Groupon reports better-than-expected revenue, still not profitable
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Image Credits: Mike Mozart / Flickr under a CC BY 2.0 license.
Deal site Groupon saw its shares rising today in after-hours trading, following a better-than-expected second quarter earnings report.
Analysts expected the Chicago-based company to report negative earnings per share of $0.02 on revenue on a non-GAAP basis, and $713.8 million in revenue, according to Estimize data.
But Groupon beat Wall Street revenue expectations with second quarter revenue of $756 million. And it posted a better-than-expected net loss of $6.8 million on a non-GAAP basis, or $0.01 loss per share.
In a phone interview, Groupon CEO Rich Williams said that the reasons the company did not make profits in the last quarter are essentially two: Groupon is still investing in marketing and other efforts to attract new customers, and they face other costs associated with company restructuring.
Williams was promoted to CEO last November.
To improve customer experience, Williams said that customer support staff now answers calls faster, because the company improved tools that employees have. The Groupon mobile app also saw changes, by making the notification system more targeted and location-based, Williams said.
In the first half of 2016, Groupon revenue looked better than it did over the same period last year. But the company is not looking quite as strong as it did in the first half of 2015 in terms of profitability.
Last year, through the end of June, Groupon had a net profit on a GAAP-basis of $94.8 million, or 14 cents per share. This year, during the first half of the year, Groupon had a net loss of $104 million, or 18 cents per share.
Groupon revenue in the first half of 2016 reached $1.49 billion.
In Nasdaq trading today, Groupon shares closed at $3.78. In the past year, Groupon stock had been down 71 percent. Last year on November 2, the day before Groupon’s current CEO was appointed, shares in the company were trading at $3.83.
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