For most of the last year, Groupon has been dead money. It's no longer plunging the way it did following its IPO, but over the last 12 months, the stock is down about 2%, badly underperforming the broader S&P 500.
Its most recent earnings report did little to change that. Although Groupon's results exceeded expectations, its guidance -- once again -- proved disappointing.
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In the subsequent earnings call, Groupon's management offered up a number of key points for investors to consider. Below are five of the most important quotes from that earnings call.
Korean investment limited Groupon's earningsOn an unadjusted basis, Groupon's business remains unprofitable, which may make it a difficult investment for all but the most speculative portfolios. In the fourth quarter, Groupon posted an operating loss of $60 million.
According to Groupon's CEO Eric Lefkofsky, however, that operating loss is worse than it appears. More than one-fifth of that loss was due to significant investments in Ticket Monster, a rapidly growing subsidy Groupon acquired last year, and one that it is considering spinning off or selling.
The North American business is growingGroupon's core North American business -- the online marketplace and mobile application most investors are likely familiar with -- is continuing to see increased engagement, though it may not (yet) be translating into profitability.
During the call, Lefkofsky drew attention to the rapid growth of the business, highlighting several key metrics, including gross billings, which represents the amount of goods and services sold through Groupon's platform.
Groupon continues to try to build a local platformFor more than a year, Groupon has been attempting to shift its business model, transitioning from a daily deals giant to a sort of local commerce marketplace. Lefkofsky reiterated Groupon's commitment to that vision during the call, pointing out its large (and growing) base of both customers and users.
Shifting away from email blastsGroupon's business was built on email blasts -- each day, Groupon would send an email out to its list of interested buyers, advertising a relevant daily deal in their particular area. But there are limits to that approach, and Groupon has been working to lessen its dependence. Rather than rely on email alone, Groupon is trying to draw new customers in from search engines. During the call, Lefkofsky noted his company's progress.
The Pages initiative is workingTo fuel that search engine initiative, Groupon launched "Pages" last year. Roughly similar to Yelp's individual business profiles, Groupon's Pages serve as information hubs for its merchant partners, allowing customers to leave reviews and request deals. The Pages initiative is less than a year old, but Lefkofsky noted that the company is already making great progress.
The article 5 Things Groupon Inc.'s Management Wants You to Know originally appeared on Fool.com.
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