider units to be an important indicator of the total volume of business conducted through our marketplaces. We report units on a gross basis prior to the consideration of customer refunds and therefore units are not always a good proxy for gross billings.

•Active customers are unique user accountsaccounts, identified by a distinct email address, that have made a purchase during the TTM either through one of our online marketplaces or directly with a merchant for which we earned a commission. We consider this metric to be an important indicator of our business performance as it helps us to understand how the number of customers actively purchasing our offerings is trending. Some customers could establish and make purchases from more than one account, so it is possible that our active customer metric may count certain customers more than once in a given period. We do not include consumers who solely make purchases with retailers using digital coupons accessed through our websites or mobile applications in our active customer metric, nor do we include consumers who solely make purchases of our inventory through third-party marketplaces with which we partner.

•Revenue is earned through transactions for which we generate commissions by selling goods or services on behalf of third-party merchants. Revenue from those transactions is reported on a net basis as the purchase price collected from the customer for the offering less an agreed upon portion of the purchase price paid to the third-party merchant. Revenue also includes commissions we earn when customers make purchases with retailers using digital coupons accessed through our digital properties.

•Contribution Profit ismeasures ourthe measureamount of segmentmarketing profitability,investment needed to generate revenue and is defined as net revenues less cost of sales and marketing expense. See Item 8, Note 18,19, Segment and Geographical Information, for additional information.

•Adjusted EBITDA is a non-GAAP financial measure that we define as Net income (loss) from continuing operations excluding income taxes, interest and other non-operating items, depreciation and amortization, stock-based compensation, and other special charges and credits, including items that are unusual in nature or infrequently occurring. For further information and a reconciliation to Net income (loss), from continuing operations, refer to our discussion under Non-GAAP Financial Measures in the Results of Operations section.

•Free cash flow is a non-GAAP financialliquidity measure that comprises Netnet cash provided by (used in) operating activities from continuing operations less purchases of property and equipment and capitalized software. For further information and a reconciliation to Net cash provided by (used in) operating activities,activities from continuing operations, refer to our discussion in the Liquidity and Capital Resources section.

•Marketing expense consists primarily of online marketing costs, such as search engine marketing, advertising on social networking sites and affiliate programs, and offline marketing costs, such as television. Additionally, compensation expense for marketing employees is classified within Marketing expense. We record these costs within Marketing on the Consolidated Statements of Operations when incurred. From time to time, we have offerings from well-known national merchants for customer acquisition and activation purposes, for which the amount we owe the merchant for each voucher sold exceeds the transaction price paid by the customer. Our gross billings from those transactions generate no revenue and our net cost (i.e., the excess of the amount owed to the merchant over the amount paid by the customer) is classified as marketing expense. We evaluate marketing expense as a percentage of gross profit because it gives us an indication of how well our marketing spend is driving gross profit performance.

Attracting and retaining local merchants. As we focus on our local experiences marketplace, we depend on our ability to attract and retain merchants who are willing to offer their experiences on our platform. Merchants can withdraw their offerings from our marketplace at any time, and their willingness to continue offering services through our marketplace depends on the effectiveness of our marketplace offering. We arecontinue focusedto focus on improving our marketplace offering and merchant value proposition by exploring opportunities to better balance the needs of merchant partners, customers and Groupon.

Acquiring and retaining customers. To acquire and retain customers to drive higher volumes on our platform from new and existing customers, we arecontinue focusedto focus on strengthening our product offering,offerings, improving the attractiveness of our offerings, and enhancing the performance of our marketing campaigns.

Impact of macroeconomic conditions. We have been, and may continue to be, impacted by adverse consequences of the macroeconomic environment, including but not limited to, inflationary pressures, higher labor costs, tariff and other trade policy, labor shortages, supply chain challenges and changes in consumer and merchant behavior. Judicial and executive developments relating to U.S. trade and tariff policies in February 2026 may further increase uncertainty regarding the scope, implementation and potential future direction of such measures, and further changes could occur. In addition, recent and potential future changes to trade and tariff policies may introduce increased pricing volatility and overall uncertainty into our operations. To minimize the impact of macroeconomic conditions on our business, and to create value for our merchants and customers, we are focusing on building long-term relationships with local merchants to enhance our inventory selection, improving the customer experience through inventory curation and expanding convenience in order to drive customer demand and purchase frequency.

North America gross billings andbillings, units decreased by $8.5 million and 1.2 million, while TTM active customers remainedincreased flatby $121.4 million, 0.8 million and 0.8 million, respectively, for the year ended December 31, 20242025 compared with the prior year period. As a result of favorable refund rates and our supply transformation efforts, ourOur Local category experienced growth in gross billings, active customersbillings and units.units driven by our continued execution of our hyperlocal marketplace strategy and increased marketing spend, with strength in our core local business supported by improved supply quality and effective category management. The Local category growth is partially offset by a de-emphasis on our Goods category evidenced by a decrease of our Goods active customers that resulted in fewer unit sales and lower gross billings year over year.year in the Goods category.

North America segment revenue, cost of revenue and gross profit for the years ended December 31, 20242025 and 20232024 were as follows (dollars in thousandsthousands, except percentages):

North America revenue and gross profit increased by $9.8 million, and $13.6 million, respectively, while cost of revenue decreased by $3.9 million and $13.1 million while gross profit increased by $9.2$3.8 million for the year ended December 31, 20242025 compared with the prior year period. AsOur Local revenue increased by 4.5%, lagging the rate of growth in gross billings as a result of favorablepromotional refund ratesdiscounts and ourhigher supplyredemption transformation efforts, our Local category experienced revenue growth. The Local category growth is offset by a de-emphasis on our Goods category evidenced by a decrease of our Goods active customers that resulted in fewer unit sales and lower gross billings year over year.rates. The decrease in cost of revenue is primarily due to a decrease in amortization of internally-developed software relating to customer-facing applications.applications, which is a direct result of our cost savings initiatives. Gross profit increased due to an increase in revenue remaining relatively flat and a decrease in cost of revenue. The decline in our Goods category is primarily attributable to our overall de-emphasis of the Goods category.

North America marketing and contribution profit for the years ended December 31, 20242025 and 20232024 were as follows (dollars in thousandsthousands, except percentages):

North America contribution profit decreasedremained relatively flat for the year ended December 31, 20242025, compared with the prior year period, primarilyas due to anthe increase in marketing expense.expense was largely offset by the increase in gross profit.

International segment revenue, cost of revenue and gross profit for the years ended December 31, 20242025 and 20232024 were as follows (dollars in thousandsthousands, except percentages):

International marketing and contribution profit for the years ended December 31, 20242025 and 20232024 were as follows (dollars in thousandsthousands, except percentages):

International marketing expense and marketing expense as a percentage of revenue decreasedincreased for the year ended December 31, 20242025 compared to the prior year period, primarily due to traffic declines and a lowerincreased investment in our online marketing spend.spend to drive customer acquisition and demand growth. Marketing expense as a percentage of revenue increased as revenue growth did not keep pace with our marketing investment as strong performance in paid channels was offset by headwinds in non-paid channels.

International contribution profit decreased for the year ended December 31, 20242025 compared with the prior year period, primarily due to a decrease in revenue.gross profit and an increase in marketing.

Operating expenses for the years ended December 31, 20242025 and 20232024 were as follows (dollars in thousandsthousands, except percentages):

SG&A and SG&A as a percentage of gross profitrevenue decreased for the year ended December 31, 20242025 compared with the prior year period, primarily due to alower decreasetechnology inexpenses, cloudpartially computingoffset costsby andhigher apayroll reduction in headcount as a result of our 2022 Restructuring Plan.costs.

Gain on sale of assets increaseddecreased for the year ended December 31, 20242025 compared with the prior year period, primarily due to a gain from the sale of certain intangible assets.assets in 2024. See Item 8, Note 4,5, Goodwill and Other Intangible Assets, for additional information.

Other income (expense), net includes interest income, interest expense, gains and losses from changes in fair value of investmentsinvestments, gain on sale of investment, and foreign currency gains and losses, primarily resulting from intercompany balances with our subsidiaries that are denominated in foreign currencies.

Other income (expense), net for the years ended December 31, 20242025 and 20232024 was as follows (dollars in thousandsthousands, except percentages):

The change in Other income (expense), net for the year ended December 31, 20242025 compared with the prior year period is primarily related to a $40.3$67.3 million changeincrease in foreign currency gains and(losses) losses.which Thisprimarily wasresulted partiallyfrom offsetU.S. dollar-denominated intercompany balances with our foreign subsidiaries. The increase is primarily driven by athe remeasurementEuro ofappreciation ouragainst investmentthe inU.S. SumUpdollar of $25.8 million induring the year ended December 31, 2023,2025 withcompared no comparable activity into the current year period.ended SeeDecember Item31, 8, Note 5, Investments, for additional information.2024.

Provision (benefit) for income taxes for the years ended December 31, 20242025 and 20232024 was as follows (dollars in thousandsthousands, except percentages):

The primary factors impacting the effective tax rate for the years ended December 31, 20242025 and 20232024 were the pretax losses incurred in jurisdictions that have valuation allowances against their net deferred tax assets.assets, including U.S. pre-tax losses due to a loss on extinguishment of debt and the tax settlement expense for the Italy 2012 and 2017 Assessments. For the years ended December 31, 20242025 and 2023,2024, we continue to maintain a full valuation allowance against all U.S. federal and state deferred tax assets. We expect that our consolidated effective tax rate in future periods may continue to differ significantly from the U.S. federal income tax rate as a result of our tax obligations in jurisdictions with profits and valuation allowances in jurisdictions with losses.

In addition to financial results reported in accordance with GAAP, we have provided the following non-GAAP financial measures: Adjusted EBITDA, free cash flow and foreign currency exchange rate neutral operating results. Those non-GAAP financial measuresmeasures, which are presented on a continuing operations basis, are intended to aid investors in better understanding our current financial performance and prospects for the future as seen through the eyes of management. We believe that those non-GAAP financial measures facilitate comparisons with our historical results and with the results of peer companies who present similar measures (although other companies may define non-GAAP measures differently than we define them, even when similar terms are used to identify such measures). However, those non-GAAP financial measures are not intended to be a substitute for those reported in accordance with GAAP.

Adjusted EBITDA. Adjusted EBITDA is a non-GAAP performance measure that we define as Net income (loss) from continuing operations excluding income taxes, interest and other non-operating items, depreciation and amortization, stock-based compensation and other special charges and credits, including items that are unusual in nature or infrequently occurring. Our definition of Adjusted EBITDA may differ from similar measures used by other companies, even when similar terms are used to identify such measures. Adjusted EBITDA is a key measure used by our management and Board to evaluate operating performance, generate future operating plans and make strategic decisions. Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and Board. However, Adjusted EBITDA is not intended to be a substitute for Net income (loss). from continuing operations.

We exclude stock-based compensation expense and depreciation and amortization because they are primarily non-cash in nature and we believe that non-GAAP financial measures excluding those items provide meaningful supplemental information about our operating performance and liquidity. For the years ended December 31, 20242025 and 2023,2024, special charges and credits included charges related to our Italy,Italy Restructuring Plan, 2022 Restructuring Plan and 2020 Restructuring Plans,Plan, as well as gain on sale of assetsassets, gain on sale of business, loss on extinguishment of debt and foreign VAT assessments. We exclude special charges and credits from Adjusted EBITDA because we believe that excluding those items provides meaningful supplemental information about our core operating performance and facilitates comparisons with our historical results. For the foreign VAT assessments, we also considered the fact that we ceased operations in Portugal in 2016 and it is not part of our ongoing business. We have not engaged in any revenue-generating or payroll-related activity in Portugal since ceasing those operations nor do we intend to engage in these activities in that jurisdiction in the future.

The following is a reconciliation of Adjusted EBITDA to the most comparable GAAP financial measure, Net income (loss) for the years ended December 31, 20242025 and 20232024 (dollars in thousands):

(1)Stock-based compensation excludes expense related to the liability-classified 2024 Executive PSUs that are required to be settled in cash.PSUs. Refer to Item 8, Note 11,12, Compensation Arrangements, for additional information.

Free cash flow. Free cash flow is a non-GAAP liquidity measure that comprises netNet cash provided by (used in) operating activities from continuing operations less purchases of property and equipment and capitalized software. We use free cash flow to conduct and evaluate our business because, although it is similar to Net cash flow,provided by (used in) from continuing operations, we believe that it typically represents a more useful measure of cash flows because purchases of fixed assets, software developed for internal use and website development costs are necessary components of our ongoing operations. Free cash flow is not intended to represent the total increase or decrease in our cash balance for the applicable period.

Our principal source of liquidity is our cash balance totaling $228.8$296.1 million as of December 31, 2024.2025. The Company's cash requirements are subject to change as business conditions warrant and opportunities arise. Additionally, with the Rights Offering, terminationexecution of our Credit Agreement in February 2024, and the Exchange and Subscription Agreements in November 2024,2024 and Exchange Agreement in July 2025, we believe that the Company has sufficient liquidity to support its overall ongoing operational needs within the next 12 months.months, including the repayment of the remaining outstanding $33.7 million principal of the 2026 Notes upon maturity in March 2026.

Our net cash flows from operating, investing and financing activities from continuing operations for the years ended December 31, 20242025 and 20232024 were as follows (in thousands):

Free cash flow is a non-GAAP liquidity measure that comprises net cash provided by operating activities, less purchases of property and equipment and capitalized software. Our free cash flow for the years ended December 31, 20242025 and 20232024 and reconciliations to the most comparable GAAP financial measure, Net cash provided by (used in) operating activities,activities from continuing operations, for those periods are as follows (in thousands):

Our revenue-generating transactions are primarily structured such that we collect cash up-front from customers and pay third-party merchants at a later date, either based upon the customer's redemption of the related voucher or fixed payment terms, which are generally biweekly,weekly, throughout the term of the merchant's offering.

There have been no material changes from the risk factors previously disclosed in Part I, Item 1A, Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2025, exceptand asPart supplementedII, below.Item 1A, Risk Factors of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026.

Our mission is to get people offline through quality local experiences at great value. We believe the best things in life happen offline, and as the world becomes increasingly digitized, we expect demand to grow for in-person experiences and for the digital pathways consumers use to discover and book them. Groupon sits at the intersection of consumer intent and local supply, which we believe positions us to serve as a bridge between the emerging AI economy and the millions of local merchants who power Main Street.merchants. Our strategy is to be the trusted local experience marketplace where customers go to buy quality local services and experiences at unbeatable value. We plan to grow our revenue by building long-term relationships with local merchants to strengthen our online selection and by enhancing the customer reach through experience curation and improved convenience in order to drive customer demand and purchase frequency.

In the first quarter of 2026, we launched Project Foundry, a company-wide initiative to transform our operating model by embedding AI agents into the core of every function. The goal of Foundry is not the launch of a single feature or capability, but to re-architect how work is performed internally so the Company operates with the speed required to succeed in an AI-native world. The financial impact of this initiative is not yet reasonably estimable,determinable, and we expect Foundry to influence how we operate over the remainder of 2026 and in future periods.

As part of Project Foundry and the Company’s strategy to become an AI-native company, management is evaluating a range of operational initiatives to better align the Company’s cost structure with this AI-native operating model, improve its operational efficiency and become more nimble, and position the Company for growth. These initiatives, including significant restructuring actions, have not been finalized orwere approved by the Board of Directors. The Company expects that it will initiate these actionsDirectors in the second quarter with a reduction of its2026. globalAs headcountthe byCompany approximatelyimplements 15%Project andFoundry, intendsmanagement expects to announcecontinue furtherto details about this andevaluate additional significantmaterial cost-reduction and automation actions. The Company expects any such actions onceto thosebe planscompleted areby finalizedthe andend approved.of 2027.

Our gross billings and units for the three and six months ended MarchJune 31,30, 2026 and 2025 were as follows (in thousands):

Our active customers for the trailing twelve months ended MarchJune 31,30, 2026 and 2025 were as follows (in thousands):

•Adjusted EBITDA is a non-GAAP financial measure that we define as Net incomeIncome (loss) from continuing operations excluding income taxes, interest and other non-operating items, depreciation and amortization, stock-based compensation, and other special charges and credits, including items that are unusual in nature or infrequently occurring. For further information and a reconciliation to Net incomeIncome (loss) from continuing operations, refer to our discussion under the Non-GAAP Financial Measures section.

The following table presents the above financial metrics for the three and six months ended MarchJune 31,30, 2026 and 2025 (in thousands):

•Marketing expense consists primarily of online marketing costs, such as search engine marketing, advertising on social networking sites and affiliate programs, and offline marketing costs, such as television. Additionally, compensation expense for marketing employees is classified within Marketing expense. We record these costs within Marketing onin the Condensed Consolidated Statements of Operations when incurred. From time to time, we have offerings from well-known national merchants for customer acquisition and activation purposes, for which the amount we owe the merchant for each voucher sold exceeds the transaction price paid by the customer. Our gross billings from those transactions generate no revenue and our net cost (i.e., the excess of the amount owed to the merchant over the amount paid by the customer) is classified as marketing expense. We evaluate marketing expense as a percentage of gross profitrevenue because it gives us an indication of how well our marketing spend is driving gross profitrevenue performance.

•SG&A expenses include selling expenses such as sales commissions and other compensation expenses for sales representatives, as well as costs associated with supporting the sales function such as technology, telecommunications and travel. General and administrative expenses include compensation expense for employees involved in customer service, operations, technology and product development, as well as general corporate functions, such as finance, legal and human resources. Additional costs in general and administrative include depreciation and amortization, rent, professional fees, litigation costs, travel and entertainment, recruiting, maintenance, certain technology costs and other general corporate costs. We evaluate SG&A expense as a percentage of gross profitrevenue because it gives us an indication of our operating efficiency.

•Restructuring and related charges represent severance and benefit costs for workforce reductions, facilities-related costs and professional advisory fees. See Item 1, Note 10, Restructuring and Related Charges (Credits), for additional information about our restructuring plans.

Impact of macroeconomic conditions. We have been, and may continue to be, impacted by adverse consequences of the macroeconomic environment, including but not limited to, inflationary pressures, higher labor costs, tariff and other trade policies, labor shortages, supply chain challenges and changes in consumer and merchant behavior. Judicial and executive developments relating to U.S. tariff and trade policies in Q1 2026 may further increase uncertainty regarding the scope, implementation and potential future direction of such measures, and further changes could occur. In addition, recent and potential future changes to trade and tariff policies may introduce increased pricing volatility and overall uncertainty into our operations. To minimize the impact of macroeconomic conditions on our business, and to create value for our merchants and customers, we are focusing on building long-term relationships with local merchants to enhance our inventory selection, improving the customer experience through inventory curation and expanding convenience in order to drive customer demand and purchase frequency.

North America segment gross billings and units for the three and six months ended MarchJune 31,30, 2026 and 2025 were as follows (in thousands):

North America TTM active customers for the trailing twelve months ended MarchJune 31,30, 2026 and 2025 were as follows (in thousands):

North America gross billings and units decreased by $0.5$1.2 million and 0.40.5 million, while TTM active customers increased by 0.50.1 million for the three months ended MarchJune 31,30, 2026 compared with the prior year period. Within our Local category, gross billings increaseddecreased 2.0%0.6% year-over-year and unit volume declined, reflecting growth in transaction value that more than offset a decline in transaction volume.volume that exceeded the effects of the growth in transaction value. From a supply perspective, our Local category growth was led by our Things to Do offerings, partially offset by a deceleration in our Small Business merchant base, softness in Health, Beauty & Wellness andwas pressurepartially offset by continued strength in our Things to Do offerings. Our Enterprise channel declined modestly year-over-year, with the pace of decline improving from the first quarter, while our EnterpriseSmall channel.Business merchant base was also slightly lower. From a demand perspective, paidmanaged channels delivereddeclined, strongbut year-over-yearimproved growth,following the transition to our new customer data platform, with the decline moderating from the first quarter and a return to growth in June. The decline was partially offset by headwindsgrowth in our managedorganic and organicdirect channels, while paid channels andgrew modestly. Gross billings in our Goods category declined, reflecting our continued de-emphasis of the negativecategory, impactwhich of severe winter weatherresulted in Januaryfewer andunit February.sales year-over-year. In addition, growth in our Travel category was driven by our Tours offerings.

North America segment revenue, cost of revenue and gross profit for the three and six months ended MarchJune 31,30, 2026 and 2025 were as follows (in thousands):

North America revenue,revenue and gross profit decreased by $1.8 million and $2.7 million while cost of revenue decreasedincreased by $1.2 million, $0.9 million and $0.3 million for the three months ended MarchJune 31,30, 2026 compared with the prior year period. Our Local revenue decreased 0.5%,1.7%, laggingconsistent with the ratedrivers of growth in gross billings,billings asdiscussed a result of higher promotional discounts.above. The decreaseincrease in cost of revenue is primarily due to ahigher decreasecredit card processing fees and an increase in amortization of internally-developed software relating to customer-facing applications.applications that resulted from a transfer of assets between our reportable segments. The transfer did not have an impact on our consolidated results of operations, other than an immaterial effect on our income tax provision. Gross profit decreased due to the decrease in revenue,revenue partiallyand offset by a decreaseincrease in cost of revenue.

North America marketing and contribution profit for the three and six months ended MarchJune 31,30, 2026 and 2025 was as follows (in thousands):

North America marketing expense and marketing expense as a percentage of revenue increased for the three months ended MarchJune 31,30, 2026 compared with the prior year period, primarily driven by higher investmentbrand marketing spend and marketing technology costs, partially offset by a decline in paid channels.marketing spend. Marketing expense as a percentage of revenue increased as revenue growth did not keep pace with our marketing investment dueincreased towhile therevenue headwinds in our managed and organic channels, partially offset by favorable paid channel performance.declined.

North America contribution profit decreased for the three months ended MarchJune 31,30, 2026 compared with the prior year period, primarily due to lower gross profit and higher marketing investment.

International segment gross billings and units for the three and six months ended MarchJune 31,30, 2026 and 2025 were as follows (in thousands):

International TTM active customers for the trailing twelve months ended MarchJune 31,30, 2026 and 2025 were as follows (in thousands):

International gross billings and units decreased by $3.4$1.7 million and 0.020.2 million, while TTM active customers increased by 0.2 million for the three months ended MarchJune 31,30, 2026 compared with the prior year period. The decline in reported gross billings was primarily due to the divestiture of Giftcloud. Excluding Giftcloud, International Local gross billings grew 14.3%4.7% year-over-year, reflecting growth in bothtransaction value partially offset by a decline in transaction volume and transaction value.volume. From a supply perspective, growth within International Local, excluding GiftcloudGiftcloud, was driven by an expansion of seasonally relevant supply acrossconcentrated ourin major markets,international cities, led by our Health, Beauty & Wellness and Things to Do offering.offerings. From a demand perspective, the continued deployment of our new consumer platform across International markets contributed to improved organic trafficperformance during the quarter. Gross billings in our Goods category declined, reflecting our continued de-emphasis of the category, which resulted in fewer unit sales year-over-year. In addition, there was ana $8.9$2.3 million favorable impact on gross billings from year-over-year changes in foreign currency exchange rates.

International segment revenue, cost of revenue and gross profit for the three and six months ended MarchJune 31,30, 2026 and 2025 were as follows (in thousands):

Comparison of the Three Months Ended MarchJune 31,30, 2026 and 2025

International revenue,revenue and gross profit increased by $0.8 million and $1.6 million while cost of revenue increaseddecreased by $1.2 million, $0.7 million, and $0.5$0.9 million for the three months ended MarchJune 31,30, 2026 compared with the prior year period. Excluding Giftcloud, International Local revenue increased 18.8%,8.5%, consistent with the drivers of gross billings discussed above. The increasedecrease in cost of revenue was primarily due to Giftcloudlower chargesamortization inof theinternally-developed currentsoftware yearrelating to customer-facing applications that wereresulted intercompanyfrom transactionsa pre-divestituretransfer inof theassets priorbetween year.our reportable segments. The transfer did not have an impact on our consolidated results of operations, other than an immaterial effect on our income tax provision. Revenue and gross profit also had favorable impacts of $2.5$0.6 million and $2.2$0.5 million from year-over-year changes in foreign currency exchange rates.

International marketing and contribution profit for the three and six months ended MarchJune 31,30, 2026 and 2025 were as follows (in thousands):

International marketing expense and marketing expense as a percentage of revenue increased for the three months ended MarchJune 31,30, 2026 compared with the prior year period, primarily due to a higher investment in paid channels to capitalize on expanded supply and demand opportunities.

International contribution profit decreasedincreased for the three months ended MarchJune 31,30, 2026 compared with the prior year period, primarily due to higheran marketingincrease investment,in gross profit, partially offset by growthhigher inmarketing gross profit.investment.

Operating expenses for the three and six months ended MarchJune 31,30, 2026 and 2025 were as follows (in thousands):

(1)The three and six months ended MarchJune 31,30, 2026 includes $11.7$8.2 million and $19.9 million of stock-based compensation expense and $2.3 million and $4.6 million of depreciation and amortization expense. The three and six months ended MarchJune 31,30, 2025 includes $7.7$8.7 million and $16.4 million of stock-based compensation expense and $3.4$2.4 million and $5.8 million of depreciation and amortization expense.

SG&A and SG&A as a percentage of revenue increaseddecreased for the three months ended MarchJune 31,30, 2026 compared with the prior year period, due to higher stock-based compensation expense for new awards andlower payroll related costs,costs resulting from reduced headcount, including reductions from our 2026 Restructuring Plan, partially offset by loweremployer amortizationpaid payroll tax expense from the exercising of internallyvested developed software relating to non-customer facing applications.options.

Other income (expense), net for the three and six months ended MarchJune 31,30, 2026 and 2025 was as follows (in thousands):

The change in Other income (expense), net for the three months ended MarchJune 31,30, 2026 as compared to the three months ended MarchJune 31,30, 2025 is primarily related to a $13.0$22.5 million decrease in net foreign currency gains (losses) which primarily resulted from U.S. dollar-denominated intercompany balances with our foreign subsidiaries. The decreaseloss isduring the three months ended June 30, 2026 was primarily driven by net foreign currency losses in the current year period from the weakeningdepreciation of the U.SEuro dollaragainst relativethe U.S. dollar, as compared to the Euro compared to net foreign currency gainsgain in the prior year period.period driven by the Euro appreciation against the U.S. dollar. In each of these periods, these intercompany balances represented U.S. dollar-denominated payables owed by our foreign subsidiaries, whose functional currency is not the U.S. dollar, to Groupon, Inc.

Provision (benefit) for income taxes for the three and six months ended MarchJune 31,30, 2026 and 2025 were as follows (in thousands):

The effective tax rates for the three and six months ended MarchJune 31,30, 2026 and 2025 were impacted by pretax losses incurred in jurisdictions that have valuation allowances against their net deferred tax assets and by benefits due to taxreturn-to-provision refunds received.adjustments. The effective tax rate for the three and six months ended MarchJune 31,30, 2026 was further impacted by additional tax expense resulting from the signing of an advance pricing agreement with international tax authorities during the quarterfirst quarter, and an increase in the Company's liability related to unremitted foreign earnings.earnings, partially offset by benefits due to tax refunds received. For the three and six months ended MarchJune 31,30, 2026 and 2025, we continue to maintain a full valuation allowance against all U.S. federal and state deferred tax assets. We expect that our consolidated effective tax rate in future periods may continue to differ significantly from the U.S. federal income tax rate as a result of our tax obligations in jurisdictions with profits and valuation allowances in jurisdictions with losses.

Adjusted EBITDA. Adjusted EBITDA is a non-GAAP performance measure that we define as Net incomeIncome (loss) from continuing operations excluding income taxes, interest and other non-operating items, depreciation and amortization, stock-based compensation and other special charges and credits, including items that are unusual in nature or infrequently occurring. Our definition of Adjusted EBITDA may differ from similar measures used by other companies, even when similar terms are used to identify such measures. Adjusted EBITDA is a key measure used by our management and Board to evaluate operating performance, generate future operating plans and make strategic decisions. Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and Board. However, Adjusted EBITDA is not intended to be a substitute for Net incomeIncome (loss) from continuing operations.

We exclude stock-based compensation expense and depreciation and amortization because they are primarily non-cash in nature and we believe that non-GAAP financial measures excluding those items provide meaningful supplemental information about our operating performance and liquidity. For the three and six months ended MarchJune 31,30, 2026 and 2025, special charges and credits included charges related to our 2026 Restructuring Plan, Italy Restructuring Plan, 2022 Restructuring Plan andPlan, 2020 Restructuring Plan.Plan, and the (gain) on sale of business. We exclude special charges and credits from Adjusted EBITDA because we believe that excluding those items provides meaningful supplemental information about our core operating performance and facilitates comparisons with our historical results.

The following is a reconciliation of Adjusted EBITDA to the most comparable GAAP financial measure, Net incomeIncome (loss) from continuing operations, for the three and six months ended MarchJune 31,30, 2026 and 2025 (in thousands):

Free cash flow. Free cash flow is a non-GAAP liquidity measure that comprises Net cash provided by (used in) operating activities from continuing operations less purchases of property and equipment and capitalized software. We use free cash flow to conduct and evaluate our business because, although it is similar to Net cash provided by (used in) operating activities from continuing operations, we believe that it typically represents a more useful measure of cash flows because purchases of fixed assets, software developed for internal use and website development costs are necessary components of our ongoing operations. Free cash flow is not intended to represent the total increase or decrease in our cash balance for the applicable period.

The following table represents the effect on our Condensed Consolidated Statements of Operations from changes in exchange rates versus the U.S. dollar for the three and six months ended MarchJune 31,30, 2026 (in thousands):

Our principal source of liquidity is our cash balance totaling $225.5$226.3 million as of MarchJune 31,30, 2026. The Company’s cash requirements are subject to change as business conditions warrant and opportunities arise. We believe that the Company has sufficient liquidity to support its overall ongoing operational needs within the next 12 months, including the repayment of the 2027 Notes upon maturity on March 15, 2027.

Our net cash flows from operating, investing and financing activities from continuing operations for the three and six months ended MarchJune 31,30, 2026 and 2025 were as follows (in thousands):

Free cash flow is a non-GAAP liquidity measure that comprises net cash provided by operating activities, less purchases of property and equipment and capitalized software. Our free cash flow for the three and six months ended MarchJune 31,30, 2026 and 2025 and a reconciliation to the most comparable GAAP financial measure, Net cash provided by (used in) operating activities from continuing operations, for those periods were as follows (in thousands):