Daily deals provider Groupon Inc. significantly narrowed its net loss in the first quarter, with the company’s North American business offsetting continued weak revenues in its overseas markets.
The company reported a net loss of $4 million, or 1 cent a share for the first quarter, compared with a net loss of $11.7 million, or 2 cents a share, for the same period last year.
The earnings report sent Groupon’s stock up more than 11 percent in after-hours trading.
Revenue rose 7.5 percent to $601.4 million in the first quarter from $559.3 million a year earlier. North American operations were entirely responsible for the increase, posting a 42 percent jump in revenues. The international segment saw revenues drop 18 percent from a year earlier.
Groupon has been struggling to turn around its international operations, particularly in Europe, where quality control has suffered in the company’s zealous pursuit of growth. The company has been rolling out deal personalization technology and other tools overseas to get performance in line with North America, where those features have shown promise. But international technology automation is still in relatively early stages.
Gross billings, which represent the total dollar value of purchases before Groupon pays merchants their cut, rose 4 percent on the year to $1.41 billion. The bifurcation between the North American and international segments persisted in gross billings as well, with the former market growing 23 percent while gross billings fell 9 percent overseas.
This was Groupon’s first earnings report without co-founder and former Chief Executive Andrew Mason at the helm. He was fired at the end of February and replaced on an interim basis by two board members, Eric Lefkofsky and Ted Leonsis. Lefkofsky helped found Groupon and is a major shareholder of the company, while Leonsis was a longtime AOL executive who is now CEO of Monumental Sports & Entertainment LLC, the owner of sports properties such as the Washington Wizards and Washington Capitals.
Groupon said its number of active customers, or those that have purchased a Groupon in the last 12 months, increased 13 percent on the year to 41.7 million. The company also said it’s seeing promising trends in transactions conducted via mobile devices and by customers using its “marketplace” — a bank of thousands of ongoing deals that subscribers can search. Groupon is seeking to shift from its model of email blasts to a model where it fulfills demand of consumers searching for deals. Last month, the company introduced new versions of its Android and iPhone applications that emphasize search.
The company said 45 percent of North American transactions in March were done on a mobile device, up from 30 percent in the same month of 2012. Email represented less than 45 percent of North American transactions in the first quarter.
Groupon said it expects revenue between $575 million and $625 million in the second quarter.
wawong@tribune.com | Twitter @VelocityWong
