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    Groupon (GRPN)

    GRPN Q3 2024: Legacy User Retention Slumps Amid Tech Rollout

    Reported on Jul 14, 2025
    Pre-Earnings PriceN/ADate unavailable
    Post-Earnings PriceN/ADate unavailable
    Price ChangeN/A
    • Sales Force Expansion and Efficiency: Management is aggressively ramping up its localized sales force in key U.S. markets, such as Chicago, and expects similar improvements in Europe. This focused expansion is likely to lead to a better marketplace balance and enhanced revenue growth capabilities.
    • International Tech Stack Upgrade: The plan to migrate international markets onto a modern tech stack by the first half of next year could drive operational efficiencies and improved customer experiences, laying a foundation for long-term growth.
    • Near-Target Marketing Efficiency: Executives highlighted that marketing campaigns are close to consistently achieving a 100% ROI within 14 days, suggesting that once efficiencies are fully realized, the customer acquisition engine can drive strong, profitable revenue growth.
    • Legacy Retention Concerns: Executives expressed that the friction introduced by technical changes (e.g., forced logouts and password resets) has led to a one-time drop in retention rates among long-standing North American customers, with uncertainty about a full recovery in these cohorts.
    • Marketing Efficiency Challenges: There were indications of reduced marketing efficiency—specifically, difficulties in consistently achieving the target 100% ROI due to tech migration impacts, which could pressure margins and customer acquisition costs.
    • Convertible Debt Refinancing Uncertainty: The discussion on the remaining convertible notes (approximately $54 million) revealed uncertainty in how these will be managed or refinanced, contributing an element of financial risk.
    1. Legacy Retention
      Q: Why won't legacy retention bounce in North America?
      A: Management pointed to tech-related friction—password resets and forced logouts—reducing activity among long‑time users, though efforts to reactivate these segments persist.

    2. Marketing ROI
      Q: What drives achieving 14‑day 100% ROI?
      A: They expect marketing efficiency to improve as system issues ease, targeting 100% ROI within 14 days despite recent tech migration and election challenges.

    3. Convertible Notes
      Q: What happens to remaining 2026 convertible debt?
      A: Management explained that the outstanding amount of roughly $54M will be managed by refinancing, without offering the same new note terms to those holders.

    4. Voucher Impact
      Q: Why do higher voucher redemptions hurt revenue?
      A: Although increased redemptions drive sales, they also raise variable costs and depress margins, impacting net revenue performance.

    5. SumUp Stake
      Q: Any update on the SumUp stake sale?
      A: The stake remains under review as a potential value asset, with further sales contingent on market demand and coordination with SumUp.

    6. Sales Force
      Q: How is North America sales hiring progressing?
      A: The focus is on expanding in key markets—especially Chicago—with a temporary hiring pause until January to ensure effective training and operational efficiency.

    Research analysts covering Groupon.