Groupon Q2 2013 Public Fact Summary

Page 1

OVERVIEW

1 Active deals reflect the number of daily featured and Deal Bank deals offered on average at the end of the quarter. Units reflect vouchers and products sold before cancellations and refunds. Spend per average active customer reflects the total gross billings generated in the trailing twelve months per average active customer over that period. Active customers reflect the total number of accounts who have purchased a Groupon during the trailing twelve months.

2 Gross billings defined as the total dollar value of customer purchases of goods and services, excluding applicable taxes and net of estimated refunds3 Direct revenue represents revenues from the sale of products for which Groupon is the merchant of record4 Please refer to the non-GAAP reconciliation tables in Groupon’s Q2 2013 earnings release, available at investor.groupon.com

MERCHANTS LOVE GROUPON FINANCIAL RESULTS: Q2

GLOBAL REACH: Q2

CONSUMERS LOVE GROUPON

• Groupon has sold more than 400 million deals

• More than 50 million people worldwide have downloaded the Groupon Mobile app

• Consolidated units increased 15% YoY to 46 million; North America units increased 45%, EMEA units decreased 3%, and Rest of World units decreased 12%1

• Trailing twelve month billings per average active customer increased by $5 to $156 in NA and remained at $138 globally1

• North American customer satisfaction is best-in-class with 94% of customers satisfied with their most recent purchase (see p.5)

• Active customers increased 12% year-over-year1

Groupon (NASDAQ: GRPN) is a global leader in local commerce, making it easy for people around the world to search and discover great businesses at unbeatable prices. Groupon is reinventing the traditional small business world by providing merchants with a suite of products and services, including customizable deals, payments processing capabilities and point-of-sale solutions to help them attract more customers and run their operations more effectively. By leveraging the company’s global relationships and scale, Groupon offers consumers incredible deals on the best stuff to eat, see, do, and buy in 48 countries. With Groupon, shoppers discover the best a city has to offer with Groupon Local, enjoy vacations with Groupon Getaways, and find a curated selection of electronics, fashion, home furnishings and more with Groupon Goods.

To subscribe to Groupon emails, visit www.Groupon.com. To learn more about the company’s merchant solutions and how to work with Groupon, visit www.GrouponWorks.com.

• More than 500,000 merchants have been featured in our marketplace

• Number of active deals in North America increased to more than 54,000 on average at the end of Q2, compared with nearly 40,000 as reported in Q1 and ~1,000 worldwide at the time of the IPO1

• In June, more than 75% of the merchant contracts Groupon signed in North America opted to feature in our Pull marketplace with a monthly recurring deal

• 81% of merchants felt the Groupon deal increased awareness of their business within the community (see p.5)

• Consistently, more than 50% of merchants choose to refeature with Groupon

• Gross billings increased 10% YoY to $1.41 billion2

• Consolidated revenue of $608.7 million, an increase of 7% YoY

• Operating income excluding stock compensation and acquisition-related costs of $59.0 million versus $71.9 million in Q2 20124

• Earnings per share excluding stock compensation and acquisition-related costs of $0.024

• $29.3 million of Free Cash Flow in Q2 and trailing twelve month FCF of $75.3 million4

• At the end of the quarter, Groupon had $1.2 billion in cash and cash equivalents and no long-term borrowings

• 48 countries worldwide (see country list on p.4), 500+ markets worldwide

• More than 200 million subscribers

• 42.6 million active customers worldwide as of June 30, a 12% increase YoY1

• 2300+ individual types of goods, services and experiences

• Nearly 11,000 Groupon employees worldwide

• 10 acquisitions in 2012 and 3 acquisitions by the end of June 2013

ACTIVE CUSTOMERS (IN MILLIONS)

EMEA

Rest of World

2Q12

3Q12

4Q12

1Q13

2Q13

15.1 8.7

16.0

17.2

18.2

19.1

38.0

39.5

41.0

41.7

42.6

14.2

9.114.4

9.514.3

9.514.0

9.613.9

North America

Groupon Q2 2013 Public Fact Summary

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GROUPON'S POTENTIAL - BUILDING A LOCAL PLATFORM WORLDWIDE1

EMAIL – YOUR PERSONALIZED DEAL DELIVERY

DISTRIBUTION

GROUPON'S "PULL" MARKETPLACE - THE WORLD'S LARGEST DEAL MARKETPLACE

• Groupon’s 200+ million subscribers receive emails each day surprising and delighting them with curated, unbeatably priced offers from an ever-expanding list of more than 2,300 individual types of goods, services and experiences

• Email has been diversified beyond local deals to include Groupon Getaways, GrouponLive, Groupon Reserve and Groupon Goods

• Smart Deals email personalization gives Groupon the ability to customize the deals subscribers receive every day and includes input subscribers submit on their interests and curiosities

• Smart Deals is now live in seven of Groupon's ten largest markets and has driven as much as a 30% lift in the North American email purchase rate as of June 30

• As the Pull Marketplace continues to gain traction, direct email is now less than 40% of North American transactions

• Launched in New York and Chicago in November 2012, Groupon’s marketplace is the world’s first local e-commerce marketplace featuring a massive selection where customers can browse or search for deals on demand

• Groupon’s marketplace, made up of featured deals and the massive inventory of active deals known as Deal Bank, is an accumulation of more than 54,000 deals on average in North America alone at the end of the quarter

• On the ‘All Deals’ or 'Featured Deal' tab of Groupon.com, subscribers can search the inventory of daily deals, Deal Bank deals and real-time offers by keyword and location (tap the magnifying glass on mobile)

• In June, more than 75% of the merchant contracts Groupon signed in North America opted to feature a monthly recurring deal

• Groupon Local unit sales growth in North America accelerated from 17% in Q1 to 22% in Q2, a signal pull is starting to gain traction

And >65 million local merchants worldwide

Yet, there are about 30 million merchants in Groupon's core categories

Groupon has featured more than 500,000 merchants worldwide

65M30M500K

1 Localeze/Neustar & Factual.com Business Listings and company estimates

Groupon Q2 2013 Public Fact Summary

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CHANNELSMobile - A Global M-Commerce Leader

Mobile Customers

Mobile Devices

North American mobile customers continue to be more engaged than our web-only customers, purchasing more frequently and spending more

International mobile mix is less than North America, but increasing at a faster rate.

Groupon Mobile app versions are consistently given a perfect five-star user rating in the iTunes App Store.

percent of our North American transactions were completed on a mobile device in June

million people worldwide have downloaded our mobile app, including more than 7.5 million in Q2 alone

most downloaded free apps of all time in the U.S.1

1 iTunes rating for US store as of 6/10/13, ranking available here - https://itunes.apple.com/WebObjects/MZStore.woa/wa/viewFeature?id=640266685&mt=8

NORTH AMERICA MOBILE TRANSACTION MIXMonthly, January, '11 to June, '13 (% of transactions)

iPhone

Blackberry

Android

Windows Phone

Groupon is preparing to be the first large scale e-commerce company that is predominantly driven by mobile transactions.

January '11 July '11January '12

January '12

July '12

June '13

April '11

October '11

April '12

October '12

March '13

50NEARLY

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

50MORE THAN

25ONE

OF THE

Groupon Q2 2013 Public Fact Summary

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Customers able to buy deals by location and keyword on the website and mobile app

3

ANATOMY OF A GROUPON DEAL GLOBAL FOOTPRINT

MARKET 1ST DEAL SOLD

United States Canada Germany UK France Austria Italy Spain Netherlands Switzerland Sweden Poland Turkey Finland Ireland Norway Belgium Chile Greece Portugal Argentina Brazil Mexico Colombia Japan Russia Peru Taiwan Hong Kong Singapore Philippines Uruguay Israel South Africa Malaysia India Romania Ukraine Australia South Korea UAE China Indonesia Puerto Rico New Zealand Morocco Denmark Panama Thailand

October 2008 April 2010 May 2010 May 2010 May 2010 May 2010 May 2010 May 2010 May 2010 May 2010 May 2010 May 2010 May 2010 May 2010 May 2010 May 2010 May 2010 June 2010 June 2010 June 2010 June 2010 June 2010 June 2010 June 2010 August 2010 August 2012 September 2010 November 2010 November 2010 November 2010 November 2010 November 2010 December 2010 January 2011 January 2011 January 2011 January 2011 January 2011 February 2011 March 2011 March 2011 March 2011 April 2011 April 2011 May 2011 July 2011 September 2011 October 2011 March 2012

Since 2008, Groupon has experienced record-setting growth, expanding from its first market in Chicago to operations in 48 countries and 500+ markets worldwide.

Groupon offers sent to subscribers via email or browsed by consumers on the website or mobile app

2

Deals sourced from high-quality merchants sold at a discount. (e.g. $20 for $40 in value at local retailer)

1

Simply redeem goods or services from merchants

4

Groupon pays merchants

North America: Groupon typically pays merchants and suppliers in installments within 60 days. Merchants with an ongoing deal in the Deal Bank typically receive payments on an ongoing basis throughout the term of the offering.

International: Groupon typically pays merchants when the customer redeems the Groupon. Goods suppliers are typically paid within 60 days.

5

Groupon Q2 2013 Public Fact Summary

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Merchants find Groupon to be: 4

75%

trustworthy

80%

easy to use

74%

reliable

GROUPON MERCHANT AND CUSTOMER SATISFACTION

Groupon earns high marks in customer and merchant satisfaction, improving scores across the globe

Merchant Satisfaction: Groupon’s July 2013 U.S. customer and merchant satisfaction scores continue to remain best-in-class. 1,2

International Satisfaction Continues to Improve: Groupon has made continued progress in elevating our customer and merchant satisfaction scores internationally, with MSAT rising more than 15% and CSAT more than 10% over the past year. 1,2

94%

76%

84%

9 out of 10

92%

89%

81%

85%

82%

of customers and 8 out of 10 merchants are satisfied with Groupon 1,2,5

of customers spend beyond the value of the Groupon 6

of customers would not have gone to the merchant if not for the Groupon deal, and 20% were not even considering the purchase before they saw the deal 2

“Groupon provided us with more customers than all the other companies put together.”

Scott Edwards Owner, Sharkarosa Wildlife Ranch Pilot Point, TX 3

of customers are satisfied with the Groupon Mobile app 2

of recent Groupon customers plan to purchase from Groupon again in the next 60 days 2

of businesses that Groupon works with have 20 employees or less 4

of merchants felt the Groupon deal increased awareness of their business within the community 4

of customers have referred someone to the business – Groupon customers are “influencers” who spread the word in their peer group 2

of merchants agree that their Groupon deal brought in new customers 4

“I would say that the percentage of repeat Groupon customers is close to 60-65%.”

Aaron Hasley Co-Owner, Wine & Palette Oklahoma City, OK 3

1 ForeSee Groupon Merchant Satisfaction Study, July 2013 (commissioned by Groupon)2 ForeSee Groupon Customer Satisfaction Study, July 2013 (commissioned by Groupon)3 Visit GrouponWorks.com for hundreds of case studies and video testimonials from merchants4 CatalystMR, Q2 Merchant Business Partnership Survey, May 2013 (commissioned by Groupon)5 Recent purchasers surveyed on most recent Groupon purchase6 Internal Redemption Data, Jan. 2013 - Aug. 2013. In instances where a merchant has recorded a total bill

Groupon Q2 2013 Public Fact Summary

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CATEGORIES AND MERCHANT TOOLS

Groupon’s diverse categories and integrated Merchant Operating System tools continue to help merchants grow

Categories

Groupon Local - www.groupon.com

• Groupon offers consumers incredible deals on the best stuff to eat, see, do and buy in 48 countries

• Subscribers are emailed deals customized for them each day by Groupon’s Smart Deals email personalization technology (currently available in NA; rolling out in international markets), which includes input subscribers submit on their interests and curiosities

• Local deals are available in the deal marketplace on Groupon.com and Groupon Mobile, searchable by keyword and location

• Local deals make up a large part of Groupon’s 2,300+ individual types of goods, services and experiences, including food and drink, health and beauty, leisure/activities and services

• North America Local billings growth increased more than 9% YoY and North America Local units growth increased to 22% YoY in Q2

• Groupon Local deals can be purchased in all of Groupon’s 48 countries and 500+ markets

Groupon Goods - www.groupon.com/goods

• Launched in September 2011 in select North American and International markets

• Consumer products featuring a variety of sub-categories, including electronics, home and garden and toys

• Increased from 37% year-over-year billings growth in Q1 to 50% in Q2

• Black Friday 2012 was the biggest four-day weekend of sales since the inception of Groupon Goods

Groupon Getaways - www.groupon.com/getaways

• Launched in July 2011

• Groupon’s strategic partnership with Expedia to offer travel deals

• Deals featuring personally curated offers from top travel partners – hotels, packages, airfare and beyond

• Billings growth increased more than 50% year-over-year in North America

GrouponLive - www.groupon.com/live

• GrouponLive launched in May 2011, G-Pass in April 2012

• Partnership with Live Nation whereby Groupon serves as a local resource for LiveNation events and clients of its global ticketing business, Ticketmaster

• G-Pass, which allows GrouponLive customers to bypass the box office line and go straight to the entrance, surpassed one million redemptions in June 2013

Groupon Reserve - www.groupon.com/reserve

• Launched with email-only offers in August 2012 and relaunched in July 2013 featuring the integration of the Savored platform

• Premium channel for upscale offers; customers can book tables at some of the best restaurants in their city at discounts of up to 40%, with expansion to other offerings planned

• Live in 10 markets with plans to expand to more cities in the U.S. and in key international markets by the end of 2013

Merchant OS Tools

Breadcrumb PRO - www.breadcrumb.groupon.com

• Launched nationwide May 2013

• A complete restaurant and bar management system with more than 200 features including customizable menus, full modifiers, flexible kitchen printing, labor tracking, and real-time reporting

• Plans start as low as $99 per month and include lifetime updates, free 24/7 support no licensing fees

Breadcrumb POS - www.breadcrumb.groupon.com/pos

• Launched nationwide May 2013

• A free iPad Point of Sale app with easy account creation, a simple setup, and free 24/7 live support

• Paired with Breadcrumb Payments for credit card processing

Breadcrumb Payments - www.breadcrumb.groupon.com/payments

• Launched nationwide September 2012; integrated into Breadcrumb POS

• A payments service backed by a guarantee to be the lowest cost option for merchants to accept credit cards, built into the latest version of the Groupon Merchants app for the iPhone and iPod Touch

• Swiped transaction rates - Just 1.8% + $0.15 per swipe for Visa, MasterCard, and Discover (Amex rates vary)

Groupon Merchant Center - https://merchants.groupon.com

• Dashboard that provides merchants with comprehensive real-time view of customer insights, feedback and performance measurement across Groupon campaigns; tracks customer comments, customer acquisition, incremental customer spending and ROI from Groupon marketing services

Resources

GrouponWorks - www.grouponworks.com

• Launched new redesigned version in July 2012

• Features Groupon’s entire suite of marketing products and services for merchants and hundreds of case studies and video testimonials from merchants

Social Innovation

Groupon Grassroots - www.grassroots.groupon.com

• First launched as G-Team in 2010, relaunched as Groupon Grassroots in April 2012

• Raised more than $6.5 million towards activating citizenship and fostering neighborhood advancement

• 100% of all funds raised go directly to the defined projects- Groupon does not take a cut