Groupon, Inc.

Hello and welcome to Groupon's fourth quarter 2024 financial results conference call. On the call today are Chief Executive Officer Dushan Sengphul, Chief Financial Officer Yijie Peng, and Senior Vice President of Corporate Development and Investor Relations Rana Kashyap. At this time, all participants are in a listen-only mode. Today's call will be a question and answer session only. The company has posted earnings material, including earnings commentary and earnings slides on the company's investor relations website at investor.gruppon.com. Today's conference call is being recorded. Before we begin, Groupon would like to remind listeners that the following discussion and responses to your questions reflect management's views as of today, March 12th, 2025 only, and will include forward-looking statements. Actual results may differ materially from those expressed or implied in the company's forward-looking statements. Groupon undertakes no obligation to update these forward-looking statements as a result of new information or future events. Additional information about risks and other factors that could potentially impact the company's financial results are included in its earnings press release and in its filings with the SEC, including its annual report on Form 10-K. We encourage investors to use Groupon's investor relations website at investor.groupon.com as a way of easily finding information about the company. Groupon promptly makes available on this website, the reports that the company files and furnishes with the SEC, corporate governance information, and select press releases and social media postings. On the call today, the company will also discuss the following non-GAAP financial measures, adjusted EBITDA and free cashflow. In Groupon's press release and their filings with the SEC, each of which is posted on its investor relations website, you will find additional disclosures regarding these non-GAAP measures, including reconciliations of these measures to the most comparable measures under U.S. GAAP. And with that, I'd like to turn it over to Dushan to make a few opening remarks before we jump into Q&A.

Hello, and thanks for joining us for our fourth quarter and full year 2024 earnings call. It's a pleasure to be with all of you. Yesterday, after the market closed, we released our earnings and posted our earnings commentary and updated slides on our investor relationships website. In addition, I encourage you to review our press release and 10K, which contain more detail on our fourth quarter and full year results. Today, my plan is to make brief opening remarks and then open up the call for questions. both live from our analysts and several that were pre-submitted in advance. I am pleased to share that 2024 was a pivotal year in Groupon's transformation journey and we are entering 2025 with significant momentum. Groupon today is fundamentally different than it was two years ago when I joined as CEO. While our core mission remains unchanged to be the trusted destination for discovering high-quality local experiences at unbeatable value, how we deliver on this mission has evolved significantly. Our transformation is delivering results across three key areas. First, in marketplace health. We have shifted from chasing volume to building quality, evidenced by North America Locust's positive 8% billing growth in Q4 after declining 19% in 2022. This improvement stems directly from our focus on curated experiences and strategic merchant partnerships. Second, in our platform modernization, we've completed major migrations, including our fraud detection platform, North America cloud infrastructure, new website, and ERP system. These aren't just technical upgrades. They are strategic investments that enable us to innovate faster and create more engaging experiences. Third, in our financial strength. We generated 69 million in adjusted EBITDA and 41 million in free cash flow for the full year. Our first positive free cash flow since exiting the pandemic. This improvement flows directly from our more efficient operations and healthier marketplace dynamics. For Q4 specifically, after a challenging Q3 impacted by technical migrations, We rebounded strongly. We are seeing encouraging signs across the business. North America local returned it to 8% billing growth. International local, excluding Italy, grew billings by 2%, with positive momentum in all four major markets. We saw double-digit growth in key verticals, including things to do, enterprise brands, and gifting and seasonal offerings. Looking ahead to 2025, we are confident this will be the year we return Groupon to sustained growth. Our 2025 strategy focuses on winning in key markets through our proven city-by-city approach, prioritizing high-impact categories like things to do, beauty and wellness, and gifting, enhancing customer retention through improved personalization, boosting merchant success with enhanced tools, in completing our remaining technical migration including our North America mobile app in Q2. With a much better cash position of 229 million versus the previous year and a clear roadmap for growth, we are well positioned to create value for all stakeholders as we execute the next chapter in Groupon's transformation. I want to thank the Groupon team for their resilience and commitment which have been instrumental in our progress. With that, Let's open the call for questions.

Thanks, Dushan. Our first question comes from Sean McGowan from Roth Capital. Sean, you can now unmute.