Groupon Tops 1Q Expectations, But 2Q View Light

Groupon (NASDAQ:GRPN) reported a much deeper first-quarter loss late Tuesday on higher costs and a light second-quarter outlook, sending its shares sharply lower in after-hours trade.

The Chicago–based daily deals site reported a net loss of $37.8 million, or six cents a share, compared with a year-earlier loss of just $3.9 million, or a penny a share. Operating expenses bloated to $405.6 million.

Excluding one-time items, Groupon said it lost a penny a share in the first quarter, better than the three-cent loss predicted by analysts in a Thomson Reuters poll.

Revenue for the three-month period increased 26% to $757.6 million, beating the Street’s view of $738.4 million as active customers climbed 24% year-over-year to 51.8 million.

Gross billings -- the total dollar value of customer purchases excluding taxes and refunds -- grew 29% to $1.82 billion. The company also recorded double-digit growth in both the U.S. and key EMEA regions.

“We had a record quarter in terms of demand, with worldwide billings increasing 29% and reaching their highest level ever," Groupon CEO Eric Lefkofsky said in a statement. "Our marketplace continued to gain traction and growth in our mobile business accelerated.”

The daily deals site recorded more than 10 million app downloads last quarter, helping to push mobile transactions up to 54% in March.

For the remainder of the year, it said it is prepared to invest further in improving margins in its local and goods business categories, while expanding profitably outside the U.S.

Groupon raised its full-year outlook, now anticipating EBITDA to exceed $300 million.

For the current quarter, it is anticipating sales between $725 million and $775 million, in light with the consensus view of $754.4 million.

However, it sees non-GAAP earnings between break-even and two-cents a share, below the three-cent profit predicted by analysts on average.

Shares of Groupon fell nearly 4% to $6.49 in after-hours trade.