Groupon (GRPN) Q3 2026 Earnings Report

The call was strategically optimistic but financially uneven. Groupon reported solid billings growth, strong performance in Things to Do and Travel, substantial AI-related productivity gains, progress on restructuring savings and a significant share-repurchase program. However, revenue and adjusted EBITDA missed guidance, free cash flow was negative, marketing returns disappointed, North America Local supply remained weak and expected purchase-frequency improvements have not yet materialized. Management expressed confidence in the company's AI-native strategy, marketplace investments and long-term opportunities, making the overall tone positive despite near-term execution challenges.

For Q4, Groupon expects free cash flow of at least $85 million, is running marketing with a little bit lower ROI targets, or a little bit better return in other words, and expects that we will see better results during the quarter; the company expects SG&A to come down, views Q4 as a more indicative rate, has realized about 70% of restructuring savings on a run rate basis, with some of the rest of that still going to come in Q1, and expects that level to continue to be an opportunity to work on next year. The Trust & Quality process will take a while to optimize, with ongoing work with merchants on improvement, and the company expects these investments to drive an increase in purchase frequency and customer retention over time, while it expects to bring more first-time customers into the app in Q4 and its goal is to improve the second purchase rate. Groupon expects FoundryAI to be the default way of our teams get work done by the end of 2026, does not expect a material impact from agentic commerce on Q4 results, expects the effects of rebuilding North America Core Local supply outside Things to Do to begin showing in results in 2027, and will provide 2027 guidance with its fourth quarter results.