Groupon, Inc.

Good day, everyone, and welcome to Groupon's third quarter 2019 financial results conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the company's formal remarks. To ask a question, press the star key followed by the number one on your touchtone phone. Once again, that's star one to ask a question. Today's conference call is being recorded. For opening remarks, I would like to turn the call over to the Vice President of Investor Relations, Jennifer Bugelmans. Please go ahead.

Good morning, and welcome to Groupon's third quarter 2019 financial results conference call. On the call today are our CEO, Rich Williams, and interim CFO, Melissa Thomas. The following discussion and responses to your questions reflect management's views as of today, November 5, 2019 only, and will include forward-looking statements. Thank you for joining us. as a way of easily finding information about the company. Groupon promptly makes available on this website the reports that the company files or furnishes with the SEC, corporate governance information, our quarterly stockholder letter, and select press releases and social media postings. On the call today, we will also discuss the following non-GAAP financial measures, adjusted EBITDA, free cash flow, and FX neutral results. In our press release and our filings with the SEC, Each of which is posted on our Investor Relations website, you will find additional disclosures regarding the non-GAAP measures, including reconciliations of these measures to the most comparable measures under U.S. GAAP. All references to SG&A in 2018 exclude the charges for the IBM patent litigation. As we discuss the results during this call, note that all comparisons, unless otherwise stated, refer to year-over-year growth as reported. All gross profit comparisons are FX-neutral. including gross profit per customer. And with that, I'm happy to turn the call over to Rich.

Thanks, Jennifer. And thanks to everyone for joining the call as we discuss our third quarter results. As usual, we also released our quarterly letter to stockholders yesterday alongside our earnings announcement which goes into more detail about the things we'll discuss today. I encourage you to take the time to read it. I'm pleased to speak today about our strategic progress in the third quarter, which delivered adjusted EBITDA of $50 million and free cash flow of $126 million on a trailing 12-month basis. These results underscore the tremendous opportunity Groupon is best positioned to capture. Local commerce is a vast addressable market and few, if any, can boast our unique combination of customer and merchant scale. To fully realize this opportunity, we remain focused on four strategic priorities. improving the customer experience, expanding our open platform, investing in our international business, and continuing our history of operational rigor. I'm pleased to report that we made progress in all four areas, even as we faced challenges in the form of continued traffic declines, as well as an international business dealing with broad macroeconomic issues in Europe, particularly in the UK. Those factors contributed to lower than expected gross profit in the quarter. In spite of some near-term challenges, The team also delivered on some key initiatives in the quarter as we continued to scale Groupon Select, our new membership product, and launched important product enhancements, including significant improvements to our mobile web experience focused squarely on reducing friction and improving conversion. We also continue to add high-quality partners, which will bring even more great inventory and offers to our site. Over the last quarter, we've made a concerted effort to meet with many of you, and the feedback was clear. We can be crisper in describing our vision and in helping you identify the metrics that will matter most in tracking our progress going forward, particularly where we're most differentiated in local. Expect to hear more from us moving into 2020 as we further refine our communications approach and strategy. Before I hand the call over, I'd like to introduce Melissa Thomas, our interim CFO. For those of you who have not yet spoken with Melissa, she's a veteran finance professional who has been with Groupon for three years. and that time she's overseen our commercial finance teams and currently also serves as our chief accounting officer. With that, I'll turn the call over to Melissa to walk you through the financial highlights for the third quarter.