Signaling a change of fortunes, online deals company Groupon Inc posted a smaller net loss and sharply higher revenue in the first quarter, helped by increased demand from a growing customer base.
Its revenue surpassed Wall Street’s expectations and Groupon’s stock shot up nearly 18 percent in after-hours trading. It was a welcome reprieve for the newly public company that’s seen its stock battered following a series of missteps with its finances.
Groupon said on Monday that its net loss was US$11.7 million, or US$0.02 per share, in the January-March period. It posted a loss of US$146.5 million, or US$0.48 per share, in the first quarter of last year when it was still privately held.
Excluding special items such as stock-compensation expenses, Groupon earned US$0.02 per share in the latest quarter, matching Wall Street’s estimates.
Revenue grew 89 percent to US$559.3 million from US$295.5 million a year earlier.
Analysts, on average, were expecting revenue of US$530.5 million, according to a poll by FactSet. Groupon itself had forecast revenue of US$510 million to US$550 million.
“We are pleased to report a record quarter that demonstrates our progress in unlocking the opportunity in local commerce for merchants and customers worldwide,” CEO Andrew Mason said.
He said the company has started to see the benefits of new technologies, such as its “SmartDeals” program, which aims to make deals more relevant to users depending on where they are and who they are, for example.
Chicago-based Groupon went public in November, pricing its stock at US$20 per share. Since February, though, the shares have declined steadily. In a recent letter to shareholders, Mason acknowledged that the six months since the company’s initial public offering have been “rocky to say the least.”
In March, the company restated its quarterly financial results, explaining that it lost more than it initially reported because it had to pay out more refunds than expected. Earlier this month, it replaced two of its board members to add executives with more accounting experience.
Groupon ended the quarter with 36.9 million active customers, up from 15.4 million at the end of the previous year’s first quarter. Often criticized for its spending to acquire new subscribers, Groupon said it added roughly the same number of customers as it did in the fourth quarter, but spent 25 percent less on marketing.
First-quarter marketing costs fell 49 percent to US$116.6 million from US$230.1 million in the same period last year.
For the current quarter, Groupon forecast revenue of between US$550 million and US$590 million. Analysts are forecasting second-quarter revenue of US$560.3 million.