10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2018

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________________ to ________________

Commission file number: 1-35335

Groupon, Inc.

(Exact name of registrant as specified in its charter)

Delaware	27-0903295
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
600 West Chicago Avenue, Suite 400 Chicago, Illinois	60654
(Address of principal executive offices)	(Zip Code)

312-334-1579

(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes  x         No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).        

Yes  x         No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer x                           Accelerated filer ☐         

Non-accelerated filer (Do not check if a smaller reporting company) ☐    Smaller reporting company ☐

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐            No  x

As of May 7, 2018, there were 564,615,531 shares of the registrant's common stock outstanding.

TABLE OF CONTENTS

PART I. Financial Information	Page
Forward-Looking Statements	3
Item 1. Financial Statements and Supplementary Data	4
Condensed Consolidated Balance Sheets as of March 31, 2018 (unaudited) and December 31, 2017	4
Condensed Consolidated Statements of Operations for the three months ended March 31, 2018 and 2017 (unaudited)	5
Condensed Consolidated Statements of Comprehensive Income (Loss) for the three months ended March 31, 2018 and 2017 (unaudited)	6
Condensed Consolidated Statements of Stockholders' Equity for the three months ended March 31, 2018 (unaudited)	7
Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2018 and 2017 (unaudited)	8
Notes to Condensed Consolidated Financial Statements (unaudited)	9
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3. Quantitative and Qualitative Disclosure about Market Risk	50
Item 4. Controls and Procedures	51
PART II. Other Information
Item 1. Legal Proceedings	52
Item 1A. Risk Factors	52
Item 2. Unregistered sales of equity securities and use of proceeds	53
Item 5. Other Information	53
Item 6. Exhibits	54
Signatures	55

______________________________________________________

2

PART I. FINANCIAL INFORMATION

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding our future results of operations and financial position, business strategy and plans and our objectives for future operations. The words "may," "will," "should," "could," "expect," "anticipate," "believe," "estimate," "intend," "continue" and other similar expressions are intended to identify forward-looking statements. We have based these forward looking statements largely on current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from those expressed or implied in our forward-looking statements. Such risks and uncertainties include, but are not limited to, risk related to volatility in our operating results; execution of our business and marketing strategies; retaining existing customers and adding new customers; challenges arising from our international operations, including fluctuations in currency exchange rates, legal and regulatory developments and any potential adverse impact from the United Kingdom's likely exit from the European Union; retaining and adding high quality merchants; our voucherless offerings; cybersecurity breaches; competing successfully in our industry; changes to merchant payment terms; providing a strong mobile experience for our customers; maintaining our information technology infrastructure; delivery and routing of our emails; claims related to product and service offerings; managing inventory and order fulfillment risks; litigation; managing refund risks; retaining and attracting members of our executive team; completing and realizing the anticipated benefits from acquisitions, dispositions, joint ventures and strategic investments; lack of control over minority investments; tax liabilities; tax legislation; compliance with domestic and foreign laws and regulations, including the CARD Act, GDPR and regulation of the Internet and e-commerce; classification of our independent contractors; protecting our intellectual property; maintaining a strong brand; customer and merchant fraud; payment-related risks; our ability to raise capital if necessary and our outstanding indebtedness; global economic uncertainty; our common stock, including volatility in our stock price; our senior convertible notes; our ability to realize the anticipated benefits from the hedge and warrant transactions; and those risks and other factors discussed in Part I, Item 1A, Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2017, as well as in our condensed consolidated financial statements, related notes, and the other financial information appearing elsewhere in this report and our other filings with the Securities and Exchange Commission, or the SEC. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. We do not intend, and undertake no obligation, to update any of our forward-looking statements after the date of this report to reflect actual results or future events or circumstances. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

As used herein, "Groupon," "we," "our," and similar terms include Groupon, Inc. and its subsidiaries, unless the context indicates otherwise.

3

ITEM 1. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

GROUPON, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

	March 31, 2018			December 31, 2017
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	725,909		$	880,129
Accounts receivable, net	81,571			98,294
Prepaid expenses and other current assets	89,282			94,025
Total current assets	896,762			1,072,448
Property, equipment and software, net	146,717			151,145
Goodwill	289,945			286,989
Intangible assets, net	16,925			19,196
Investments (including $103,579 and $109,751 at March 31, 2018 and December 31, 2017, respectively, at fair value)	129,373			135,189
Other non-current assets	23,206			12,538
Total Assets	$	1,502,928		$	1,677,505
Liabilities and Equity
Current liabilities:
Accounts payable	$	23,400		$	31,968
Accrued merchant and supplier payables	568,570			770,335
Accrued expenses and other current liabilities	265,920			331,196
Total current liabilities	857,890			1,133,499
Convertible senior notes, net	192,619			189,753
Other non-current liabilities	102,047			102,408
Total Liabilities	1,152,556			1,425,660
Commitments and contingencies (see Note 8)
Stockholders' Equity
Common stock, par value $0.0001 per share, 2,010,000,000 shares authorized; 752,664,286 shares issued and 564,062,044 shares outstanding at March 31, 2018; 748,541,862 shares issued and 559,939,620 shares outstanding at December 31, 2017	75			75
Additional paid-in capital	2,192,469			2,174,708
Treasury stock, at cost, 188,602,242 shares at March 31, 2018 and December 31, 2017	(867,450		)	(867,450		)
Accumulated deficit	(1,006,308		)	(1,088,204		)
Accumulated other comprehensive income (loss)	29,936			31,844
Total Groupon, Inc. Stockholders' Equity	348,722			250,973
Noncontrolling interests	1,650			872
Total Equity	350,372			251,845
Total Liabilities and Equity	$	1,502,928		$	1,677,505

See Notes to Condensed Consolidated Financial Statements.

4

GROUPON, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share amounts)

(unaudited)

	Three Months Ended March 31,
	2018			2017
Revenue:
Service	$	301,797		$	301,577
Product	324,743			372,049
Total revenue	626,540			673,626
Cost of revenue:
Service	31,145			42,873
Product	270,510			321,302
Total cost of revenue	301,655			364,175
Gross profit	324,885			309,451
Operating expenses:
Marketing	99,156			86,342
Selling, general and administrative	222,061			232,058
Restructuring charges	283			2,731
Total operating expenses	321,500			321,131
Income (loss) from operations	3,385			(11,680		)
Other income (expense), net	(8,515		)	(4,602		)
Income (loss) from continuing operations before provision (benefit) for income taxes	(5,130		)	(16,282		)
Provision (benefit) for income taxes	(2,335		)	4,587
Income (loss) from continuing operations	(2,795		)	(20,869		)
Income (loss) from discontinued operations, net of tax	—			487
Net income (loss)	(2,795		)	(20,382		)
Net income attributable to noncontrolling interests	(4,093		)	(4,032		)
Net income (loss) attributable to Groupon, Inc.	$	(6,888	)	$	(24,414	)
Basic and diluted net income (loss) per share:
Continuing operations	$	(0.01	)	$	(0.04	)
Discontinued operations	0.00			0.00
Basic and diluted net income (loss) per share	$	(0.01	)	$	(0.04	)
Weighted average number of shares outstanding
Basic	561,735,937			562,195,243
Diluted	561,735,937			562,195,243

See Notes to Condensed Consolidated Financial Statements.

5

GROUPON, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands)

(unaudited)

	Three Months Ended March 31,
	2018			2017
Income (loss) from continuing operations	$	(2,795	)	$	(20,869	)
Other comprehensive income (loss) from continuing operations:
Net change in unrealized gain (loss) on foreign currency translations adjustments	(1,568		)	430
Reclassification adjustments related to defined benefit pension plan	—			585
Net change in unrealized gain (loss) on available-for-sale securities (net of tax effect of $0 and $147 for the three months ended March 31, 2018 and 2017, respectively)	(501		)	239
Other comprehensive income (loss) from continuing operations	(2,069		)	1,254
Comprehensive income (loss) from continuing operations	(4,864		)	(19,615		)
Income (loss) from discontinued operations	—			487
Other comprehensive income (loss) from discontinued operations - Foreign currency translation adjustments:
Net unrealized gain (loss) during the period	—			(1,793		)
Reclassification adjustment included in net income (loss) from discontinued operations	—			(14,718		)
Net change in unrealized gain (loss)	—			(16,511		)
Comprehensive income (loss) from discontinued operations	—			(16,024		)
Comprehensive income (loss)	(4,864		)	(35,639		)
Comprehensive income (loss) attributable to noncontrolling interests	(4,093		)	(4,032		)
Comprehensive income (loss) attributable to Groupon, Inc.	$	(8,957	)	$	(39,671	)

See Notes to Condensed Consolidated Financial Statements.

6

GROUPON, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(in thousands, except share amounts)

(unaudited)

	Groupon, Inc. Stockholders' Equity
	Common Stock				Additional Paid-In Capital			Treasury Stock					Accumulated Deficit			Accumulated Other Comprehensive Income (Loss)			Total Groupon, Inc. Stockholders' Equity			Non-controlling Interests			Total Equity
	Shares		Amount					Shares		Amount
Balance at December 31, 2017	748,541,862		$	75	$	2,174,708		(188,602,242	)	$	(867,450	)	$	(1,088,204	)	$	31,844		$	250,973		$	872		$	251,845
Cumulative effect of change in accounting principle, net of tax	—		—		—			—		—			88,945			—			88,945			—			88,945
Reclassification for impact of U.S. tax rate change	—		—		—			—		—			(161		)	161			—			—			—
Net income (loss)	—		—		—			—		—			(6,888		)	—			(6,888		)	4,093			(2,795		)
Foreign currency translation	—		—		—			—		—			—			(1,568		)	(1,568		)	—			(1,568		)
Unrealized gain (loss) on available-for-sale securities, net of tax	—		—		—			—		—			—			(501		)	(501		)	—			(501		)
Exercise of stock options	2,400		—		6			—		—			—			—			6			—			6
Vesting of restricted stock units and performance share units	4,157,462		—		—			—		—			—			—			—			—			—
Shares issued under employee stock purchase plan	746,773		—		2,434			—		—			—			—			2,434			—			2,434
Shares issued to settle liability-classified awards	1,240,379		—		6,436			—		—			—			—			6,436			—			6,436
Tax withholdings related to net share settlements of stock-based compensation awards	(2,024,590	)	—		(9,355		)	—		—			—			—			(9,355		)	—			(9,355		)
Stock-based compensation on equity-classified awards	—		—		18,240			—		—			—			—			18,240			—			18,240
Distributions to noncontrolling interest holders	—		—		—			—		—			—			—			—			(3,315		)	(3,315		)
Balance at March 31, 2018	752,664,286		$	75	$	2,192,469		(188,602,242	)	$	(867,450	)	$	(1,006,308	)	$	29,936		$	348,722		$	1,650		$	350,372

See Notes to Condensed Consolidated Financial Statements.

7

GROUPON, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

	Three Months Ended March 31,
	2018			2017
Operating activities
Net income (loss)	$	(2,795	)	$	(20,382	)
Less: Income (loss) from discontinued operations, net of tax	—			487
Income (loss) from continuing operations	(2,795		)	(20,869		)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization of property, equipment and software	26,721			28,667
Amortization of acquired intangible assets	2,940			5,400
Stock-based compensation	19,326			19,701
Deferred income taxes	(6,575		)	(74		)
(Gain) loss from changes in fair value of investments	5,033			(303		)
Impairment of investment	855			—
Amortization of debt discount on convertible senior notes	2,866			2,587
Change in assets and liabilities, net of acquisitions and dispositions:
Accounts receivable	17,623			10,594
Prepaid expenses and other current assets	9,601			5,380
Accounts payable	(8,341		)	(13,184		)
Accrued merchant and supplier payables	(143,330		)	(138,238		)
Accrued expenses and other current liabilities	(41,564		)	(36,040		)
Other, net	(2,107		)	(1,707		)
Net cash provided by (used in) operating activities from continuing operations	(119,747		)	(138,086		)
Net cash provided by (used in) operating activities from discontinued operations	—			(1,098		)
Net cash provided by (used in) operating activities	(119,747		)	(139,184		)
Investing activities
Purchases of property and equipment and capitalized software	(20,144		)	(14,076		)
Acquisitions of intangible assets and other investing activities	(238		)	56
Net cash provided by (used in) investing activities from continuing operations	(20,382		)	(14,020		)
Net cash provided by (used in) investing activities from discontinued operations	—			(7,547		)
Net cash provided by (used in) investing activities	(20,382		)	(21,567		)
Financing activities
Payments for purchases of treasury stock	—			(27,234		)
Taxes paid related to net share settlements of stock-based compensation awards	(9,179		)	(8,970		)
Proceeds from stock option exercises and employee stock purchase plan	2,434			2,468
Distributions to noncontrolling interest holders	(3,315		)	(3,450		)
Payments of capital lease obligations	(9,024		)	(8,067		)
Payments of contingent consideration related to acquisitions	(1,815		)	—
Other financing activities	—			(473		)
Net cash provided by (used in) financing activities	(20,899		)	(45,726		)
Effect of exchange rate changes on cash, cash equivalents and restricted cash, including cash classified within current assets of discontinued operations	6,191			3,973
Net increase (decrease) in cash, cash equivalents and restricted cash, including cash classified within current assets of discontinued operations	(154,837		)	(202,504		)
Less: Net increase (decrease) in cash classified within current assets of discontinued operations	—			(28,866		)
Net increase (decrease) in cash, cash equivalents and restricted cash	(154,837		)	(173,638		)
Cash, cash equivalents and restricted cash, beginning of period	885,481			874,906
Cash, cash equivalents and restricted cash, end of period	$	730,644		$	701,268

Non-cash investing and financing activities
Continuing operations:
Equipment acquired under capital lease obligations	1,470		1,340
Increase (decrease) in liabilities related to purchases of property and equipment and capitalized software	(1,022	)	(1,185	)
Investments acquired in connection with business dispositions	—		2,022

See Notes to Condensed Consolidated Financial Statements.

8

GROUPON, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Company Information

Groupon, Inc. and subsidiaries (the "Company"), which commenced operations in October 2008, operates online local commerce marketplaces throughout the world that connect merchants to consumers by offering goods and services, generally at a discount. Customers access those marketplaces through the Company's websites, primarily localized groupon.com sites in many countries, and its mobile applications.

The Company's operations are organized into two segments: North America and International. See Note 15, Segment Information.

Unaudited Interim Financial Information

The Company has prepared the accompanying condensed consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") for interim financial reporting. These condensed consolidated financial statements are unaudited and, in the Company's opinion, include all adjustments, consisting of normal recurring adjustments and accruals, necessary for a fair presentation of the Company's condensed consolidated balance sheets, statements of operations, comprehensive income (loss), cash flows and stockholders' equity for the periods presented. Operating results for the periods presented are not necessarily indicative of the results to be expected for the full year ending December 31, 2018. Certain information and disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") have been omitted in accordance with the rules and regulations of the SEC. These condensed consolidated financial statements and notes should be read in conjunction with the audited consolidated financial statements and notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2017, filed with the SEC on February 14, 2018, as amended by the Form 10-K/A for the year ended December 31, 2017, filed with the SEC on March 23, 2018.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The Company's condensed consolidated financial statements were prepared in accordance with U.S. GAAP and include the assets, liabilities, revenue and expenses of all wholly-owned subsidiaries and majority-owned subsidiaries over which the Company exercises control and variable interest entities for which the Company has determined that it is the primary beneficiary. Outside stockholders' interests in subsidiaries are shown on the condensed consolidated financial statements as Noncontrolling interests. Equity investments in entities in which the Company does not have a controlling financial interest are accounted for under the equity method, the fair value option, as available-for-sale securities or at cost adjusted for observable price changes and impairments, as appropriate.

Reclassifications and Terminology Changes

Certain reclassifications have been made to the condensed consolidated financial statements of prior periods and the accompanying notes to conform to the current period presentation, including the change in presentation of restricted cash in the condensed consolidated statements of cash flows upon adoption of ASU 2016-18. Refer to Note 2, Adoption of New Accounting Standards, for additional information. Additionally, in prior periods, the Company referred to its product revenue and service revenue as "direct revenue" and "third-party and other revenue," respectively. This terminology change did not impact the amounts presented in the condensed consolidated financial statements.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires estimates and assumptions that affect the reported amounts and classifications of assets and liabilities, revenue and expenses, and the related disclosures of contingent liabilities in the condensed consolidated financial statements and accompanying notes. Estimates are used for, but not limited to, variable consideration from unredeemed vouchers, income taxes, valuation of goodwill and intangible assets, investments, customer refunds, contingent liabilities and the useful lives of property, equipment and software and intangible assets. Actual results could differ materially from those estimates.

9

2. ADOPTION OF NEW ACCOUNTING STANDARDS

The Company adopted the guidance in ASC Topic 606, Revenue from Contracts with Customers, on January 1, 2018. Topic 606 is a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. See Changes to Accounting Policies from Adoption of New Accounting Standards below and Note 10, Revenue Recognition, for information on the impact of adopting Topic 606 on the Company's accounting policies.

The Company adopted the guidance in ASU 2016-01, Financial Instruments (Topic 825-10) - Recognition and Measurement of Financial Assets and Financial Liabilities, as amended, on January 1, 2018. This ASU generally requires equity investments to be measured at fair value with changes in fair value recognized through net income and eliminates the cost method for equity securities. However, for equity investments without readily determinable fair values the ASU permits entities to elect to measure the investments at cost adjusted for observable price changes and impairments, with changes in the measurement recognized through net income. We applied that measurement alternative to our equity investments that were previously accounted for under the cost method. The adoption of ASU 2016-01 did not have a material impact on the condensed consolidated financial statements. See Changes to Accounting Policies from Adoption of New Accounting Standards below for additional information on the impact of adopting the ASU on the Company's accounting policies.

The Company adopted the guidance in ASU 2016-18, Statement of Cash Flows (Topic 230) - Restricted Cash, on January 1, 2018. This ASU requires companies to include amounts generally described as restricted cash and restricted cash equivalents, along with cash and cash equivalents, when reconciling the beginning-of-period and end-of-period amounts shown on the statement of cash flows. Previously, changes in restricted cash were reported within cash flows from operating activities. The Company applied that change in cash flow classification on a retrospective basis, which resulted in an increase of $1.6 million to net cash used in operating activities for the three months ended March 31, 2017.

Restricted cash primarily represents amounts that the Company is unable to access for operational purposes pursuant to letters of credit with financial institutions. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheet to amounts shown in the condensed consolidated statements of cash flows, as of March 31, 2018 and 2017 and December 31, 2017 (in thousands):

	March 31, 2018		March 31, 2017		December 31, 2017
Cash and cash equivalents	$	725,909	$	690,975	$	880,129
Restricted cash included in prepaid expenses and other current assets	4,332		5,250		4,932
Restricted cash included in other non-current assets	403		5,043		420
Cash, cash equivalents and restricted cash	$	730,644	$	701,268	$	885,481

The Company adopted the guidance in ASU 2017-05, Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20) - Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets, on January 1, 2018. This ASU is meant to clarify the scope of ASC Subtopic 610-20, Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets, and to add guidance for partial sales of nonfinancial assets. The adoption of ASU 2017-05 did not have a material impact on the condensed consolidated financial statements.

The Company adopted the guidance in ASU 2017-07, Compensation - Retirement Benefits (Topic 715) - Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, on January 1, 2018. This ASU requires employers to include only the service cost component of net periodic pension cost in operating expenses, together with other employee compensation costs. The other components of net periodic pension cost, including interest cost, expected return on plan assets, amortization of prior service cost and settlement and curtailment effects, are to be included in non-operating expenses. The adoption of ASU 2017-07 did not have a material impact on the condensed consolidated financial statements.

The Company adopted the guidance in ASU 2017-09, Compensation - Stock Compensation (Topic 718) - Scope of Modification Accounting, on January 1, 2018. This ASU clarifies the changes to terms or conditions of a share-based payment award that require an entity to apply modification accounting. The adoption of ASU 2017-09 did not have a material impact on the condensed consolidated financial statements.

The Company adopted the guidance in ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220) - Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, as of January 1, 2018. This ASU permits a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act (the "Jobs Act"). As a result of the adoption of ASU 2018-02, the Company reclassified $0.2 million from accumulated other comprehensive income (loss) to accumulated deficit.

Changes to Accounting Policies from Adoption of New Accounting Standards

Revenue Recognition

Prior to its adoption of Topic 606, the Company recognized revenue when the following criteria were met: persuasive evidence of an arrangement existed; delivery had occurred; the selling price was fixed or determinable and collection was reasonably assured. Following its adoption of Topic 606, the Company recognizes revenue when it satisfies a performance obligation by transferring a promised good or service to a customer. Substantially all of the Company's performance obligations are satisfied at a point in time rather than over time.

Product Revenue

The Company generates product revenue from direct sales of merchandise inventory through its Goods category. For product revenue transactions, the Company is the primary party responsible for providing the good to the customer, it has inventory risk and it has discretion in establishing prices. As such, product revenue is reported on a gross basis as the purchase price received from the customer. Product revenue, including associated shipping revenue, is recognized when title passes to the customer upon delivery of the product.

Service Revenue

Service revenue is primarily earned from transactions in which the Company earns commissions by selling goods or services on behalf of third-party merchants. Those transactions generally involve a customer's purchase of a voucher through one of the Company's online marketplaces that can be redeemed with a third-party merchant for specified goods or services (or for discounts on specified goods or services). Service revenue from those transactions is reported on a net basis as the purchase price collected from the customer less the portion of the purchase price that is payable to the third-party merchant. The Company recognizes revenue from those transactions when its commission has been earned, which occurs when a sale through one of the Company's online marketplaces is completed and the related voucher has been made available to the customer. The Company believes that its remaining obligations to remit payment to the merchant and to provide information about vouchers sold are administrative activities that are immaterial in the context of the contract with the merchant. Prior to its adoption of Topic 606, the Company deferred the revenue from hotel reservation offerings until the customer's stay commenced. Following its adoption of Topic 606, revenue from hotel reservation offerings is recognized at the time the reservation is made, net of an allowance for estimated cancellations.

The Company also earns commissions when customers make purchases with retailers using digital coupons accessed through its websites and mobile applications and from voucherless merchant offerings in which customers earn cash back on their credit card statements when they transact with third-party merchants. The Company recognizes those commissions as revenue in the period in which the underlying transactions between the customer and the third-party merchant are completed.

Variable Consideration for Unredeemed Vouchers

For merchant agreements with redemption payment terms, the merchant is not paid its share of the sale price for a voucher sold through one of the Company's online marketplaces until the customer redeems the related voucher. If the customer does not redeem a voucher with such merchant payment terms, the Company retains all of the gross billings for that voucher, rather than retaining only its net commission. Prior to its adoption of Topic 606, the Company recognized that variable consideration from unredeemed vouchers and derecognized the related accrued merchant payables when its legal obligation to the merchant expired, which the Company believes is shortly after the voucher expiration date in most jurisdictions. Following its adoption of Topic 606, the Company estimates the variable consideration from vouchers that will not ultimately be redeemed and recognizes that amount as revenue at the time of sale, rather than when the Company's legal obligation expires. The Company estimates variable consideration from unredeemed vouchers using its historical voucher redemption experience. If actual redemptions differ from the Company's estimates, the effects could be material to the condensed consolidated financial statements.

Refunds

Prior to the adoption of Topic 606, refunds were recorded as a reduction of revenue, except for refunds on service revenue transactions for which the merchant's share was not recoverable, which were presented as a cost of revenue. Following the adoption of Topic 606, all refunds are recorded as a reduction of revenue. The liability for estimated refunds is included within Accrued expenses and other current liabilities on the consolidated balance sheets.

The Company estimates its refund reserve using historical refund experience by deal category. The Company assesses the trends that could affect its estimates on an ongoing basis and makes adjustments to the refund reserve calculations if it appears that changes in circumstances, including changes to the Company's refund policies or general economic conditions, may cause future refunds to differ from its initial estimates. If actual refunds differ from the Company's estimates, the effects could be material to the condensed consolidated financial statements.

Discounts, Customer Credits and Other Consideration Payable to Customers

The Company provides discount offers to encourage purchases of goods and services through its online marketplaces. The Company records discounts as a reduction of revenue.

Additionally, the Company issues credits to customers that can be applied to future purchases through its online marketplaces. Credits are primarily issued as consideration for refunds. To a lesser extent, credits are issued for customer relationship purposes. Credits issued to satisfy refund requests are applied as a reduction to the refunds reserve. Prior to the adoption of Topic 606, customer credits issued for relationship purposes were classified in the condensed consolidated statement of operations as a marketing expense. Following the adoption of Topic 606, customer credits issued for relationship purposes are classified as a reduction of revenue.

Prior to its adoption of Topic 606, the Company recognized breakage income for unused customer credits when they expired or were forfeited. Following its adoption of Topic 606, breakage income from customer credits that are not expected to be used is estimated and recognized as revenue in proportion to the pattern of redemption for customer credits that are used.

Sales and Related Taxes

Sales, use, value-added and related taxes that are imposed on specific revenue-generating transactions are presented on a net basis and excluded from revenue.

Costs of Obtaining Contracts

Prior to its adoption of Topic 606, the Company expensed the incremental costs to obtain contracts with third-party merchants, such as sales commissions, as incurred. Following its adoption of Topic 606, those costs are deferred and recognized over the expected period of the merchant arrangement, generally from 12 to 18 months. As of March 31, 2018, the Company had $3.9 million and $12.5 million of deferred contract acquisition costs recorded within Prepaid and other current assets and Other non-current assets, respectively. For the three months ended March 31, 2018, the Company amortized $6.8 million of deferred contract acquisition costs and did not recognize any impairment losses in relation to the deferred costs. Those costs are classified within Selling, general and administrative expenses in the condensed consolidated statements of operations.

Cost of Revenue

Cost of revenue is comprised of direct and certain indirect costs incurred to generate revenue. Costs incurred to generate revenue, which include credit card processing fees, editorial costs, compensation expense for technology support personnel who are responsible for maintaining the infrastructure of the Company's websites, amortization of internal-use software relating to customer-facing applications, web hosting and other processing fees are attributed to the cost of service and product revenue in proportion to gross billings during the period. For product revenue transactions, cost of revenue also includes the cost of inventory, shipping and fulfillment costs and inventory markdowns. Fulfillment costs are comprised of third-party logistics provider costs, as well as rent, depreciation, personnel costs and other costs of operating the Company's fulfillment center. Prior to adoption of Topic 606, cost of revenue on service revenue transactions also included refunds for which the merchant's share was not recoverable.

Financial Instruments

Prior to the adoption of the guidance in ASU 2016-01, investments in nonmarketable equity shares with no redemption provisions that are not common stock or in-substance common stock or for which the Company does not have the ability to exercise significant influence were accounted for using the cost method of accounting and are classified within Investments on the consolidated balance sheets. Under the cost method of accounting, investments were carried at cost and adjusted only for other-than-temporary declines in fair value, certain distributions and additional investments. Subsequent to the adoption of the guidance in ASU 2016-01, the Company applies a measurement alternative for equity investments without readily determinable fair values that permits entities to elect to measure the investments at cost adjusted for observable price changes and impairments, with changes in the measurement recognized through net income.

3. DISCONTINUED OPERATIONS AND OTHER BUSINESS DISPOSITIONS

In October 2016, the Company completed a strategic review of its international markets in connection with its efforts to optimize its global footprint and focus on the markets that it believes have the greatest potential to benefit the Company's long-term financial performance. Based on that review, the Company decided to focus its business on 15 core countries and to pursue strategic alternatives for its operations in the remaining 11 countries, which were primarily based in Asia and Latin America. The dispositions of the Company's operations in those 11 countries were completed between November 2016 and March 2017.

A business disposition that represents a strategic shift and has (or will have) a major effect on an entity's operations and financial results is reported as a discontinued operation. The Company determined that the decision reached by its management and Board of Directors to exit those 11 non-core countries, which comprised a substantial majority of its operations outside of North America and EMEA, represented a strategic shift in its business. Additionally, based on its review of quantitative and qualitative factors relevant to the dispositions, the Company determined that the disposition of the businesses in those countries would have a major effect on its operations and financial results. As such, the results of operations and cash flows for its operations in those countries, including the gains and losses on the dispositions and related income tax effects, are presented as discontinued operations in the accompanying condensed consolidated financial statements for the three months ended March 31, 2018 and 2017.

Dispositions Completed in 2017

In connection with its strategic initiative to exit non-core countries as discussed above, the Company sold an 83% controlling stake in its subsidiary in Israel and sold its subsidiaries in Argentina, Chile, Colombia, Peru, Mexico, Brazil, Singapore and Hong Kong during the three months ended March 31, 2017. The Company recognized a net pretax loss on those dispositions of $1.3 million, which consisted of the following (in thousands):

	Three Months Ended March 31, 2017
Net consideration received:
Fair value of minority investments retained or acquired	$	2,021
Cash proceeds received	3,462
Cash proceeds receivable	2,000
Less: transaction costs	1,394
Total net consideration received	6,089
Cumulative translation gain reclassified to earnings	14,718
Less: Net book value upon closing of the transactions	14,596
Less: Indemnification liabilities (1)	5,365
Less: Unfavorable contract liability for transition services	2,114
Loss on dispositions	$	(1,268	)

(1) See Note 8, Commitments and Contingencies, for additional information about the indemnification liabilities.

10

GROUPON, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Results of Discontinued Operations and Assets and Liabilities of Discontinued Operations

The following table summarizes the major classes of line items included in income (loss) from discontinued operations, net of tax, for the three months ended March 31, 2017 (in thousands):

	Three Months Ended March 31, 2017 (1)
Service revenue	$	12,602
Product revenue	2,962
Service cost of revenue	(2,557		)
Product cost of revenue	(3,098		)
Marketing expense	(1,239		)
Selling, general and administrative expense	(9,908		)
Restructuring	(778		)
Other income, net	3,852
Income (loss) from discontinued operations before loss on dispositions and provision for income taxes	1,836
Loss on dispositions	(1,268		)
Provision for income taxes	(81		)
Income (loss) from discontinued operations, net of tax	$	487

(1) The income (loss) from discontinued operations before loss on dispositions and provision for income taxes for the three months ended March 31, 2017 includes the results of each business through its respective disposition date.

4. GOODWILL AND OTHER INTANGIBLE ASSETS

The following table summarizes the Company's goodwill activity by segment for the three months ended March 31, 2018 (in thousands):

	North America		International		Consolidated
Balance as of December 31, 2017	$	178,685	$	108,304	$	286,989
Foreign currency translation	—		2,956		2,956
Balance as of March 31, 2018	$	178,685	$	111,260	$	289,945

The following table summarizes the Company's intangible assets as of March 31, 2018 and December 31, 2017 (in thousands):

	March 31, 2018						December 31, 2017
Asset Category	Gross Carrying Value		Accumulated Amortization		Net Carrying Value		Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Customer relationships	$	57,573	$	48,845	$	8,728	$	56,749	$	46,513	$	10,236
Merchant relationships	11,755		10,302		1,453		11,598		9,853		1,745
Trade names	12,212		10,891		1,321		12,077		10,469		1,608
Developed technology	37,045		37,045		—		36,864		36,864		—
Patents	19,697		15,563		4,134		19,031		15,204		3,827
Other intangible assets	10,757		9,468		1,289		10,875		9,095		1,780
Total	$	149,039	$	132,114	$	16,925	$	147,194	$	127,998	$	19,196

11

GROUPON, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Amortization of intangible assets is computed using the straight-line method over their estimated useful lives, which range from 1 to 5 years. Amortization expense related to intangible assets was $2.9 million and $5.4 million for the three months ended March 31, 2018 and 2017, respectively. As of March 31, 2018, the Company's estimated future amortization expense related to intangible assets is as follows (in thousands):

Remaining amounts in 2018	$	7,870
2019	6,790
2020	1,280
2021	641
2022	325
Thereafter	19
Total	$	16,925

5. INVESTMENTS

The following table summarizes the Company's investments as of March 31, 2018 and December 31, 2017 (dollars in thousands):

	March 31, 2018		Percent Ownership of Voting Stock			December 31, 2017		Percent Ownership of Voting Stock
Available-for-sale securities:
Convertible debt securities	$	11,070				$	11,354
Redeemable preferred shares	14,576		19%	to	25%	15,431		19%	to	25%
Total available-for-sale securities	25,646					26,785
Fair value option investments	77,933		10%	to	19%	82,966		10%	to	19%
Other equity investments (1)	25,794		1%	to	19%	25,438		1%	to	19%
Total investments	$	129,373				$	135,189

(1) Represents equity investments without readily determinable fair values. Those investments were previously accounted for using the cost method of accounting. Under the cost method, investments were carried at cost and adjusted only for other-than-temporary declines in fair value, certain distributions and additional investments. The Company adopted the guidance in ASU 2016-01 on January 1, 2018. Under that guidance, the Company has elected to record equity investments without readily determinable fair values at cost adjusted for observable price changes and impairments. There were no adjustments for observable price changes or impairments related to these investments for the three months ended March 31, 2018.

The following table summarizes the amortized cost, gross unrealized gain, gross unrealized loss and fair value of the Company's available-for-sale securities as of March 31, 2018 and December 31, 2017 (in thousands):

	March 31, 2018									December 31, 2017
	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss (1)			Fair Value		Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss (1)			Fair Value
Available-for-sale securities:
Convertible debt securities	$	10,422	$	1,176	$	(528	)	$	11,070	$	10,205	$	1,653	$	(504	)	$	11,354
Redeemable preferred shares	14,576		—		—			14,576		15,431		—		—			15,431
Total available-for-sale securities	$	24,998	$	1,176	$	(528	)	$	25,646	$	25,636	$	1,653	$	(504	)	$	26,785

(1) Gross unrealized loss is related to one security that was in a loss position for greater than 12 months as of March 31, 2018 and December 31, 2017.

12

GROUPON, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Fair Value Option Investments    

In connection with the dispositions of controlling stakes in Ticket Monster, an entity based in the Republic of Korea, in May 2015 and Groupon India in August 2015, the Company obtained minority investments in Monster Holdings LP ("Monster LP") and in Nearbuy Pte Ltd. ("Nearbuy"), respectively. The Company has made an irrevocable election to account for both of those investments at fair value with changes in fair value reported in earnings. The Company elected to apply fair value accounting to those investments because it believes that fair value is the most relevant measurement attribute for those investments, as well as to reduce operational and accounting complexity.

The Company determined that the fair value of its investments in Monster LP and Nearbuy was $73.7 million and $4.2 million, respectively, as of March 31, 2018 and $78.9 million and $4.0 million, respectively, as of December 31, 2017. For the three months ended March 31, 2018, the Company recognized a loss of $5.2 million and a gain of $0.2 million from changes in the fair value of its investments in Monster LP and Nearbuy, respectively. For the three months ended March 31, 2017, the Company recognized a gain of $2.4 million and a loss of $2.1 million from changes in the fair value of its investments in Monster LP and Nearbuy, respectively.

6. SUPPLEMENTAL CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF OPERATIONS INFORMATION

The following table summarizes the Company's other income (expense), net for the three months ended March 31, 2018 and 2017 (in thousands):

	Three Months Ended March 31,
	2018			2017
Interest income	$	1,509		$	602
Interest expense	(5,493		)	(5,319		)
Gains (losses), net on changes in fair value of investments	(5,033		)	303
Foreign currency gains (losses), net	1,398			51
Impairment of investment	(855		)	—
Other	(41		)	(239		)
Other income (expense), net	$	(8,515	)	$	(4,602	)

The following table summarizes the Company's prepaid expenses and other current assets as of March 31, 2018 and December 31, 2017 (in thousands):

	March 31, 2018		December 31, 2017
Merchandise inventories	$	24,771	$	25,528
Prepaid expenses	34,668		40,399
Income taxes receivable	9,918		10,299
Other	19,925		17,799
Total prepaid expenses and other current assets	$	89,282	$	94,025

The following table summarizes the Company's accrued merchant and supplier payables as of March 31, 2018 and December 31, 2017 (in thousands):

	March 31, 2018		December 31, 2017
Accrued merchant payables	$	395,085	$	459,662
Accrued supplier payables (1)	173,485		310,673
Total accrued merchant and supplier payables	$	568,570	$	770,335

(1) Amounts include payables to suppliers of inventories and providers of shipping and fulfillment services.

13

GROUPON, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

The following table summarizes the Company's accrued expenses and other current liabilities as of March 31, 2018 and December 31, 2017 (in thousands):

	March 31, 2018		December 31, 2017
Refunds reserve	$	29,434	$	31,275
Compensation and benefits	47,255		73,096
Customer credits	18,761		28,487
Income taxes payable	12,239		9,645
Deferred revenue	22,185		29,539
Current portion of capital lease obligations	22,023		25,958
Other	114,023		133,196
Total accrued expenses and other current liabilities	$	265,920	$	331,196

The following table summarizes the Company's other non-current liabilities as of March 31, 2018 and December 31, 2017 (in thousands):

	March 31, 2018		December 31, 2017
Contingent income tax liabilities	$	45,469	$	43,699
Capital lease obligations	15,448		18,500
Deferred income taxes	880		811
Other	40,250		39,398
Total other non-current liabilities	$	102,047	$	102,408

The following table summarizes the components of accumulated other comprehensive income (loss) as of March 31, 2018 and December 31, 2017 (in thousands):

	Foreign currency translation adjustments			Unrealized gain (loss) on available-for-sale securities			Total
Balance as of December 31, 2017	$	30,962		$	882		$	31,844
Reclassification for impact of U.S. tax rate change	—			161			161
Other comprehensive income (loss)	(1,568		)	(501		)	(2,069		)
Balance as of March 31, 2018	$	29,394		$	542		$	29,936

7. FINANCING ARRANGEMENTS

Convertible Senior Notes

On April 4, 2016, the Company issued $250.0 million in aggregate principal amount of convertible senior notes (the "Notes") in a private placement to A-G Holdings, L.P. ("AGH"). Michael Angelakis, the chairman and chief executive officer of Atairos Group, Inc. ("Atairos"), joined the Company's Board of Directors in connection with the issuance of the Notes. Atairos controls the voting power of AGH. The net proceeds from this offering were $243.2 million after deducting issuance costs. The Notes bear interest at a rate of 3.25% per annum, payable annually in arrears on April 1 of each year, beginning on April 1, 2017. The Notes will mature on April 1, 2022, subject to earlier conversion or redemption.

Each $1,000 of principal amount of the Notes initially is convertible into 185.1852 shares of common stock, which is equivalent to an initial conversion price of $5.40 per share, subject to adjustment upon the occurrence of specified events. Upon conversion, the Company can elect to settle the conversion value in cash, shares of its common stock, or any combination of cash and shares of its common stock. Holders of the Notes may convert their Notes at their option at any time until the close of business on the scheduled trading day immediately preceding the maturity date. In addition, if specified corporate events occur prior to the maturity date, the Company may be required to increase the conversion rate for holders who elect to convert based on the effective date of such event and the applicable stock price attributable to the event, as set forth in a table contained in the indenture governing the Notes (the "Indenture"). Based on the closing price of the Company's common stock of $4.34 as of March 31, 2018, the if-converted value of the Notes was less than the principal amount.

With certain exceptions, upon a fundamental change (as defined in the Indenture), the holders of the Notes may require the Company to repurchase all or a portion of their Notes for cash at a purchase price equal to the principal amount plus accrued and unpaid interest. In addition, the Company may redeem the Notes, at its option, at a purchase price equal to the principal amount plus accrued and unpaid interest on or after April 1, 2020, if the closing sale price of the common stock exceeds 150% of the then-current conversion price for 20 or more trading days in the 30 consecutive trading day period preceding the Company’s exercise of this redemption right.

The Notes are senior unsecured obligations of the Company that rank equal in right of payment to all senior unsecured indebtedness of the Company and rank senior in right of payment to any indebtedness that is contractually subordinated to the Notes.

The Indenture includes customary events of default. If an event of default, as defined in the Indenture, occurs and is continuing, the principal amount of the Notes and any accrued and unpaid interest may be declared immediately due and payable. In the case of bankruptcy or insolvency, the principal amount of the Notes and any accrued and unpaid interest would automatically become immediately due and payable.

The Company has separated the Notes into their liability and equity components in the accompanying condensed consolidated balance sheet. The carrying amount of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated conversion feature. The carrying amount of the equity component, representing the conversion option, was determined by deducting the fair value of the liability component from the principal amount of the Notes. The difference between the principal amount of the Notes and the liability component (the "debt discount") is amortized to interest expense at an effective interest rate of 9.75% over the term of the Notes. The equity component of the Notes is included in additional paid-in capital in the condensed consolidated balance sheet and is not remeasured as long as it continues to meet the conditions for equity classification.

The Company incurred transaction costs of approximately $6.8 million related to the issuance of the Notes. Those transaction costs were allocated to the liability and equity components in the same manner as the allocation of the proceeds from the Notes. Transaction costs attributable to the liability component of $4.8 million were recorded as a debt discount in the condensed consolidated balance sheet and are being amortized to interest expense over the term of the Notes. Transaction costs attributable to the equity component of $2.0 million were recorded in stockholders' equity as a reduction of the equity component.

The carrying amount of the Notes consisted of the following as of March 31, 2018 and December 31, 2017 (in thousands):

	March 31, 2018			December 31, 2017
Liability component:
Principal amount	$	250,000		$	250,000
Less: debt discount	(57,381		)	(60,247		)
Net carrying amount of liability component	$	192,619		$	189,753
Net carrying amount of equity component	$	67,014		$	67,014

The estimated fair value of the Notes as of March 31, 2018 and December 31, 2017 was $281.5 million and $285.6 million, respectively, and was determined using a lattice model. The Company classified the fair value of the Notes as a Level 3 measurement due to the lack of observable market data over fair value inputs such as its stock price volatility over the term of the Notes and its cost of debt.

As of March 31, 2018, the remaining term of the Notes is approximately four years. During the three months ended March 31, 2018 and 2017, the Company recognized interest expense on the Notes as follows (in thousands):

	Three Months Ended March 31,
	2018		2017
Contractual interest expense (3.25% of the principal amount per annum)	$	2,032	$	2,032
Amortization of debt discount	2,866		2,587
Total interest expense	$	4,898	$	4,619

Note Hedges and Warrants

In May 2016, the Company purchased convertible note hedges with respect to its common stock for a cost of $59.1 million from certain bank counterparties. The convertible note hedges provide the Company with the right to purchase up to 46.3 million shares of the Company's common stock at an initial strike price of $5.40 per share, which corresponds to the initial conversion price of the Notes, and are exercisable by the Company upon conversion of the Notes. The convertible note hedges are intended to reduce the potential economic dilution upon conversion of the Notes. The convertible note hedges are separate transactions and are not part of the terms of the Notes. Holders of the Notes do not have any rights with respect to the convertible note hedges.

In May 2016, the Company also sold warrants for total cash proceeds of $35.5 million to certain bank counterparties. The warrants provide the counterparties with the right to purchase up to 46.3 million shares of the Company's common stock at a strike price of $8.50 per share. The warrants expire on various dates between July 1, 2022 and August 26, 2022 and are exercisable on their expiration dates. The warrants are separate transactions and are not part of the terms of the Notes or convertible note hedges. Holders of the Notes and convertible note hedges do not have any rights with respect to the warrants.

The amounts paid and received for the convertible note hedges and warrants were recorded in additional paid-in capital in the condensed consolidated balance sheets as of March 31, 2018 and December 31, 2017. The convertible note hedges and warrants are not remeasured as long as they continue to meet the conditions for equity classification. The amounts paid for the convertible note hedges are tax deductible over the term of the Notes, while the proceeds received from the warrants are not taxable. 

Under the if-converted method, the shares of common stock underlying the conversion option in the Notes are included in the diluted earnings per share denominator and the interest expense on the Notes, net of tax, is added to the numerator. However, upon conversion, there will be no economic dilution from the Notes, as exercise of the convertible note hedges eliminates any dilution from the Notes that would have otherwise occurred when the price of the Company’s common stock exceeds the conversion price. Taken together, the purchase of the convertible note hedges and sale of warrants are intended to offset any actual dilution from the conversion of the Notes and to effectively increase the overall conversion price from $5.40 to $8.50 per share.

Revolving Credit Agreement

The Company's amended and restated senior secured revolving credit agreement (the "Amended and Restated Credit Agreement") provides for aggregate principal borrowings of up to $250.0 million and matures in June 2019. Borrowings under the Amended and Restated Credit Agreement bear interest, at the Company's option, at a rate per annum equal to the Alternate Base Rate or Adjusted LIBO Rate (each as defined in the Amended and Restated Credit Agreement) plus an additional margin ranging between 0.50% and 2.25%. The Company is required to pay quarterly commitment fees ranging from 0.25% to 0.40% per annum of the average daily amount of unused commitments available under the Amended and Restated Credit Agreement. The Amended and Restated Credit Agreement also provides for the issuance of up to $45.0 million in letters of credit, provided that the sum of outstanding borrowings and letters of credit do not exceed the maximum funding commitment of $250.0 million.

The Amended and Restated Credit Agreement is secured by substantially all of the Company's and its subsidiaries' tangible and intangible assets, including a pledge of 100% of the outstanding capital stock of substantially all of its direct and indirect domestic subsidiaries and 65% of the shares or equity interests of first-tier foreign subsidiaries and each U.S. entity whose assets substantially consist of capital stock and/or intercompany debt of one or more foreign subsidiaries, subject to certain exceptions. Certain of the Company's domestic subsidiaries are guarantors under the Amended and Restated Credit Agreement.

The Amended and Restated Credit Agreement contains various customary restrictive covenants that limit the Company's ability to, among other things: incur additional indebtedness; make dividend and other restricted payments, including share repurchases; enter into sale and leaseback transactions; make investments, loans or advances; grant or incur liens on assets; sell assets; engage in mergers, consolidations, liquidations or dissolutions; and engage in transactions with affiliates. The Amended and Restated Credit Agreement requires the Company to maintain compliance with specified financial covenants, comprised of a minimum fixed charge coverage ratio, a maximum leverage ratio, a maximum senior secured indebtedness ratio and a minimum liquidity ratio, each as set forth in the Amended and Restated Credit Agreement. The Company is also required to maintain, as of the last day of each fiscal quarter, unrestricted cash of at least $400.0 million, including $200.0 million in accounts held with lenders under the Amended and Restated Credit Agreement or their affiliates. Non-compliance with these covenants may result in termination of the commitments under the Amended and Restated Credit Agreement and any then outstanding borrowings may be declared due and payable immediately. The Company has the right to terminate the Amended and Restated Credit Agreement or reduce the available commitments at any time.

As of March 31, 2018 and December 31, 2017, the Company had no borrowings and had outstanding letters of credit of $23.4 million and $22.7 million, respectively, under the Amended and Restated Credit Agreement.

8. COMMITMENTS AND CONTINGENCIES

Except for the changes set forth below, the Company's commitments as of March 31, 2018 and through the date these condensed consolidated financial statements were issued did not materially change from the amounts set forth in the Company's 2017 Annual Report on Form 10-K.

Purchase Obligations

In the first quarter 2018, the Company entered into a non-cancelable arrangement for cloud computing services. As of March 31, 2018, future payments under that contractual obligation are as follows (in thousands):

2018	$	1,500
2019	3,400
2020	3,400
2021	3,400
2022	3,400
Total	$	15,100

Leases

In May 2018, the Company entered into a new office lease for one of its foreign locations. The future payments under that operating lease for each of the next five years and thereafter are as follows (in thousands):

2018	$	2,461
2019	2,749
2020	2,749
2021	2,749
2022	2,749
Thereafter	6,187
Total minimum lease payments	$	19,644

Legal Matters and Other Contingencies

From time to time, the Company is party to various legal proceedings incident to the operation of its business. For example, the Company currently is involved in proceedings brought by former employees and merchants, intellectual property infringement suits, customer lawsuits, consumer class actions and suits alleging, among other things, violations of state consumer protection or privacy laws. The following is a brief description of significant legal proceedings.

On March 2, 2016, International Business Machines Corporation ("IBM") filed a complaint in the United States District Court for the District of Delaware against the Company (the "Delaware Action"). In the Delaware Action, IBM alleges that the Company has infringed and continues to willfully infringe certain IBM patents that IBM claims relate to the presentation of applications and advertising in an interactive service, preserving state information in online transactions and single sign-on processes in a computing environment and seeks damages (including a request that the amount of compensatory damages be trebled), injunctive relief and costs and reasonable attorneys’ fees. On December 13, 2016, the Company filed a motion to invalidate two of IBM’s patents relating to the presentation of applications and advertising on the grounds that such patents are patent-ineligible. The court denied the motion on November 17, 2017. The court issued an order construing disputed terms in the patent claims on August 3, 2017. On March 24, 2017, the Company filed a petition for inter partes review with the United States Patent and Trademark Office seeking to invalidate IBM’s asserted patent related to single sign-on processes. IBM filed its preliminary response on July 6, 2017. The Patent Trial and Appeal Board denied the Company’s petition for review on October 2, 2017. The Company filed a Request for Rehearing and Reconsideration with the Patent Trial and Appeal Board on November 1, 2017, which was also denied. In the Delaware Action, the Company filed a motion on March 5, 2018 for summary judgment that it does not infringe the asserted patents and that IBM may not claim an earlier priority date for its patent relating to preserving state information in online transactions to overcome the Company’s challenge that the patent is invalid. The Company also filed a motion to exclude IBM’s damages expert's testimony, on the ground that the expert's opinions of IBM’s damages claim do not meet the requisite standard for expert testimony. On March 5, 2018, IBM moved for summary judgment that certain asserted claims of IBM’s patent relating to preserving state information in online transactions are not invalid, that certain prior art references raised by the Company do not anticipate or render obvious asserted claims of two of IBM’s patents, and that the Company cannot claim certain affirmative defenses. IBM filed a motion to preclude the Company’s damages or technical expert from referencing alternatives to the allegedly infringing technologies, but did not ask the court to exclude either of their testimonies in full. The parties participated in a mediation on the case before a federal magistrate judge in Delaware on April 3, 2018.  No settlement was reached at that mediation. A hearing on the parties' cross-motions for summary judgment, and on the parties’ respective challenges to expert witness testimony, subsequently was held on April 24, 2018 and the court has taken the motions under advisement. There is no set ruling date. Trial is scheduled to commence on July 16, 2018 in the Delaware Action. On May 9, 2016, the Company filed a complaint in the United States District Court for the Northern District of Illinois against IBM (the "Illinois Action"). The Company alleges that IBM has infringed and continues to willfully infringe one of the Company’s patents relating to location-based services. The Company intends to seek damages and injunctive relief for IBM’s infringement of this patent. On December 20, 2016, IBM filed a motion to dismiss this case, and the court denied that motion. The court held a Markman hearing on April 3, 2017, but has not yet construed the claims. On May 18, 2017, IBM filed two petitions for inter partes review with the United States Patent and Trademark Office seeking to invalidate the Company’s patent relating to location-based services. The Company filed its preliminary responses on September 6, 2017. The Patent Office denied one petition and instituted a review of the Company’s patent in response to the other petition, but such review did not include all claims requested by IBM. On May 1, 2018, the Patent Office stated that it would institute review of the claims that were not previously under review based on a recent Supreme Court decision (SAS Institute, Inc. v. Iancu) finding that the Patent Office must institute review of either all or none of claims petitioners seek to review. A trial date is not yet set in the Illinois Action. The Company plans to vigorously defend against the claims filed by IBM in the Delaware Action and the challenges to the Company’s patent in the Illinois Action.

In addition, other third parties have from time to time claimed, and others may claim in the future, that the Company has infringed their intellectual property rights. The Company is subject to intellectual property disputes, including patent infringement claims, and expects that it will increasingly be subject to intellectual property infringement claims as its services expand in scope and complexity. The Company has in the past litigated such claims, and the Company is presently involved in several patent infringement and other intellectual property-related claims (including the IBM matter described above), including pending litigation or trademark disputes relating to, for example, the Company's Goods category, some of which could involve potentially substantial claims for damages or injunctive relief. The Company may also become more vulnerable to third-party claims as laws such as the Digital Millennium Copyright Act are interpreted by the courts, and as the Company becomes subject to laws in jurisdictions where the underlying laws with respect to the potential liability of online intermediaries are either unclear or less favorable. The Company believes that additional lawsuits alleging that it has violated patent, copyright or trademark laws will be filed against it. Intellectual property claims, whether meritorious or not, are time consuming and often costly to resolve, could require expensive changes in the Company's methods of doing business or the goods it sells, or could require it to enter into costly royalty or licensing agreements.

The Company also is subject to consumer claims or lawsuits relating to alleged violations of consumer protection or privacy rights and statutes, some of which could involve potentially substantial claims for damages, including statutory or punitive damages. Consumer and privacy related claims or lawsuits, whether meritorious or not, could be time consuming, result in costly litigation, damage awards, fines and penalties, injunctive relief or increased costs of doing business through adverse judgment or settlement, or require the Company to change its business practices, sometimes in expensive ways.

The Company also is subject to, or in the future may become subject to, a variety of regulatory inquiries, audits, and investigations across the jurisdictions where the Company conducts its business, including, for example, inquiries related to consumer protection, employment matters and/or hiring practices, marketing practices, tax, unclaimed property and privacy rules and regulations. Any regulatory actions against the Company, whether meritorious or not, could be time consuming, result in costly litigation, damage awards, fines and penalties, injunctive relief or increased costs of doing business through adverse judgment or settlement, require the Company to change its business practices in expensive ways, require significant amounts of management time, result in the diversion of significant operational resources or otherwise harm the Company's business.

The Company establishes an accrued liability for loss contingencies related to legal and regulatory matters when the loss is both probable and reasonably estimable. Those accruals represent management's best estimate of probable losses and, in such cases, there may be an exposure to loss in excess of the amounts accrued. For certain of the matters described above, there are inherent and significant uncertainties based on, among other factors, the stage of the proceedings, developments in the applicable facts of law, or the lack of a specific damage claim. However, the Company believes that the amount of reasonably possible losses in excess of the amounts accrued for those matters would not have a material adverse effect on its business, consolidated financial position, results of operations or cash flows. The Company's accrued liabilities for loss contingencies related to legal and regulatory matters may change in the future as a result of new developments, including, but not limited to, the occurrence of new legal matters, changes in the law or regulatory environment, adverse or favorable rulings, newly discovered facts relevant to the matter, or changes in the strategy for the matter. Regardless of the outcome, litigation and other regulatory matters can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources and other factors.

Indemnifications

In connection with the dispositions of the Company's operations in Latin America (see Note 3, Discontinued Operations and Other Business Dispositions), the Company agreed to indemnify the buyer for certain tax and other matters. The indemnification liabilities were initially recorded at their fair value, estimated to be $5.4 million using a probability-weighted expected cash flow approach, upon closing of the transactions as an adjustment to the net loss on the dispositions within discontinued operations. The Company estimates that the total amount of obligations that are reasonably possible to arise under the indemnifications in excess of amounts accrued as of March 31, 2018 is approximately $19.0 million.

In the normal course of business to facilitate transactions related to its operations, the Company indemnifies certain parties, including employees, lessors, service providers, merchants, and counterparties to investment agreements and asset and stock purchase agreements with respect to various matters. The Company has agreed to hold certain parties harmless against losses arising from a breach of representations or covenants, or other claims made against those parties. These agreements may limit the time within which an indemnification claim can be made and the amount of the claim. The Company is also subject to increased exposure to various claims as a result of its divestitures and acquisitions, particularly in cases where the Company is entering into new businesses in connection with such acquisitions. The Company may also become more vulnerable to claims as it expands the range and scope of its services and is subject to laws in jurisdictions where the underlying laws with respect to potential liability are either unclear or less favorable. In addition, the Company has entered into indemnification agreements with its officers, directors and underwriters, and the Company's bylaws contain similar indemnification obligations that cover officers, directors, employees and other agents. 

Except as noted above, it is not possible to determine the maximum potential amount under these indemnification agreements due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. Historically, any payments that the Company has made under these agreements have not had a material impact on the operating results, financial position or cash flows of the Company.

9. STOCKHOLDERS' EQUITY AND COMPENSATION ARRANGEMENTS

The Company's Board of Directors (the "Board") has the authority, without approval by the stockholders, to issue up to a total of 50,000,000 shares of preferred stock in one or more series. The Board may establish the number of shares to be included in each such series and may fix the designations, preferences, powers and other rights of the shares of a series of preferred stock. The Board could authorize the issuance of preferred stock with voting or conversion rights that could dilute the voting power or rights of the holders of its common stock. As of March 31, 2018 and December 31, 2017, there were no shares of preferred stock outstanding.

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GROUPON, INC.

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(unaudited)

Common Stock

Pursuant to the Company's restated certificate of incorporation, the Board has the authority to issue up to a total of 2,010,000,000 shares of common stock. Each holder of common stock shall be entitled to one vote for each such share on any matter that is submitted to a vote of stockholders. In addition, holders of the common stock will vote as a single class of stock on any matter that is submitted to a vote of stockholders.

Share Repurchase Program

In May 2018, the Board authorized the Company to repurchase up to $300.0 million of its common stock under a new share repurchase program. The Company's prior share repurchase program expired in April 2018. During the three months ended March 31, 2018, the Company did not purchase any shares under that program. As of March 31, 2018 and upon its expiration the following month, up to $135.2 million of common stock remained available for purchase under that prior share repurchase program. The timing and amount of share repurchases, if any, will be determined based on market conditions, limitations under the Amended and Restated Credit Agreement, share price and other factors, and the share repurchase program may be terminated at any time.

Groupon, Inc. Stock Plans

The Groupon, Inc. Stock Plans (the "Plans") are administered by the Compensation Committee of the Board (the "Compensation Committee"), which determines the number of awards to be issued, the corresponding vesting schedule and the exercise price for options. As of March 31, 2018, 63,923,154 shares of common stock were available for future issuance under the Plans.

The stock-based compensation expense related to stock awards issued under the Plans and acquisition-related awards are presented within the following line items of the condensed consolidated statements of operations for the three months ended March 31, 2018 and 2017 (in thousands):

	Three Months Ended March 31,
	2018		2017
Cost of revenue	$	396	$	663
Marketing	1,794		1,802
Selling, general and administrative	17,088		17,185
Other income (expense)	48		51
Total stock-based compensation expense	$	19,326	$	19,701

The Company also capitalized $1.7 million and $1.5 million of stock-based compensation for the three months ended March 31, 2018 and 2017, respectively, in connection with internally-developed software. As of March 31, 2018, a total of $107.9 million of unrecognized compensation costs related to unvested employee stock awards are expected to be recognized over a remaining weighted-average period of 1.32 years.

Employee Stock Purchase Plan

The Company is authorized to grant up to 10,000,000 shares of common stock under its employee stock purchase plan ("ESPP"). For the three months ended March 31, 2018 and 2017, 746,773 and 877,845 shares of common stock, respectively, were issued under the ESPP.

Restricted Stock Units

The restricted stock units granted under the Plans generally have vesting periods between one and four years. Restricted stock units are amortized on a straight-line basis over the requisite service period.

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(unaudited)

The table below summarizes activity regarding unvested restricted stock units granted under the Plans for the three months ended March 31, 2018:

	Restricted Stock Units		Weighted-Average Grant Date Fair Value (per unit)
Unvested at December 31, 2017	28,939,110		$	4.32
Granted	2,610,912		5.24
Vested	(3,878,827	)	4.53
Forfeited	(1,608,149	)	4.02
Unvested at March 31, 2018	26,063,046		4.40

Performance Share Units

The performance share units granted under the Plans vest in shares of the Company's common stock upon the achievement of financial and operational targets specified in the respective award. The awards are subject to both continued employment through the performance period dictated by the award and certification by the Compensation Committee that the specified financial and operational targets have been achieved.

During the three months ended March 31, 2018, the Company granted performance share units for which the maximum number of common shares issuable upon vesting of those performance share units is 3,283,114 shares, the grant date fair value was $5.20 per unit and the total grant date fair value of the shares for which the performance conditions are expected to be met was $8.5 million. During the three months ended March 31, 2018, 278,635 shares of the Company's common stock were issued related to performance share units granted in the previous year following the Compensation Committee's certification of the Company's financial and operational metrics for the year ended December 31, 2017. The weighted average grant date fair value of those units was $3.78 per share.

Performance Bonus Awards

If bonus amounts earned under the Company's primary employee bonus plans exceed targeted bonus amounts because specified financial metrics of the Company exceed the performance conditions set forth in those plans, such excess is required to be settled in the Company's common stock. The Company's obligation to issue shares for employee bonus amounts exceeding the specified bonus targets is accounted for separately as a liability-classified stock-based compensation arrangement with performance conditions.

During the three months ended March 31, 2018, 1,240,379 shares of the Company's common stock were issued related to performance bonus awards granted in the previous year following the Compensation Committee's certification of the Company's financial and operational metrics for the year ended December 31, 2017. The weighted average grant date fair value of those awards was $5.20 per share.

Stock Options

The exercise price of stock options granted is equal to the fair value of the underlying stock on the date of grant. The contractual term for stock options expires ten years from the grant date. Stock options generally vested over a three or four-year period, with 25% of the awards vesting after one year and the remainder of the awards vesting on a monthly or quarterly basis thereafter.

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GROUPON, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

The table below summarizes the stock option activity for the three months ended March 31, 2018:

	Options		Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands) (1)
Outstanding and exercisable at December 31, 2017	885,580		$	0.62	1.76	$	3,967
Exercised	(2,400	)	2.36
Forfeited	—		—
Outstanding and exercisable at March 31, 2018	883,180		0.61		1.51	$	3,294

(1) The aggregate intrinsic value of options outstanding and exercisable represents the total pretax intrinsic value (the difference between the fair value of the Company's stock on the last day of each period and the exercise price, multiplied by the number of options where the fair value exceeds the exercise price) that would have been received by the option holders had all option holders exercised their options as of March 31, 2018 and December 31, 2017, respectively.

10. REVENUE RECOGNITION

Product and service revenue are generated from sales transactions through the Company's online marketplaces in three primary categories: Local, Goods and Travel.

Product revenue is earned from direct sales of merchandise inventory to customers and includes any related shipping fees. Service revenue primarily represents the net commissions earned by the Company from selling goods and services provided by third-party merchants. Those marketplace transactions generally involve the online delivery of a voucher that can be redeemed by the purchaser with the third-party merchant for goods or services (or for discounts on goods or services). To a lesser extent, service revenue also includes commissions earned when customers make purchases with retailers using digital coupons accessed through the Company's websites and mobile applications. Additionally, in the United States the Company has recently been developing and testing voucherless offerings that are linked to customer credit cards. Customers claim those voucherless merchant offerings through the Company's online marketplaces and earn cash back on their credit card statements when they transact with the related merchants, who pay the Company commissions for such transactions.

In connection with most of our product and service revenue transactions, we collect cash from credit card payment processors shortly after a sale occurs. For transactions in which the Company earns commissions when customers make purchases with retailers using digital coupons accessed through its websites and mobile applications, the Company generally collects payment from affiliate networks on terms ranging from 30 to 150 days.

Previously, the Company referred to its product revenue and service revenue as "direct revenue" and "third-party and other revenue," respectively.

Adoption of ASC Topic 606, Revenue from Contracts with Customers

On January 1, 2018, the Company adopted Accounting Standards Codification Topic 606, Revenue from Contracts with Customers ("Topic 606") using the modified retrospective method. Beginning on January 1, 2018, results are presented in accordance with the Company's revised policies, while prior period amounts are not adjusted and continue to be reported in accordance with the Company's historical policies. The adoption of Topic 606 did not significantly impact the Company's presentation of revenue on a gross or net basis. The following changes resulted from the adoption of Topic 606:

• For merchant agreements with redemption payment terms, the merchant is not paid its share of the sale price for a voucher sold through one of the Company's online marketplaces until the customer redeems the related voucher. If the customer does not redeem a voucher with such merchant payment terms, the Company retains all of the gross billings for that voucher, rather than retaining only its net commission. Prior to its adoption of Topic 606, the Company recognized that variable consideration from unredeemed vouchers and derecognized the related accrued merchant payables when its legal obligation to the merchant expired, which the Company believes is shortly after the voucher expiration date in most jurisdictions. Following its adoption of Topic 606, the Company estimates the variable consideration from vouchers that will not ultimately be redeemed and recognizes that amount as revenue at the time of sale, rather than when the Company's legal obligation expires. The Company estimates variable consideration from unredeemed vouchers using its historical voucher redemption experience. Most vouchers sold through the Company's marketplace in the United States do not have

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GROUPON, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

expiration dates and redemption payment terms were not widely used in that jurisdiction before 2017, so the Company's North America segment did not have variable consideration from unredeemed vouchers in prior periods.

• Prior to its adoption of Topic 606, the Company expensed the incremental costs to obtain contracts with third-party merchants, such as sales commissions, as incurred. Following its adoption of Topic 606, those costs are deferred and recognized over the expected period of the merchant arrangement, generally from 12 to 18 months.

• Prior to its adoption of Topic 606, the Company recognized breakage income for unused customer credits when they expired or were forfeited. Following its adoption of Topic 606, breakage income from customer credits that are not expected to be used is estimated and recognized as revenue in proportion to the pattern of redemption for customer credits that are used.

• Prior to its adoption of Topic 606, the Company deferred the revenue from hotel reservation offerings until the customer's stay commenced. Following its adoption of Topic 606, revenue from hotel reservation offerings is recognized at the time the reservation is made, net of an allowance for estimated cancellations.

• Prior to its adoption of Topic 606, the Company classified refunds on service revenue transactions for which the merchant's share of the refund amount is not recoverable as a cost of revenue. Following its adoption of Topic 606, those refunds are classified as a reduction of revenue.

• Prior to its adoption of Topic 606, the Company classified credits issued to consumers for relationship purposes as a marketing expense. Following its adoption of Topic 606, those credits are classified as a reduction of revenue.

The Company recorded a net reduction to its opening accumulated deficit of $88.9 million, which is net of a $6.7 million income tax effect, as of January 1, 2018 due to the cumulative impact of adopting Topic 606. The following table summarizes balance sheet accounts impacted by the cumulative effect of adopting Topic 606 (in thousands):

Account	Increase (decrease) to beginning accumulated deficit
Prepaid expenses and other current assets	$	(4,007	)
Other non-current assets	(10,223		)
Accrued merchant and supplier payables	(64,970		)
Accrued expenses and other current liabilities	(13,188		)
Other non-current liabilities	3,443
Effect on beginning accumulated deficit	$	(88,945	)

See Note 2, Adoption of New Accounting Standards, for additional information about the Company's revenue recognition policies before and after the adoption of Topic 606.

Impacts on Condensed Consolidated Financial Statements

The following tables summarize the impacts of adopting Topic 606 on the Company's condensed consolidated financial statements as of and for the three months ended March 31, 2018 (in thousands):

Condensed Consolidated Balance Sheet

	March 31, 2018
	As reported		Adjustments			Balances without adoption of Topic 606
Total assets	$	1,502,928	$	(13,082	)	$	1,489,846
Total liabilities	1,152,556		84,185			1,236,741
Total Groupon, Inc. stockholders' equity	350,372		(97,267		)	253,105

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GROUPON, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Condensed Consolidated Statement of Operations

	Three Months Ended March 31, 2018
	As reported			Adjustments			Balances without adoption of Topic 606
Revenue:
Service revenue (1)	$	301,797		$	(1,779	)	$	300,018
Product revenue	324,743			—			324,743
Total revenue	626,540			(1,779		)	624,761
Cost of revenue:
Service cost of revenue (2)	31,145			6,275			37,420
Product cost of revenue	270,510			—			270,510
Cost of revenue (2)	301,655			6,275			307,930
Gross profit	324,885			(8,054		)	316,831
Operating expenses:
Marketing (3)	99,156			1,573			100,729
Selling, general and administrative (4)	222,061			(1,264		)	220,797
Restructuring charges	283			—			283
Total operating expenses	321,500			309			321,809
Income (loss) from operations	3,385			(8,363		)	(4,978		)
Other income (expense), net	(8,515		)	—			(8,515		)
Income (loss) before provision (benefit) for income taxes	(5,130		)	(8,363		)	(13,493		)
Provision (benefit) for income taxes (5)	(2,335		)	(1,019		)	(3,354		)
Net income (loss)	$	(2,795	)	$	(7,344	)	$	(10,139	)

(1) Reflects decreases of $5.6 million related to the timing of recognition of variable consideration from unredeemed vouchers, $3.3 million related to the timing of recognition of revenue from hotel reservation offerings and $0.7 million related to the timing of recognition of breakage revenue from customer credits that are not expected to be used, partially offset by a $7.8 million increase for refunds on service revenue transactions for which the merchant's share is not recoverable and customer credits issued for relationship purposes, which are classified as reductions of revenue under Topic 606.

(2) Reflects an increase for refunds on service revenue transactions for which the merchant's share is not recoverable, which are classified as a reduction of revenue under Topic 606.

(3) Reflects an increase for customer credits issued for relationship purposes, which are classified as a reduction of revenue under Topic 606.

(4) Reflects the amortization of deferred contract acquisition costs in excess of amounts capitalized in the current period.

(5) As discussed in Note 12, Income Taxes, for the three months ended March 31, 2018, the Company recognized a $6.4 million income tax benefit resulting from the impact of adopting Topic 606 on intercompany activity in certain foreign jurisdictions. That income tax benefit is not reflected in this table, which presents the direct impacts of adopting Topic 606.

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GROUPON, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Segment and Category Information

	Three Months Ended March 31, 2018
	As reported		Adjustments			Balances without adoption of Topic 606
North America
Service revenue:
Local	$	187,411	$	3,613		$	191,024
Goods	4,874		—			4,874
Travel	20,084		(3,080		)	17,004
Product revenue - Goods	180,887		—			180,887
Total North America revenue	393,256		533			393,789
International
Service revenue:
Local	74,578		(1,445		)	73,133
Goods	3,414		(239		)	3,175
Travel	11,436		(628		)	10,808
Product revenue - Goods	143,856		—			143,856
Total International revenue	233,284		(2,312		)	230,972
Consolidated
Service revenue:
Local	261,989		2,168			264,157
Goods	8,288		(239		)	8,049
Travel	31,520		(3,708		)	27,812
Product revenue - Goods	324,743		—			324,743
Total Consolidated Revenue	$	626,540	$	(1,779	)	$	624,761

Contract Balances

The following table summarizes the activity in revenue deferred from contracts with customers for the three months ended March 31, 2018 (in thousands):

	Deferred Revenue
Balance as of January 1, 2018	$	25,763
Revenue deferred	22,185
Revenue recognized	(25,935		)
Foreign currency translation	172
Balance as of March 31, 2018	$	22,185

A substantial majority of our deferred revenue relates to product sales for which revenue will be recognized as the products are delivered to customers, generally within one week following the balance sheet date.

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GROUPON, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

The following table summarizes the activity in the liability for customer credits for the three months ended March 31, 2018 (in thousands):

	Customer Credits
Balance as of January 1, 2018	$	19,414
Credits issued	32,386
Credits redeemed (1)	(28,167		)
Breakage revenue recognized	(5,036		)
Foreign currency translation	164
Balance as of March 31, 2018	$	18,761

(1) Customer credits can be redeemed through the Company's online marketplaces for goods or services provided by a third-party merchant or for merchandise inventory sold by the Company. When customer credits are redeemed for goods or services provided by a third-party merchant, service revenue is recognized on a net basis as the difference between the carrying amount of the customer credit liability derecognized and the amount due to the merchant for the related transaction. When customer credits are redeemed for merchandise inventory sold by the Company, product revenue is recognized on a gross basis equal to the amount of the customer credit liability derecognized. Customer credits are primarily used within one year of issuance.

11. RESTRUCTURING    

In September 2015, the Company commenced a restructuring plan relating primarily to workforce reductions in its international operations. The Company has also undertaken workforce reductions in its North America segment. In addition to workforce reductions in its ongoing markets, the Company ceased operations in 17 countries within its International segment as part of the restructuring plan between September 2015 and March 2016. Those country exits, which generally comprised the Company's smallest international markets, resulted from a series of separate decisions made at different times during that period that were not part of an overall strategic shift. Costs related to the restructuring plan are classified as Restructuring charges on the condensed consolidated statements of operations. The actions under the Company's restructuring plan were completed as of September 30, 2017 and substantially all of the remaining cash payments for actions under that plan are expected to be disbursed through December 31, 2018.

The Company incurred cumulative costs for employee severance and benefits and other exit costs of $80.5 million under the plan since its inception in September 2015. In addition to those costs, the Company incurred cumulative long-lived asset impairment charges of $7.5 million resulting from its restructuring activities.

The following tables summarize the costs incurred by segment related to the Company’s restructuring plan for the three months ended March 31, 2018 and 2017 (in thousands):

	Three Months Ended March 31, 2018
	Employee Severance and Benefit Costs (1)		Other Exit Costs (1)		Total Restructuring Charges
North America	$	—	$	—	$	—
International	230		53		283
Consolidated	$	230	$	53	$	283

	Three Months Ended March 31, 2017
	Employee Severance and Benefit Costs (2)		Other Exit Costs		Total Restructuring Charges
North America	$	1,778	$	177	$	1,955
International	523		253		776
Consolidated	$	2,301	$	430	$	2,731

(1) The $0.3 million of restructuring charges during three months ended March 31, 2018 reflects changes in estimates related to prior actions.

(2) The employee severance and benefit costs for the three months ended March 31, 2017 related to the termination of approximately 200 employees.

The following table summarizes the restructuring liability activity for each period (in thousands):

	Employee Severance and Benefit Costs			Other Exit Costs			Total
Balance as of December 31, 2017	$	3,817		$	304		$	4,121
Charges payable in cash	230			53			283
Cash payments	(720		)	(53		)	(773		)
Foreign currency translation	71			—			71
Balance as of March 31, 2018	$	3,398		$	304		$	3,702

12. INCOME TAXES

The Company's tax provision for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items.

For the three months ended March 31, 2018, the Company recorded an income tax benefit from continuing operations of $2.3 million on a pretax loss from continuing operations of $5.1 million. For the three months ended March 31, 2017, the Company recorded income tax expense from continuing operations of $4.6 million on a pretax loss from continuing operations of $16.3 million.

The Company's U.S. Federal income tax rate is 21%. The effective tax rate for the three months ended March 31, 2018 reflected a $6.4 million income tax benefit resulting from the impact of adopting Topic 606 on intercompany activity in certain foreign jurisdictions, partially offset by pretax losses incurred in jurisdictions that have valuation allowances against their net deferred tax assets. The primary factor impacting the effective tax rate for the three months ended March 31, 2017 was the pretax losses incurred in jurisdictions that have valuation allowances against their net deferred tax assets.

The Company is currently undergoing income tax audits in multiple jurisdictions. There are many factors, including factors outside of the Company's control, which influence the progress and completion of those audits. During the fourth quarter 2017, the Company received an income tax assessment and a notification of proposed assessment from the tax authorities in two foreign jurisdictions, totaling $141.8 million in the aggregate. The Company believes that the assessments, which primarily relate to transfer pricing on transactions occurring from 2011 to 2014, are without merit and it intends to vigorously defend itself in those matters. In addition to any potential increases in its liabilities for uncertain tax positions from the ultimate resolution of those assessments, the Company believes that it is reasonably possible that reductions of up to $40.6 million in unrecognized tax benefits may occur within the 12 months following March 31, 2018 upon closing of income tax audits or the expiration of applicable statutes of limitations.

The Tax Cuts and Jobs Act (the "Jobs Act") was signed into law on December 22, 2017. The Company has made provisional estimates for the impact of the Jobs Act related to the re-measurement of deferred income taxes, valuation allowances, uncertain tax positions, and its assessment of permanently reinvested earnings. Those estimates may be impacted by the need for further analysis and future clarification and guidance regarding available tax accounting methods and elections, earnings and profits computations and state tax conformity to federal tax changes. Additionally, while the Company does not expect to incur the deemed repatriation tax, it has not yet finalized the related calculations. The Jobs Act also establishes global intangible low-taxed income ("GILTI") provisions that impose a tax on foreign income in excess of a deemed return on intangible assets of foreign corporations. The Company is in the process of evaluating the impact of taxes on GILTI and has not yet determined whether its accounting policy will be to recognize deferred taxes for basis differences that are expected to affect the amount of GILTI inclusion upon reversal or to recognize taxes on GILTI as an expense in the period incurred.

In general, it is the practice and intention of the Company to reinvest the earnings of its non-U.S. subsidiaries in those operations. Additionally, while the Company does not expect to incur the deemed repatriation tax established by the Jobs Act, an actual repatriation from its non-U.S. subsidiaries could be subject to foreign and U.S. state income taxes. Aside from limited exceptions for which the related deferred tax liabilities recognized as of March 31, 2018 and December 31, 2017 are immaterial, the Company does not intend to distribute earnings of foreign subsidiaries for which it has an excess of the financial reporting basis over the tax basis of its investments and therefore has not recorded any deferred taxes related to such amounts. The actual tax cost resulting from a distribution would depend on income tax laws and circumstances at the time of distribution. Determination of the amount of unrecognized deferred tax liability related to the excess of the financial reporting basis over the tax basis of the Company's foreign subsidiaries is not practical due to the complexities associated with the calculation.

13. FAIR VALUE MEASUREMENTS

Fair value is defined under U.S. GAAP as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or a liability.

To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs in valuation methodologies used to measure fair value:

Level 1 - Measurements that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 - Measurements that include other inputs that are directly or indirectly observable in the marketplace.

Level 3 - Measurements derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. These fair value measurements require significant judgment.

In determining fair value, the Company uses various valuation approaches within the fair value measurement framework. The valuation methodologies used for the Company's assets and liabilities measured at fair value and their classification in the valuation hierarchy are summarized below:

Cash equivalents. Cash equivalents primarily consist of AAA-rated money market funds. The Company classified cash equivalents as Level 1 due to the short-term nature of these instruments and measured the fair value based on quoted prices in active markets for identical assets.

Fair value option and available-for-sale securities investments. To determine the fair value of its fair value option investments each period, the Company first estimates the fair value of each entity in its entirety. The Company primarily uses the discounted cash flow method, which is an income approach, to estimate the fair value of the investees. The key inputs to determining fair values under that approach are cash flow forecasts and discount rates. As of March 31, 2018 and December 31, 2017, the Company applied discount rates of 21% and 22%, respectively, in its discounted cash flow valuations for Monster LP. The Company also uses a market approach valuation technique, which is based on market multiples of guideline companies, to determine the fair value of each entity. The discounted cash flow and market multiple valuations are then evaluated and weighted to determine the amount that is most representative of the fair value of each entity. Once the Company determines the fair value of each entity, it then determines the fair value of its specific investments in those entities. The entities have complex capital structures, so the Company applies an option-pricing model that considers the liquidation preferences of each investee’s respective classes of ownership interests to determine the fair value of the Company’s investment in each entity.

The Company also has investments in redeemable preferred shares and convertible debt securities issued by nonpublic entities. The Company measures the fair value of those available-for-sale securities using the discounted cash flow method.

The Company has classified its fair value option investments and its investments in available-for-sale securities as Level 3 due to the lack of observable market data over fair value inputs such as cash flow projections and discount rates. Increases in projected cash flows and decreases in discount rates contribute to increases in the estimated fair values of the fair value option investments and available-for-sale securities, whereas decreases in projected cash flows and increases in discount rates contribute to decreases in their fair values.

Contingent consideration. The Company had contingent obligations to transfer cash to the former owners of acquired businesses if specified financial results were met over future reporting periods (i.e., earn-outs). Liabilities for contingent consideration were measured at fair value each reporting period, with the acquisition-date fair value included as part of the consideration transferred and subsequent changes in fair value recorded in earnings within Selling, general and administrative expense on the condensed consolidated statements of operations.

21

GROUPON, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

The Company used an income approach to value contingent consideration obligations based on the present value of probability-weighted future cash flows. The Company classified the contingent consideration liabilities as Level 3 due to the lack of relevant observable market data over fair value inputs such as probability-weighting of payment outcomes.

The following tables summarize the Company's assets that are measured at fair value on a recurring basis as of March 31, 2018 and December 31, 2017 (in thousands):

			Fair Value Measurement at Reporting Date Using
	March 31, 2018		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents	$	93,325	$	93,325	$	—	$	—
Fair value option investments	77,933		—		—		77,933
Available-for-sale securities:
Convertible debt securities	11,070		—		—		11,070
Redeemable preferred shares	14,576		—		—		14,576

			Fair Value Measurement at Reporting Date Using
	December 31, 2017		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents	$	137,975	$	137,975	$	—	$	—
Fair value option investments	82,966		—		—		82,966
Available-for-sale securities:
Convertible debt securities	11,354		—		—		11,354
Redeemable preferred shares	15,431		—		—		15,431

22

GROUPON, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

The following table provides a roll-forward of the fair value of recurring Level 3 fair value measurements for the three months ended March 31, 2018 and 2017 (in thousands):

	Three Months Ended March 31,
	2018			2017
Assets
Fair value option investments:
Beginning Balance	$	82,966		$	82,584
Total gains (losses) included in earnings	(5,033		)	303
Ending Balance	$	77,933		$	82,887
Unrealized gains (losses) still held (1)	$	(5,033	)	$	303
Available-for-sale securities
Convertible debt securities:
Beginning Balance	$	11,354		$	10,038
Acquisition of convertible debt security	—			1,612
Total gains (losses) included in other comprehensive income (loss)	(501		)	42
Total gains (losses) included in earnings (2)	217			239
Ending Balance	$	11,070		$	11,931
Unrealized gains (losses) still held (1)	$	(284	)	$	281
Redeemable preferred shares:
Beginning Balance	$	15,431		$	17,444
Total gains (losses) included in other comprehensive income (loss)	—			344
Impairment included in earnings	(855		)	—
Ending Balance	$	14,576		$	17,788
Unrealized (losses) gains still held (1)	$	(855	)	$	344
Liabilities
Contingent Consideration:
Beginning Balance	$	—		$	14,588
Total losses (gains) included in earnings (3)	—			12
Ending Balance	$	—		$	14,600
Unrealized losses (gains) still held (1)	$	—		$	12

(1) Represents the unrealized losses or gains recorded in earnings and/or other comprehensive income (loss) during the period for assets and liabilities classified as Level 3 that are still held (or outstanding) at the end of the period.

(2) Represents accretion of interest income and changes in the fair value of an embedded derivative.

(3) Changes in the fair value of contingent consideration liabilities are classified within Selling, general and administrative expense on the consolidated statements of operations.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Certain assets and liabilities are measured at fair value on a nonrecurring basis, including assets that are written down to fair value as a result of an impairment. The Company did not record any significant nonrecurring fair value measurements after initial recognition for the three months ended March 31, 2018 and 2017.

23

GROUPON, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Estimated Fair Value of Financial Assets and Liabilities Not Measured at Fair Value

The following table presents the carrying amount and fair value of equity securities that were classified as cost method investments as of December 31, 2017 (in thousands):

	December 31, 2017
	Carrying Amount		Fair Value
Cost method investments (1)	$	25,438	$	32,792

(1) See Note 2, Adoption of New Accounting Standards, and Note 5, Investments, for information about the Company's adoption of ASU 2016-01 on January 1, 2018 and its impact on accounting for equity investments without readily determinable fair values that were previously subject to the cost method of accounting.

The fair values of the Company's cost method investments were determined using the market approach or the income approach, depending on the availability of fair value inputs such as financial projections for the investees and market multiples for comparable companies. The Company classified the fair value measurements of its cost method investments as Level 3 measurements within the fair value hierarchy as of December 31, 2017 because they involve significant unobservable inputs such as cash flow projections and discount rates.

The Company's other financial instruments not carried at fair value consist primarily of accounts receivable, restricted cash, accounts payable, accrued merchant and supplier payables and accrued expenses. The carrying values of these assets and liabilities approximate their respective fair values as of March 31, 2018 and December 31, 2017 due to their short-term nature.

14. INCOME (LOSS) PER SHARE

Basic net income (loss) per share is computed using the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per share is computed using the weighted-average number of common shares and the effect of potentially dilutive securities outstanding during the period. Potentially dilutive securities include stock options, restricted stock units, performance share units, unvested restricted stock awards, performance bonus awards, ESPP shares, warrants and convertible senior notes. If dilutive, those potentially dilutive securities are reflected in diluted net income (loss) per share by application of the treasury stock method, except for the convertible senior notes, which are subject to the if-converted method.

The following table sets forth the computation of basic and diluted net income (loss) per share of common stock for the three months ended March 31, 2018 and 2017 (in thousands, except share amounts and per share amounts):

	Three Months Ended March 31,
	2018			2017
Basic and diluted net income (loss) per share:
Numerator
Net income (loss) - continuing operations	$	(2,795	)	$	(20,869	)
Less: Net income (loss) attributable to noncontrolling interests	4,093			4,032
Net income (loss) attributable to common stockholders - continuing operations	(6,888		)	(24,901		)
Net income (loss) attributable to common stockholders - discontinued operations	—			487
Net income (loss) attributable to common stockholders	$	(6,888	)	$	(24,414	)
Denominator
Weighted-average common shares outstanding	561,735,937			562,195,243
Basic and diluted net income (loss) per share (1):
Continuing operations	$	(0.01	)	$	(0.04	)
Discontinued operations	0.00			0.00
Basic and diluted net income (loss) per share	$	(0.01	)	$	(0.04	)

(1) The potentially dilutive impacts of outstanding equity awards, warrants and convertible senior notes have been excluded from the calculation of dilutive net income (loss) per share for the three months ended March 31, 2018 and 2017 as their effect on net income (loss) per share from

24

GROUPON, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

continuing operations was antidilutive.

The following weighted-average potentially dilutive instruments are not included in the diluted net income (loss) per share calculations above because they would have had an antidilutive effect on the net income (loss) per share from continuing operations:

	Three Months Ended March 31,
	2018	2017
Restricted stock units	28,033,489	24,360,648
Other stock-based compensation awards	3,212,026	3,813,848
Convertible senior notes	46,296,300	46,296,300
Warrants	46,296,300	46,296,300
Total	123,838,115	120,767,096

The Company had outstanding performance share units as of March 31, 2018 and 2017 that were eligible to vest into shares of common stock subject to the achievement of specified performance conditions. Contingently issuable shares are excluded from the computation of diluted earnings per share if, based on current period results, the shares would not be issuable if the end of the reporting period were the end of the contingency period. There were up to 3,283,114 and 683,076 shares of common stock issuable upon vesting of outstanding performance share units as of March 31, 2018 and 2017, respectively, that were excluded from the table above as the performance conditions were not satisfied as of the end of the respective periods.

15. SEGMENT INFORMATION

The segment information reported in the tables below reflects the operating results that are regularly reviewed by the Company's chief operating decision maker to assess performance and make resource allocation decisions. The Company's operations are organized into two segments: North America and International.

The following table summarizes revenue by reportable segment and category for the three months ended March 31, 2018 and 2017 (in thousands):

	Three Months Ended March 31,
	2018		2017
North America
Service revenue:
Local	$	187,411	$	200,545
Goods	4,874		1,704
Travel	20,084		20,462
Product revenue - Goods	180,887		250,646
Total North America revenue (1)	393,256		473,357
International
Service revenue:
Local	74,578		63,575
Goods	3,414		4,289
Travel	11,436		11,002
Product revenue - Goods	143,856		121,403
Total International revenue (1)	$	233,284	$	200,269

25

GROUPON, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

(1) North America includes revenue from the United States of $385.4 million and $464.7 million for the three months ended March 31, 2018 and 2017, respectively. International includes revenue from the United Kingdom of $83.0 million and $65.5 million for the three months ended March 31, 2018 and 2017, respectively. There were no other individual countries that represented more than 10% of consolidated total revenue for the three months ended March 31, 2018 and 2017. Prior to the second quarter of 2017, revenue was attributed to individual countries based on the domicile of the legal entities within the Company's consolidated group that undertook those transactions. Beginning in the second quarter of 2017, the Company updated its attribution of revenue by country in the current period to be based on the location of the customer. Revenue amounts by country for the three months ended March 31, 2017 have been retrospectively adjusted to reflect that change in attribution.

The following table summarizes gross profit by reportable segment and category for the three months ended March 31, 2018 and 2017 (in thousands):

	Three Months Ended March 31,
	2018		2017
North America
Service gross profit:
Local	$	166,756	$	169,342
Goods	3,941		1,307
Travel	16,002		15,165
Product gross profit - Goods	32,981		35,123
Total North America gross profit	219,680		220,937
International
Service gross profit:
Local	70,215		59,194
Goods	3,087		3,660
Travel	10,651		10,036
Product gross profit - Goods	21,252		15,624
Total International gross profit	$	105,205	$	88,514

The following table summarizes operating income by reportable segment for the three months ended March 31, 2018 and 2017 (in thousands):

	Three Months Ended March 31,
	2018			2017
Operating income (loss) (1) (2):
North America	$	(1,860	)	$	(14,783	)
International	5,245			3,103
Total operating income (loss)	$	3,385		$	(11,680	)

(1) Includes stock-based compensation of $17.9 million and $18.3 million for North America for the three months ended March 31, 2018 and 2017, respectively, and $1.4 million for International for the three months ended March 31, 2018 and 2017.

(2) Includes restructuring charges of $2.0 million for North America for the three months ended March 31, 2017 and $0.3 million and $0.8 million for International for the three months ended March 31, 2018 and 2017, respectively.

The following table summarizes the Company's total assets by reportable segment as of March 31, 2018 and December 31, 2017 (in thousands):

	March 31, 2018		December 31, 2017
Total assets:
North America (1)	$	920,834	$	1,045,072
International (1)	582,094		632,433
Consolidated total assets	$	1,502,928	$	1,677,505

26

GROUPON, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

(1) North America contains assets from the United States of $877.8 million and $1,006.2 million as of March 31, 2018 and December 31, 2017, respectively. International contains assets from Ireland of $167.1 million and $219.7 million as of March 31, 2018 and December 31, 2017, respectively. There were no other individual countries that represented more than 10% of consolidated total assets as of March 31, 2018 and December 31, 2017.

16. SUBSEQUENT EVENTS

On April 30, 2018, the Company acquired 80% of the outstanding shares of Cloud Savings Company, Ltd. ("Cloud Savings"). Cloud Savings is a UK-based business that operates online discount code and digital gift card platforms. Concurrent with the acquisition, the Company entered into an agreement with the noncontrolling shareholder giving it the right to acquire the remaining outstanding shares for $8.9 million in December 2018. Additionally, the noncontrolling shareholder has the right to require the Company to purchase its shares in December 2018 for that same amount. Those rights and obligations to acquire the remaining outstanding shares will be recorded as a financing obligation.

The total acquisition price was approximately $72.7 million, consisting of $64.1 million in cash paid at closing and the $8.6 million estimated fair value of the financing obligation. The acquisition-date net working capital of Cloud Savings was approximately $8.8 million, including $6.6 million of cash. The remainder of the preliminary acquisition price allocation had not yet been completed at the time these condensed consolidated financial statements were issued.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read together with our condensed consolidated financial statements and related notes included under Part I, Item 1 of this Quarterly Report on Form 10-Q. This discussion contains forward-looking statements about our business and operations. Our actual results may differ materially from those we currently anticipate as a result of many factors, including those we describe under Risk Factors and elsewhere in this Quarterly Report.

Overview

Groupon operates online local commerce marketplaces throughout the world that connect merchants to consumers by offering goods and services, generally at a discount. Consumers access those marketplaces through our websites, primarily localized groupon.com sites in many countries, and our mobile applications. Traditionally, local merchants have tried to reach consumers and generate sales through a variety of methods, including online advertising, paid telephone directories, direct mail, newspaper, radio, television and other promotions. By bringing the brick and mortar world of local commerce onto the Internet, Groupon is helping local merchants to attract customers and sell goods and services. We provide consumers with savings and help them discover what to do, eat, see, buy and where to travel.

We offer goods and services through our online marketplaces in three primary categories: Local, Goods and Travel. During 2017 and continuing in 2018, we are shifting more of the focus on our websites and mobile applications in North America to offerings in our Local category, which we believe provides us with the greatest opportunity for long-term gross profit growth. As part of our growth strategy, we have also been developing and testing a number of product enhancements that are intended to make our offerings easier to use for both customers and merchants, including voucherless offerings that are linked to customer credit cards.

We generate both product and service revenue from our business operations. In prior periods, we referred to product revenue and service revenue as "direct revenue" and "third-party and other revenue," respectively. This terminology change did not impact amounts presented in the accompanying condensed consolidated financial statements.

We earn product revenue from direct sales of merchandise inventory through our Goods category. Product revenue is reported on a gross basis as the purchase price received from the customer. Product revenue, including associated shipping revenue, is recognized when title passes to the customer upon delivery of the product.

We primarily earn service revenue from transactions in which we earn commissions by selling goods or services on behalf of third-party merchants. Those transactions generally involve a customer's purchase of a voucher through one of our online marketplaces that can be redeemed with a third-party merchant for specified goods or services (or for discounts on specified goods or services). Service revenue from those transactions is reported on a net basis as the purchase price collected from the customer less the portion of the purchase price that is payable to the third-party merchant. We recognize revenue from those transactions when our commission has been earned, which occurs when a sale through one of our online marketplaces is completed and the related voucher has been made available to the customer. Service revenue also includes commissions that we earn when customers make purchases with retailers using digital coupons accessed through our websites and mobile applications and from voucherless merchant offerings in which customers earn cash back on their credit card statements when they transact with third-party merchants. We recognize those commissions as revenue when earned, which occurs when the underlying transactions between the customer and the third-party merchant are completed.

How We Measure Our Business

We measure our business with several financial and operating metrics. We use those metrics to assess the progress of our business and make decisions on where to allocate capital, time and technology investments. Certain of the financial metrics are reported in accordance with U.S. GAAP and certain of those metrics are considered non-GAAP financial measures. As our business evolves, we may make changes in future periods to the key financial and operating metrics that we use to measure our business. For further information and reconciliations to the most applicable financial measures under U.S. GAAP, refer to our discussion under Non-GAAP Financial Measures in the Results of Operations section.

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Financial Metrics

• Revenue. Product revenue is earned from direct sales of merchandise inventory through our Goods category and is reported on a gross basis as the purchase price received from the customer. Service revenue is earned from transactions in which we earn commissions by selling goods or services on behalf of third-party merchants, primarily through sales of vouchers and similar transactions in which we collect the transaction price from the customer and remit a portion of that transaction price to the third-party merchant who will provide the related goods or services. Service revenue from those transactions is reported on a net basis as the purchase price collected from the customer less the portion of the purchase price that is payable to the third-party merchant. Service revenue also includes commissions we earn when customers make purchases with retailers using digital coupons accessed through our websites and mobile applications and from voucherless merchant offerings in which customers earn cash back on their credit card statements when they transact with third-party merchants.

• Gross profit. Gross profit reflects the net margin earned after deducting our cost of revenue from our revenue. Due to the lack of comparability between product revenue, which is reported on a gross basis, and service revenue, which primarily consists of transactions reported on a net basis, we believe that gross profit is an important measure for evaluating our performance.

• Adjusted EBITDA. Adjusted EBITDA is a non-GAAP financial measure that we define as net income (loss) from continuing operations excluding income taxes, interest and other non-operating items, depreciation and amortization, stock-based compensation, acquisition-related expense (benefit), net and other special charges and credits, including items that are unusual in nature or infrequently occurring. For further information and a reconciliation to Income (loss) from continuing operations, refer to our discussion under Non-GAAP Financial Measures in the Results of Operations section.

• Free cash flow. Free cash flow is a non-GAAP financial measure that comprises net cash provided by (used in) operating activities from continuing operations less purchases of property and equipment and capitalized software from continuing operations. For further information and a reconciliation to Net cash provided by (used in) operating activities from continuing operations, refer to our discussion in the Liquidity and Capital Resources section.

The following table presents the above financial metrics for the three months ended March 31, 2018 and 2017 (in thousands):

	Three Months Ended March 31,
	2018		2017
Revenue	626,540		673,626
Gross profit	324,885		309,451
Adjusted EBITDA	52,607		44,780
Free cash flow (1)	(139,891	)	(152,162	)

(1) Prior period free cash flow information has been updated from negative $150.3 million previously reported to reflect the adoption of ASU 2016-18, Statement of Cash Flows (Topic 230) - Restricted Cash, on January 1, 2018. See Note 2, Adoption of New Accounting Standards, for additional information on the adoption of ASU 2016-18.

Operating Metrics

• Gross Billings. This metric represents the total dollar value of customer purchases of goods and services. For sales of vouchers and similar transactions in which we collect the transaction price from the customer and remit a portion of the transaction price to the third-party merchant who will provide the related goods or services, which comprise a substantial majority of our service revenue transactions, gross billings differs from revenue reported in our condensed consolidated statements of operations, which is presented net of the merchant's share of the transaction price. For product revenue transactions, gross billings are equivalent to product revenue reported in our condensed consolidated statements of operations. We consider this metric to be an important indicator of our growth and business performance as it measures the dollar volume of transactions generated through our marketplaces. Tracking gross billings on service revenue transactions also allows us to monitor the percentage of gross billings that we are able to retain after payments to merchants.

29

• Active customers. We define active customers as unique user accounts that have made a purchase during the trailing twelve months ("TTM") either through one of our online marketplaces or directly with a merchant for which we earned a commission. We consider this metric to be an important indicator of our business performance as it helps us to understand how the number of customers actively purchasing our offerings is trending. Some customers could establish and make purchases from more than one account, so it is possible that our active customer metric may count certain customers more than once in a given period. For entities that we have acquired in a business combination, this metric includes active customers of the acquired entity, including customers who made purchases prior to the acquisition.

• Gross billings and gross profit per active customer. These metrics represent the TTM gross billings and gross profit generated per active customer. We use these metrics to evaluate trends in customer spend and in the average contribution to gross billings and profit on a per-customer basis. We updated the calculation of these metrics in the current period to reflect active customers as of the end of the period, rather than the average of active customers as of the beginning and end of period, in the denominator of the calculations. Because our active customer metrics are based on purchases over a TTM period, we believe that this change improves the usefulness of these metrics. The prior period metrics presented below have been updated to reflect this change.

• Units. This metric represents the number of purchases during the reporting period, before refunds and cancellations, made either through one of our online marketplaces or directly with a merchant for which we earned a commission. We consider unit growth to be an important indicator of the total volume of business conducted through our marketplaces.

Our gross billings for thethree months ended March 31, 2018 and 2017 were as follows (in thousands):

	Three Months Ended March 31,
	2018		2017
Gross billings	$	1,293,264	$	1,357,976

Our active customers, gross billings per active customer and gross profit per active customer for the TTM endedMarch 31, 2018 and 2017 were as follows:

	Trailing Twelve Months Ended March 31,
	2018		2017
TTM Active customers (in thousands)	49,680		48,335
TTM Gross billings per active customer (1)	$	112.34	$	117.43
TTM Gross profit per active customer (1)	$	27.16	$	26.27

(1) TTM Gross billings per active customer have been updated from $122.68 previously reported and TTM Gross profit per active customer has been updated from $27.45 previously reported for the three months ended March 31, 2017 due to the change in the calculation discussed above.

Our units for the three months ended March 31, 2018 and 2017 were as follows (in thousands):

	Three Months Ended March 31,
	2018	2017
Units	42,424	45,731

Factors Affecting Our Performance

Attracting and Retaining Local Merchants. As we seek to build a more complete online local commerce marketplace platform, we depend on our ability to attract and retain merchants who are willing to offer discounted products and services through our marketplaces. Additionally, merchants can generally withdraw their offerings from our marketplaces at any time and their willingness to continue offering products and services through our platform depends on the effectiveness of our marketing and promotional services. We primarily source the deal offerings available on our marketplaces through our sales teams, which comprise a significant portion of our global employee base. We have also entered into commercial agreements with third parties that enable us to feature additional merchant offerings through our marketplaces. We continue to focus much of our sales efforts on sourcing local deal offerings in subcategories that we believe provide us with the best opportunities for high frequency customer purchase behavior. In connection with our efforts to grow our offerings in those high frequency subcategories, which include food and drink, health, beauty and wellness, and events and activities, we may be willing to offer more attractive terms to local merchants that could reduce our deal margins in future periods.

Growing our Active Customer Base and Customer Value. We must acquire and retain customers and improve gross profit per customer in order to grow our business. We have significantly increased our marketing spending in recent years in order to drive customer growth. Our marketing spending includes investments in offline campaigns intended to increase customer awareness and understanding of the Groupon brand and our product and service offerings. The organic traffic to our websites and mobile

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applications, including organic traffic from consumers responding to our emails, has declined in recent years, such that an increasing proportion of our traffic is generated from paid marketing channels, such as search engine marketing. As such, we are focused on developing sources of organic traffic other than email and optimizing the efficiency of our marketing spending, which is primarily guided by return on investment thresholds that are currently based on expected months-to-payback targets ranging from 12 to 18 months. Additionally, we consider order discounts and certain other initiatives to drive customer acquisition and activation to be marketing-related activities, even though such activities may not be presented as marketing expenses in our consolidated statements of operations.

Investing in Growth. We have invested significantly in product and technology enhancements intended to support the growth of our online marketplaces and we intend to continue to do so in the future. We have also invested in business acquisitions to grow our merchant and customer base and advance our product and technology capabilities. We are currently developing and testing a number of product enhancements intended to make our offerings easier to use for both customers and merchants, including voucherless offerings that are linked to customer credit cards, which we refer to as Groupon+, and functionality enabling appointment booking at the time an offering is purchased. We believe that those initiatives may be important drivers for increasing customer purchase frequency and growing our business over time. We are currently focusing our efforts on growing customer awareness of the products and scaling the related merchant base. As such, our gross profit and operating income may be adversely impacted in the near term as we focus more of our marketing initiatives and related efforts on early stage voucherless offerings. Additionally, Groupon+ offerings provide cash back on the customer's credit card and involve Groupon collecting a net fee from the merchant, rather than selling a voucher to the customer and then remitting a portion of the proceeds to the merchant. As we report sales of vouchers to customers as gross billings, the growth of Groupon+ transactions in future periods could adversely impact our gross billings trends.

Continuing to Focus on Managing Operating Efficiency. We are focused on effectively managing our cost structure as we seek to generate and grow our profitability in future periods. As a result of numerous divestitures and other exits from countries in which we previously operated, which were completed from 2015 through 2017, we reduced the global footprint of our operations from 47 countries to 15 countries. Additionally, we significantly reduced our global workforce over that period as a result of our restructuring actions. Those restructuring actions and our continuing efforts to automate internal processes have allowed us to centralize many of our back office activities in lower cost shared service centers resulting in significant reductions in our selling, general and administrative expenses in recent periods. We have primarily used those savings to invest in marketing and product enhancements intended to drive the growth of our business. We intend to continue to focus on maintaining operating efficiency.

Results of Operations

Gross Billings

Gross billings is an operating metric that represents the total dollar value of customer purchases of products and services. Gross billings is presented net of customer refunds, order discounts and sales and related taxes. In our Goods category, we generate gross billings from product revenue transactions in which we sell merchandise inventory directly to customers, as well as service revenue transactions in which we sell products on behalf of third-party merchants.

Gross billings for the three months ended March 31, 2018 and 2017 were as follows (dollars in thousands):

	Three Months Ended March 31,
	2018		2017		$ Change			% Change
Gross billings:
Service	$	968,521	$	985,922	$	(17,401	)	(1.8	)%
Product	324,743		372,054		(47,311		)	(12.7	)
Total gross billings	$	1,293,264	$	1,357,976	$	(64,712	)	(4.8	)

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The effect on our gross billings for the three months ended March 31, 2018 from changes in exchange rates versus the U.S. dollar was as follows (in thousands):

	Three Months Ended March 31, 2018
	At Avg. Q1 2017 Rates (1)		Exchange Rate Effect (2)		As Reported
Gross billings	$	1,241,220	$	52,044	$	1,293,264

(1) Represents the financial statement balances that would have resulted had exchange rates in the reporting period been the same as those in effect in the prior year period.

(2) Represents the increase or decrease in the reported amount resulting from changes in exchange rates from those in effect in the prior year period.

Gross Billings by Segment

Gross billings by category and segment for the three months ended March 31, 2018 and 2017 were as follows (dollars in thousands):

	Three Months Ended March 31,
	2018		2017		$ Change			% Change
North America
Service gross billings:
Local	$	543,021	$	587,766	$	(44,745	)	(7.6	)%
Goods	28,589		11,942		16,647			139.4
Travel	102,499		114,163		(11,664		)	(10.2	)
Product gross billings - Goods	180,887		250,646		(69,759		)	(27.8	)
Total North America gross billings	854,996		964,517		(109,521		)	(11.4	)
International
Service gross billings:
Local	217,307		191,219		26,088			13.6
Goods	19,583		27,671		(8,088		)	(29.2	)
Travel	57,522		53,161		4,361			8.2
Product gross billings - Goods	143,856		121,408		22,448			18.5
Total International gross billings	438,268		393,459		44,809			11.4
Total gross billings	$	1,293,264	$	1,357,976	$	(64,712	)	(4.8	)

The percentages of gross billings by segment for the three months ended March 31, 2018 and 2017 were as follows:

Q1 2018 Q1 2017

North America International

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North America

North America gross billings for the three months ended March 31, 2018 decreased from the prior year, reflecting decreases of $44.7 million in our Local category and $53.1 million in our Goods category. Factors impacting North America gross billings included the following:

• A decrease in gross billings from our Goods category, which resulted from our ongoing efforts to de-emphasize lower margin product offerings in connection with our strategic initiative to optimize for gross profit generation;

• We ceased most of our food delivery operations in the third quarter of 2017, which resulted in a $17.4 million decrease in Local gross billings as compared to the prior year period; and

• We continued to shift customer impressions from traditional voucher offerings with food and drink merchants toward Groupon+ voucherless offerings as we seek to scale that product. While we believe that voucherless offerings have the potential to ultimately drive long-term gross profit growth, the shift away from traditional food and drink vouchers is adversely impacting our gross billings in the near term.

Average customer spend decreased, as gross billings per active customer were $116.95 for the three months ended March 31, 2018, as compared to $125.31 in the prior year period.

Order discounts, which are presented as a reduction of gross billings and revenue, decreased by $11.1 million to $39.2 million for the three months ended March 31, 2018, as compared to $50.3 million in the prior year period.

For the three months ended March 31, 2018, there was a $1.9 million favorable impact on gross billings as a result of adopting Topic 606 as compared to previous accounting guidance. See Note 2, Adoption of New Accounting Policies, and Note 10, Revenue Recognition, for additional information on the impact of adopting the ASU and its related amendments on the Company's accounting policies.

International

International gross billings increased during the three months ended March 31, 2018, reflecting increases of $26.1 million, $14.4 million and $4.4 million in our Local, Goods and Travel categories, respectively. That increase was primarily driven by a $51.8 million favorable impact from year-over-year changes in foreign currency rates for thethree months ended March 31, 2018.

Order discounts, which are presented as a reduction of gross billings and revenue, increased by $4.5 million to $13.8 million for the three months ended March 31, 2018, as compared to $9.3 million in the prior year period.

For the three months ended March 31, 2018, there was a $0.5 million favorable impact on gross billings as a result of adopting Topic 606 as compared to previous accounting guidance. See Note 2, Adoption of New Accounting Policies, and Note 10, Revenue Recognition, for additional information on the impact of adopting the ASU and its related amendments on the Company's accounting policies.

Revenue

We earn product revenue from direct sales of merchandise inventory through our Goods category. Product revenue is reported on a gross basis as the purchase price received from the customer. Service revenue is earned from transactions in which we earn commissions by selling goods or services on behalf of third-party merchants, primarily through sales of vouchers and similar transactions in which we collect the transaction price from the customer and remit a portion of that transaction price to the third-party merchant who will provide the related goods or services. Service revenue from those transactions is reported on a net basis as the purchase price collected from the customer less the portion of the purchase price that is payable to the third-party merchant. Service revenue also includes commissions we earn when customers make purchases with retailers using digital coupons accessed through our websites and mobile applications and from voucherless merchant offerings in which customers earn cash back on their credit card statements when they transact with third-party merchants.

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Revenue for the three months ended March 31, 2018 and 2017 was as follows (dollars in thousands):

	Three Months Ended March 31,
	2018		2017		$ Change			% Change
Revenue:
Service	$	301,797	$	301,577	$	220		0.1	%
Product	324,743		372,049		(47,306		)	(12.7	)
Total revenue	$	626,540	$	673,626	$	(47,086	)	(7.0	)

The effect on revenue for the three months ended March 31, 2018 from changes in exchange rates versus the U.S. dollar was as follows (in thousands):

	Three Months Ended March 31, 2018
	At Avg. Q1 2017 Rates (1)		Exchange Rate Effect (2)		As Reported
Revenue	$	597,251	$	29,289	$	626,540

(1) Represents the financial statement balances that would have resulted had exchange rates in the reporting period been the same as those in effect in the prior year period.

(2) Represents the increase or decrease in the reported amount resulting from changes in exchange rates from those in effect in the prior year period.

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Revenue by Segment

Revenue by category and segment for the three months ended March 31, 2018 and 2017 was as follows (dollars in thousands):

	Three Months Ended March 31,
	2018		2017		$ Change			% Change
North America
Service revenue:
Local	$	187,411	$	200,545	$	(13,134	)	(6.5	)%
Goods	4,874		1,704		3,170			186.0
Travel	20,084		20,462		(378		)	(1.8	)
Product revenue - Goods	180,887		250,646		(69,759		)	(27.8	)
Total North America revenue	393,256		473,357		(80,101		)	(16.9	)
International
Service revenue:
Local	74,578		63,575		11,003			17.3
Goods	3,414		4,289		(875		)	(20.4	)
Travel	11,436		11,002		434			3.9
Product revenue - Goods	143,856		121,403		22,453			18.5
Total International revenue	233,284		200,269		33,015			16.5
Total revenue	$	626,540	$	673,626	(47,086		)	(7.0	)

The percentages of revenue by segment for the three months ended March 31, 2018 and 2017 were as follows:

Q1 2018 Q1 2017

North America International

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The percentages of service gross billings that we retained after deducting the merchant's share for the three months ended March 31, 2018 and 2017 were as follows:

North America International

North America

The decreasein North America revenue for thethree months endedMarch 31, 2018reflects decreases of $13.1 million and $66.6 million in our Local and Goods categories, respectively. The decreases were attributable to the following:

• decreases in Goods and Local gross billings, as discussed above; and

• an increase in the proportion of service revenue transactions in our Goods category, which are reported on a net basis, with a corresponding decrease in in the proportion of product revenue transactions, which are reported on a gross basis.

The percentage of gross billings related to service revenue transactions that we retained after deducting the merchant’s share was substantially consistent with the prior year.

For the three months ended March 31, 2018, there was a $0.5 million unfavorable impact on revenue as a result of adopting Topic 606 as compared to previous accounting guidance. See Note 2, Adoption of New Accounting Policies, and Note 10, Revenue Recognition, for additional information on the impact of adopting the ASU and its related amendments on the Company's accounting policies.

International

The increase in International revenue for the three months endedMarch 31, 2018 reflects increases of $11.0 million and $21.6 million in our Local and Goods categories, respectively. The increases were primarily attributable to the following:

• a $29.2 million favorable impact on international revenue from year-over-year changes in foreign exchange rates for the three months endedMarch 31, 2018;

• an increase in the proportion of service revenue transactions in our Goods category, which are reported on a net basis, with a corresponding decrease in in the proportion of product revenue transactions, which are reported on a gross basis; and

• an increase in the percentage of gross billings that we retained after deducting the merchant’s share in service revenue transactions to 30.4% for the three months ended March 31, 2018, as compared to 29.0% in the prior year period. The percentage of gross billings that we retain after deducting the merchant's share reflects the overall results of individual deal-by-deal negotiations with merchants and can vary significantly from period-to-period.

For the three months ended March 31, 2018, there was a $2.3 million favorable impact on revenue as a result of adopting Topic 606 as compared to previous accounting guidance. See Note 2, Adoption of New Accounting Policies, and Note 10, Revenue Recognition, for additional information on the impact of adopting the ASU and its related amendments on the Company's accounting policies.

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Cost of Revenue

Cost of revenue is comprised of direct and certain indirect costs incurred to generate revenue. Costs incurred to generate revenue, which include credit card processing fees, editorial costs, compensation expense for technology support personnel who are responsible for maintaining the infrastructure of our websites, amortization of internal-use software relating to customer-facing applications, web hosting and other processing fees are attributed to the cost of product and service revenue in proportion to gross billings during the period. For product revenue transactions, cost of revenue also includes the cost of inventory, shipping and fulfillment costs and inventory markdowns. Fulfillment costs are comprised of third-party logistics provider costs, as well as rent, depreciation, personnel costs and other costs of operating our fulfillment center. 

Cost of revenue on product and service revenue for the three months ended March 31, 2018 and 2017 was as follows (dollars in thousands):

	Three Months Ended March 31,
	2018		2017		$ Change			% Change
Cost of revenue:
Service	$	31,145	$	42,873	$	(11,728	)	(27.4	)%
Product	270,510		321,302		(50,792		)	(15.8	)
Total cost of revenue	$	301,655	$	364,175	$	(62,520	)	(17.2	)

The effect on cost of revenue for the three months ended March 31, 2018 from changes in exchange rates versus the U.S. dollar was as follows (in thousands):

	Three Months Ended March 31, 2018
	At Avg. Q1 2017 Rates (1)		Exchange Rate Effect (2)		As Reported
Cost of revenue	$	284,785	$	16,870	$	301,655

(1) Represents the financial statement balances that would have resulted had exchange rates in the reporting period been the same as those in effect in the prior year period.

(2) Represents the increase or decrease in the reported amount resulting from changes in exchange rates from those in effect in the prior year period.

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Cost of Revenue by Segment

Cost of revenue by category and segment for the three months ended March 31, 2018 and 2017 was as follows (dollars in thousands):

	Three Months Ended March 31,
	2018		2017		$ Change			% Change
North America
Service cost of revenue:
Local	$	20,655	$	31,203	$	(10,548	)	(33.8	)%
Goods	933		397		536			135.0
Travel	4,082		5,297		(1,215		)	(22.9	)
Product cost of revenue - Goods	147,906		215,523		(67,617		)	(31.4	)
Total North America cost of revenue	173,576		252,420		(78,844		)	(31.2	)
International
Service cost of revenue:
Local	4,363		4,381		(18		)	(0.4	)
Goods	327		629		(302		)	(48.0	)
Travel	785		966		(181		)	(18.7	)
Product cost of revenue - Goods	122,604		105,779		16,825			15.9
Total International cost of revenue	128,079		111,755		16,324			14.6
Total cost of revenue	$	301,655	$	364,175	$	(62,520	)	(17.2	)

The percentages of cost of revenue by segment for the three months ended March 31, 2018 and 2017 were as follows:

Q1 2018 Q1 2017

North America International

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North America

The decrease in North America cost of revenue for thethree months endedMarch 31, 2018 was primarily attributable to the decrease in product revenue transactions as discussed above.

For the three months ended March 31, 2018, there was a $6.3 million favorable impact on cost of revenue as a result of adopting Topic 606 as compared to previous accounting guidance. See Note 2, Adoption of New Accounting Policies, and Note 10, Revenue Recognition, for additional information on the impact of adopting Topic 606 and its related amendments on the Company's accounting policies.

International

The increase in International cost of revenue for thethree months endedMarch 31, 2018 was primarily attributable to a$16.9 million unfavorable impact from year-over-year changes in foreign exchange rates.

Gross Profit

Gross profit for the three months ended March 31, 2018 and 2017 was as follows (dollars in thousands):

	Three Months Ended March 31,
	2018		2017		$ Change		% Change
Gross profit:
Service	$	270,652	$	258,704	$	11,948	4.6	%
Product	54,233		50,747		3,486		6.9
Total gross profit	$	324,885	$	309,451	$	15,434	5.0

The effect on gross profit for the three months ended March 31, 2018 from changes in exchange rates versus the U.S. dollar was as follows (in thousands):

	Three Months Ended March 31, 2018
	At Avg. Q1 2017 Rates (1)		Exchange Rate Effect (2)		As Reported
Gross profit	$	312,466	$	12,419	$	324,885

(1) Represents the financial statement balances that would have resulted had exchange rates in the reporting period been the same as those in effect in the prior year period.

(2) Represents the increase or decrease in the reported amount resulting from changes in exchange rates from those in effect in the prior year period.

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Gross Profit by Segment

Gross profit by category and segment for the three months ended March 31, 2018 and 2017 was as follows (dollars in thousands):

	Three Months Ended March 31,
	2018		2017		$ Change			% Change
North America
Service gross profit:
Local	$	166,756	$	169,342	$	(2,586	)	(1.5	)%
Goods	3,941		1,307		2,634			201.5
Travel	16,002		15,165		837			5.5
Product gross profit - Goods	32,981		35,123		(2,142		)	(6.1	)
Total North America gross profit	219,680		220,937		(1,257		)	(0.6	)
International
Service gross profit:
Local	70,215		59,194		11,021			18.6
Goods	3,087		3,660		(573		)	(15.7	)
Travel	10,651		10,036		615			6.1
Product gross profit - Goods	21,252		15,624		5,628			36.0
Total International gross profit	105,205		88,514		16,691			18.9
Total gross profit	$	324,885	$	309,451	$	15,434		5.0

The percentages of gross profit by segment for the three months ended March 31, 2018 and 2017 were as follows:

Q1 2018 Q1 2017

North America International

North America

North America gross profit for the three months endedMarch 31, 2018 was substantially consistent with the prior year period.

Gross profit from product revenue transactions in our Goods category decreased by 6.1%, as compared to the 27.8% decrease in revenue from those transactions. That difference was attributable to higher gross margins on product revenue transactions, which were 18.2% for the three months ended March 31, 2018 as compared to 14.0% in the prior year period. The margin improvement resulted from our ongoing efforts to de-emphasize lower margin product offerings and reduce our shipping and fulfillment costs.

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For the three months ended March 31, 2018, there was a $5.7 million favorable impact on gross profit as a result of adopting Topic 606 as compared to previous accounting guidance. That favorable impact included $3.0 million related to the change in the timing of recognition of variable consideration from unredeemed vouchers and $2.9 million related to the change in the timing of recognition of revenue from hotel reservation offerings. As a result of the Company’s increased use of pay-on-redemption terms with merchants in North America beginning in the third quarter 2017, we expect that the change to recognizing estimated variable consideration at the time of sale under Topic 606 will drive continued favorability in North America gross profit during the remainder of 2018, as compared to the gross profit that would have been reported in the current year under the previous accounting guidance. The favorable impact from recognizing revenue from hotel reservation offerings at the time of booking was primarily driven by seasonal travel patterns and we do not expect a significant impact from that change for the full year 2018. See Note 2, Adoption of New Accounting Policies, and Note 10, Revenue Recognition, for additional information on the impact of adopting Topic 606 and its related amendments on the Company's accounting policies.

International

The increase in International gross profit for the three months ended March 31, 2018 was primarily attributable to the following:

• a $12.4 million favorable impact on International gross profit from year-over-year changes in foreign exchange rates for the three months ended March 31, 2018; and

• our ongoing efforts to de-emphasize lower margin product offerings in all of our categories and to reduce our shipping and fulfillment costs on product revenue transactions.

For the three months ended March 31, 2018, there was a $2.3 million favorable impact on gross profit as a result of adopting Topic 606 as compared to previous accounting guidance. That favorable impact primarily reflected $2.7 million related to the change in the timing of recognition of variable consideration from unredeemed vouchers. Our international segment continues to primarily use pay-on redemption terms with merchants and the impact of the change to recognizing variable consideration at the time of sale under Topic 606 could be favorable or unfavorable from period to period for that segment based on seasonal revenue levels, particularly in our Local category, and changes in redemption rates. See Note 2, Adoption of New Accounting Policies, and Note 10, Revenue Recognition, for additional information on the impact of adopting Topic 606 and its related amendments on the Company's accounting policies.

Marketing

Marketing expense consists primarily of online marketing costs, such as search engine marketing, advertising on social networking sites and affiliate programs, and offline marketing costs, such as television and radio advertising. Additionally, compensation expense for marketing employees is classified within marketing expense. We record these costs within Marketing on the condensed consolidated statements of operations when incurred. From time to time, we offer deals with well-known national merchants for customer acquisition and activation purposes, for which the amount we owe the merchant for each voucher sold exceeds the transaction price paid by the customer. Our gross billings from those transactions generate no service revenue and our net cost (i.e., the excess of the amount owed to the merchant over the amount paid by the customer) is classified as marketing expense. We evaluate marketing expense as a percentage of gross profit because it gives us an indication of how well our marketing spend is driving gross profit growth.

Marketing expense by segment as a percentage of gross profit for the three months ended March 31, 2018 and 2017 was as follows (dollars in thousands):

	Three Months Ended March 31,
	2018		% of Gross Profit		2017		% of Gross Profit		$ Change		% Change
Marketing:
North America	$	71,451	32.5	%	$	63,543	28.8	%	$	7,908	12.4	%
International	27,705		26.3		22,799		25.8		4,906		21.5
Total marketing	$	99,156	30.5		$	86,342	27.9		$	12,814	14.8

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Marketing by Segment

The percentages of marketing expense by segment for the three months ended March 31, 2018 and 2017 were as follows:

Q1 2018 Q1 2017

North America International

North America

North America segment marketing expense and marketing expense as a percentage of gross profit for the three months ended March 31, 2018 increased from the prior year period, which was primarily attributable to our continued efforts to drive awareness of the Groupon brand and our product and service offerings.

International

International segment marketing expense and marketing expense as a percentage of gross profit for the three months ended March 31, 2018 increased from the prior year period, which was primarily attributable to a $3.6 million unfavorable impact on International segment marketing expense from year-over-year changes in foreign exchange rates and our ongoing strategic initiative to increase our marketing activities to drive customer growth.

Selling, General, and Administrative

Selling expenses reported within Selling, general and administrative on the condensed consolidated statements of operations consist of sales commissions and other compensation expenses for sales representatives, as well as costs associated with supporting the sales function such as technology, telecommunications and travel. General and administrative expenses include compensation expense for employees involved in customer service, operations, technology and product development, as well as general corporate functions, such as finance, legal and human resources. Additional costs included in general and administrative include depreciation and amortization, rent, professional fees, litigation costs, travel and entertainment, recruiting, office supplies, maintenance, certain technology costs and other general corporate costs. We evaluate selling, general and administrative expense as a percentage of gross profit because it gives us an indication of our operating efficiency.

Selling, general and administrative expense ("SG&A") as a percentage of gross profit for the three months ended March 31, 2018 and 2017 was as follows (dollars in thousands):

	Three Months Ended March 31,
	2018		% of Gross Profit		2017		% of Gross Profit		$ Change			% Change
Selling, general and administrative	$	222,061	68.4	%	$	232,058	75.0	%	$	(9,997	)	(4.3	)%

The decrease in SG&A and SG&A as a percentage of gross profit for three months ended March 31, 2018 as compared to the prior year period was primarily attributable to our continued efforts to improve our cost structure, including the following:

• a $4.4 million decrease in compensation-related costs; and

• decreases in facilities costs, systems costs, and other general expenses.

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There was an $8.7 million unfavorable impact from year-over-year changes in foreign currency exchange rates for the three months ended March 31, 2018.

Restructuring Charges

Restructuring charges represent severance and benefit costs for workforce reductions, impairments of long-lived assets and other exit costs resulting from our restructuring activities. See Note 11, Restructuring, for information about our restructuring plan.

Income (Loss) from Operations

Income (loss) from operations by segment for the three months ended March 31, 2018 and 2017 was as follows (dollars in thousands):

	Three Months Ended March 31,
	2018			2017			$ Change		% Change
Income (loss) from operations
North America	$	(1,860	)	$	(14,783	)	$	12,923	87.4	%
International	5,245			3,103			2,142		69.0
Total income (loss) from operations	$	3,385		$	(11,680	)	$	15,065	129.0

North America

The improvement in our income (loss) from operations was primarily attributable to a $20.1 million decrease in SG&A, partially offset by a $7.9 million increase in marketing expense.

Income (loss) from operations includes stock-based compensation of $17.9 million and $18.3 million for the three months ended March 31, 2018 and 2017, respectively.

For the three months ended March 31, 2018, there was a $5.2 million favorable impact on income (loss) from operations as a result of adopting Topic 606 as compared to previous accounting guidance. See Note 2, Adoption of New Accounting Policies, and Note 10, Revenue Recognition, for additional information on the impact of adopting Topic 606 and its related amendments on the Company's accounting policies.

International

The improvement in our income (loss) from operations was primarily attributable to a $16.7 million increase in gross profit, partially offset by a $10.1 million increase in SG&A and a $4.9 million increase in marketing expense.

Income (loss) from operations includes stock-based compensation of $1.4 million for the three months ended March 31, 2018 and 2017.

For the three months ended March 31, 2018, there was a $3.1 million favorable impact on income (loss) from operations as a result of adopting Topic 606 as compared to previous accounting guidance. See Note 2, Adoption of New Accounting Policies, and Note 10, Revenue Recognition, for additional information on the impact of adopting Topic 606 and its related amendments on the Company's accounting policies.

Other Income (Expense), Net

Other income (expense), net includes interest income, interest expense, gains and losses on fair value option investments, impairments of investments and foreign currency gains and losses, primarily resulting from intercompany balances with our subsidiaries that are denominated in foreign currencies.

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Other income (expense), net for the three months ended March 31, 2018 and 2017 was as follows (dollars in thousands):

	Three Months Ended March 31,
	2018			2017			$ Change			% Change
Other income (expense), net	$	(8,515	)	$	(4,602	)	$	(3,913	)	(85.0	)%

Other income (expense), net for the three months ended March 31, 2018 primarily consisted of the following:

• $5.0 million net loss on our fair value option investments. See Note 5, Investments, for additional information; and

• $5.5 million of interest expense.

These items were partially offset by the following:

• $1.4 million in foreign currency gains, which primarily resulted from intercompany balances with our subsidiaries that are denominated in foreign currencies; and

• $1.5 million in interest income.

Other income (expense), net for the three months ended March 31, 2017 primarily consisted of $5.3 million of interest expense.

Provision (Benefit) for Income Taxes

Provision (benefit) for income taxes for the three months ended March 31, 2018 and 2017 was as follows (dollars in thousands):

	Three Months Ended March 31,
	2018			2017			$ Change			% Change
Provision (benefit) for income taxes	$	(2,335	)	$	4,587		$	(6,922	)	(150.9	)%
Effective tax rate	45.5		%	(28.2		)%

Our U.S. Federal income tax rate is 21%. The effective tax rate for three months ended March 31, 2018 reflected a $6.4 million income tax benefit resulting from the impact of adopting Topic 606 on intercompany activity in certain foreign jurisdictions, partially offset by pretax losses incurred in jurisdictions that have valuation allowances against their net deferred tax assets. The primary factor impacting the effective tax rate for the three months ended March 31, 2017 was the pretax losses incurred in jurisdictions that have valuation allowances against their net deferred tax assets.

The Company is currently undergoing income tax audits in multiple jurisdictions. It is likely that the examination phase of some of those audits will conclude in the next 12 months. There are many factors, including factors outside of our control, which influence the progress of and completion of those audits. During the fourth quarter 2017, we received an income tax assessment and a notification of proposed assessment from the tax authorities in two foreign jurisdictions, totaling $141.8 million in the aggregate. We believe that the assessments, which primarily relate to transfer pricing on transactions occurring from 2011 to 2014, are without merit and we intend to vigorously defend ourselves in those matters. In addition to any potential increases in our liabilities for uncertain tax positions from the ultimate resolution of those assessments, we believe that it is reasonably possible that reductions of up to $40.6 million in unrecognized tax benefits may occur within the 12 months following March 31, 2018 upon closing of income tax audits or the expiration of applicable statutes of limitations.

The Tax Cuts and Jobs Act (the "Jobs Act") was signed into law on December 22, 2017. In general, it is our practice and intention to reinvest the earnings of our non-U.S. subsidiaries in those operations. Additionally, while we do not expect to incur the deemed repatriation tax established by the Jobs Act, an actual repatriation from our non-U.S. subsidiaries could be subject to foreign and U.S. state income taxes. Aside from limited exceptions for which the related deferred tax liabilities recognized as of March 31, 2018 and December 31, 2017 are immaterial, we do not intend to distribute earnings of foreign subsidiaries for which we have an excess of the financial reporting basis over the tax basis of our investments and therefore have not recorded any deferred taxes related to such amounts. The actual tax cost resulting from a distribution would depend on income tax laws and circumstances at the time of distribution. Determination of the amount of unrecognized deferred tax liability related to the excess of the financial reporting basis over the tax basis of our foreign subsidiaries is not practical due to the complexities associated with the calculation.

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We expect that our consolidated effective tax rate in future periods will continue to differ significantly from the U.S. federal income tax rate as a result of our tax obligations in jurisdictions with profits and valuation allowances in jurisdictions with losses.

Income (Loss) from Discontinued Operations

From November 2016 through March 2017, we exited our operations in 11 non-core countries and their results have been presented as discontinued operations. See Note 3, Discontinued Operations and Other Business Dispositions, for additional information about the dispositions and see Note 8, Commitments and Contingencies, for information about indemnification obligations related to discontinued operations.

Non-GAAP Financial Measures

In addition to financial results reported in accordance with U.S. GAAP, we have provided the following non-GAAP financial measures: Adjusted EBITDA, free cash flow and foreign currency exchange rate neutral operating results. Those non-GAAP financial measures, which are presented on a continuing operations basis, are intended to aid investors in better understanding our current financial performance and prospects for the future as seen through the eyes of management. We believe that those non-GAAP financial measures facilitate comparisons with our historical results and with the results of peer companies who present similar measures (although other companies may define non-GAAP measures differently than we define them, even when similar terms are used to identify such measures). However, those non-GAAP financial measures are not intended to be a substitute for those reported in accordance with U.S. GAAP.

Adjusted EBITDA. Adjusted EBITDA is a non-GAAP performance measure that we define as net income (loss) from continuing operations excluding income taxes, interest and other non-operating items, depreciation and amortization, stock-based compensation, acquisition-related expense (benefit), net and other special charges and credits, including items that are unusual in nature or infrequently occurring. Our definition of Adjusted EBITDA may differ from similar measures used by other companies, even when similar terms are used to identify such measures. Adjusted EBITDA is a key measure used by our management and Board of Directors to evaluate operating performance, generate future operating plans and make strategic decisions for the allocation of capital. Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and Board of Directors. However, Adjusted EBITDA is not intended to be a substitute for income (loss) from continuing operations.

We exclude stock-based compensation expense and depreciation and amortization because they are primarily non-cash in nature and we believe that non-GAAP financial measures excluding those items provide meaningful supplemental information about our operating performance and liquidity. Acquisition-related expense (benefit), net is comprised of the change in the fair value of contingent consideration arrangements and external transaction costs related to business combinations, primarily consisting of legal and advisory fees. The composition of our contingent consideration arrangements and the impact of those arrangements on our operating results vary over time based on a number of factors, including the terms of our business combinations and the timing of those transactions. For the three months ended March 31, 2018 and 2017, special charges and credits included charges related to our restructuring plan. We exclude special charges and credits from Adjusted EBITDA because we believe that excluding those items provides meaningful supplemental information about our core operating performance and facilitates comparisons with our historical results.

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The following is a reconciliation of Adjusted EBITDA to the most comparable U.S. GAAP financial measure, Income (loss) from continuing operations for the three months ended March 31, 2018 and 2017 (in thousands):

	Three Months Ended March 31,
	2018			2017
Income (loss) from continuing operations	$	(2,795	)	$	(20,869	)
Adjustments:
Stock-based compensation (1)	19,278			19,650
Depreciation and amortization	29,661			34,067
Acquisition-related expense (benefit), net	—			12
Restructuring charges	283			2,731
Other (income) expense, net	8,515			4,602
Provision (benefit) for income taxes	(2,335		)	4,587
Total adjustments	55,402			65,649
Adjusted EBITDA	$	52,607		$	44,780

(1) Represents stock-based compensation expense recorded within Selling, general and administrative, Cost of revenue and Marketing. Other income (expense), net includes $0.05 million for the three months ended March 31, 2018 and 2017.

Free cash flow. Free cash flow is a non-GAAP liquidity measure that comprises net cash provided by operating activities from continuing operations less purchases of property and equipment and capitalized software from continuing operations. We use free cash flow to conduct and evaluate our business because, although it is similar to cash flow from continuing operations, we believe that it typically represents a more useful measure of cash flows because purchases of fixed assets, software developed for internal use and website development costs are necessary components of our ongoing operations. Free cash flow is not intended to represent the total increase or decrease in our cash balance for the applicable period.

Free cash flow has limitations due to the fact that it does not represent the residual cash flow available for discretionary expenditures. For example, free cash flow does not include cash payments for business acquisitions. In addition, free cash flow reflects the impact of the timing difference between when we are paid by customers and when we pay merchants and suppliers. Therefore, we believe it is important to view free cash flow as a complement to our entire consolidated statements of cash flows. For a reconciliation of free cash flow to the most comparable U.S. GAAP financial measure, see Liquidity and Capital Resources below.

Foreign currency exchange rate neutral operating results. Foreign currency exchange rate neutral operating results show current period operating results as if foreign currency exchange rates had remained the same as those in effect in the prior year period. Those measures are intended to facilitate comparisons to our historical performance. For a reconciliation of foreign currency exchange rate neutral operating results to the most comparable U.S. GAAP financial measures, see Results of Operations above.

Liquidity and Capital Resources

Our principal sources of liquidity are cash flows from operations, cash and cash equivalents and available borrowing capacity under our Amended and Restated Credit Agreement. As of March 31, 2018, we had $725.9 million in cash and cash equivalents, which primarily consisted of bank deposits and government money market funds.

Our net cash flows from operating, investing and financing activities from continuing operations for the three months ended March 31, 2018 and 2017 were as follows (in thousands):

	Three Months Ended March 31,
	2018			2017
Cash provided by (used in):
Operating activities (1)	$	(119,747	)	$	(138,086	)
Investing activities	(20,382		)	(14,020		)
Financing activities	(20,899		)	(45,726		)

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(1) Prior period net cash used in operating activities from continuing operations has been updated from $136.2 million previously reported to reflect the adoption of ASU 2016-18 on January 1, 2018. See Note 2, Adoption of New Accounting Standards, for additional information on the adoption of ASU 2016-18.

Free cash flow is a non-GAAP liquidity measure that comprises net cash provided by operating activities from continuing operations, less purchases of property and equipment and capitalized software from continuing operations. Our free cash flow for the three months ended March 31, 2018 and 2017 and reconciliations to the most comparable U.S. GAAP financial measure, Net cash provided by (used in) operating activities from continuing operations, for those periods are as follows (in thousands):

	Three Months Ended March 31,
	2018			2017
Net cash provided by (used in) operating activities from continuing operations (1)	$	(119,747	)	$	(138,086	)
Purchases of property and equipment and capitalized software from continuing operations	(20,144		)	(14,076		)
Free cash flow (1)	$	(139,891	)	$	(152,162	)

(1) Prior period net cash used in operating activities from continuing operations and free cash flow have been updated from $136.2 million and negative $150.3 million previously reported, respectively, to reflect the adoption of ASU 2016-18 on January 1, 2018. See Note 2, Adoption of New Accounting Standards, for additional information on the adoption of ASU 2016-18.

Our revenue-generating transactions are primarily structured such that we collect cash up-front from customers and pay third-party merchants at a later date, either based on a fixed payment schedule or upon the customer's redemption of the related voucher. For merchants on fixed payment terms, we remit payments on an ongoing basis, generally bi-weekly, throughout the term of the merchant's offering. For purchases of merchandise inventory, our supplier payment terms generally range from net 30 to net 60 days. We have primarily paid merchants on fixed payment terms in North America and upon voucher redemption internationally. In the third quarter of 2017, we began to increase our use of redemption payment terms with our North America merchants as well and we expect that trend to continue.

Our cash balances fluctuate significantly throughout the year based on many variables, including gross billings growth rates, the timing of payments to merchants and suppliers, seasonality and the mix of transactions between Goods and Local. For example, we typically generate strong cash inflows during the fourth quarter holiday season, driven primarily by our Goods category, followed by significant cash outflows in the following period when payments are made to inventory suppliers. We are currently developing and testing voucherless offerings that are linked to customer credit cards, which we refer to as Groupon+. For Groupon+ deals, we offer cash back on customers' credit card statements based on qualifying purchases with participating merchants. For those offerings, we remit payment to a card brand network at the time of the qualifying purchase for the customer's cash back incentive and then we collect from the merchant both our commission and reimbursement for the customer's cash back incentive, usually on a bi-weekly basis. The working capital impact of Groupon+ offerings is less favorable to us than voucher transactions, for which we collect payment from customers at the time of sale and remit payment to merchants at a later date. As such, we expect that our cash flows will initially be adversely impacted to the extent that Groupon+ offerings begin to scale in future periods.

For the three months ended March 31, 2018, our net cash used in operating activities from continuing operations was $119.7 million, as compared to our $2.8 million net loss from continuing operations. That difference was primarily attributable to a $168.1 million net decrease from changes in working capital and other assets and liabilities. The working capital impact was primarily related to the seasonal timing of payments to inventory suppliers. The difference between our net cash provided by operating activities and our net income from continuing operations due to changes in working capital was partially offset by $51.2 million of non-cash items, including depreciation and amortization and stock-based compensation.

For the three months ended March 31, 2017, our net cash used in operating activities from continuing operations was $138.1 million, as compared to a $20.9 million net loss from continuing operations. That difference was primarily due to a $173.2 million decrease from changes in working capital and other assets and liabilities. The working capital impact was primarily related to the seasonal timing of payments to inventory suppliers and payments related to our restructuring activities. The difference between our net cash provided by operating activities and our net income from continuing operations due to changes in working capital was partially offset by $56.0 million of non-cash items, including depreciation and amortization and stock-based compensation.

Our net cash used in investing activities from continuing operations was $20.4 million and $14.0 million for the three months ended March 31, 2018 and 2017, respectively. For the three months ended March 31, 2018 and 2017, our net cash used in investing activities from continuing operations included $20.1 million and $14.1 million, respectively, in purchases of property and equipment and capitalized software.

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Our net cash used in financing activities was $20.9 million and $45.7 million for the three months ended March 31, 2018 and 2017, respectively. For the three months ended March 31, 2018, net cash used in financing activities included $9.0 million in payments of capital lease obligations and $9.2 million in taxes paid related to net share settlements of stock-based compensation awards. For the three months ended March 31, 2017, net cash used in financing activities included $27.2 million in purchases of treasury stock under our share repurchase program, $8.1 million in payments of capital lease obligations and $9.0 million in taxes paid related to net share settlements of stock-based compensation awards.

Our Amended and Restated Credit Agreement provides for aggregate principal borrowings of up to $250.0 million and matures in July 2019. As of March 31, 2018, we had no borrowings under our Amended and Restated Credit Agreement and were in compliance with all covenants. See Note 7, Financing Arrangements, for additional information.

As of March 31, 2018, we had $279.0 million in cash held by our international subsidiaries, which is primarily denominated in Euros, British Pounds Sterling, Canadian dollars, and, to a lesser extent, Australian dollars and Japanese yen. In general, it is our practice and intention to re-invest the earnings of our non-U.S. subsidiaries in those operations. We have not, nor do we anticipate the need to, repatriate funds to the United States to satisfy domestic liquidity needs arising in the ordinary course of business.

In May 2018, the Board of Directors authorized us to repurchase up to $300.0 million of our common stock under a new share repurchase program. The Company's prior share repurchase program expired in April 2018. During the three months ended March 31, 2018, we did not purchase any shares under the share repurchase program. As of March 31, 2018 and upon its expiration the following month, up to $135.2 million of our common stock remained available for purchase under that prior share repurchase program. The timing and amount of share repurchases, if any, will be determined based on market conditions, limitations under our Amended and Restated Credit Agreement, share price and other factors, and the program may be terminated at any time. Repurchases will be made in compliance with SEC rules and other legal requirements and may be made, in part, under a Rule 10b5-1 plan, which permits share repurchases when we might otherwise be precluded from doing so.

Our cash and cash equivalents and cash flows generated from our operations may be used to fund strategic investments, business acquisitions, working capital needs, investments in technology, marketing and share repurchases. Additionally, we have the ability to borrow funds under our Amended and Restated Credit Agreement. We could also seek to raise additional financing, if available on terms that we believe are favorable, to increase the amount of liquid funds that we can access for acquisitions, share repurchases or other strategic investment opportunities. Although we can provide no assurances, we believe that our cash and cash equivalents balance and cash generated from operations and available borrowings under our Amended and Restated Credit Agreement should be sufficient to meet our working capital requirements and capital expenditures for at least the next twelve months.

Contractual Obligations and Commitments

Our contractual obligations and commitments as of March 31, 2018 did not materially change from the amounts set forth in our 2017 Annual Report on Form 10-K, except as disclosed in Note 8, Commitments and Contingencies.

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements as of March 31, 2018.

Critical Accounting Policies and Estimates

The preparation of condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts and classifications of assets and liabilities, revenue and expenses, and related disclosures of contingent liabilities. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Management's Discussion and Analysis of Financial Condition and Results of Operations is based upon our condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP. Our significant accounting policies are discussed in Note 2, Summary of Significant Accounting Policies, and in the notes to the consolidated financial statements included in our Annual Report on Form 10-K, as amended, for the year ended December 31, 2017. In addition, refer to the critical accounting policies and estimates under Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2017.

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The changes to our revenue recognition policies upon the adoption of Topic 606 on January 1, 2018 represents a material change to our critical accounting policies and estimates during the three months ended March 31, 2018. See Note 2, Adoption of New Accounting Standards, and Note 10, Revenue Recognition, for additional information related to our revised revenue recognition policies.

Recently Issued Accounting Standards

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This ASU will require assets and liabilities arising from leases, including operating leases, to be recognized on the balance sheet. The ASU is effective for annual reporting periods beginning after December 15, 2018 and interim periods within those annual periods, and requires a modified retrospective transition method. We are still assessing the impact of ASU 2016-02. See Note 10, Commitments and Contingencies, in our Form 10-K, as amended, for the year ended December 31, 2017 for information about our lease commitments.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses of Financial Instruments. This ASU requires entities to measure credit losses for financial assets measured at amortized cost based on expected losses rather than incurred losses. For available-for-sale debt securities with unrealized losses, entities will be required to recognize credit losses through an allowance for credit losses. The ASU will be effective for annual reporting periods beginning after December 15, 2019 and interim periods within those annual periods. While we are still assessing the impact of ASU 2016-13, we currently believe that the adoption of this guidance will not have a material impact on our condensed consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350) - Simplifying the Test for Goodwill Impairment. This ASU eliminates Step 2 of the goodwill impairment test and requires a goodwill impairment to be measured as the amount by which a reporting unit’s carrying amount exceeds its fair value, not to exceed the carrying amount of its goodwill. The ASU is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. We believe that the adoption of this guidance will not have a material impact on our condensed consolidated financial statements.

There are no other accounting standards that have been issued but not yet adopted that we believe could have a material impact on our condensed consolidated financial position or results of operations.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We have operations both within the United States and internationally, and we are exposed to market risks in the ordinary course of our business, including the effect of foreign currency fluctuations, interest rate changes and inflation. Information relating to quantitative and qualitative disclosures about those market risks is set forth below.

Foreign Currency Exchange Risk

We transact business in various foreign currencies other than the U.S. dollar, principally the euro, British pound sterling, Canadian dollar and Australian dollar, which exposes us to foreign currency risk. For the three months ended March 31, 2018, we derived approximately 37.2% of our revenue from our International segment. Revenue and related expenses generated from our international operations are generally denominated in the local currencies of the corresponding countries. The functional currencies of our subsidiaries that either operate or support those markets are generally the same as the corresponding local currencies. However, the results of operations of, and certain of our intercompany balances associated with, our international operations are exposed to foreign currency exchange rate fluctuations. Upon consolidation, as exchange rates vary, our revenue and other operating results may differ materially from expectations, and we may record significant gains or losses on the re-measurement of intercompany balances.

We assess our foreign currency exchange risk based on hypothetical changes in rates utilizing a sensitivity analysis that measures the potential impact on working capital based on a 10% change (increase and decrease) in currency rates. We use a current market pricing model to assess the changes in the value of the U.S. dollar on foreign currency denominated monetary assets and liabilities. The primary assumption used in this model is a hypothetical 10% weakening or strengthening of the U.S. dollar against those currency exposures as of March 31, 2018 and December 31, 2017.

As of March 31, 2018, our net working capital deficit (defined as current assets less current liabilities) from subsidiaries that are subject to foreign currency translation risk was $13.3 million. The potential increase in this working capital deficit from a hypothetical 10% adverse change in quoted foreign currency exchange rates would be $1.3 million. This compares to a $21.5 million working capital deficit subject to foreign currency exposure as of December 31, 2017, for which a 10% adverse change would have resulted in a potential increase in this working capital deficit of $2.2 million.

Interest Rate Risk

Our cash and cash equivalents primarily consist of bank deposits and government money market funds. Our exposure to market risk for changes in interest rates is limited because our cash and cash equivalents have a short-term maturity and are used primarily for working capital purposes. In April 2016, we issued convertible notes with an aggregate principal amount of $250.0 million (see Note 7, Financing Arrangements). The convertible notes bear interest at a fixed rate, so we have no financial statement impact from changes in interest rates. However, changes in market interest rates impact the fair value of the convertible notes along with other variables such as our credit spreads and the market price and volatility of our common stock. In June 2016, we entered into the Amended and Restated Credit Agreement that provides for aggregate principal borrowings of up to $250.0 million. As of March 31, 2018, there were no borrowings outstanding under the Amended and Restated Credit Agreement. Because the Amended and Restated Credit Agreement bears interest at a variable rate, we are exposed to market risk relating to changes in interest rates if we borrow under the Amended and Restated Credit Agreement. We also have $37.5 million of capital lease obligations and $11.1 million of investments in convertible debt securities issued by nonpublic entities that are classified as available-for-sale. We do not believe that the interest rate risk on the long-term capital lease obligations and investments is significant.

Impact of Inflation

We believe that our results of operations are not materially impacted by moderate changes in the inflation rate. Inflation and changing prices did not have a material effect on our business, financial condition or results of operations for the three months ended March 31, 2018.

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ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act), as of the end of the period covered by this Quarterly Report on Form 10-Q.

Based on this evaluation, our management concluded that, as of March 31, 2018, our disclosure controls and procedures are effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

On January 1, 2018, we adopted the revenue recognition guidance in Topic 606. We implemented internal controls designed to provide reasonable assurance that we have properly applied the guidance in Topic 606 to our financial statements. Those internal controls included the establishment of policies and procedures related to estimates required by Topic 606, such as estimates of variable consideration from unredeemed vouchers.

There were no other changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Limitations on Effectiveness of Controls and Procedures

In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

For a description of our material pending legal proceedings, please see Note 8, Commitments and Contingencies, to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

ITEM 1A. RISK FACTORS

There have been no material changes from the risk factors previously disclosed in Part I, Item 1A, Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2017, except to supplement and amend those risk factors as follows:

We may be subject to breaches of our information technology systems, which could harm our relationships with our customers and merchants, subject us to negative publicity and litigation, and cause substantial harm to our business.

In operating a global online business, we and our third-party service providers maintain significant proprietary information and manage large amounts of personal data and confidential information about our employees, customers and merchants. We and such service providers are at constant risk of cyber-attacks or cyber intrusions via the Internet, computer viruses, break-ins, malware, phishing attacks, hacking, denial-of-service attacks or other attacks and similar disruptions from the unauthorized use of or access to computer systems (including from internal and external sources). These types of incidents have become more prevalent and pervasive across industries, including in our industry, and such attacks on our systems have occurred in the past and are expected to occur in the future. Further, we believe that we are a compelling target for such attacks as a result of the high profile of our brand and the amount and type of information we maintain relating to our customers and merchants. Any such incident could lead to interruptions, delays or website outages, causing loss of critical data or the unauthorized disclosure or use of personally identifiable or other confidential information.

Any failure to prevent or mitigate cybersecurity breaches or other improper access to, or disclosure of, our data or confidential information, including non-public financial information, could result in the loss or misuse of such data or information, negatively impacting customers’ and merchants’ confidence in the security of our services and potentially resulting in significant customer or merchant attrition, a decline in customer purchase frequency, litigation and/or regulatory investigations, and/or damage to our brand and reputation.

Our risk and exposure to these matters remains heightened because of, among other things, the evolving nature of these threats, our prominent size and scale, the large number of transactions that we process, our geographic footprint and international presence, our use of open source software, the complexity of our systems, the maturity of our systems, processes and risk management framework, our number of employees, the location of our businesses and data storage facilities, the jurisdictions in which we operate and the various and evolving laws and regulatory schemes governing data and data protection applicable to us, the extent to which our current systems, controls, processes and practices permit us to detect, log and monitor security events, our use of cloud based technologies and the outsourcing of some of our business operations.

Although cybersecurity and the continued development and enhancement of our controls, processes and practices designed to protect our systems, computers, software, data and networks from attack, damage or unauthorized access are a high priority for us, our activities and investment may not be deployed quickly enough or successfully protect our systems against all vulnerabilities, including technologies developed to bypass our security measures or zero day vulnerabilities. In addition, outside parties may attempt to fraudulently induce employees, merchants or customers to disclose access credentials or other sensitive information in order to gain access to our secure systems and networks. We also may be subject to additional vulnerabilities as we integrate the systems, computers, software and data of acquired businesses into our networks and separate the systems, computers, software and data of disposed businesses from our networks.

We maintain a cybersecurity risk management program that is overseen by our Vice President, Information Security, who reports directly to our Chief Technology Officer. Our Vice President, Information Security regularly reports to the Audit Committee on the state of our cybersecurity program and provides updates on cybersecurity matters. We also conduct an annual cybersecurity review with our Board of Directors. As part of our cybersecurity risk management program, we employ security practices to protect and maintain the systems located at our data centers and hosting providers, invest in intrusion, anomaly, and vulnerability detection tools and engage third-party security firms to test the security of our websites and systems.  In addition, we regularly evaluate and assess our systems and the controls, processes and practices to protect those systems and also conduct penetration testing against our own system. The evaluations, assessments and testing identify areas of potential weakness in, and suggested improvements to, the maturity of our systems, processes, and risk management framework as well as vulnerabilities in those systems, processes, and risk management framework that could be attacked and exploited to access and acquire proprietary and confidential information,

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including information about our customers and merchants. There are no assurances that our cybersecurity risk mitigation program or our actions and investments to improve the maturity of our systems, processes and risk management framework or remediate vulnerabilities will be sufficient or completed quickly enough to prevent or limit the impact of any cyber intrusion. In addition, in the future we may be required to expend significant additional resources to modify or enhance our protective measures, controls and systems or to improve the maturity of our systems, processes and risk management framework, or investigate or remediate any information security vulnerabilities. These improvements, modifications and enhancements may take significant time to implement. Further, the sophistication of potential attacks or the capabilities of our systems and processes may not permit us to detect the occurrence of cyber incidents until significant data loss has occurred. Moreover, because the techniques used to gain access to or sabotage systems often are not recognized until launched against a target, we may be unable to anticipate the methods necessary to defend against these types of attacks and we cannot predict the extent, frequency or impact these problems may have on us. Any actual breach, the perceived threat of a breach or a perceived breach, could cause our customers, merchants, card brands and payment card processors to cease doing business with us or do business with us less frequently, subject us to lawsuits (including claims for damages), investigations, regulatory fines or other action or liability or damage to our brand and reputation, which would harm our business, financial condition and results of operations.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Recent Sales of Unregistered Securities

During the three months ended March 31, 2018, we did not issue any unregistered equity securities.

Issuer Purchases of Equity Securities

On May 7, 2018, the Board authorized us to repurchase up to $300.0 million of our common stock under a new share repurchase program. The timing and amount of any share repurchases, if any, will be determined based on market conditions, limitations under the amended and restated credit agreement, share price and other factors, and the program may be terminated at any time. We will fund the repurchases, if any, through cash on hand, future cash flows and borrowings under our credit facility. Repurchases will be made in compliance with SEC rules and other legal requirements and may be made in part under a Rule 10b5-1 plan, which permits stock repurchases when the Company might otherwise be precluded from doing so.

Our prior share repurchase program expired in April 2018. During the three months ended March 31, 2018, we did not purchase any shares under the prior share repurchase program. As of March 31, 2018 and upon its expiration the following month, up to$135.2 million of common stock remained available for purchase under that prior program. See Note 9, Stockholders' Equity and Compensation Arrangements, for discussion regarding our share repurchase program.

The following table provides information about purchases of shares of our common stock during the three months ended March 31, 2018 related to shares withheld upon vesting of restricted stock units for minimum tax withholding obligations:

Date	Total Number of Shares Purchased (1)	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Program	Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under Program
January 1-31, 2018	367,244	$	5.14	—	—
February 1-28, 2018	263,327	4.69		—	—
March 1-31, 2018	1,394,019	4.46		—	—
Total	2,024,590	$	4.62	—	—

(1) Total number of shares delivered to us by employees to satisfy the mandatory tax withholding requirement upon vesting of stock-based compensation awards.

ITEM 5. OTHER INFORMATION

On May 7, 2018, the Board of Directors of the Company approved a new share repurchase program, which replaces its prior program that expired in April 2018. Under the new share repurchase program, Groupon is authorized to repurchase up to $300.0 million of its outstanding common stock. The timing and amount of any share repurchases will be determined based on market conditions, share price and other factors, and any such repurchases may be made in the open market or through privately negotiated transactions. Repurchases will be made in compliance with SEC rules and other legal requirements and may be made in part under a Rule 10b5-1 plan, which permits stock repurchases when Groupon might otherwise be precluded from doing so.

53

ITEM 6. EXHIBITS

Exhibit Number	Description
10.1	Amended and Restated Groupon, Inc. Non-Employee Directors’ Compensation Plan
10.2	Form of Notice of Performance Share Unit Award and Form of Performance Share Unit Award Agreement under the Groupon, Inc. 2011 Incentive Plan, as amended
31.1	Certification of Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

54

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on this 9th day of May 2018.

GROUPON, INC.
By:	/s/ Michael Randolfi
	Name:	Michael Randolfi
	Title:	Chief Financial Officer

55

EX-10.1

Exhibit 10.1

GROUPON, INC.

NON-EMPLOYEE DIRECTORS' COMPENSATION PLAN

Amended and Restated as of February 1, 2018

The Company hereby establishes this Plan to assist the Company in attracting and retaining persons of competence and stature who are not employees to serve as Directors by providing them with competitive retainers, an ownership interest in the Company, and the opportunity to defer Retainers.

1.Effective Date. The Plan was initially effective as of the Effective Date and was amended and restated effective February 1, 2018.

2.Definitions. Where used in the Plan, the following capitalized words and terms shall have the meanings specified below, unless the context clearly indicates to the contrary:

(a)"Account" means the recordkeeping account established by the Committee for each Participant to which DSUs, and earnings thereon, are credited in accordance with Section 10 of the Plan.

(b)"Beneficiary" means such person(s) or legal entity that is designated by a Participant under Section 14 to receive benefits hereunder after such Participant's death.

(c)"Board" means the Company's Board of Directors.

(d)"Cash Retainer" means the portion of a Retainer which is payable in cash.

(e)"Change in Control" means such term as defined in the Incentive Plan. Notwithstanding the foregoing, if an amount payable under the Plan is "deferred compensation" for purposes of Code Section 409A, and if a payment of such amount would be accelerated or otherwise triggered upon a Change in Control, then the foregoing definition is modified, to the extent necessary to avoid the imposition of an excise tax under Code Section 409A, to mean a "change in control event" as such term is defined for purposes of Code Section 409A. For purposes of clarity, if an amount would, for example, vest and be paid on a Change in Control as defined herein but payment of such amount would violate the provisions of Code Section 409A, then the amount shall vest but will be paid only in compliance with its terms and Code Section 409A (i.e., upon a permissible payment event).

(f)"Code" means the Internal Revenue Code of 1986, as amended.

(g)"Code Section 409A" means Section 409A of the Code and all interpretive guidance issued thereunder by the U.S. Internal Revenue Service.

(h)"Committee" means a committee appointed to administer the Plan by the Board, or the properly designated delegate of such committee.

(i)"Company" means Groupon, Inc., a Delaware corporation.

(j)"Director" means each director who has been duly appointed to the Board.

(k)"Disability" means the individual is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months.

(l)"DSU" means a deferred share unit issued under and pursuant to the terms and conditions of the Incentive Plan.

(m)"Election Form" means such document(s) or form(s), which may be electronic, as prescribed and made available from time to time by the Committee, whereby a Participants elects to exchange all or a portion of his or her Cash Retainer for an award of DSUs.

(n)"Exchange Act" means the Securities Exchange Act of 1934.

(o)"Fair Market Value" as of a particular date shall mean the fair market value of a Share as determined in accordance with the Incentive Plan.

(p)"Incentive Plan" means the Groupon, Inc. 2011 Incentive Plan.

(q)"Participant" means each Director who is not an employee of the Company.

(r)"Plan" means this Groupon, Inc. Non-Employee Directors' Compensation Plan.

(s)"Retainer" means the annual fee payable by the Company to a Participant with respect to his or her service on the Board, including both fees payable in cash and fees payable in Shares.

(t)"Retirement" means a Separation upon or after attaining seventy (70) years of age.

(u)"RSU" means a restricted stock unit issued under and pursuant to the terms and conditions of the Incentive Plan.

(v)"RSU Retainer" means the portion of a Retainer which is payable in the form of RSUs.

(w)"Separation" means a Participant's ceasing to be a Director on account of a voluntary or involuntary separation from service, within the meaning of Code Section 409A, with the Board, for any reason.

(x)"Share" means a share of the Company's common stock.

(y)"Specified Employee" means a Participant who is determined by the Company to be a "specified employee" within the meaning of Code Section 409A with respect to a Separation occurring in any twelve (12) month period commencing on each April 1 based on the Participant's compensation with the Company, as defined in Code Section 416(i)(1)(D), and his or her status at the end of the immediately preceding calendar year.

3.Eligibility and Participation. Each Director who is not an employee of the Company and who is selected by the Committee for participation in the Plan shall be a Participant in the Plan. A Participant will cease to be a Participant in the Plan on the earlier to occur of (a) his or her Separation or (b) the date on which the Committee determines that he or she is no longer eligible to participate in the Plan.

4.Retainer. Each Participant shall be paid an annual Retainer in the amount of $250,000 in exchange for his or her service as a Director. In addition, the annual Retainer for the chair of (a) the Compensation Committee will be increased by $20,000, (b) the Nominating and Corporate Governance Committee will be increased by $15,000, and (c) the Audit Committee will be increased by $30,000. The Retainer shall be paid as follows: (a) 30% in the form of a Cash Retainer and (b) 70% in the form of an RSU Retainer. Any additional amount due to a Participant who serves as the chair of one of the aforementioned committees, shall be paid as follows: (a) 1/3 (one-third) in the form of a Cash Retainer and (b) 2/3 (two-thirds) in the form of an RSU Retainer. The Cash Retainer shall be paid to the Participant on a quarterly basis as soon as practicable, but in any event within thirty (30) days, following the end of a calendar quarter, for the future quarter's service. Each Director who becomes a Participant during a calendar quarter will be entitled to receive a quarterly Cash Retainer payment for such quarter, unless, immediately before becoming a Participant, he or she was an employee of the Company. The RSU Retainer shall be awarded to the Participant on an annual basis on the date of the Company's annual meeting of stockholders. In the event that a Director becomes a Participant following the date of the annual meeting of stockholders but during the same calendar year as the annual meeting of the stockholders, the Board may, in its sole discretion, pay such Participant a pro-rated RSU Retainer with respect to his or her service during such year.

5.Vesting of RSUs. 100% of the RSUs awarded pursuant to an RSU Retainer shall vest and become non-forfeitable on the first anniversary of the date on which the applicable RSU Retainer was granted. Notwithstanding the foregoing, the following provisions shall apply in the circumstances described below:

(a)Death; Disability; Retirement. In the event of a Participant's Separation due to his or her death, Disability, or Retirement, vesting of the unvested portion of an RSU Retainer shall be accelerated upon the date of Separation.

(b)All Other Separations. In the event of a Participant's Separation for any reason other than his or her death, Disability, or Retirement, any unvested portion of an RSU Retainer shall immediately be cancelled and forfeited on the date of Separation.

(c)Change in Control. In the event of a Change in Control, vesting of the unvested portion of an RSU Retainer shall be accelerated upon the date of the Change in Control.

6.Distribution of RSUs. RSUs shall be distributed as soon as administratively practicable, but in any event within sixty (60) days, following the date on which the RSUs vest in accordance with Section 5. In the event of a Participant's death, distribution will be made to the Participant's Beneficiary.

7.Deferral of Cash Retainer. Notwithstanding any provision of Section 4, a Participant may elect to exchange all or a portion of his or her Cash Retainer for an award of DSUs in the manner described in this Section 7. The number of DSUs to be awarded will be determined by dividing the amount of the Cash Retainer to be exchanged by the Fair Market Value of a Share as of the date(s) on which the Cash Retainer would otherwise have been paid. DSUs will be credited to the Participant's Account effective as of the date on which the Cash Retainer would otherwise have been paid. The Committee may establish procedures for deferral elections as it deems necessary to comply with the requirements of the Plan and Code Section 409A.

(a)Election. A Participant can make an election to receive DSUs by completing and executing an Election Form that specifies the amount or percentage of the Cash Retainer to be exchanged for DSUs and the date on which DSUs shall be distributed, and filing the completed Election Form with the Committee. A Participant's Election Form shall remain in effect under the Plan until it is terminated by operation of the Plan or changed by the Participant in accordance with this Section. A Participant's Election Form must be filed with the Committee before expiration of the election period established by the Committee, which period, with respect to Cash Retainers to be paid in a given calendar year, shall end no later than December 31 of the immediately preceding calendar year. Notwithstanding the foregoing, a Participant may file an Election Form within the thirty (30) day period immediately following the date he or she first becomes a Participant, provided that the Cash Retainer being exchanged for DSUs relates to services performed after the date of such election.

(b)Revoking an Election. A Participant may elect to suspend or revoke a prior filed Election Form for services performed during a subsequent calendar year by filing an Election Form that specifies the amount or percentage of the Cash Retainer to be deferred before expiration of the election period established by the Committee, which period shall end no later than December 31 of the calendar year immediately preceding such year.

(c)Changing an Election. A Participant may elect to change his or her elected time of distribution of DSUs. Any election change must be made no later than twelve (12) months before the date on which distribution would have commenced under the Participant’s original election, and such election change will not be effective until twelve (12) months following the date of the election change. Any such election change may not provide for a new distribution date that is earlier than five (5) years following the originally elected distribution date.

8.Distribution of DSUs. A Participant's Account shall be distributed to the Participant as soon as administratively possible, but in any event within thirty (30) days, following the later of (a) the Participant's Separation, or (b) the occurrence of a specified date as elected by the Participant in his or her Election Form. In the event that the distribution trigger is the Participant's Separation due to the Participant's death, distribution will be made to the Participant's Beneficiary.

(a)Form of Payment. A Participant's Account shall be distributed in a single distribution in the form of Shares.

(b)Income Inclusion under Code Section 409A. Notwithstanding any provision of the Plan to the contrary, in the event that the Plan fails to meet the requirements of Code Section 409A, the Committee may distribute to Participants the portion of their Accounts that is required to be included in income as a result of such failure.

9.Source of Shares. The RSUs and DSUs that may be paid pursuant to the Plan shall be issued under the Incentive Plan subject to all of the terms and conditions of the Incentive Plan, and only to the extent that Shares remain available for issuance under the Incentive Plan. The terms and conditions of the Incentive Plan are incorporated into and made a part of this Plan with respect to any RSUs and DSUs paid pursuant to this Plan, and any awards of RSUs or DSUs shall be governed by and construed in accordance with the provisions of the Incentive Plan. In the event of any inconsistency between the Incentive Plan and this Plan with respect to RSUs or DSUs, the terms of the Incentive Plan shall control. The Plan does not constitute a separate source of Shares for the grant of the RSUs and DSUs described herein.

10.Accounts. The Committee shall establish and maintain, or cause to be established and maintained, a separate Account for each Participant hereunder who executes and files an Election Form pursuant to Section 7. Each such Participant's DSUs shall be separately accounted for and credited with earnings, to the extent applicable, for recordkeeping purposes only, to his or her Account. A Participant's Account shall be solely for the purposes of measuring the amounts to be paid under the Plan. The Company shall not be required to fund or secure a Participant's Account in any way, the Company's obligation to Participants hereunder being purely contractual.

11.Administration. The Plan shall be administered by the Committee. So long as the Company is subject to Section 16 of the Exchange Act, the Committee will consist of not fewer than two (2) members of the Board or such greater number as may be required for compliance with Rule 16b-3 issued under the Exchange Act and will be comprised of persons who are independent for purposes of applicable stock exchange listing requirements.

(a)Committee's Authority. The Committee shall have full discretionary authority to construe and interpret the terms and provisions of the Plan; to adopt, alter and repeal administrative rules, guidelines and practices governing the Plan; to perform all acts, including the delegation of its administrative responsibilities to advisors or other persons; and to rely upon the information or opinions of legal counselor experts selected to render advice with respect to the Plan, as it shall deem advisable, with respect to the administration of the Plan. The Committee may take any action, correct any defect, supply any omission or reconcile any inconsistency in the Plan, or in any election hereunder, in the manner and to the extent it shall deem necessary to carry the Plan into effect or to carry out the Company's purposes in adopting the Plan.

(b)Final Determinations. Any decision, interpretation or other action made or taken in good faith by or at the direction of the Company or the Committee arising out of or in connection with the Plan, shall be within the absolute discretion of each of them, and shall be final, binding and conclusive on the Company, and all Participants and Beneficiaries and their respective heirs, executors, administrators, successors and assigns. The Committee's determinations hereunder need not be uniform, and may be made selectively among Participants, whether or not they are similarly situated.

(c)Delegation of Authority. The Committee may, to the extent permitted by law, delegate some or all of its authority under the Plan to such officers of the Company as it deems appropriate. Unless the Committee otherwise specifies, any delegate will have the authority and right to exercise (within the scope of such person's delegated authority) all of the same powers and discretion that would otherwise be available to the Committee pursuant to the terms hereof. The Committee may also employ or appoint agents (who may be officers or employees of the Company) to assist in the administration of the Plan and to take such actions under the Plan on its behalf as the Committee deems appropriate.

(d)Indemnification. The Company shall indemnify the Committee and any individuals to whom administrative duties have been properly delegated under this Plan, against any and all claims, losses, damages, expenses and liabilities arising from their responsibilities in connection with this Plan, unless the same is determined to be due to gross negligence or willful misconduct.

(e)Plan Expenses. The expense of administering the Plan shall be borne by the Company.

12.Amendment or Termination. The Board may amend this Plan at any time and from time to time. The Board may terminate this Plan, to the extent such termination is permissible according to Treasury Regulations or other published guidance issued by the U.S. Department of Treasury or the Internal Revenue Service. Any amendment or termination of this Plan will not materially adversely affect the rights of a Participant accrued prior thereto without that Participant's written consent, except to the extent required by law or to conform the operation of the Plan to the requirements of Code Section 409A.

13.Taxes. The Company is not responsible for the tax consequences under federal, state or local law of any election made by any Participant under the Plan. All payments under the Plan are subject to withholding and reporting requirements to the extent required by applicable law. To the extent required by law in effect at the time a distribution is made from the Plan, the Company or its agents shall have the right to withhold or deduct from any distributions or payments any taxes required to be withheld by federal, state or local governments.

14.Participant and Beneficiary Information. Each Participant shall keep the Committee informed of his or her current address and the current address of his or her designated Beneficiary or Beneficiaries. A Participant may from time to time change his or her designated Beneficiary without the consent of such Beneficiary by filing a new designation in writing with the Committee. If no Beneficiary designation is in effect at the time of the Participant's death, or if the designated Beneficiary is missing or has predeceased the Participant, distribution shall be made to the Participant's surviving spouse, or if none, to his or her surviving children per stirpes, and if none, to his or her estate. The Committee shall not be obligated to search for any person. If such person is not located within one (1) year after the date on which a payment or distribution is payable under the Plan, payment shall be made to the Participant's estate.

15.Right of Company to Take Actions. The adoption and maintenance of this Plan shall not be deemed to constitute a contract between the Company and a Director, or to be a consideration for, nor an inducement or condition of, the employment of any person. Nothing herein contained, or any action taken hereunder, shall be deemed to give a Director the right to be retained in the service of the Board or to interfere with the right of the Board to discharge the Director at any time for any reason, nor shall it be deemed to give to the Board the right to require the Director to remain in its employ, nor shall it interfere with the Director's right to terminate his or her service at any time. Nothing in this Plan shall prevent the Company from amending, modifying, or terminating any other benefit plan.

16.Headings. The headings of the sections and subsections of this Plan are for reference only. In the event of a conflict between a heading and the contents of a section or subsection, the contents of the section or subsection shall control.

17.Number and Gender. Whenever any words used herein are in the singular form, they shall be construed as though they were also used in the plural form in all cases where they would so apply, and references to the male gender shall be construed as applicable to the female gender where applicable, and vice versa.

18.Code Section 409A. Amounts payable under this Plan are intended to be exempt from or otherwise comply with the requirements of Code Section 409A. With respect to amounts payable under this Plan that constitute nonqualified deferred compensation within the meaning of Code Section 409A, the Plan is intended to be an unfunded nonqualified deferred compensation plan, and to the extent that the Plan is inconsistent with Code Section 409A, the applicable provisions of Code Section 409A shall be deemed to automatically supersede such inconsistent provisions. No amount under this Plan that constitutes nonqualified deferred compensation and is payable upon a Specified Employee's Separation shall be paid to such Specified Employee before the date that is at least six (6) months after the date of such Specified Employee's Separation (or, if earlier, the date of the Specified Employee's death).

19.Applicable Law. To the extent not preempted by federal law, this Plan shall be construed, administered and governed in all respects under and by the laws of the State of Delaware, without giving effect to its conflict of laws principles. The jurisdiction and venue for any disputes arising under, or any action brought to enforce (or otherwise relating to), this Plan shall be exclusively in the courts in the State of Illinois, County of Cook, including the Federal Courts located therein (should Federal jurisdiction exist).

20.Alienation or Assignment of Benefits. Except as otherwise provided under the Plan, a Participant's rights and interest under the Plan shall not be assigned or transferred except as otherwise provided herein, and the Participant's rights to benefit payments under the Plan shall not be subject to alienation, pledge or garnishment by or on behalf of creditors (including heirs, beneficiaries, or dependents) of the Participant or of a Beneficiary.

21.Company's Protection. By execution of an Election Form, each Participant shall be deemed to have agreed to cooperate with the Company by furnishing any and all information reasonably requested by the Committee in order to facilitate the payment of benefits hereunder.

Exhibit A

GROUPON, INC.

NON-EMPLOYEE DIRECTORS' COMPENSATION PLAN

DEFERRAL ELECTION FORM

Please complete and return this Election Form to [_______]so that it is received by Groupon on or before December 31 of the year prior to the year in which you intend to exchange all or a portion of your Cash Retainer for deferred share units ("DSUs") under the Groupon, Inc. Non-Employee Directors' Compensation Plan (the "Plan"). However, if you are newly eligible to participate in the Plan, you may complete and return this Election Form during the 30-day period following the date on which you became a Participant. Capitalized terms used in this Election Form and not defined herein shall have the meaning ascribed to them in the Plan.

_________________________ First Name	_________________________ Middle Name			_________________________ Last Name
___________________________________ Street Address		_______________ City		________ State	______________ Zip Code
_________________________ Social Security Number	_________________________ Date of Birth		☐ MALE ☐ FEMALE
_________________________ Telephone Number	___________________________________ Email

ELECTION TO RECEIVE DEFERRED SHARE UNITS

As a non-employee director on Groupon's Board of Directors (the "Board"), you may elect to exchange all or a portion of your Cash Retainer for an award of DSUs, which will be credited to an account established for you under the Plan.

This election will be applied to your Cash Retainer effective January 1 of the year following the year in which you make and file this election. This election will remain in effect for each subsequent year until you file a new Election Form with the Committee in accordance with the terms of the Plan. Any new election will not be effective until January 1 of the year following the year in which the new election is made and filed.

However, if you are a new Participant in the Plan, and you make and file this election during the 30-day period following the date on which you became a Participant in the Plan, your election will be applied to your Cash Retainer paid after your Election Form is filed.

Please complete the following:

• I elect to exchange a whole percentage of my Cash Retainer equal to ________% (0%-100%) for an award of DSUs under the terms of the Plan.

ELECTION OF DISTRIBUTION DATE

Your DSUs will be paid to you on the later to occur of (a) your separation from service, or (b) the date you elect pursuant to this Election Form, in accordance with the terms of the Plan. If you do not elect a date below, your DSUs will be paid upon your separation from service. This election will be applied to DSUs credited to your Plan account beginning on January 1 of the year following the year in which you make and file this election. Following your initial election, you may elect a different date by filing a new Election Form with the Committee in accordance with the terms

of the Plan; however, a new election following your initial election (1) must be filed with the Committee no later than 12 months prior to the distribution date you initially elected, (2) will not become effective until 12 months following the date your new election is made and filed, and (3) must elect a distribution date that is at least 5 years after the date you initially elected.

Please complete the following:

• I elect to receive a distribution of my DSUs on [_____ ___, ____].

AGREEMENT AND AUTHORIZATION

I understand that my elections are subject to review and final approval by the Committee, and that my elections are governed by the terms and conditions of the Plan, as may be amended from time to time. The Plan and related Plan materials (if any) have been made available to me, and I have had the opportunity to ask questions and receive answers regarding the terms and conditions of the Plan. I hereby certify that the above information about me is true, accurate, and complete. I authorize Groupon to make the appropriate deductions, as indicated on this form, from my Cash Retainer. I acknowledge that I have been advised to consult with my own financial, tax, estate planning and legal advisors before making any election to defer compensation in order to determine the tax effects and other implications of my participation in the Plan.

______________________________________________________ Participant Signature	____________________________ Date
______________________________________________________ Signature of Company Representative Acknowledging Receipt	____________________________ Date

EX-10.2

Exhibit 10.2

PSU Award Terms

GROUPON, INC. 2011 INCENTIVE PLAN

FORM OF NOTICE OF PERFORMANCE SHARE UNIT AWARD

GRANT NUMBER: [________] PSUs (at Target)

The Participant (as defined herein) has been granted a Full Value Award of performance share units ("PSUs") in Groupon, Inc. (the "Company"), subject to the terms and conditions of the Performance Share Unit Award Agreement (the "Agreement") and the Groupon, Inc. 2011 Incentive Plan, as amended (the "Plan"), as set forth below. Capitalized terms in this Notice of Performance Share Unit Award (this "Notice"), unless otherwise defined herein, shall have the meanings assigned to them in the Plan.

1.Name: [____________] (the "Participant")

2.Address: [________]

3.Grant Date: [____]

4.Performance Period: the one-year period commencing on January 1, 2018 and ending on December 31, 2018 (the "Performance Period").

5.Performance Measures; Vesting:

(a)Subject to achievement of the performance conditions below in this Section 5, the amount of PSUs earned, if any, shall vest as follows on the following dates if the Participant continuously provides material services to the Company, whether as an officer, director, employee, consultant, independent contractor or agent (in "Continued Service Status") through such dates (unless otherwise indicated): ____% of the PSUs on the date the Committee certifies attainment of the Performance Measures following the end of the Performance Period, subject to the Participant being in Continued Service Status through the end of the Performance Period; [ ____% of the PSUs on January 2, 2020; ____% of the PSUs on January 2, 2021; ____% of the PSUs on January 2, 2022.][; and ______% of the PSUs on January 2, 2023.] (each a “Vesting Date.”).

(b)Vesting of the PSUs will occur as set forth above so long as (A) the Participant has not experienced a Termination Date prior to (i) the end of the Performance Period (except as otherwise provided in Section 7), with respect to the first Vesting Date, and (ii) each Vesting Date, with respect to each Vesting Date thereafter, and (B) the goals with respect to one or more of the performance measures specified in Exhibit A hereto (the "Performance Measures") have been satisfied, and the Committee has certified the attainment of the Performance Measures.

(i)In the event that the Company’s actual performance with respect to a Performance Measure does not meet the "threshold" level specified in Exhibit A, no PSUs shall be earned for that Performance Measure.

(ii) Linear interpolation shall be used to determine the amount of PSUs earned with respect to a Performance Measure for performance between "threshold" and "target" or between "target" and "maximum," as applicable.

(iii)If the Company’s actual performance with respect to a Performance Measure exceeds "maximum," the PSUs earned for that Performance Measure shall

equal the PSUs for "maximum."

(c)The Performance Measures shall be Net Customers, Gross Profit per Customer, and People Goals, each weighted equally (33 1/3%). For purposes of this Notice and the Agreement:

(i)"Gross Profit per Customer" means gross profit generated per active customer as reported in our financial statements.

(ii)"Net Customers" are defined as unique user accounts that have made a purchase during the trailing twelve months either through one of our online marketplaces or directly with a merchant for which we earned a commission. 

(iii)"People Goals" means the objectives and corresponding quantitative performance levels established by the Committee and set forth on Exhibit A hereto.

6.Settlement: After the Committee has certified attainment of the Performance Measures following the end of the Performance Period and subject to the continued service requirements in Section 5, the Participant shall be entitled to receive on each Vesting Date the number of Shares equal to the corresponding portion of total number of PSUs that are earned, if any, as determined under Section 5 of this Notice, subject to any tax withholding obligation with respect to any Tax-Related Items (as defined in Section 3 of the Agreement). Delivery of such Shares shall be made (i) with respect to the first Vesting Date, in the first 2.5 months of the calendar year next following the end of the Performance Period, after the Performance Measure results are approved and certified by the Committee and (ii) with respect to each subsequent Vesting Date, on such Vesting Date.

7.Termination of Employment: If the Participant experiences a Termination Date (i) prior to the end of the Performance Period for any reason, all PSUs awarded in this Notice and the Agreement shall be forfeited, and all rights of the Participant to such PSUs shall immediately terminate or (ii) prior to any Vesting Date after the first Vesting Date, all rights of the Participant to the remaining unvested PSUs shall be forfeited and all rights to such PSUs shall immediately terminate. Notwithstanding the foregoing, any PSUs that would vest upon a Termination Date (including any pro rata amounts) due to additional months of vesting credited under an employment or severance plan or agreement that applies to the Participant will be subject to and will be paid, if at all, based on the level of actual performance with respect to the Performance Measures, after the Performance Measure results are approved and certified by the Committee. For purposes of the Participant’s severance benefit agreement with the Company (the "SBA"), if applicable, any PSUs earned hereunder that are subject to Continued Service Status following the first Vesting Date shall be considered "Equity-Based Awards (whose vesting is based solely on continued service over time)" for purposes of Section 1 in Exhibit 1 of the SBA. In addition, notwithstanding anything to the contrary in the SBA, for any Eligible Termination (as defined in the SBA) occurring prior to the first Vesting Date, any pro-rata vesting applicable under the second sentence of Section 1 in Exhibit 1 of the SBA shall only apply to the portion of the PSUs scheduled to vest on the first Vesting Date (e.g., if a total of 1,000 PSUs were earned for the full Award based on the Company’s performance and 250 PSUs were scheduled to vest on the first Vesting Date, the maximum amount of additional vesting the Participant could receive in this termination scenario would be with respect to these 250 PSUs).

8.General Terms: The Participant understands that his or her employment with or service to the Company is for an unspecified duration, can be terminated at any time in accordance with applicable law, and that nothing in this Notice, the Agreement, or the Plan changes the nature of that relationship. The Participant acknowledges that the vesting of the PSUs pursuant to this Notice and the Agreement is conditioned on the achievement of the Performance Measures and his or her continued employment throughout the Performance Period, except as otherwise indicated above. The

Participant understands that this Notice is subject to the terms and conditions of the Agreement and the Plan prospectus that contains the entire plan, both of which is incorporated herein by reference. The Participant represents and warrants that the Participant has received and read this Notice, the Agreement, and the Plan. If there are any inconsistencies between this Notice or Agreement and the Plan, the terms of the Plan will govern.

PARTICIPANT	GROUPON, INC.
Date:	Date:

EXHIBIT A

TO

FORM OF NOTICE OF PERFORMANCE SHARE UNIT AWARD

PERFORMANCE MEASURES AND STRATEGIC GOALS

[Target goals for applicable year]

GROUPON, INC. 2011 INCENTIVE PLAN

FORM OF PERFORMANCE SHARE UNIT AWARD AGREEMENT

Capitalized terms in this agreement (this "Agreement"), unless otherwise defined herein, shall have the meanings assigned to them in the Groupon, Inc. 2011 Incentive Plan (the "Plan").

You, as Participant, have been granted a Full Value Award of performance share units ("PSUs") in Groupon, Inc. (the "Company") subject to the terms, restrictions and conditions of the Plan, the Notice of Performance Share Unit Award (the "Notice") and this Agreement.

1.No Stockholder Rights. Unless and until such time as Shares are issued in settlement of vested PSUs, the Participant shall have no ownership of the Shares underlying the PSUs and shall have no right to receive dividends or dividend equivalents with respect to such Shares or to vote such Shares.

2.No Transfer. Awards under the Plan are not transferable except to the Participant's Beneficiary upon the death of the Participant.

3.Tax Withholding Obligations.

(a)Regardless of any action the Company takes with respect to any or all income tax, social insurance, payroll tax, payment on account or other tax-related items related to the Participant's participation in the Plan and legally applicable to the Participant (“Tax-Related Items”), the Participant acknowledges that the ultimate liability for all Tax-Related Items is and remains the Participant's responsibility and may exceed the amount actually withheld by the Company. The Participant further acknowledges that the Company: (i) makes no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the grant of PSUs, including the grant, vesting or settlement of PSUs, the subsequent sale of Shares acquired pursuant to such vesting and the receipt of any dividends and/or dividend equivalents; and (ii) does not commit to and is under no obligation to structure the terms of the grant or any aspect of the PSUs to reduce or eliminate the Participant's liability for Tax-Related Items or achieve any particular tax result. Further, if the Participant becomes subject to tax in more than one jurisdiction between the Grant Date and the date of any relevant taxable event, the Participant acknowledges that the Company may be required to withhold or account for Tax-Related Items in more than one jurisdiction.

(b)Prior to any relevant taxable or tax withholding event, the Participant shall pay or make adequate arrangements satisfactory to the Company to satisfy all Tax-Related Items. In this regard, the Participant authorizes the Company or its agents to satisfy the obligations with regard to all Tax-Related Items by withholding otherwise deliverable Shares to be issued upon vesting/settlement of the PSUs. The Participant may also, with the consent of the Committee, authorize the Company to satisfy the obligations with regard to all Tax-Related Items by one or more of the following (which may be in addition to or in lieu of the foregoing):

(i)Withholding from any wages or other cash compensation paid to the Participant by the Company; or

(ii) Withholding from the proceeds of the sale of Shares acquired upon vesting/settlement of the PSUs either through a voluntary sale or through a mandatory sale arranged by the Company (on the Participant's behalf pursuant to this authorization).

(c)To avoid negative accounting treatment, the Company may withhold or account for Tax-Related Items by considering applicable minimum statutory withholding amounts or other applicable withholding rates. If the obligation for Tax-Related Items is satisfied by withholding in Shares, for tax purposes, the Participant shall be deemed to have been issued the full number of Shares subject to the vested PSUs, notwithstanding that a number of Shares are held back solely for the purpose of paying the Tax-Related Items due as a result of any aspect of the Participant's participation in the Plan. Finally, the Participant shall pay to the Company any amount of Tax-Related Items that the Company may be required to withhold as a result of the Participant's participation in the Plan that cannot be satisfied by the means previously described. The Company may refuse to deliver the Shares or proceeds of the sale of Shares if the Participant fails to comply with the Participant's obligations in connection with the Tax-Related Items.

(d)Further, the settlement of the PSUs is intended to either be exempt from Section 409A of the Code under the "short-term deferral" exemption, or otherwise comply with Section 409A of the Code, and this Agreement will be interpreted, operated and administered in a manner that is consistent with this intent. In furtherance of this intent, the Company may, at any time and without the Participant's consent, modify the terms of the Award as it determines appropriate to comply with the requirements of Section 409A of the Code and the related U.S. Department of Treasury guidance. The Company makes no representation or covenant to ensure that the PSUs, settlement of the PSUs or other payment hereunder are exempt from or compliant with Section 409A of the Code and will have no liability to the Participant or any other party if the settlement of the PSUs or other payment hereunder that is intended to be exempt from, or compliant with, Section 409A of the Code, is not so exempt or compliant or for any action taken by the Company with respect thereto.

4.Compliance with Laws and Regulations. The issuance of Shares underlying the PSUs will be subject to and conditioned upon compliance by the Company and the Participant (including any written representations, warranties and agreements as the Committee may request of the Participant for compliance with all applicable laws) with all applicable state, federal, local and foreign laws and regulations of any governmental authority, including adopting any such conforming amendments as are necessary to comply with Section 409A of the Code, and with all applicable requirements of any national or regional securities exchange or quotation system on which the Shares may be listed or quoted at the time of such issuance or transfer.

5.No Advice Regarding Award. The Company is not providing any tax, legal, or financial advice, nor is the Company making any recommendations regarding the Participant's participation in the Plan, or the acquisition or sale of the underlying Shares. The Participant is hereby advised to consult with his or her own personal tax, legal and financial advisors regarding the Participant’s participation in the Plan before taking any action related to the Plan.

6.Legend on Certificates. The certificates and/or book-entry notation representing the Shares issued hereunder shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Plan, this Agreement or the rules, regulations, and other requirements of the U.S. Securities and Exchange Commission, any national or regional securities exchange or quotation system upon which such Shares are listed, and any applicable federal, state, local and foreign laws, and the Committee may cause a legend or legends, electronic or otherwise, to be put on any such certificates and/or book-entry notation to make appropriate reference to such restrictions.

7.Market Standoff Agreement. The Participant agrees that in connection with any registration of the Company's securities that, upon the request of the Company or the underwriters

managing any public offering of the Company's securities, the Participant will not sell or otherwise dispose of any Shares without the prior written consent of the Company or such underwriters, as the case may be, for such reasonable period of time after the effective date of such registration as may be requested by such managing underwriters and subject to all restrictions as the Company or the underwriters may specify. The Participant will enter into any agreement reasonably required by the underwriters to implement the foregoing.

8.Successors and Assigns. The Company may assign any of its rights under this Agreement. This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth herein, this Agreement will be binding upon the Participant and the Participant's heirs, executors, administrators, legal representatives, successors and assigns.

9.Entire Agreement; Severability. The Plan and the Notice are incorporated herein by reference. Except with respect to vesting terms specifically provided in the Participant’s individual employment, severance, or other agreement(s) with the Company, the Plan, the Notice and this Agreement supersede in their entirety all prior undertakings and agreements of the Company and the Participant with respect to the subject matter hereof. If any provision of this Agreement is determined by a court of law to be illegal or unenforceable, then such provision will be enforced to the maximum extent possible and the other provisions will remain fully effective and enforceable.

10.Waiver. Waiver of any term or condition of this Agreement by any party shall not be construed as a waiver of a subsequent breach or failure of the same term or condition, or a waiver of any other term or condition of this Agreement. Any waiver must be in writing.

11.Governing Law and Venue. The validity, interpretation, instruction, performance, enforcement and remedies of or relating to this Agreement, and the rights and obligations of the parties hereunder, shall be governed by and construed in accordance with the substantive laws of the State of Delaware, without regard to the conflict of law principles, rules or statutes of any jurisdiction. For the purpose of litigating any dispute that arises under this Agreement, the parties hereby consent to the exclusive jurisdiction and agree that such litigation shall be conducted in the federal or state courts of the State of Illinois.

12.Notices. Any notice or document required to be filed with the Committee or the Company under the Plan must be in writing and will be properly filed if delivered or mailed to the Company's Human Resources Departmentat the Company's principal executive offices. If intended for the Participant, notices shall be delivered personally or shall be addressed (if sent by mail) to the Participant's then current residence address as shown on the Company's records, or to such other address as the Participant directs in a notice to the Company, or shall be delivered electronically to the Participant's email address as shown on the Company's records. All notices shall be deemed to be given on the date received at the address of the addressee or, if delivered personally or electronically, on the date delivered. The Company may, in its sole discretion, decide to deliver any documents related to current or future participation in the Plan through an on-line or electronic system established and maintained by the Company or its designee. The Company may, by written notice to affected persons, revise its notice procedures from time to time. Any notice required under the Plan (other than a notice of election) may be waived by the person entitled to notice.

13.Need to Accept Award. The Participant acknowledges that the Notice and this Agreement must be accepted within 90 days of the Grant Date in order to be eligible to receive any benefits from this Award. If this Award is not accepted within that time period, the Award may be cancelled and all benefits under this Award will be forfeited. To accept this Award, the Participant must access the Merrill Lynch website and follow the instructions for acceptance. If this grant was

distributed to the Participant in hard copy format, the Participant must sign the agreement and return it to the Company's Compensation Department within 90 days.

By the Participant's signature and the signature of the Company's representative below and on the Notice, the Participant and the Company agree that this Award of PSUs is granted under and governed by the terms and conditions of the Plan, the Notice and this Agreement. The Participant has reviewed the Plan, the Notice and this Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Agreement, and fully understands all provisions of the Plan, the Notice and this Agreement. The Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee upon any questions relating to the Plan, the Notice and this Agreement. The Participant further agrees to notify the Company upon any change in the Participant's residence address.

PARTICIPANT	GROUPON, INC.
Date:	Date:

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Rich Williams, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Groupon, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 9, 2018/s/ Rich Williams

Rich Williams

Chief Executive Officer

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Michael Randolfi, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Groupon, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 9, 2018/s/ Michael Randolfi

Michael Randolfi

Chief Financial Officer

(Principal Financial Officer)

EX-32.1

Exhibit 32.1

Certifications Pursuant to

18 U.S.C. Section 1350

As Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Groupon, Inc. (the "Company") on Form 10-Q for the period ended March 31, 2018, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Rich Williams, Chief Executive Officer of the Company, and Michael Randolfi, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to our knowledge, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:    /s/ Rich Williams

Rich Williams

Chief Executive Officer

(Principal Executive Officer)

By:    /s/ Michael Randolfi

Michael Randolfi

Chief Financial Officer

(Principal Financial Officer)

Date: May 9, 2018

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Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2018	May 07, 2018
Document and Entity Information [Abstract]
Entity Registrant Name	Groupon, Inc.
Entity Central Index Key	0001490281
Entity Filer Category	Large Accelerated Filer
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Type	10-Q
Document Period End Date	Mar. 31, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q1
Entity Common Stock, Shares Outstanding		564,615,531

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands		Mar. 31, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents		$ 725,909	$ 880,129
Accounts receivable, net		81,571	98,294
Prepaid expenses and other current assets		89,282	94,025
Total current assets		896,762	1,072,448
Property, equipment and software, net		146,717	151,145
Goodwill		289,945	286,989
Intangible assets, net		16,925	19,196
Investments (including $103,579 and $109,751 at March 31, 2018 and December 31, 2017, respectively, at fair value)		129,373	135,189
Other non-current assets		23,206	12,538
Total Assets	[1]	1,502,928	1,677,505
Current liabilities:
Accounts payable		23,400	31,968
Accrued merchant and supplier payables		568,570	770,335
Accrued expenses and other current liabilities		265,920	331,196
Total current liabilities		857,890	1,133,499
Convertible senior notes, net		192,619	189,753
Other non-current liabilities		102,047	102,408
Total Liabilities		1,152,556	1,425,660
Commitments and contingencies (see Note 8)
Stockholders' Equity
Common stock, par value $0.0001 per share, 2,010,000,000 shares authorized; 752,664,286 shares issued and 564,062,044 shares outstanding at March 31, 2018; 748,541,862 shares issued and 559,939,620 shares outstanding at December 31, 2017		75	75
Additional paid-in capital		2,192,469	2,174,708
Treasury stock, at cost, 188,602,242 shares at March 31, 2018 and December 31, 2017		(867,450)	(867,450)
Accumulated deficit		(1,006,308)	(1,088,204)
Accumulated other comprehensive income (loss)		29,936	31,844
Total Groupon, Inc. Stockholders' Equity		348,722	250,973
Noncontrolling interests		1,650	872
Total Equity		350,372	251,845
Total Liabilities and Equity		$ 1,502,928	$ 1,677,505

[1] (1)North America contains assets from the United States of $877.8 million and $1,006.2 million as of March 31, 2018 and December 31, 2017, respectively. International contains assets from Ireland of $167.1 million and $219.7 million as of March 31, 2018 and December 31, 2017, respectively. There were no other individual countries that represented more than 10% of consolidated total assets as of March 31, 2018 and December 31, 2017.

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Investments at fair value	$ 103,579	$ 109,751
Common stock, par value (in usd per share)	$ 4.34
Common Stock
Common stock, par value (in usd per share)	$ 0.1000	$ 0.1000
Common Stock, Shares Authorized	2,010,000,000,000	2,010,000,000,000
Common Stock, Shares, Issued	752,664,286,000	564,062,044,000
Common Stock, Shares, Outstanding	748,541,862,000	559,939,620,000
Treasury Stock
Treasury Stock, Shares	(188,602,242)	(188,602,242)

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands		3 Months Ended
		Mar. 31, 2018		Mar. 31, 2017
Revenue:
Service		$ 301,797	[1]	$ 301,577
Product		324,743		372,049
Total revenue		626,540	[2]	673,626
Cost of revenue:
Service		31,145	[3]	42,873
Product		270,510		321,302
Total cost of revenue		301,655	[3]	364,175
Gross profit		324,885		309,451
Operating expenses:
Marketing		99,156	[4]	86,342
Selling, general and administrative		222,061	[5]	232,058
Restructuring charges		283		2,731
Total operating expenses		321,500		321,131
Income (loss) from operations	[6],[7]	3,385		(11,680)
Other income (expense), net		(8,515)		(4,602)
Income (loss) from continuing operations before provision (benefit) for income taxes		(5,130)		(16,282)
Provision (benefit) for income taxes		(2,335)		4,587
Income (loss) from continuing operations		(2,795)		(20,869)
Income (loss) from discontinued operations, net of tax		0		487	[8]
Net income (loss)		(2,795)		(20,382)
Net income attributable to noncontrolling interests		(4,093)		(4,032)
Net income (loss) attributable to Groupon, Inc.		$ (6,888)		$ (24,414)
Basic and diluted net income (loss) per share:
Continuing operations (in usd per share)		$ (0.01)		$ (0.04)
Discontinued operations (in usd per share)		0.00		0.00
Basic and diluted net income (loss) per share (in usd per share)		$ (0.01)		$ (0.04)
Weighted average number of shares outstanding
Basic (in shares)		561,735,937		562,195,243
Diluted (in shares)		561,735,937		562,195,243

[1] (1)Reflects decreases of $5.6 million related to the timing of recognition of variable consideration from unredeemed vouchers, $3.3 million related to the timing of recognition of revenue from hotel reservation offerings and $0.7 million related to the timing of recognition of breakage revenue from customer credits that are not expected to be used, partially offset by a $7.8 million increase for refunds on service revenue transactions for which the merchant's share is not recoverable and customer credits issued for relationship purposes, which are classified as reductions of revenue under Topic 606.

[2] (1)North America includes revenue from the United States of $385.4 million and $464.7 million for the three months ended March 31, 2018 and 2017, respectively. International includes revenue from the United Kingdom of $83.0 million and $65.5 million for the three months ended March 31, 2018 and 2017, respectively. There were no other individual countries that represented more than 10% of consolidated total revenue for the three months ended March 31, 2018 and 2017. Prior to the second quarter of 2017, revenue was attributed to individual countries based on the domicile of the legal entities within the Company's consolidated group that undertook those transactions.

[3] (2)Reflects an increase for refunds on service revenue transactions for which the merchant's share is not recoverable, which are classified as a reduction of revenue under Topic 606.

[4] (3)Reflects an increase for customer credits issued for relationship purposes, which are classified as a reduction of revenue under Topic 606.

[5] (4)Reflects the amortization of deferred contract acquisition costs in excess of amounts capitalized in the current period.

[6] (1)Includes stock-based compensation of $17.9 million and $18.3 million for North America for the three months ended March 31, 2018 and 2017, respectively, and $1.4 million for International for the three months ended March 31, 2018 and 2017.

[7] (2)Includes restructuring charges of $2.0 million for North America for the three months ended March 31, 2017 and $0.3 million and $0.8 million for International for the three months ended March 31, 2018 and 2017, respectively.

[8] (1)The income (loss) from discontinued operations before loss on dispositions and provision for income taxes for the three months ended March 31, 2017 includes the results of each business through its respective disposition date.

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Condensed Statement of Income Captions [Line Items]
Income (loss) from continuing operations	$ (2,795)	$ (20,869)
Other comprehensive income (loss) from continuing operations:
Net change in unrealized gain (loss) on foreign currency translations adjustments	(1,568)
Reclassification adjustments related to defined benefit pension plan	0	585
Net change in unrealized gain (loss) on available-for-sale securities (net of tax effect of $0 and $147 for the three months ended March 31, 2018 and 2017, respectively)	(501)	239
Income (loss) from discontinued operations	0	487
Other comprehensive income (loss) from discontinued operations - Foreign currency translation adjustments:
Other Comprehensive Income (Loss), Net of Tax	(2,069)	1,254
Comprehensive income (loss)	(4,864)	(35,639)
Comprehensive income (loss) attributable to noncontrolling interests	(4,093)	(4,032)
Comprehensive income (loss) attributable to Groupon, Inc.	(8,957)	(39,671)
Tax effect	0	147
Continuing Operations
Other comprehensive income (loss) from continuing operations:
Net change in unrealized gain (loss) on foreign currency translations adjustments	(1,568)	430
Other comprehensive income (loss) from discontinued operations - Foreign currency translation adjustments:
Comprehensive income (loss)	(4,864)	(19,615)
Discontinued Operations, Disposed of by Sale
Other comprehensive income (loss) from continuing operations:
Net change in unrealized gain (loss) on foreign currency translations adjustments	0	(16,511)
Other comprehensive income (loss) from discontinued operations - Foreign currency translation adjustments:
Net unrealized gain (loss) during the period	0	(1,793)
Reclassification adjustment included in net income (loss) from discontinued operations	0	(14,718)
Other Comprehensive Income (Loss), Net of Tax	$ 0	$ (16,024)

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CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - 3 months ended Mar. 31, 2018 - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Treasury Stock	Accumulated Deficit	Accumulated Other Comprehensive Income (Loss)	Total Groupon, Inc. Stockholders' Equity	Non-controlling Interests
Beginning balance (in shares) at Dec. 31, 2017		748,541,862
Beginning balance at Dec. 31, 2017	$ 251,845	$ 75	$ 2,174,708		$ (1,088,204)	$ 31,844	$ 250,973	$ 872
Treasury stock, beginning balance (in shares) at Dec. 31, 2017				(188,602,242)
Treasury stock, beginning balance at Dec. 31, 2017	867,450			$ (867,450)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cumulative effect of change in accounting principle, net of tax	88,945				88,945		88,945
Reclassification for impact of U.S. tax rate change					(161)	161
Net income (loss) attributable to noncontrolling interest	(2,795)				(6,888)			4,093
Net income (loss) attributable to parent	(6,888)						(6,888)
Foreign currency translation	(1,568)					(1,568)	(1,568)
Unrealized gain (loss) on available-for-sale securities, net of tax	$ (501)					(501)	(501)
Exercise in stock options (in shares)	2,400	2,400
Exercise of stock options	$ 6		6				6
Vesting of restricted stock units and performance share units (in shares)		4,157,462
Shares issued under employee stock purchase plan (in shares)		746,773
Shares issued under employee stock purchase plan	2,434		2,434				2,434
Shares issued to settle liability-classified awards (in shares)		1,240,379
Shares issued to settle liability-classified awards	6,436		6,436				6,436
Tax withholdings related to net share settlements of stock-based compensation awards (in shares)		(2,024,590)
Tax withholdings related to net share settlements of stock-based compensation awards	(9,355)		(9,355)				(9,355)
Stock-based compensation on equity-classified awards	18,240		18,240				18,240
Distributions to noncontrolling interest holders	(3,315)							(3,315)
Ending balance (in shares) at Mar. 31, 2018		752,664,286
Ending balance at Mar. 31, 2018	350,372	$ 75	$ 2,192,469		$ (1,006,308)	$ 29,936	$ 348,722	$ 1,650
Treasury stock, ending balance (in shares) at Mar. 31, 2018				(188,602,242)
Treasury stock, ending balance at Mar. 31, 2018	$ 867,450			$ (867,450)

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Operating activities
Net income (loss)	$ (2,795)	$ (20,382)
Less: Income (loss) from discontinued operations, net of tax	0	487	[1]
Income (loss) from continuing operations	(2,795)	(20,869)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization of property, equipment and software	26,721	28,667
Amortization of acquired intangible assets	2,940	5,400
Stock-based compensation	19,326	19,701
Deferred income taxes	(6,575)	(74)
(Gain) loss from changes in fair value of investments	5,033	(303)
Impairment of investment	855	0
Amortization of debt discount on convertible senior notes	2,866	2,587
Change in assets and liabilities, net of acquisitions and dispositions:
Accounts receivable	17,623	10,594
Prepaid expenses and other current assets	9,601	5,380
Accounts payable	(8,341)	(13,184)
Accrued merchant and supplier payables	(143,330)	(138,238)
Accrued expenses and other current liabilities	(41,564)	(36,040)
Other, net	(2,107)	(1,707)
Net cash provided by (used in) operating activities from continuing operations	(119,747)	(138,086)
Net cash provided by (used in) operating activities from discontinued operations	0	(1,098)
Net cash provided by (used in) operating activities	(119,747)	(139,184)
Investing activities
Purchases of property and equipment and capitalized software	(20,144)	(14,076)
Acquisitions of intangible assets and other investing activities	(238)	56
Net cash provided by (used in) investing activities from continuing operations	(20,382)	(14,020)
Net cash provided by (used in) investing activities from discontinued operations	0	(7,547)
Net cash provided by (used in) investing activities	(20,382)	(21,567)
Financing activities
Payments for purchases of treasury stock	0	(27,234)
Taxes paid related to net share settlements of stock-based compensation awards	(9,179)	(8,970)
Proceeds from stock option exercises and employee stock purchase plan	2,434	2,468
Distributions to noncontrolling interest holders	(3,315)	(3,450)
Payments of capital lease obligations	(9,024)	(8,067)
Payments of contingent consideration related to acquisitions	(1,815)	0
Other financing activities	0	(473)
Net cash provided by (used in) financing activities	(20,899)	(45,726)
Effect of exchange rate changes on cash, cash equivalents and restricted cash, including cash classified within current assets of discontinued operations	6,191	3,973
Net increase (decrease) in cash, cash equivalents and restricted cash, including cash classified within current assets of discontinued operations	(154,837)	(202,504)
Less: Net increase (decrease) in cash classified within current assets of discontinued operations	0	(28,866)
Net increase (decrease) in cash, cash equivalents and restricted cash	(154,837)	(173,638)
Cash, cash equivalents and restricted cash, beginning of period	885,481	874,906
Cash, cash equivalents and restricted cash, end of period	730,644	701,268
Non-cash investing and financing activities
Equipment acquired under capital lease obligations	1,470	1,340
Increase (decrease) in liabilities related to purchases of property and equipment and capitalized software	(1,022)	(1,185)
Investments acquired in connection with business dispositions	$ 0	$ 2,022

[1] (1)The income (loss) from discontinued operations before loss on dispositions and provision for income taxes for the three months ended March 31, 2017 includes the results of each business through its respective disposition date.

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DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

3 Months Ended

Mar. 31, 2018

Business Description and Basis of Presentation [Abstract]

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Company Information

Groupon, Inc. and subsidiaries (the "Company"), which commenced operations in October 2008, operates online local commerce marketplaces throughout the world that connect merchants to consumers by offering goods and services, generally at a discount. Customers access those marketplaces through the Company's websites, primarily localized groupon.com sites in many countries, and its mobile applications.

The Company's operations are organized into two segments: North America and International. See Note 15, Segment Information.

Unaudited Interim Financial Information

The Company has prepared the accompanying condensed consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") for interim financial reporting. These condensed consolidated financial statements are unaudited and, in the Company's opinion, include all adjustments, consisting of normal recurring adjustments and accruals, necessary for a fair presentation of the Company's condensed consolidated balance sheets, statements of operations, comprehensive income (loss), cash flows and stockholders' equity for the periods presented. Operating results for the periods presented are not necessarily indicative of the results to be expected for the full year ending December 31, 2018. Certain information and disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") have been omitted in accordance with the rules and regulations of the SEC. These condensed consolidated financial statements and notes should be read in conjunction with the audited consolidated financial statements and notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2017, filed with the SEC on February 14, 2018, as amended by the Form 10-K/A for the year ended December 31, 2017, filed with the SEC on March 23, 2018.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The Company's condensed consolidated financial statements were prepared in accordance with U.S. GAAP and include the assets, liabilities, revenue and expenses of all wholly-owned subsidiaries and majority-owned subsidiaries over which the Company exercises control and variable interest entities for which the Company has determined that it is the primary beneficiary. Outside stockholders' interests in subsidiaries are shown on the condensed consolidated financial statements as Noncontrolling interests. Equity investments in entities in which the Company does not have a controlling financial interest are accounted for under the equity method, the fair value option, as available-for-sale securities or at cost adjusted for observable price changes and impairments, as appropriate.

Reclassifications and Terminology Changes

Certain reclassifications have been made to the condensed consolidated financial statements of prior periods and the accompanying notes to conform to the current period presentation, including the change in presentation of restricted cash in the condensed consolidated statements of cash flows upon adoption of ASU 2016-18. Refer to Note 2, Adoption of New Accounting Standards, for additional information. Additionally, in prior periods, the Company referred to its product revenue and service revenue as "direct revenue" and "third-party and other revenue," respectively. This terminology change did not impact the amounts presented in the condensed consolidated financial statements.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires estimates and assumptions that affect the reported amounts and classifications of assets and liabilities, revenue and expenses, and the related disclosures of contingent liabilities in the condensed consolidated financial statements and accompanying notes. Estimates are used for, but not limited to, variable consideration from unredeemed vouchers, income taxes, valuation of goodwill and intangible assets, investments, customer refunds, contingent liabilities and the useful lives of property, equipment and software and intangible assets. Actual results could differ materially from those estimates.

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ADOPTION OF NEW ACCOUNTING STANDARDS

3 Months Ended

Mar. 31, 2018

Accounting Policies [Abstract]

ADOPTION OF NEW ACCOUNTING STANDARDS

ADOPTION OF NEW ACCOUNTING STANDARDS

The Company adopted the guidance in ASC Topic 606, Revenue from Contracts with Customers, on January 1, 2018. Topic 606 is a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. See Changes to Accounting Policies from Adoption of New Accounting Standards below and Note 10, Revenue Recognition, for information on the impact of adopting Topic 606 on the Company's accounting policies.

The Company adopted the guidance in ASU 2016-01, Financial Instruments (Topic 825-10) - Recognition and Measurement of Financial Assets and Financial Liabilities, as amended, on January 1, 2018. This ASU generally requires equity investments to be measured at fair value with changes in fair value recognized through net income and eliminates the cost method for equity securities. However, for equity investments without readily determinable fair values the ASU permits entities to elect to measure the investments at cost adjusted for observable price changes and impairments, with changes in the measurement recognized through net income. We applied that measurement alternative to our equity investments that were previously accounted for under the cost method. The adoption of ASU 2016-01 did not have a material impact on the condensed consolidated financial statements. See Changes to Accounting Policies from Adoption of New Accounting Standards below for additional information on the impact of adopting the ASU on the Company's accounting policies.

The Company adopted the guidance in ASU 2016-18, Statement of Cash Flows (Topic 230) - Restricted Cash, on January 1, 2018. This ASU requires companies to include amounts generally described as restricted cash and restricted cash equivalents, along with cash and cash equivalents, when reconciling the beginning-of-period and end-of-period amounts shown on the statement of cash flows. Previously, changes in restricted cash were reported within cash flows from operating activities. The Company applied that change in cash flow classification on a retrospective basis, which resulted in an increase of $1.6 million to net cash used in operating activities for the three months ended March 31, 2017.

Restricted cash primarily represents amounts that the Company is unable to access for operational purposes pursuant to letters of credit with financial institutions. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheet to amounts shown in the condensed consolidated statements of cash flows, as of March 31, 2018 and 2017 and December 31, 2017 (in thousands):

	March 31, 2018		March 31, 2017		December 31, 2017
Cash and cash equivalents	$	725,909	$	690,975	$	880,129
Restricted cash included in prepaid expenses and other current assets	4,332		5,250		4,932
Restricted cash included in other non-current assets	403		5,043		420
Cash, cash equivalents and restricted cash	$	730,644	$	701,268	$	885,481

The Company adopted the guidance in ASU 2017-05, Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20) - Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets, on January 1, 2018. This ASU is meant to clarify the scope of ASC Subtopic 610-20, Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets, and to add guidance for partial sales of nonfinancial assets. The adoption of ASU 2017-05 did not have a material impact on the condensed consolidated financial statements.

The Company adopted the guidance in ASU 2017-07, Compensation - Retirement Benefits (Topic 715) - Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, on January 1, 2018. This ASU requires employers to include only the service cost component of net periodic pension cost in operating expenses, together with other employee compensation costs. The other components of net periodic pension cost, including interest cost, expected return on plan assets, amortization of prior service cost and settlement and curtailment effects, are to be included in non-operating expenses. The adoption of ASU 2017-07 did not have a material impact on the condensed consolidated financial statements.

The Company adopted the guidance in ASU 2017-09, Compensation - Stock Compensation (Topic 718) - Scope of Modification Accounting, on January 1, 2018. This ASU clarifies the changes to terms or conditions of a share-based payment award that require an entity to apply modification accounting. The adoption of ASU 2017-09 did not have a material impact on the condensed consolidated financial statements.

The Company adopted the guidance in ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220) - Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, as of January 1, 2018. This ASU permits a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act (the "Jobs Act"). As a result of the adoption of ASU 2018-02, the Company reclassified $0.2 million from accumulated other comprehensive income (loss) to accumulated deficit.

Changes to Accounting Policies from Adoption of New Accounting Standards

Revenue Recognition

Prior to its adoption of Topic 606, the Company recognized revenue when the following criteria were met: persuasive evidence of an arrangement existed; delivery had occurred; the selling price was fixed or determinable and collection was reasonably assured. Following its adoption of Topic 606, the Company recognizes revenue when it satisfies a performance obligation by transferring a promised good or service to a customer. Substantially all of the Company's performance obligations are satisfied at a point in time rather than over time.

Product Revenue

The Company generates product revenue from direct sales of merchandise inventory through its Goods category. For product revenue transactions, the Company is the primary party responsible for providing the good to the customer, it has inventory risk and it has discretion in establishing prices. As such, product revenue is reported on a gross basis as the purchase price received from the customer. Product revenue, including associated shipping revenue, is recognized when title passes to the customer upon delivery of the product.

Service Revenue

Service revenue is primarily earned from transactions in which the Company earns commissions by selling goods or services on behalf of third-party merchants. Those transactions generally involve a customer's purchase of a voucher through one of the Company's online marketplaces that can be redeemed with a third-party merchant for specified goods or services (or for discounts on specified goods or services). Service revenue from those transactions is reported on a net basis as the purchase price collected from the customer less the portion of the purchase price that is payable to the third-party merchant. The Company recognizes revenue from those transactions when its commission has been earned, which occurs when a sale through one of the Company's online marketplaces is completed and the related voucher has been made available to the customer. The Company believes that its remaining obligations to remit payment to the merchant and to provide information about vouchers sold are administrative activities that are immaterial in the context of the contract with the merchant. Prior to its adoption of Topic 606, the Company deferred the revenue from hotel reservation offerings until the customer's stay commenced. Following its adoption of Topic 606, revenue from hotel reservation offerings is recognized at the time the reservation is made, net of an allowance for estimated cancellations.

The Company also earns commissions when customers make purchases with retailers using digital coupons accessed through its websites and mobile applications and from voucherless merchant offerings in which customers earn cash back on their credit card statements when they transact with third-party merchants. The Company recognizes those commissions as revenue in the period in which the underlying transactions between the customer and the third-party merchant are completed.

Variable Consideration for Unredeemed Vouchers

For merchant agreements with redemption payment terms, the merchant is not paid its share of the sale price for a voucher sold through one of the Company's online marketplaces until the customer redeems the related voucher. If the customer does not redeem a voucher with such merchant payment terms, the Company retains all of the gross billings for that voucher, rather than retaining only its net commission. Prior to its adoption of Topic 606, the Company recognized that variable consideration from unredeemed vouchers and derecognized the related accrued merchant payables when its legal obligation to the merchant expired, which the Company believes is shortly after the voucher expiration date in most jurisdictions. Following its adoption of Topic 606, the Company estimates the variable consideration from vouchers that will not ultimately be redeemed and recognizes that amount as revenue at the time of sale, rather than when the Company's legal obligation expires. The Company estimates variable consideration from unredeemed vouchers using its historical voucher redemption experience. If actual redemptions differ from the Company's estimates, the effects could be material to the condensed consolidated financial statements.

Refunds

Prior to the adoption of Topic 606, refunds were recorded as a reduction of revenue, except for refunds on service revenue transactions for which the merchant's share was not recoverable, which were presented as a cost of revenue. Following the adoption of Topic 606, all refunds are recorded as a reduction of revenue. The liability for estimated refunds is included within Accrued expenses and other current liabilities on the consolidated balance sheets.

The Company estimates its refund reserve using historical refund experience by deal category. The Company assesses the trends that could affect its estimates on an ongoing basis and makes adjustments to the refund reserve calculations if it appears that changes in circumstances, including changes to the Company's refund policies or general economic conditions, may cause future refunds to differ from its initial estimates. If actual refunds differ from the Company's estimates, the effects could be material to the condensed consolidated financial statements.

Discounts, Customer Credits and Other Consideration Payable to Customers

The Company provides discount offers to encourage purchases of goods and services through its online marketplaces. The Company records discounts as a reduction of revenue.

Additionally, the Company issues credits to customers that can be applied to future purchases through its online marketplaces. Credits are primarily issued as consideration for refunds. To a lesser extent, credits are issued for customer relationship purposes. Credits issued to satisfy refund requests are applied as a reduction to the refunds reserve. Prior to the adoption of Topic 606, customer credits issued for relationship purposes were classified in the condensed consolidated statement of operations as a marketing expense. Following the adoption of Topic 606, customer credits issued for relationship purposes are classified as a reduction of revenue.

Prior to its adoption of Topic 606, the Company recognized breakage income for unused customer credits when they expired or were forfeited. Following its adoption of Topic 606, breakage income from customer credits that are not expected to be used is estimated and recognized as revenue in proportion to the pattern of redemption for customer credits that are used.

Sales and Related Taxes

Sales, use, value-added and related taxes that are imposed on specific revenue-generating transactions are presented on a net basis and excluded from revenue.

Costs of Obtaining Contracts

Prior to its adoption of Topic 606, the Company expensed the incremental costs to obtain contracts with third-party merchants, such as sales commissions, as incurred. Following its adoption of Topic 606, those costs are deferred and recognized over the expected period of the merchant arrangement, generally from 12 to 18 months. As of March 31, 2018, the Company had $3.9 million and $12.5 million of deferred contract acquisition costs recorded within Prepaid and other current assets and Other non-current assets, respectively. For the three months ended March 31, 2018, the Company amortized $6.8 million of deferred contract acquisition costs and did not recognize any impairment losses in relation to the deferred costs. Those costs are classified within Selling, general and administrative expenses in the condensed consolidated statements of operations.

Cost of Revenue

Cost of revenue is comprised of direct and certain indirect costs incurred to generate revenue. Costs incurred to generate revenue, which include credit card processing fees, editorial costs, compensation expense for technology support personnel who are responsible for maintaining the infrastructure of the Company's websites, amortization of internal-use software relating to customer-facing applications, web hosting and other processing fees are attributed to the cost of service and product revenue in proportion to gross billings during the period. For product revenue transactions, cost of revenue also includes the cost of inventory, shipping and fulfillment costs and inventory markdowns. Fulfillment costs are comprised of third-party logistics provider costs, as well as rent, depreciation, personnel costs and other costs of operating the Company's fulfillment center. Prior to adoption of Topic 606, cost of revenue on service revenue transactions also included refunds for which the merchant's share was not recoverable.

Financial Instruments

Prior to the adoption of the guidance in ASU 2016-01, investments in nonmarketable equity shares with no redemption provisions that are not common stock or in-substance common stock or for which the Company does not have the ability to exercise significant influence were accounted for using the cost method of accounting and are classified within Investments on the consolidated balance sheets. Under the cost method of accounting, investments were carried at cost and adjusted only for other-than-temporary declines in fair value, certain distributions and additional investments. Subsequent to the adoption of the guidance in ASU 2016-01, the Company applies a measurement alternative for equity investments without readily determinable fair values that permits entities to elect to measure the investments at cost adjusted for observable price changes and impairments, with changes in the measurement recognized through net income.

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DISCONTINUED OPERATIONS AND OTHER BUSINESS DISPOSITIONS

3 Months Ended

Mar. 31, 2018

Discontinued Operation, Gain (Loss) on Disposal of Discontinued Operation, Net of Tax [Abstract]

DISCONTINUED OPERATIONS AND OTHER BUSINESS DISPOSITIONS

DISCONTINUED OPERATIONS AND OTHER BUSINESS DISPOSITIONS

In October 2016, the Company completed a strategic review of its international markets in connection with its efforts to optimize its global footprint and focus on the markets that it believes have the greatest potential to benefit the Company's long-term financial performance. Based on that review, the Company decided to focus its business on 15 core countries and to pursue strategic alternatives for its operations in the remaining 11 countries, which were primarily based in Asia and Latin America. The dispositions of the Company's operations in those 11 countries were completed between November 2016 and March 2017.

A business disposition that represents a strategic shift and has (or will have) a major effect on an entity's operations and financial results is reported as a discontinued operation. The Company determined that the decision reached by its management and Board of Directors to exit those 11 non-core countries, which comprised a substantial majority of its operations outside of North America and EMEA, represented a strategic shift in its business. Additionally, based on its review of quantitative and qualitative factors relevant to the dispositions, the Company determined that the disposition of the businesses in those countries would have a major effect on its operations and financial results. As such, the results of operations and cash flows for its operations in those countries, including the gains and losses on the dispositions and related income tax effects, are presented as discontinued operations in the accompanying condensed consolidated financial statements for the three months ended March 31, 2018 and 2017.

Dispositions Completed in 2017

In connection with its strategic initiative to exit non-core countries as discussed above, the Company sold an 83% controlling stake in its subsidiary in Israel and sold its subsidiaries in Argentina, Chile, Colombia, Peru, Mexico, Brazil, Singapore and Hong Kong during the three months ended March 31, 2017. The Company recognized a net pretax loss on those dispositions of $1.3 million, which consisted of the following (in thousands):

	Three Months Ended March 31, 2017
Net consideration received:
Fair value of minority investments retained or acquired	$	2,021
Cash proceeds received	3,462
Cash proceeds receivable	2,000
Less: transaction costs	1,394
Total net consideration received	6,089
Cumulative translation gain reclassified to earnings	14,718
Less: Net book value upon closing of the transactions	14,596
Less: Indemnification liabilities (1)	5,365
Less: Unfavorable contract liability for transition services	2,114
Loss on dispositions	$	(1,268	)

(1) See Note 8, Commitments and Contingencies, for additional information about the indemnification liabilities.

Results of Discontinued Operations and Assets and Liabilities of Discontinued Operations

The following table summarizes the major classes of line items included in income (loss) from discontinued operations, net of tax, for the three months ended March 31, 2017 (in thousands):

	Three Months Ended March 31, 2017 (1)
Service revenue	$	12,602
Product revenue	2,962
Service cost of revenue	(2,557		)
Product cost of revenue	(3,098		)
Marketing expense	(1,239		)
Selling, general and administrative expense	(9,908		)
Restructuring	(778		)
Other income, net	3,852
Income (loss) from discontinued operations before loss on dispositions and provision for income taxes	1,836
Loss on dispositions	(1,268		)
Provision for income taxes	(81		)
Income (loss) from discontinued operations, net of tax	$	487

(1) The income (loss) from discontinued operations before loss on dispositions and provision for income taxes for the three months ended March 31, 2017 includes the results of each business through its respective disposition date.

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GOODWILL AND OTHER INTANGIBLE ASSETS

3 Months Ended

Mar. 31, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND OTHER INTANGIBLE ASSETS

GOODWILL AND OTHER INTANGIBLE ASSETS

The following table summarizes the Company's goodwill activity by segment for the three months ended March 31, 2018 (in thousands):

	North America		International		Consolidated
Balance as of December 31, 2017	$	178,685	$	108,304	$	286,989
Foreign currency translation	—		2,956		2,956
Balance as of March 31, 2018	$	178,685	$	111,260	$	289,945

The following table summarizes the Company's intangible assets as of March 31, 2018 and December 31, 2017 (in thousands):

	March 31, 2018						December 31, 2017
Asset Category	Gross Carrying Value		Accumulated Amortization		Net Carrying Value		Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Customer relationships	$	57,573	$	48,845	$	8,728	$	56,749	$	46,513	$	10,236
Merchant relationships	11,755		10,302		1,453		11,598		9,853		1,745
Trade names	12,212		10,891		1,321		12,077		10,469		1,608
Developed technology	37,045		37,045		—		36,864		36,864		—
Patents	19,697		15,563		4,134		19,031		15,204		3,827
Other intangible assets	10,757		9,468		1,289		10,875		9,095		1,780
Total	$	149,039	$	132,114	$	16,925	$	147,194	$	127,998	$	19,196

Amortization of intangible assets is computed using the straight-line method over their estimated useful lives, which range from 1 to 5 years. Amortization expense related to intangible assets was $2.9 million and $5.4 million for the three months ended March 31, 2018 and 2017, respectively. As of March 31, 2018, the Company's estimated future amortization expense related to intangible assets is as follows (in thousands):

Remaining amounts in 2018	$	7,870
2019	6,790
2020	1,280
2021	641
2022	325
Thereafter	19
Total	$	16,925

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INVESTMENTS

3 Months Ended

Mar. 31, 2018

Schedule of Equity Method Investments [Abstract]

INVESTMENTS

5. INVESTMENTS

The following table summarizes the Company's investments as of March 31, 2018 and December 31, 2017 (dollars in thousands):

	March 31, 2018		Percent Ownership of Voting Stock			December 31, 2017		Percent Ownership of Voting Stock
Available-for-sale securities:
Convertible debt securities	$	11,070				$	11,354
Redeemable preferred shares	14,576		19%	to	25%	15,431		19%	to	25%
Total available-for-sale securities	25,646					26,785
Fair value option investments	77,933		10%	to	19%	82,966		10%	to	19%
Other equity investments (1)	25,794		1%	to	19%	25,438		1%	to	19%
Total investments	$	129,373				$	135,189

(1) Represents equity investments without readily determinable fair values. Those investments were previously accounted for using the cost method of accounting. Under the cost method, investments were carried at cost and adjusted only for other-than-temporary declines in fair value, certain distributions and additional investments. The Company adopted the guidance in ASU 2016-01 on January 1, 2018. Under that guidance, the Company has elected to record equity investments without readily determinable fair values at cost adjusted for observable price changes and impairments. There were no adjustments for observable price changes or impairments related to these investments for the three months ended March 31, 2018.

The following table summarizes the amortized cost, gross unrealized gain, gross unrealized loss and fair value of the Company's available-for-sale securities as of March 31, 2018 and December 31, 2017 (in thousands):

	March 31, 2018									December 31, 2017
	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss (1)			Fair Value		Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss (1)			Fair Value
Available-for-sale securities:
Convertible debt securities	$	10,422	$	1,176	$	(528	)	$	11,070	$	10,205	$	1,653	$	(504	)	$	11,354
Redeemable preferred shares	14,576		—		—			14,576		15,431		—		—			15,431
Total available-for-sale securities	$	24,998	$	1,176	$	(528	)	$	25,646	$	25,636	$	1,653	$	(504	)	$	26,785

(1) Gross unrealized loss is related to one security that was in a loss position for greater than 12 months as of March 31, 2018 and December 31, 2017.

Fair Value Option Investments    

In connection with the dispositions of controlling stakes in Ticket Monster, an entity based in the Republic of Korea, in May 2015 and Groupon India in August 2015, the Company obtained minority investments in Monster Holdings LP ("Monster LP") and in Nearbuy Pte Ltd. ("Nearbuy"), respectively. The Company has made an irrevocable election to account for both of those investments at fair value with changes in fair value reported in earnings. The Company elected to apply fair value accounting to those investments because it believes that fair value is the most relevant measurement attribute for those investments, as well as to reduce operational and accounting complexity.

The Company determined that the fair value of its investments in Monster LP and Nearbuy was $73.7 million and $4.2 million, respectively, as of March 31, 2018 and $78.9 million and $4.0 million, respectively, as of December 31, 2017. For the three months ended March 31, 2018, the Company recognized a loss of $5.2 million and a gain of $0.2 million from changes in the fair value of its investments in Monster LP and Nearbuy, respectively. For the three months ended March 31, 2017, the Company recognized a gain of $2.4 million and a loss of $2.1 million from changes in the fair value of its investments in Monster LP and Nearbuy, respectively.

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SUPPLEMENTAL CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF OPERATIONS INFORMATION

3 Months Ended

Mar. 31, 2018

Supplemental Consolidated Balance Sheet & Statement of Operations Information [Abstract]

SUPPLEMENTAL CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF OPERATIONS INFORMATION

SUPPLEMENTAL CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF OPERATIONS INFORMATION

The following table summarizes the Company's other income (expense), net for the three months ended March 31, 2018 and 2017 (in thousands):

	Three Months Ended March 31,
	2018			2017
Interest income	$	1,509		$	602
Interest expense	(5,493		)	(5,319		)
Gains (losses), net on changes in fair value of investments	(5,033		)	303
Foreign currency gains (losses), net	1,398			51
Impairment of investment	(855		)	—
Other	(41		)	(239		)
Other income (expense), net	$	(8,515	)	$	(4,602	)

The following table summarizes the Company's prepaid expenses and other current assets as of March 31, 2018 and December 31, 2017 (in thousands):

	March 31, 2018		December 31, 2017
Merchandise inventories	$	24,771	$	25,528
Prepaid expenses	34,668		40,399
Income taxes receivable	9,918		10,299
Other	19,925		17,799
Total prepaid expenses and other current assets	$	89,282	$	94,025

The following table summarizes the Company's accrued merchant and supplier payables as of March 31, 2018 and December 31, 2017 (in thousands):

	March 31, 2018		December 31, 2017
Accrued merchant payables	$	395,085	$	459,662
Accrued supplier payables (1)	173,485		310,673
Total accrued merchant and supplier payables	$	568,570	$	770,335

(1) Amounts include payables to suppliers of inventories and providers of shipping and fulfillment services.

The following table summarizes the Company's accrued expenses and other current liabilities as of March 31, 2018 and December 31, 2017 (in thousands):

	March 31, 2018		December 31, 2017
Refunds reserve	$	29,434	$	31,275
Compensation and benefits	47,255		73,096
Customer credits	18,761		28,487
Income taxes payable	12,239		9,645
Deferred revenue	22,185		29,539
Current portion of capital lease obligations	22,023		25,958
Other	114,023		133,196
Total accrued expenses and other current liabilities	$	265,920	$	331,196

The following table summarizes the Company's other non-current liabilities as of March 31, 2018 and December 31, 2017 (in thousands):

	March 31, 2018		December 31, 2017
Contingent income tax liabilities	$	45,469	$	43,699
Capital lease obligations	15,448		18,500
Deferred income taxes	880		811
Other	40,250		39,398
Total other non-current liabilities	$	102,047	$	102,408

The following table summarizes the components of accumulated other comprehensive income (loss) as of March 31, 2018 and December 31, 2017 (in thousands):

	Foreign currency translation adjustments			Unrealized gain (loss) on available-for-sale securities			Total
Balance as of December 31, 2017	$	30,962		$	882		$	31,844
Reclassification for impact of U.S. tax rate change	—			161			161
Other comprehensive income (loss)	(1,568		)	(501		)	(2,069		)
Balance as of March 31, 2018	$	29,394		$	542		$	29,936

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FINANCING ARRANGEMENTS

3 Months Ended

Mar. 31, 2018

Debt Disclosure [Abstract]

FINANCING ARRANGEMENTS

FINANCING ARRANGEMENTS

Convertible Senior Notes

On April 4, 2016, the Company issued $250.0 million in aggregate principal amount of convertible senior notes (the "Notes") in a private placement to A-G Holdings, L.P. ("AGH"). Michael Angelakis, the chairman and chief executive officer of Atairos Group, Inc. ("Atairos"), joined the Company's Board of Directors in connection with the issuance of the Notes. Atairos controls the voting power of AGH. The net proceeds from this offering were $243.2 million after deducting issuance costs. The Notes bear interest at a rate of 3.25% per annum, payable annually in arrears on April 1 of each year, beginning on April 1, 2017. The Notes will mature on April 1, 2022, subject to earlier conversion or redemption.

Each $1,000 of principal amount of the Notes initially is convertible into 185.1852 shares of common stock, which is equivalent to an initial conversion price of $5.40 per share, subject to adjustment upon the occurrence of specified events. Upon conversion, the Company can elect to settle the conversion value in cash, shares of its common stock, or any combination of cash and shares of its common stock. Holders of the Notes may convert their Notes at their option at any time until the close of business on the scheduled trading day immediately preceding the maturity date. In addition, if specified corporate events occur prior to the maturity date, the Company may be required to increase the conversion rate for holders who elect to convert based on the effective date of such event and the applicable stock price attributable to the event, as set forth in a table contained in the indenture governing the Notes (the "Indenture"). Based on the closing price of the Company's common stock of $4.34 as of March 31, 2018, the if-converted value of the Notes was less than the principal amount.

With certain exceptions, upon a fundamental change (as defined in the Indenture), the holders of the Notes may require the Company to repurchase all or a portion of their Notes for cash at a purchase price equal to the principal amount plus accrued and unpaid interest. In addition, the Company may redeem the Notes, at its option, at a purchase price equal to the principal amount plus accrued and unpaid interest on or after April 1, 2020, if the closing sale price of the common stock exceeds 150% of the then-current conversion price for 20 or more trading days in the 30 consecutive trading day period preceding the Company’s exercise of this redemption right.

The Notes are senior unsecured obligations of the Company that rank equal in right of payment to all senior unsecured indebtedness of the Company and rank senior in right of payment to any indebtedness that is contractually subordinated to the Notes.

The Indenture includes customary events of default. If an event of default, as defined in the Indenture, occurs and is continuing, the principal amount of the Notes and any accrued and unpaid interest may be declared immediately due and payable. In the case of bankruptcy or insolvency, the principal amount of the Notes and any accrued and unpaid interest would automatically become immediately due and payable.

The Company has separated the Notes into their liability and equity components in the accompanying condensed consolidated balance sheet. The carrying amount of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated conversion feature. The carrying amount of the equity component, representing the conversion option, was determined by deducting the fair value of the liability component from the principal amount of the Notes. The difference between the principal amount of the Notes and the liability component (the "debt discount") is amortized to interest expense at an effective interest rate of 9.75% over the term of the Notes. The equity component of the Notes is included in additional paid-in capital in the condensed consolidated balance sheet and is not remeasured as long as it continues to meet the conditions for equity classification.

The Company incurred transaction costs of approximately $6.8 million related to the issuance of the Notes. Those transaction costs were allocated to the liability and equity components in the same manner as the allocation of the proceeds from the Notes. Transaction costs attributable to the liability component of $4.8 million were recorded as a debt discount in the condensed consolidated balance sheet and are being amortized to interest expense over the term of the Notes. Transaction costs attributable to the equity component of $2.0 million were recorded in stockholders' equity as a reduction of the equity component.

The carrying amount of the Notes consisted of the following as of March 31, 2018 and December 31, 2017 (in thousands):

	March 31, 2018			December 31, 2017
Liability component:
Principal amount	$	250,000		$	250,000
Less: debt discount	(57,381		)	(60,247		)
Net carrying amount of liability component	$	192,619		$	189,753
Net carrying amount of equity component	$	67,014		$	67,014

The estimated fair value of the Notes as of March 31, 2018 and December 31, 2017 was $281.5 million and $285.6 million, respectively, and was determined using a lattice model. The Company classified the fair value of the Notes as a Level 3 measurement due to the lack of observable market data over fair value inputs such as its stock price volatility over the term of the Notes and its cost of debt.

As of March 31, 2018, the remaining term of the Notes is approximately four years. During the three months ended March 31, 2018 and 2017, the Company recognized interest expense on the Notes as follows (in thousands):

	Three Months Ended March 31,
	2018		2017
Contractual interest expense (3.25% of the principal amount per annum)	$	2,032	$	2,032
Amortization of debt discount	2,866		2,587
Total interest expense	$	4,898	$	4,619

Note Hedges and Warrants

In May 2016, the Company purchased convertible note hedges with respect to its common stock for a cost of $59.1 million from certain bank counterparties. The convertible note hedges provide the Company with the right to purchase up to 46.3 million shares of the Company's common stock at an initial strike price of $5.40 per share, which corresponds to the initial conversion price of the Notes, and are exercisable by the Company upon conversion of the Notes. The convertible note hedges are intended to reduce the potential economic dilution upon conversion of the Notes. The convertible note hedges are separate transactions and are not part of the terms of the Notes. Holders of the Notes do not have any rights with respect to the convertible note hedges.

In May 2016, the Company also sold warrants for total cash proceeds of $35.5 million to certain bank counterparties. The warrants provide the counterparties with the right to purchase up to 46.3 million shares of the Company's common stock at a strike price of $8.50 per share. The warrants expire on various dates between July 1, 2022 and August 26, 2022 and are exercisable on their expiration dates. The warrants are separate transactions and are not part of the terms of the Notes or convertible note hedges. Holders of the Notes and convertible note hedges do not have any rights with respect to the warrants.

The amounts paid and received for the convertible note hedges and warrants were recorded in additional paid-in capital in the condensed consolidated balance sheets as of March 31, 2018 and December 31, 2017. The convertible note hedges and warrants are not remeasured as long as they continue to meet the conditions for equity classification. The amounts paid for the convertible note hedges are tax deductible over the term of the Notes, while the proceeds received from the warrants are not taxable. 

Under the if-converted method, the shares of common stock underlying the conversion option in the Notes are included in the diluted earnings per share denominator and the interest expense on the Notes, net of tax, is added to the numerator. However, upon conversion, there will be no economic dilution from the Notes, as exercise of the convertible note hedges eliminates any dilution from the Notes that would have otherwise occurred when the price of the Company’s common stock exceeds the conversion price. Taken together, the purchase of the convertible note hedges and sale of warrants are intended to offset any actual dilution from the conversion of the Notes and to effectively increase the overall conversion price from $5.40 to $8.50 per share.

Revolving Credit Agreement

The Company's amended and restated senior secured revolving credit agreement (the "Amended and Restated Credit Agreement") provides for aggregate principal borrowings of up to $250.0 million and matures in June 2019. Borrowings under the Amended and Restated Credit Agreement bear interest, at the Company's option, at a rate per annum equal to the Alternate Base Rate or Adjusted LIBO Rate (each as defined in the Amended and Restated Credit Agreement) plus an additional margin ranging between 0.50% and 2.25%. The Company is required to pay quarterly commitment fees ranging from 0.25% to 0.40% per annum of the average daily amount of unused commitments available under the Amended and Restated Credit Agreement. The Amended and Restated Credit Agreement also provides for the issuance of up to $45.0 million in letters of credit, provided that the sum of outstanding borrowings and letters of credit do not exceed the maximum funding commitment of $250.0 million.

The Amended and Restated Credit Agreement is secured by substantially all of the Company's and its subsidiaries' tangible and intangible assets, including a pledge of 100% of the outstanding capital stock of substantially all of its direct and indirect domestic subsidiaries and 65% of the shares or equity interests of first-tier foreign subsidiaries and each U.S. entity whose assets substantially consist of capital stock and/or intercompany debt of one or more foreign subsidiaries, subject to certain exceptions. Certain of the Company's domestic subsidiaries are guarantors under the Amended and Restated Credit Agreement.

The Amended and Restated Credit Agreement contains various customary restrictive covenants that limit the Company's ability to, among other things: incur additional indebtedness; make dividend and other restricted payments, including share repurchases; enter into sale and leaseback transactions; make investments, loans or advances; grant or incur liens on assets; sell assets; engage in mergers, consolidations, liquidations or dissolutions; and engage in transactions with affiliates. The Amended and Restated Credit Agreement requires the Company to maintain compliance with specified financial covenants, comprised of a minimum fixed charge coverage ratio, a maximum leverage ratio, a maximum senior secured indebtedness ratio and a minimum liquidity ratio, each as set forth in the Amended and Restated Credit Agreement. The Company is also required to maintain, as of the last day of each fiscal quarter, unrestricted cash of at least $400.0 million, including $200.0 million in accounts held with lenders under the Amended and Restated Credit Agreement or their affiliates. Non-compliance with these covenants may result in termination of the commitments under the Amended and Restated Credit Agreement and any then outstanding borrowings may be declared due and payable immediately. The Company has the right to terminate the Amended and Restated Credit Agreement or reduce the available commitments at any time.

As of March 31, 2018 and December 31, 2017, the Company had no borrowings and had outstanding letters of credit of $23.4 million and $22.7 million, respectively, under the Amended and Restated Credit Agreement.

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COMMITMENTS AND CONTINGENCIES

3 Months Ended

Mar. 31, 2018

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

Except for the changes set forth below, the Company's commitments as of March 31, 2018 and through the date these condensed consolidated financial statements were issued did not materially change from the amounts set forth in the Company's 2017 Annual Report on Form 10-K.

Purchase Obligations

In the first quarter 2018, the Company entered into a non-cancelable arrangement for cloud computing services. As of March 31, 2018, future payments under that contractual obligation are as follows (in thousands):

2018	$	1,500
2019	3,400
2020	3,400
2021	3,400
2022	3,400
Total	$	15,100

Leases

In May 2018, the Company entered into a new office lease for one of its foreign locations. The future payments under that operating lease for each of the next five years and thereafter are as follows (in thousands):

2018	$	2,461
2019	2,749
2020	2,749
2021	2,749
2022	2,749
Thereafter	6,187
Total minimum lease payments	$	19,644

Legal Matters and Other Contingencies

From time to time, the Company is party to various legal proceedings incident to the operation of its business. For example, the Company currently is involved in proceedings brought by former employees and merchants, intellectual property infringement suits, customer lawsuits, consumer class actions and suits alleging, among other things, violations of state consumer protection or privacy laws. The following is a brief description of significant legal proceedings.

On March 2, 2016, International Business Machines Corporation ("IBM") filed a complaint in the United States District Court for the District of Delaware against the Company (the "Delaware Action"). In the Delaware Action, IBM alleges that the Company has infringed and continues to willfully infringe certain IBM patents that IBM claims relate to the presentation of applications and advertising in an interactive service, preserving state information in online transactions and single sign-on processes in a computing environment and seeks damages (including a request that the amount of compensatory damages be trebled), injunctive relief and costs and reasonable attorneys’ fees. On December 13, 2016, the Company filed a motion to invalidate two of IBM’s patents relating to the presentation of applications and advertising on the grounds that such patents are patent-ineligible. The court denied the motion on November 17, 2017. The court issued an order construing disputed terms in the patent claims on August 3, 2017. On March 24, 2017, the Company filed a petition for inter partes review with the United States Patent and Trademark Office seeking to invalidate IBM’s asserted patent related to single sign-on processes. IBM filed its preliminary response on July 6, 2017. The Patent Trial and Appeal Board denied the Company’s petition for review on October 2, 2017. The Company filed a Request for Rehearing and Reconsideration with the Patent Trial and Appeal Board on November 1, 2017, which was also denied. In the Delaware Action, the Company filed a motion on March 5, 2018 for summary judgment that it does not infringe the asserted patents and that IBM may not claim an earlier priority date for its patent relating to preserving state information in online transactions to overcome the Company’s challenge that the patent is invalid. The Company also filed a motion to exclude IBM’s damages expert's testimony, on the ground that the expert's opinions of IBM’s damages claim do not meet the requisite standard for expert testimony. On March 5, 2018, IBM moved for summary judgment that certain asserted claims of IBM’s patent relating to preserving state information in online transactions are not invalid, that certain prior art references raised by the Company do not anticipate or render obvious asserted claims of two of IBM’s patents, and that the Company cannot claim certain affirmative defenses. IBM filed a motion to preclude the Company’s damages or technical expert from referencing alternatives to the allegedly infringing technologies, but did not ask the court to exclude either of their testimonies in full. The parties participated in a mediation on the case before a federal magistrate judge in Delaware on April 3, 2018.  No settlement was reached at that mediation. A hearing on the parties' cross-motions for summary judgment, and on the parties’ respective challenges to expert witness testimony, subsequently was held on April 24, 2018 and the court has taken the motions under advisement. There is no set ruling date. Trial is scheduled to commence on July 16, 2018 in the Delaware Action. On May 9, 2016, the Company filed a complaint in the United States District Court for the Northern District of Illinois against IBM (the "Illinois Action"). The Company alleges that IBM has infringed and continues to willfully infringe one of the Company’s patents relating to location-based services. The Company intends to seek damages and injunctive relief for IBM’s infringement of this patent. On December 20, 2016, IBM filed a motion to dismiss this case, and the court denied that motion. The court held a Markman hearing on April 3, 2017, but has not yet construed the claims. On May 18, 2017, IBM filed two petitions for inter partes review with the United States Patent and Trademark Office seeking to invalidate the Company’s patent relating to location-based services. The Company filed its preliminary responses on September 6, 2017. The Patent Office denied one petition and instituted a review of the Company’s patent in response to the other petition, but such review did not include all claims requested by IBM. On May 1, 2018, the Patent Office stated that it would institute review of the claims that were not previously under review based on a recent Supreme Court decision (SAS Institute, Inc. v. Iancu) finding that the Patent Office must institute review of either all or none of claims petitioners seek to review. A trial date is not yet set in the Illinois Action. The Company plans to vigorously defend against the claims filed by IBM in the Delaware Action and the challenges to the Company’s patent in the Illinois Action.

In addition, other third parties have from time to time claimed, and others may claim in the future, that the Company has infringed their intellectual property rights. The Company is subject to intellectual property disputes, including patent infringement claims, and expects that it will increasingly be subject to intellectual property infringement claims as its services expand in scope and complexity. The Company has in the past litigated such claims, and the Company is presently involved in several patent infringement and other intellectual property-related claims (including the IBM matter described above), including pending litigation or trademark disputes relating to, for example, the Company's Goods category, some of which could involve potentially substantial claims for damages or injunctive relief. The Company may also become more vulnerable to third-party claims as laws such as the Digital Millennium Copyright Act are interpreted by the courts, and as the Company becomes subject to laws in jurisdictions where the underlying laws with respect to the potential liability of online intermediaries are either unclear or less favorable. The Company believes that additional lawsuits alleging that it has violated patent, copyright or trademark laws will be filed against it. Intellectual property claims, whether meritorious or not, are time consuming and often costly to resolve, could require expensive changes in the Company's methods of doing business or the goods it sells, or could require it to enter into costly royalty or licensing agreements.

The Company also is subject to consumer claims or lawsuits relating to alleged violations of consumer protection or privacy rights and statutes, some of which could involve potentially substantial claims for damages, including statutory or punitive damages. Consumer and privacy related claims or lawsuits, whether meritorious or not, could be time consuming, result in costly litigation, damage awards, fines and penalties, injunctive relief or increased costs of doing business through adverse judgment or settlement, or require the Company to change its business practices, sometimes in expensive ways.

The Company also is subject to, or in the future may become subject to, a variety of regulatory inquiries, audits, and investigations across the jurisdictions where the Company conducts its business, including, for example, inquiries related to consumer protection, employment matters and/or hiring practices, marketing practices, tax, unclaimed property and privacy rules and regulations. Any regulatory actions against the Company, whether meritorious or not, could be time consuming, result in costly litigation, damage awards, fines and penalties, injunctive relief or increased costs of doing business through adverse judgment or settlement, require the Company to change its business practices in expensive ways, require significant amounts of management time, result in the diversion of significant operational resources or otherwise harm the Company's business.

The Company establishes an accrued liability for loss contingencies related to legal and regulatory matters when the loss is both probable and reasonably estimable. Those accruals represent management's best estimate of probable losses and, in such cases, there may be an exposure to loss in excess of the amounts accrued. For certain of the matters described above, there are inherent and significant uncertainties based on, among other factors, the stage of the proceedings, developments in the applicable facts of law, or the lack of a specific damage claim. However, the Company believes that the amount of reasonably possible losses in excess of the amounts accrued for those matters would not have a material adverse effect on its business, consolidated financial position, results of operations or cash flows. The Company's accrued liabilities for loss contingencies related to legal and regulatory matters may change in the future as a result of new developments, including, but not limited to, the occurrence of new legal matters, changes in the law or regulatory environment, adverse or favorable rulings, newly discovered facts relevant to the matter, or changes in the strategy for the matter. Regardless of the outcome, litigation and other regulatory matters can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources and other factors.

Indemnifications

In connection with the dispositions of the Company's operations in Latin America (see Note 3, Discontinued Operations and Other Business Dispositions), the Company agreed to indemnify the buyer for certain tax and other matters. The indemnification liabilities were initially recorded at their fair value, estimated to be $5.4 million using a probability-weighted expected cash flow approach, upon closing of the transactions as an adjustment to the net loss on the dispositions within discontinued operations. The Company estimates that the total amount of obligations that are reasonably possible to arise under the indemnifications in excess of amounts accrued as of March 31, 2018 is approximately $19.0 million.

In the normal course of business to facilitate transactions related to its operations, the Company indemnifies certain parties, including employees, lessors, service providers, merchants, and counterparties to investment agreements and asset and stock purchase agreements with respect to various matters. The Company has agreed to hold certain parties harmless against losses arising from a breach of representations or covenants, or other claims made against those parties. These agreements may limit the time within which an indemnification claim can be made and the amount of the claim. The Company is also subject to increased exposure to various claims as a result of its divestitures and acquisitions, particularly in cases where the Company is entering into new businesses in connection with such acquisitions. The Company may also become more vulnerable to claims as it expands the range and scope of its services and is subject to laws in jurisdictions where the underlying laws with respect to potential liability are either unclear or less favorable. In addition, the Company has entered into indemnification agreements with its officers, directors and underwriters, and the Company's bylaws contain similar indemnification obligations that cover officers, directors, employees and other agents. 

Except as noted above, it is not possible to determine the maximum potential amount under these indemnification agreements due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. Historically, any payments that the Company has made under these agreements have not had a material impact on the operating results, financial position or cash flows of the Company.

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STOCKHOLDERS' EQUITY AND COMPENSATION ARRANGEMENTS

3 Months Ended

Mar. 31, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

STOCKHOLDERS' EQUITY AND COMPENSATION ARRANGEMENTS

STOCKHOLDERS' EQUITY AND COMPENSATION ARRANGEMENTS

The Company's Board of Directors (the "Board") has the authority, without approval by the stockholders, to issue up to a total of 50,000,000 shares of preferred stock in one or more series. The Board may establish the number of shares to be included in each such series and may fix the designations, preferences, powers and other rights of the shares of a series of preferred stock. The Board could authorize the issuance of preferred stock with voting or conversion rights that could dilute the voting power or rights of the holders of its common stock. As of March 31, 2018 and December 31, 2017, there were no shares of preferred stock outstanding.

Common Stock

Pursuant to the Company's restated certificate of incorporation, the Board has the authority to issue up to a total of 2,010,000,000 shares of common stock. Each holder of common stock shall be entitled to one vote for each such share on any matter that is submitted to a vote of stockholders. In addition, holders of the common stock will vote as a single class of stock on any matter that is submitted to a vote of stockholders.

Share Repurchase Program

In May 2018, the Board authorized the Company to repurchase up to $300.0 million of its common stock under a new share repurchase program. The Company's prior share repurchase program expired in April 2018. During the three months ended March 31, 2018, the Company did not purchase any shares under that program. As of March 31, 2018 and upon its expiration the following month, up to $135.2 million of common stock remained available for purchase under that prior share repurchase program. The timing and amount of share repurchases, if any, will be determined based on market conditions, limitations under the Amended and Restated Credit Agreement, share price and other factors, and the share repurchase program may be terminated at any time.

Groupon, Inc. Stock Plans

The Groupon, Inc. Stock Plans (the "Plans") are administered by the Compensation Committee of the Board (the "Compensation Committee"), which determines the number of awards to be issued, the corresponding vesting schedule and the exercise price for options. As of March 31, 2018, 63,923,154 shares of common stock were available for future issuance under the Plans.

The stock-based compensation expense related to stock awards issued under the Plans and acquisition-related awards are presented within the following line items of the condensed consolidated statements of operations for the three months ended March 31, 2018 and 2017 (in thousands):

	Three Months Ended March 31,
	2018		2017
Cost of revenue	$	396	$	663
Marketing	1,794		1,802
Selling, general and administrative	17,088		17,185
Other income (expense)	48		51
Total stock-based compensation expense	$	19,326	$	19,701

The Company also capitalized $1.7 million and $1.5 million of stock-based compensation for the three months ended March 31, 2018 and 2017, respectively, in connection with internally-developed software. As of March 31, 2018, a total of $107.9 million of unrecognized compensation costs related to unvested employee stock awards are expected to be recognized over a remaining weighted-average period of 1.32 years.

Employee Stock Purchase Plan

The Company is authorized to grant up to 10,000,000 shares of common stock under its employee stock purchase plan ("ESPP"). For the three months ended March 31, 2018 and 2017, 746,773 and 877,845 shares of common stock, respectively, were issued under the ESPP.

Restricted Stock Units

The restricted stock units granted under the Plans generally have vesting periods between one and four years. Restricted stock units are amortized on a straight-line basis over the requisite service period.

The table below summarizes activity regarding unvested restricted stock units granted under the Plans for the three months ended March 31, 2018:

	Restricted Stock Units		Weighted-Average Grant Date Fair Value (per unit)
Unvested at December 31, 2017	28,939,110		$	4.32
Granted	2,610,912		5.24
Vested	(3,878,827	)	4.53
Forfeited	(1,608,149	)	4.02
Unvested at March 31, 2018	26,063,046		4.40

Performance Share Units

The performance share units granted under the Plans vest in shares of the Company's common stock upon the achievement of financial and operational targets specified in the respective award. The awards are subject to both continued employment through the performance period dictated by the award and certification by the Compensation Committee that the specified financial and operational targets have been achieved.

During the three months ended March 31, 2018, the Company granted performance share units for which the maximum number of common shares issuable upon vesting of those performance share units is 3,283,114 shares, the grant date fair value was $5.20 per unit and the total grant date fair value of the shares for which the performance conditions are expected to be met was $8.5 million. During the three months ended March 31, 2018, 278,635 shares of the Company's common stock were issued related to performance share units granted in the previous year following the Compensation Committee's certification of the Company's financial and operational metrics for the year ended December 31, 2017. The weighted average grant date fair value of those units was $3.78 per share.

Performance Bonus Awards

If bonus amounts earned under the Company's primary employee bonus plans exceed targeted bonus amounts because specified financial metrics of the Company exceed the performance conditions set forth in those plans, such excess is required to be settled in the Company's common stock. The Company's obligation to issue shares for employee bonus amounts exceeding the specified bonus targets is accounted for separately as a liability-classified stock-based compensation arrangement with performance conditions.

During the three months ended March 31, 2018, 1,240,379 shares of the Company's common stock were issued related to performance bonus awards granted in the previous year following the Compensation Committee's certification of the Company's financial and operational metrics for the year ended December 31, 2017. The weighted average grant date fair value of those awards was $5.20 per share.

Stock Options

The exercise price of stock options granted is equal to the fair value of the underlying stock on the date of grant. The contractual term for stock options expires ten years from the grant date. Stock options generally vested over a three or four-year period, with 25% of the awards vesting after one year and the remainder of the awards vesting on a monthly or quarterly basis thereafter.

The table below summarizes the stock option activity for the three months ended March 31, 2018:

	Options		Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands) (1)
Outstanding and exercisable at December 31, 2017	885,580		$	0.62	1.76	$	3,967
Exercised	(2,400	)	2.36
Forfeited	—		—
Outstanding and exercisable at March 31, 2018	883,180		0.61		1.51	$	3,294

(1) The aggregate intrinsic value of options outstanding and exercisable represents the total pretax intrinsic value (the difference between the fair value of the Company's stock on the last day of each period and the exercise price, multiplied by the number of options where the fair value exceeds the exercise price) that would have been received by the option holders had all option holders exercised their options as of March 31, 2018 and December 31, 2017, respectively.

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REVENUE RECOGNITION

3 Months Ended

Mar. 31, 2018

Revenue from Contract with Customer [Abstract]

REVENUE RECOGNITION

REVENUE RECOGNITION

Product and service revenue are generated from sales transactions through the Company's online marketplaces in three primary categories: Local, Goods and Travel.

Product revenue is earned from direct sales of merchandise inventory to customers and includes any related shipping fees. Service revenue primarily represents the net commissions earned by the Company from selling goods and services provided by third-party merchants. Those marketplace transactions generally involve the online delivery of a voucher that can be redeemed by the purchaser with the third-party merchant for goods or services (or for discounts on goods or services). To a lesser extent, service revenue also includes commissions earned when customers make purchases with retailers using digital coupons accessed through the Company's websites and mobile applications. Additionally, in the United States the Company has recently been developing and testing voucherless offerings that are linked to customer credit cards. Customers claim those voucherless merchant offerings through the Company's online marketplaces and earn cash back on their credit card statements when they transact with the related merchants, who pay the Company commissions for such transactions.

In connection with most of our product and service revenue transactions, we collect cash from credit card payment processors shortly after a sale occurs. For transactions in which the Company earns commissions when customers make purchases with retailers using digital coupons accessed through its websites and mobile applications, the Company generally collects payment from affiliate networks on terms ranging from 30 to 150 days.

Previously, the Company referred to its product revenue and service revenue as "direct revenue" and "third-party and other revenue," respectively.

Adoption of ASC Topic 606, Revenue from Contracts with Customers

On January 1, 2018, the Company adopted Accounting Standards Codification Topic 606, Revenue from Contracts with Customers ("Topic 606") using the modified retrospective method. Beginning on January 1, 2018, results are presented in accordance with the Company's revised policies, while prior period amounts are not adjusted and continue to be reported in accordance with the Company's historical policies. The adoption of Topic 606 did not significantly impact the Company's presentation of revenue on a gross or net basis. The following changes resulted from the adoption of Topic 606:

• For merchant agreements with redemption payment terms, the merchant is not paid its share of the sale price for a voucher sold through one of the Company's online marketplaces until the customer redeems the related voucher. If the customer does not redeem a voucher with such merchant payment terms, the Company retains all of the gross billings for that voucher, rather than retaining only its net commission. Prior to its adoption of Topic 606, the Company recognized that variable consideration from unredeemed vouchers and derecognized the related accrued merchant payables when its legal obligation to the merchant expired, which the Company believes is shortly after the voucher expiration date in most jurisdictions. Following its adoption of Topic 606, the Company estimates the variable consideration from vouchers that will not ultimately be redeemed and recognizes that amount as revenue at the time of sale, rather than when the Company's legal obligation expires. The Company estimates variable consideration from unredeemed vouchers using its historical voucher redemption experience. Most vouchers sold through the Company's marketplace in the United States do not have expiration dates and redemption payment terms were not widely used in that jurisdiction before 2017, so the Company's North America segment did not have variable consideration from unredeemed vouchers in prior periods.

• Prior to its adoption of Topic 606, the Company expensed the incremental costs to obtain contracts with third-party merchants, such as sales commissions, as incurred. Following its adoption of Topic 606, those costs are deferred and recognized over the expected period of the merchant arrangement, generally from 12 to 18 months.

• Prior to its adoption of Topic 606, the Company recognized breakage income for unused customer credits when they expired or were forfeited. Following its adoption of Topic 606, breakage income from customer credits that are not expected to be used is estimated and recognized as revenue in proportion to the pattern of redemption for customer credits that are used.

• Prior to its adoption of Topic 606, the Company deferred the revenue from hotel reservation offerings until the customer's stay commenced. Following its adoption of Topic 606, revenue from hotel reservation offerings is recognized at the time the reservation is made, net of an allowance for estimated cancellations.

• Prior to its adoption of Topic 606, the Company classified refunds on service revenue transactions for which the merchant's share of the refund amount is not recoverable as a cost of revenue. Following its adoption of Topic 606, those refunds are classified as a reduction of revenue.

• Prior to its adoption of Topic 606, the Company classified credits issued to consumers for relationship purposes as a marketing expense. Following its adoption of Topic 606, those credits are classified as a reduction of revenue.

The Company recorded a net reduction to its opening accumulated deficit of $88.9 million, which is net of a $6.7 million income tax effect, as of January 1, 2018 due to the cumulative impact of adopting Topic 606. The following table summarizes balance sheet accounts impacted by the cumulative effect of adopting Topic 606 (in thousands):

Account	Increase (decrease) to beginning accumulated deficit
Prepaid expenses and other current assets	$	(4,007	)
Other non-current assets	(10,223		)
Accrued merchant and supplier payables	(64,970		)
Accrued expenses and other current liabilities	(13,188		)
Other non-current liabilities	3,443
Effect on beginning accumulated deficit	$	(88,945	)

See Note 2, Adoption of New Accounting Standards, for additional information about the Company's revenue recognition policies before and after the adoption of Topic 606.

Impacts on Condensed Consolidated Financial Statements

The following tables summarize the impacts of adopting Topic 606 on the Company's condensed consolidated financial statements as of and for the three months ended March 31, 2018 (in thousands):

Condensed Consolidated Balance Sheet

	March 31, 2018
	As reported		Adjustments			Balances without adoption of Topic 606
Total assets	$	1,502,928	$	(13,082	)	$	1,489,846
Total liabilities	1,152,556		84,185			1,236,741
Total Groupon, Inc. stockholders' equity	350,372		(97,267		)	253,105

Condensed Consolidated Statement of Operations

	Three Months Ended March 31, 2018
	As reported			Adjustments			Balances without adoption of Topic 606
Revenue:
Service revenue (1)	$	301,797		$	(1,779	)	$	300,018
Product revenue	324,743			—			324,743
Total revenue	626,540			(1,779		)	624,761
Cost of revenue:
Service cost of revenue (2)	31,145			6,275			37,420
Product cost of revenue	270,510			—			270,510
Cost of revenue (2)	301,655			6,275			307,930
Gross profit	324,885			(8,054		)	316,831
Operating expenses:
Marketing (3)	99,156			1,573			100,729
Selling, general and administrative (4)	222,061			(1,264		)	220,797
Restructuring charges	283			—			283
Total operating expenses	321,500			309			321,809
Income (loss) from operations	3,385			(8,363		)	(4,978		)
Other income (expense), net	(8,515		)	—			(8,515		)
Income (loss) before provision (benefit) for income taxes	(5,130		)	(8,363		)	(13,493		)
Provision (benefit) for income taxes (5)	(2,335		)	(1,019		)	(3,354		)
Net income (loss)	$	(2,795	)	$	(7,344	)	$	(10,139	)

(1) Reflects decreases of $5.6 million related to the timing of recognition of variable consideration from unredeemed vouchers, $3.3 million related to the timing of recognition of revenue from hotel reservation offerings and $0.7 million related to the timing of recognition of breakage revenue from customer credits that are not expected to be used, partially offset by a $7.8 million increase for refunds on service revenue transactions for which the merchant's share is not recoverable and customer credits issued for relationship purposes, which are classified as reductions of revenue under Topic 606.

(2) Reflects an increase for refunds on service revenue transactions for which the merchant's share is not recoverable, which are classified as a reduction of revenue under Topic 606.

(3) Reflects an increase for customer credits issued for relationship purposes, which are classified as a reduction of revenue under Topic 606.

(4) Reflects the amortization of deferred contract acquisition costs in excess of amounts capitalized in the current period.

(5) As discussed in Note 12, Income Taxes, for the three months ended March 31, 2018, the Company recognized a $6.4 million income tax benefit resulting from the impact of adopting Topic 606 on intercompany activity in certain foreign jurisdictions. That income tax benefit is not reflected in this table, which presents the direct impacts of adopting Topic 606.

Segment and Category Information

	Three Months Ended March 31, 2018
	As reported		Adjustments			Balances without adoption of Topic 606
North America
Service revenue:
Local	$	187,411	$	3,613		$	191,024
Goods	4,874		—			4,874
Travel	20,084		(3,080		)	17,004
Product revenue - Goods	180,887		—			180,887
Total North America revenue	393,256		533			393,789
International
Service revenue:
Local	74,578		(1,445		)	73,133
Goods	3,414		(239		)	3,175
Travel	11,436		(628		)	10,808
Product revenue - Goods	143,856		—			143,856
Total International revenue	233,284		(2,312		)	230,972
Consolidated
Service revenue:
Local	261,989		2,168			264,157
Goods	8,288		(239		)	8,049
Travel	31,520		(3,708		)	27,812
Product revenue - Goods	324,743		—			324,743
Total Consolidated Revenue	$	626,540	$	(1,779	)	$	624,761

Contract Balances

The following table summarizes the activity in revenue deferred from contracts with customers for the three months ended March 31, 2018 (in thousands):

	Deferred Revenue
Balance as of January 1, 2018	$	25,763
Revenue deferred	22,185
Revenue recognized	(25,935		)
Foreign currency translation	172
Balance as of March 31, 2018	$	22,185

A substantial majority of our deferred revenue relates to product sales for which revenue will be recognized as the products are delivered to customers, generally within one week following the balance sheet date.

The following table summarizes the activity in the liability for customer credits for the three months ended March 31, 2018 (in thousands):

	Customer Credits
Balance as of January 1, 2018	$	19,414
Credits issued	32,386
Credits redeemed (1)	(28,167		)
Breakage revenue recognized	(5,036		)
Foreign currency translation	164
Balance as of March 31, 2018	$	18,761

(1) Customer credits can be redeemed through the Company's online marketplaces for goods or services provided by a third-party merchant or for merchandise inventory sold by the Company. When customer credits are redeemed for goods or services provided by a third-party merchant, service revenue is recognized on a net basis as the difference between the carrying amount of the customer credit liability derecognized and the amount due to the merchant for the related transaction. When customer credits are redeemed for merchandise inventory sold by the Company, product revenue is recognized on a gross basis equal to the amount of the customer credit liability derecognized. Customer credits are primarily used within one year of issuance.

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RESTRUCTURING RESTRUCTURING

3 Months Ended

Mar. 31, 2018

Restructuring and Related Activities [Abstract]

RESTRUCTURING

RESTRUCTURING    

In September 2015, the Company commenced a restructuring plan relating primarily to workforce reductions in its international operations. The Company has also undertaken workforce reductions in its North America segment. In addition to workforce reductions in its ongoing markets, the Company ceased operations in 17 countries within its International segment as part of the restructuring plan between September 2015 and March 2016. Those country exits, which generally comprised the Company's smallest international markets, resulted from a series of separate decisions made at different times during that period that were not part of an overall strategic shift. Costs related to the restructuring plan are classified as Restructuring charges on the condensed consolidated statements of operations. The actions under the Company's restructuring plan were completed as of September 30, 2017 and substantially all of the remaining cash payments for actions under that plan are expected to be disbursed through December 31, 2018.

The Company incurred cumulative costs for employee severance and benefits and other exit costs of $80.5 million under the plan since its inception in September 2015. In addition to those costs, the Company incurred cumulative long-lived asset impairment charges of $7.5 million resulting from its restructuring activities.

The following tables summarize the costs incurred by segment related to the Company’s restructuring plan for the three months ended March 31, 2018 and 2017 (in thousands):

	Three Months Ended March 31, 2018
	Employee Severance and Benefit Costs (1)		Other Exit Costs (1)		Total Restructuring Charges
North America	$	—	$	—	$	—
International	230		53		283
Consolidated	$	230	$	53	$	283

	Three Months Ended March 31, 2017
	Employee Severance and Benefit Costs (2)		Other Exit Costs		Total Restructuring Charges
North America	$	1,778	$	177	$	1,955
International	523		253		776
Consolidated	$	2,301	$	430	$	2,731

(1) The $0.3 million of restructuring charges during three months ended March 31, 2018 reflects changes in estimates related to prior actions.

(2) The employee severance and benefit costs for the three months ended March 31, 2017 related to the termination of approximately 200 employees.

The following table summarizes the restructuring liability activity for each period (in thousands):

	Employee Severance and Benefit Costs			Other Exit Costs			Total
Balance as of December 31, 2017	$	3,817		$	304		$	4,121
Charges payable in cash	230			53			283
Cash payments	(720		)	(53		)	(773		)
Foreign currency translation	71			—			71
Balance as of March 31, 2018	$	3,398		$	304		$	3,702

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INCOME TAXES INCOME TAXES

3 Months Ended

Mar. 31, 2018

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

The Company's tax provision for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items.

For the three months ended March 31, 2018, the Company recorded an income tax benefit from continuing operations of $2.3 million on a pretax loss from continuing operations of $5.1 million. For the three months ended March 31, 2017, the Company recorded income tax expense from continuing operations of $4.6 million on a pretax loss from continuing operations of $16.3 million.

The Company's U.S. Federal income tax rate is 21%. The effective tax rate for the three months ended March 31, 2018 reflected a $6.4 million income tax benefit resulting from the impact of adopting Topic 606 on intercompany activity in certain foreign jurisdictions, partially offset by pretax losses incurred in jurisdictions that have valuation allowances against their net deferred tax assets. The primary factor impacting the effective tax rate for the three months ended March 31, 2017 was the pretax losses incurred in jurisdictions that have valuation allowances against their net deferred tax assets.

The Company is currently undergoing income tax audits in multiple jurisdictions. There are many factors, including factors outside of the Company's control, which influence the progress and completion of those audits. During the fourth quarter 2017, the Company received an income tax assessment and a notification of proposed assessment from the tax authorities in two foreign jurisdictions, totaling $141.8 million in the aggregate. The Company believes that the assessments, which primarily relate to transfer pricing on transactions occurring from 2011 to 2014, are without merit and it intends to vigorously defend itself in those matters. In addition to any potential increases in its liabilities for uncertain tax positions from the ultimate resolution of those assessments, the Company believes that it is reasonably possible that reductions of up to $40.6 million in unrecognized tax benefits may occur within the 12 months following March 31, 2018 upon closing of income tax audits or the expiration of applicable statutes of limitations.

The Tax Cuts and Jobs Act (the "Jobs Act") was signed into law on December 22, 2017. The Company has made provisional estimates for the impact of the Jobs Act related to the re-measurement of deferred income taxes, valuation allowances, uncertain tax positions, and its assessment of permanently reinvested earnings. Those estimates may be impacted by the need for further analysis and future clarification and guidance regarding available tax accounting methods and elections, earnings and profits computations and state tax conformity to federal tax changes. Additionally, while the Company does not expect to incur the deemed repatriation tax, it has not yet finalized the related calculations. The Jobs Act also establishes global intangible low-taxed income ("GILTI") provisions that impose a tax on foreign income in excess of a deemed return on intangible assets of foreign corporations. The Company is in the process of evaluating the impact of taxes on GILTI and has not yet determined whether its accounting policy will be to recognize deferred taxes for basis differences that are expected to affect the amount of GILTI inclusion upon reversal or to recognize taxes on GILTI as an expense in the period incurred.

In general, it is the practice and intention of the Company to reinvest the earnings of its non-U.S. subsidiaries in those operations. Additionally, while the Company does not expect to incur the deemed repatriation tax established by the Jobs Act, an actual repatriation from its non-U.S. subsidiaries could be subject to foreign and U.S. state income taxes. Aside from limited exceptions for which the related deferred tax liabilities recognized as of March 31, 2018 and December 31, 2017 are immaterial, the Company does not intend to distribute earnings of foreign subsidiaries for which it has an excess of the financial reporting basis over the tax basis of its investments and therefore has not recorded any deferred taxes related to such amounts. The actual tax cost resulting from a distribution would depend on income tax laws and circumstances at the time of distribution. Determination of the amount of unrecognized deferred tax liability related to the excess of the financial reporting basis over the tax basis of the Company's foreign subsidiaries is not practical due to the complexities associated with the calculation.

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FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS

3 Months Ended

Mar. 31, 2018

Fair Value Measurements [Abstract]

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

Fair value is defined under U.S. GAAP as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or a liability.

To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs in valuation methodologies used to measure fair value:

Level 1 - Measurements that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 - Measurements that include other inputs that are directly or indirectly observable in the marketplace.

Level 3 - Measurements derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. These fair value measurements require significant judgment.

In determining fair value, the Company uses various valuation approaches within the fair value measurement framework. The valuation methodologies used for the Company's assets and liabilities measured at fair value and their classification in the valuation hierarchy are summarized below:

Cash equivalents. Cash equivalents primarily consist of AAA-rated money market funds. The Company classified cash equivalents as Level 1 due to the short-term nature of these instruments and measured the fair value based on quoted prices in active markets for identical assets.

Fair value option and available-for-sale securities investments. To determine the fair value of its fair value option investments each period, the Company first estimates the fair value of each entity in its entirety. The Company primarily uses the discounted cash flow method, which is an income approach, to estimate the fair value of the investees. The key inputs to determining fair values under that approach are cash flow forecasts and discount rates. As of March 31, 2018 and December 31, 2017, the Company applied discount rates of 21% and 22%, respectively, in its discounted cash flow valuations for Monster LP. The Company also uses a market approach valuation technique, which is based on market multiples of guideline companies, to determine the fair value of each entity. The discounted cash flow and market multiple valuations are then evaluated and weighted to determine the amount that is most representative of the fair value of each entity. Once the Company determines the fair value of each entity, it then determines the fair value of its specific investments in those entities. The entities have complex capital structures, so the Company applies an option-pricing model that considers the liquidation preferences of each investee’s respective classes of ownership interests to determine the fair value of the Company’s investment in each entity.

The Company also has investments in redeemable preferred shares and convertible debt securities issued by nonpublic entities. The Company measures the fair value of those available-for-sale securities using the discounted cash flow method.

The Company has classified its fair value option investments and its investments in available-for-sale securities as Level 3 due to the lack of observable market data over fair value inputs such as cash flow projections and discount rates. Increases in projected cash flows and decreases in discount rates contribute to increases in the estimated fair values of the fair value option investments and available-for-sale securities, whereas decreases in projected cash flows and increases in discount rates contribute to decreases in their fair values.

Contingent consideration. The Company had contingent obligations to transfer cash to the former owners of acquired businesses if specified financial results were met over future reporting periods (i.e., earn-outs). Liabilities for contingent consideration were measured at fair value each reporting period, with the acquisition-date fair value included as part of the consideration transferred and subsequent changes in fair value recorded in earnings within Selling, general and administrative expense on the condensed consolidated statements of operations.

The Company used an income approach to value contingent consideration obligations based on the present value of probability-weighted future cash flows. The Company classified the contingent consideration liabilities as Level 3 due to the lack of relevant observable market data over fair value inputs such as probability-weighting of payment outcomes.

The following tables summarize the Company's assets that are measured at fair value on a recurring basis as of March 31, 2018 and December 31, 2017 (in thousands):

			Fair Value Measurement at Reporting Date Using
	March 31, 2018		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents	$	93,325	$	93,325	$	—	$	—
Fair value option investments	77,933		—		—		77,933
Available-for-sale securities:
Convertible debt securities	11,070		—		—		11,070
Redeemable preferred shares	14,576		—		—		14,576

			Fair Value Measurement at Reporting Date Using
	December 31, 2017		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents	$	137,975	$	137,975	$	—	$	—
Fair value option investments	82,966		—		—		82,966
Available-for-sale securities:
Convertible debt securities	11,354		—		—		11,354
Redeemable preferred shares	15,431		—		—		15,431

The following table provides a roll-forward of the fair value of recurring Level 3 fair value measurements for the three months ended March 31, 2018 and 2017 (in thousands):

	Three Months Ended March 31,
	2018			2017
Assets
Fair value option investments:
Beginning Balance	$	82,966		$	82,584
Total gains (losses) included in earnings	(5,033		)	303
Ending Balance	$	77,933		$	82,887
Unrealized gains (losses) still held (1)	$	(5,033	)	$	303
Available-for-sale securities
Convertible debt securities:
Beginning Balance	$	11,354		$	10,038
Acquisition of convertible debt security	—			1,612
Total gains (losses) included in other comprehensive income (loss)	(501		)	42
Total gains (losses) included in earnings (2)	217			239
Ending Balance	$	11,070		$	11,931
Unrealized gains (losses) still held (1)	$	(284	)	$	281
Redeemable preferred shares:
Beginning Balance	$	15,431		$	17,444
Total gains (losses) included in other comprehensive income (loss)	—			344
Impairment included in earnings	(855		)	—
Ending Balance	$	14,576		$	17,788
Unrealized (losses) gains still held (1)	$	(855	)	$	344
Liabilities
Contingent Consideration:
Beginning Balance	$	—		$	14,588
Total losses (gains) included in earnings (3)	—			12
Ending Balance	$	—		$	14,600
Unrealized losses (gains) still held (1)	$	—		$	12

(1) Represents the unrealized losses or gains recorded in earnings and/or other comprehensive income (loss) during the period for assets and liabilities classified as Level 3 that are still held (or outstanding) at the end of the period.

(2) Represents accretion of interest income and changes in the fair value of an embedded derivative.

(3) Changes in the fair value of contingent consideration liabilities are classified within Selling, general and administrative expense on the consolidated statements of operations.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Certain assets and liabilities are measured at fair value on a nonrecurring basis, including assets that are written down to fair value as a result of an impairment. The Company did not record any significant nonrecurring fair value measurements after initial recognition for the three months ended March 31, 2018 and 2017.

Estimated Fair Value of Financial Assets and Liabilities Not Measured at Fair Value

The following table presents the carrying amount and fair value of equity securities that were classified as cost method investments as of December 31, 2017 (in thousands):

	December 31, 2017
	Carrying Amount		Fair Value
Cost method investments (1)	$	25,438	$	32,792

(1) See Note 2, Adoption of New Accounting Standards, and Note 5, Investments, for information about the Company's adoption of ASU 2016-01 on January 1, 2018 and its impact on accounting for equity investments without readily determinable fair values that were previously subject to the cost method of accounting.

The fair values of the Company's cost method investments were determined using the market approach or the income approach, depending on the availability of fair value inputs such as financial projections for the investees and market multiples for comparable companies. The Company classified the fair value measurements of its cost method investments as Level 3 measurements within the fair value hierarchy as of December 31, 2017 because they involve significant unobservable inputs such as cash flow projections and discount rates.

The Company's other financial instruments not carried at fair value consist primarily of accounts receivable, restricted cash, accounts payable, accrued merchant and supplier payables and accrued expenses. The carrying values of these assets and liabilities approximate their respective fair values as of March 31, 2018 and December 31, 2017 due to their short-term nature.

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INCOME (LOSS) PER SHARE INCOME (LOSS) PER SHARE

3 Months Ended

Mar. 31, 2018

Earnings Per Share [Abstract]

INCOME (LOSS) PER SHARE

14. INCOME (LOSS) PER SHARE

Basic net income (loss) per share is computed using the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per share is computed using the weighted-average number of common shares and the effect of potentially dilutive securities outstanding during the period. Potentially dilutive securities include stock options, restricted stock units, performance share units, unvested restricted stock awards, performance bonus awards, ESPP shares, warrants and convertible senior notes. If dilutive, those potentially dilutive securities are reflected in diluted net income (loss) per share by application of the treasury stock method, except for the convertible senior notes, which are subject to the if-converted method.

The following table sets forth the computation of basic and diluted net income (loss) per share of common stock for the three months ended March 31, 2018 and 2017 (in thousands, except share amounts and per share amounts):

	Three Months Ended March 31,
	2018			2017
Basic and diluted net income (loss) per share:
Numerator
Net income (loss) - continuing operations	$	(2,795	)	$	(20,869	)
Less: Net income (loss) attributable to noncontrolling interests	4,093			4,032
Net income (loss) attributable to common stockholders - continuing operations	(6,888		)	(24,901		)
Net income (loss) attributable to common stockholders - discontinued operations	—			487
Net income (loss) attributable to common stockholders	$	(6,888	)	$	(24,414	)
Denominator
Weighted-average common shares outstanding	561,735,937			562,195,243
Basic and diluted net income (loss) per share (1):
Continuing operations	$	(0.01	)	$	(0.04	)
Discontinued operations	0.00			0.00
Basic and diluted net income (loss) per share	$	(0.01	)	$	(0.04	)

(1) The potentially dilutive impacts of outstanding equity awards, warrants and convertible senior notes have been excluded from the calculation of dilutive net income (loss) per share for the three months ended March 31, 2018 and 2017 as their effect on net income (loss) per share from continuing operations was antidilutive.

The following weighted-average potentially dilutive instruments are not included in the diluted net income (loss) per share calculations above because they would have had an antidilutive effect on the net income (loss) per share from continuing operations:

	Three Months Ended March 31,
	2018	2017
Restricted stock units	28,033,489	24,360,648
Other stock-based compensation awards	3,212,026	3,813,848
Convertible senior notes	46,296,300	46,296,300
Warrants	46,296,300	46,296,300
Total	123,838,115	120,767,096

The Company had outstanding performance share units as of March 31, 2018 and 2017 that were eligible to vest into shares of common stock subject to the achievement of specified performance conditions. Contingently issuable shares are excluded from the computation of diluted earnings per share if, based on current period results, the shares would not be issuable if the end of the reporting period were the end of the contingency period. There were up to 3,283,114 and 683,076 shares of common stock issuable upon vesting of outstanding performance share units as of March 31, 2018 and 2017, respectively, that were excluded from the table above as the performance conditions were not satisfied as of the end of the respective periods.

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SEGMENT INFORMATION

3 Months Ended

Mar. 31, 2018

Segment Reporting [Abstract]

SEGMENT INFORMATION

15. SEGMENT INFORMATION

The segment information reported in the tables below reflects the operating results that are regularly reviewed by the Company's chief operating decision maker to assess performance and make resource allocation decisions. The Company's operations are organized into two segments: North America and International.

The following table summarizes revenue by reportable segment and category for the three months ended March 31, 2018 and 2017 (in thousands):

	Three Months Ended March 31,
	2018		2017
North America
Service revenue:
Local	$	187,411	$	200,545
Goods	4,874		1,704
Travel	20,084		20,462
Product revenue - Goods	180,887		250,646
Total North America revenue (1)	393,256		473,357
International
Service revenue:
Local	74,578		63,575
Goods	3,414		4,289
Travel	11,436		11,002
Product revenue - Goods	143,856		121,403
Total International revenue (1)	$	233,284	$	200,269

(1) North America includes revenue from the United States of $385.4 million and $464.7 million for the three months ended March 31, 2018 and 2017, respectively. International includes revenue from the United Kingdom of $83.0 million and $65.5 million for the three months ended March 31, 2018 and 2017, respectively. There were no other individual countries that represented more than 10% of consolidated total revenue for the three months ended March 31, 2018 and 2017. Prior to the second quarter of 2017, revenue was attributed to individual countries based on the domicile of the legal entities within the Company's consolidated group that undertook those transactions. Beginning in the second quarter of 2017, the Company updated its attribution of revenue by country in the current period to be based on the location of the customer. Revenue amounts by country for the three months ended March 31, 2017 have been retrospectively adjusted to reflect that change in attribution.

The following table summarizes gross profit by reportable segment and category for the three months ended March 31, 2018 and 2017 (in thousands):

	Three Months Ended March 31,
	2018		2017
North America
Service gross profit:
Local	$	166,756	$	169,342
Goods	3,941		1,307
Travel	16,002		15,165
Product gross profit - Goods	32,981		35,123
Total North America gross profit	219,680		220,937
International
Service gross profit:
Local	70,215		59,194
Goods	3,087		3,660
Travel	10,651		10,036
Product gross profit - Goods	21,252		15,624
Total International gross profit	$	105,205	$	88,514

The following table summarizes operating income by reportable segment for the three months ended March 31, 2018 and 2017 (in thousands):

	Three Months Ended March 31,
	2018			2017
Operating income (loss) (1) (2):
North America	$	(1,860	)	$	(14,783	)
International	5,245			3,103
Total operating income (loss)	$	3,385		$	(11,680	)

(1) Includes stock-based compensation of $17.9 million and $18.3 million for North America for the three months ended March 31, 2018 and 2017, respectively, and $1.4 million for International for the three months ended March 31, 2018 and 2017.

(2) Includes restructuring charges of $2.0 million for North America for the three months ended March 31, 2017 and $0.3 million and $0.8 million for International for the three months ended March 31, 2018 and 2017, respectively.

The following table summarizes the Company's total assets by reportable segment as of March 31, 2018 and December 31, 2017 (in thousands):

	March 31, 2018		December 31, 2017
Total assets:
North America (1)	$	920,834	$	1,045,072
International (1)	582,094		632,433
Consolidated total assets	$	1,502,928	$	1,677,505

(1) North America contains assets from the United States of $877.8 million and $1,006.2 million as of March 31, 2018 and December 31, 2017, respectively. International contains assets from Ireland of $167.1 million and $219.7 million as of March 31, 2018 and December 31, 2017, respectively. There were no other individual countries that represented more than 10% of consolidated total assets as of March 31, 2018 and December 31, 2017.

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SUBSEQUENT EVENTS

3 Months Ended

Mar. 31, 2018

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

On April 30, 2018, the Company acquired 80% of the outstanding shares of Cloud Savings Company, Ltd. ("Cloud Savings"). Cloud Savings is a UK-based business that operates online discount code and digital gift card platforms. Concurrent with the acquisition, the Company entered into an agreement with the noncontrolling shareholder giving it the right to acquire the remaining outstanding shares for $8.9 million in December 2018. Additionally, the noncontrolling shareholder has the right to require the Company to purchase its shares in December 2018 for that same amount. Those rights and obligations to acquire the remaining outstanding shares will be recorded as a financing obligation.

The total acquisition price was approximately $72.7 million, consisting of $64.1 million in cash paid at closing and the $8.6 million estimated fair value of the financing obligation. The acquisition-date net working capital of Cloud Savings was approximately $8.8 million, including $6.6 million of cash. The remainder of the preliminary acquisition price allocation had not yet been completed at the time these condensed consolidated financial statements were issued.

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ADOPTION OF NEW ACCOUNTING STANDARDS (Policies)

3 Months Ended

Mar. 31, 2018

Accounting Policies [Abstract]

Principles of Consolidation

Principles of Consolidation

The condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The Company's condensed consolidated financial statements were prepared in accordance with U.S. GAAP and include the assets, liabilities, revenue and expenses of all wholly-owned subsidiaries and majority-owned subsidiaries over which the Company exercises control and variable interest entities for which the Company has determined that it is the primary beneficiary. Outside stockholders' interests in subsidiaries are shown on the condensed consolidated financial statements as Noncontrolling interests. Equity investments in entities in which the Company does not have a controlling financial interest are accounted for under the equity method, the fair value option, as available-for-sale securities or at cost adjusted for observable price changes and impairments, as appropriate.

Reclassification and Terminology Changes

Reclassifications and Terminology Changes

Certain reclassifications have been made to the condensed consolidated financial statements of prior periods and the accompanying notes to conform to the current period presentation, including the change in presentation of restricted cash in the condensed consolidated statements of cash flows upon adoption of ASU 2016-18. Refer to Note 2, Adoption of New Accounting Standards, for additional information. Additionally, in prior periods, the Company referred to its product revenue and service revenue as "direct revenue" and "third-party and other revenue," respectively. This terminology change did not impact the amounts presented in the condensed consolidated financial statements.

Use of Estimates

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires estimates and assumptions that affect the reported amounts and classifications of assets and liabilities, revenue and expenses, and the related disclosures of contingent liabilities in the condensed consolidated financial statements and accompanying notes. Estimates are used for, but not limited to, variable consideration from unredeemed vouchers, income taxes, valuation of goodwill and intangible assets, investments, customer refunds, contingent liabilities and the useful lives of property, equipment and software and intangible assets. Actual results could differ materially from those estimates.

Adoption of New Accounting Standards

ADOPTION OF NEW ACCOUNTING STANDARDS

The Company adopted the guidance in ASC Topic 606, Revenue from Contracts with Customers, on January 1, 2018. Topic 606 is a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. See Changes to Accounting Policies from Adoption of New Accounting Standards below and Note 10, Revenue Recognition, for information on the impact of adopting Topic 606 on the Company's accounting policies.

The Company adopted the guidance in ASU 2016-01, Financial Instruments (Topic 825-10) - Recognition and Measurement of Financial Assets and Financial Liabilities, as amended, on January 1, 2018. This ASU generally requires equity investments to be measured at fair value with changes in fair value recognized through net income and eliminates the cost method for equity securities. However, for equity investments without readily determinable fair values the ASU permits entities to elect to measure the investments at cost adjusted for observable price changes and impairments, with changes in the measurement recognized through net income. We applied that measurement alternative to our equity investments that were previously accounted for under the cost method. The adoption of ASU 2016-01 did not have a material impact on the condensed consolidated financial statements. See Changes to Accounting Policies from Adoption of New Accounting Standards below for additional information on the impact of adopting the ASU on the Company's accounting policies.

The Company adopted the guidance in ASU 2016-18, Statement of Cash Flows (Topic 230) - Restricted Cash, on January 1, 2018. This ASU requires companies to include amounts generally described as restricted cash and restricted cash equivalents, along with cash and cash equivalents, when reconciling the beginning-of-period and end-of-period amounts shown on the statement of cash flows. Previously, changes in restricted cash were reported within cash flows from operating activities. The Company applied that change in cash flow classification on a retrospective basis, which resulted in an increase of $1.6 million to net cash used in operating activities for the three months ended March 31, 2017.

Restricted cash primarily represents amounts that the Company is unable to access for operational purposes pursuant to letters of credit with financial institutions. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheet to amounts shown in the condensed consolidated statements of cash flows, as of March 31, 2018 and 2017 and December 31, 2017 (in thousands):

	March 31, 2018		March 31, 2017		December 31, 2017
Cash and cash equivalents	$	725,909	$	690,975	$	880,129
Restricted cash included in prepaid expenses and other current assets	4,332		5,250		4,932
Restricted cash included in other non-current assets	403		5,043		420
Cash, cash equivalents and restricted cash	$	730,644	$	701,268	$	885,481

The Company adopted the guidance in ASU 2017-05, Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20) - Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets, on January 1, 2018. This ASU is meant to clarify the scope of ASC Subtopic 610-20, Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets, and to add guidance for partial sales of nonfinancial assets. The adoption of ASU 2017-05 did not have a material impact on the condensed consolidated financial statements.

The Company adopted the guidance in ASU 2017-07, Compensation - Retirement Benefits (Topic 715) - Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, on January 1, 2018. This ASU requires employers to include only the service cost component of net periodic pension cost in operating expenses, together with other employee compensation costs. The other components of net periodic pension cost, including interest cost, expected return on plan assets, amortization of prior service cost and settlement and curtailment effects, are to be included in non-operating expenses. The adoption of ASU 2017-07 did not have a material impact on the condensed consolidated financial statements.

The Company adopted the guidance in ASU 2017-09, Compensation - Stock Compensation (Topic 718) - Scope of Modification Accounting, on January 1, 2018. This ASU clarifies the changes to terms or conditions of a share-based payment award that require an entity to apply modification accounting. The adoption of ASU 2017-09 did not have a material impact on the condensed consolidated financial statements.

The Company adopted the guidance in ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220) - Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, as of January 1, 2018. This ASU permits a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act (the "Jobs Act"). As a result of the adoption of ASU 2018-02, the Company reclassified $0.2 million from accumulated other comprehensive income (loss) to accumulated deficit.

Revenue Recognition

Revenue Recognition

Prior to its adoption of Topic 606, the Company recognized revenue when the following criteria were met: persuasive evidence of an arrangement existed; delivery had occurred; the selling price was fixed or determinable and collection was reasonably assured. Following its adoption of Topic 606, the Company recognizes revenue when it satisfies a performance obligation by transferring a promised good or service to a customer. Substantially all of the Company's performance obligations are satisfied at a point in time rather than over time.

Product Revenue

The Company generates product revenue from direct sales of merchandise inventory through its Goods category. For product revenue transactions, the Company is the primary party responsible for providing the good to the customer, it has inventory risk and it has discretion in establishing prices. As such, product revenue is reported on a gross basis as the purchase price received from the customer. Product revenue, including associated shipping revenue, is recognized when title passes to the customer upon delivery of the product.

Service Revenue

Service revenue is primarily earned from transactions in which the Company earns commissions by selling goods or services on behalf of third-party merchants. Those transactions generally involve a customer's purchase of a voucher through one of the Company's online marketplaces that can be redeemed with a third-party merchant for specified goods or services (or for discounts on specified goods or services). Service revenue from those transactions is reported on a net basis as the purchase price collected from the customer less the portion of the purchase price that is payable to the third-party merchant. The Company recognizes revenue from those transactions when its commission has been earned, which occurs when a sale through one of the Company's online marketplaces is completed and the related voucher has been made available to the customer. The Company believes that its remaining obligations to remit payment to the merchant and to provide information about vouchers sold are administrative activities that are immaterial in the context of the contract with the merchant. Prior to its adoption of Topic 606, the Company deferred the revenue from hotel reservation offerings until the customer's stay commenced. Following its adoption of Topic 606, revenue from hotel reservation offerings is recognized at the time the reservation is made, net of an allowance for estimated cancellations.

The Company also earns commissions when customers make purchases with retailers using digital coupons accessed through its websites and mobile applications and from voucherless merchant offerings in which customers earn cash back on their credit card statements when they transact with third-party merchants. The Company recognizes those commissions as revenue in the period in which the underlying transactions between the customer and the third-party merchant are completed.

Variable Consideration for Unredeemed Vouchers

For merchant agreements with redemption payment terms, the merchant is not paid its share of the sale price for a voucher sold through one of the Company's online marketplaces until the customer redeems the related voucher. If the customer does not redeem a voucher with such merchant payment terms, the Company retains all of the gross billings for that voucher, rather than retaining only its net commission. Prior to its adoption of Topic 606, the Company recognized that variable consideration from unredeemed vouchers and derecognized the related accrued merchant payables when its legal obligation to the merchant expired, which the Company believes is shortly after the voucher expiration date in most jurisdictions. Following its adoption of Topic 606, the Company estimates the variable consideration from vouchers that will not ultimately be redeemed and recognizes that amount as revenue at the time of sale, rather than when the Company's legal obligation expires. The Company estimates variable consideration from unredeemed vouchers using its historical voucher redemption experience. If actual redemptions differ from the Company's estimates, the effects could be material to the condensed consolidated financial statements.

Refunds

Prior to the adoption of Topic 606, refunds were recorded as a reduction of revenue, except for refunds on service revenue transactions for which the merchant's share was not recoverable, which were presented as a cost of revenue. Following the adoption of Topic 606, all refunds are recorded as a reduction of revenue. The liability for estimated refunds is included within Accrued expenses and other current liabilities on the consolidated balance sheets.

The Company estimates its refund reserve using historical refund experience by deal category. The Company assesses the trends that could affect its estimates on an ongoing basis and makes adjustments to the refund reserve calculations if it appears that changes in circumstances, including changes to the Company's refund policies or general economic conditions, may cause future refunds to differ from its initial estimates. If actual refunds differ from the Company's estimates, the effects could be material to the condensed consolidated financial statements.

Discounts, Customer Credits and Other Consideration Payable to Customers

The Company provides discount offers to encourage purchases of goods and services through its online marketplaces. The Company records discounts as a reduction of revenue.

Additionally, the Company issues credits to customers that can be applied to future purchases through its online marketplaces. Credits are primarily issued as consideration for refunds. To a lesser extent, credits are issued for customer relationship purposes. Credits issued to satisfy refund requests are applied as a reduction to the refunds reserve. Prior to the adoption of Topic 606, customer credits issued for relationship purposes were classified in the condensed consolidated statement of operations as a marketing expense. Following the adoption of Topic 606, customer credits issued for relationship purposes are classified as a reduction of revenue.

Prior to its adoption of Topic 606, the Company recognized breakage income for unused customer credits when they expired or were forfeited. Following its adoption of Topic 606, breakage income from customer credits that are not expected to be used is estimated and recognized as revenue in proportion to the pattern of redemption for customer credits that are used.

Sales and Related Taxes

Sales, use, value-added and related taxes that are imposed on specific revenue-generating transactions are presented on a net basis and excluded from revenue.

Costs of Obtaining Contracts

Prior to its adoption of Topic 606, the Company expensed the incremental costs to obtain contracts with third-party merchants, such as sales commissions, as incurred. Following its adoption of Topic 606, those costs are deferred and recognized over the expected period of the merchant arrangement, generally from 12 to 18 months. As of March 31, 2018, the Company had $3.9 million and $12.5 million of deferred contract acquisition costs recorded within Prepaid and other current assets and Other non-current assets, respectively. For the three months ended March 31, 2018, the Company amortized $6.8 million of deferred contract acquisition costs and did not recognize any impairment losses in relation to the deferred costs. Those costs are classified within Selling, general and administrative expenses in the condensed consolidated statements of operations.

Cost of Revenue

Cost of Revenue

Cost of revenue is comprised of direct and certain indirect costs incurred to generate revenue. Costs incurred to generate revenue, which include credit card processing fees, editorial costs, compensation expense for technology support personnel who are responsible for maintaining the infrastructure of the Company's websites, amortization of internal-use software relating to customer-facing applications, web hosting and other processing fees are attributed to the cost of service and product revenue in proportion to gross billings during the period. For product revenue transactions, cost of revenue also includes the cost of inventory, shipping and fulfillment costs and inventory markdowns. Fulfillment costs are comprised of third-party logistics provider costs, as well as rent, depreciation, personnel costs and other costs of operating the Company's fulfillment center. Prior to adoption of Topic 606, cost of revenue on service revenue transactions also included refunds for which the merchant's share was not recoverable.

Financial Instruments

Financial Instruments

Prior to the adoption of the guidance in ASU 2016-01, investments in nonmarketable equity shares with no redemption provisions that are not common stock or in-substance common stock or for which the Company does not have the ability to exercise significant influence were accounted for using the cost method of accounting and are classified within Investments on the consolidated balance sheets. Under the cost method of accounting, investments were carried at cost and adjusted only for other-than-temporary declines in fair value, certain distributions and additional investments. Subsequent to the adoption of the guidance in ASU 2016-01, the Company applies a measurement alternative for equity investments without readily determinable fair values that permits entities to elect to measure the investments at cost adjusted for observable price changes and impairments, with changes in the measurement recognized through net income.

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ADOPTION OF NEW ACCOUNTING STANDARDS (Tables)

3 Months Ended

Mar. 31, 2018

Accounting Policies [Abstract]

Schedule of Reconciliation of Cash, Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheet to amounts shown in the condensed consolidated statements of cash flows, as of March 31, 2018 and 2017 and December 31, 2017 (in thousands):

	March 31, 2018		March 31, 2017		December 31, 2017
Cash and cash equivalents	$	725,909	$	690,975	$	880,129
Restricted cash included in prepaid expenses and other current assets	4,332		5,250		4,932
Restricted cash included in other non-current assets	403		5,043		420
Cash, cash equivalents and restricted cash	$	730,644	$	701,268	$	885,481

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DISCONTINUED OPERATIONS AND OTHER BUSINESS DISPOSITIONS (Tables)

3 Months Ended

Mar. 31, 2018

Discontinued Operation, Gain (Loss) on Disposal of Discontinued Operation, Net of Tax [Abstract]

Schedule of Gain (Loss) on Business Dispositions

The Company recognized a net pretax loss on those dispositions of $1.3 million, which consisted of the following (in thousands):

	Three Months Ended March 31, 2017
Net consideration received:
Fair value of minority investments retained or acquired	$	2,021
Cash proceeds received	3,462
Cash proceeds receivable	2,000
Less: transaction costs	1,394
Total net consideration received	6,089
Cumulative translation gain reclassified to earnings	14,718
Less: Net book value upon closing of the transactions	14,596
Less: Indemnification liabilities (1)	5,365
Less: Unfavorable contract liability for transition services	2,114
Loss on dispositions	$	(1,268	)

(1) See Note 8, Commitments and Contingencies, for additional information about the indemnification liabilities.

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GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)

3 Months Ended

Mar. 31, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill

The following table summarizes the Company's goodwill activity by segment for the three months ended March 31, 2018 (in thousands):

	North America		International		Consolidated
Balance as of December 31, 2017	$	178,685	$	108,304	$	286,989
Foreign currency translation	—		2,956		2,956
Balance as of March 31, 2018	$	178,685	$	111,260	$	289,945

Schedule of Intangible Assets

The following table summarizes the Company's intangible assets as of March 31, 2018 and December 31, 2017 (in thousands):

	March 31, 2018						December 31, 2017
Asset Category	Gross Carrying Value		Accumulated Amortization		Net Carrying Value		Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Customer relationships	$	57,573	$	48,845	$	8,728	$	56,749	$	46,513	$	10,236
Merchant relationships	11,755		10,302		1,453		11,598		9,853		1,745
Trade names	12,212		10,891		1,321		12,077		10,469		1,608
Developed technology	37,045		37,045		—		36,864		36,864		—
Patents	19,697		15,563		4,134		19,031		15,204		3,827
Other intangible assets	10,757		9,468		1,289		10,875		9,095		1,780
Total	$	149,039	$	132,114	$	16,925	$	147,194	$	127,998	$	19,196

Schedule of Estimated Future Amortization Expense

As of March 31, 2018, the Company's estimated future amortization expense related to intangible assets is as follows (in thousands):

Remaining amounts in 2018	$	7,870
2019	6,790
2020	1,280
2021	641
2022	325
Thereafter	19
Total	$	16,925

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INVESTMENTS (Tables)

3 Months Ended

Mar. 31, 2018

Schedule of Equity Method Investments [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The following tables summarize the Company's assets that are measured at fair value on a recurring basis as of March 31, 2018 and December 31, 2017 (in thousands):

			Fair Value Measurement at Reporting Date Using
	March 31, 2018		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents	$	93,325	$	93,325	$	—	$	—
Fair value option investments	77,933		—		—		77,933
Available-for-sale securities:
Convertible debt securities	11,070		—		—		11,070
Redeemable preferred shares	14,576		—		—		14,576

			Fair Value Measurement at Reporting Date Using
	December 31, 2017		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents	$	137,975	$	137,975	$	—	$	—
Fair value option investments	82,966		—		—		82,966
Available-for-sale securities:
Convertible debt securities	11,354		—		—		11,354
Redeemable preferred shares	15,431		—		—		15,431

Summary of Investments

The following table summarizes the Company's investments as of March 31, 2018 and December 31, 2017 (dollars in thousands):

	March 31, 2018		Percent Ownership of Voting Stock			December 31, 2017		Percent Ownership of Voting Stock
Available-for-sale securities:
Convertible debt securities	$	11,070				$	11,354
Redeemable preferred shares	14,576		19%	to	25%	15,431		19%	to	25%
Total available-for-sale securities	25,646					26,785
Fair value option investments	77,933		10%	to	19%	82,966		10%	to	19%
Other equity investments (1)	25,794		1%	to	19%	25,438		1%	to	19%
Total investments	$	129,373				$	135,189

(1) Represents equity investments without readily determinable fair values. Those investments were previously accounted for using the cost method of accounting. Under the cost method, investments were carried at cost and adjusted only for other-than-temporary declines in fair value, certain distributions and additional investments. The Company adopted the guidance in ASU 2016-01 on January 1, 2018. Under that guidance, the Company has elected to record equity investments without readily determinable fair values at cost adjusted for observable price changes and impairments. There were no adjustments for observable price changes or impairments related to these investments for the three months ended March 31, 2018.

Schedule of Activity for Available For Sale Securities

The following table summarizes the amortized cost, gross unrealized gain, gross unrealized loss and fair value of the Company's available-for-sale securities as of March 31, 2018 and December 31, 2017 (in thousands):

	March 31, 2018									December 31, 2017
	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss (1)			Fair Value		Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss (1)			Fair Value
Available-for-sale securities:
Convertible debt securities	$	10,422	$	1,176	$	(528	)	$	11,070	$	10,205	$	1,653	$	(504	)	$	11,354
Redeemable preferred shares	14,576		—		—			14,576		15,431		—		—			15,431
Total available-for-sale securities	$	24,998	$	1,176	$	(528	)	$	25,646	$	25,636	$	1,653	$	(504	)	$	26,785

(1) Gross unrealized loss is related to one security that was in a loss position for greater than 12 months as of March 31, 2018 and December 31, 2017.

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SUPPLEMENTAL CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF OPERATIONS INFORMATION (Tables)

3 Months Ended

Mar. 31, 2018

Supplemental Consolidated Balance Sheet & Statement of Operations Information [Abstract]

Schedule of Other Income (Expense)

The following table summarizes the Company's other income (expense), net for the three months ended March 31, 2018 and 2017 (in thousands):

	Three Months Ended March 31,
	2018			2017
Interest income	$	1,509		$	602
Interest expense	(5,493		)	(5,319		)
Gains (losses), net on changes in fair value of investments	(5,033		)	303
Foreign currency gains (losses), net	1,398			51
Impairment of investment	(855		)	—
Other	(41		)	(239		)
Other income (expense), net	$	(8,515	)	$	(4,602	)

Schedule of Prepaid and Other Current Assets

The following table summarizes the Company's prepaid expenses and other current assets as of March 31, 2018 and December 31, 2017 (in thousands):

	March 31, 2018		December 31, 2017
Merchandise inventories	$	24,771	$	25,528
Prepaid expenses	34,668		40,399
Income taxes receivable	9,918		10,299
Other	19,925		17,799
Total prepaid expenses and other current assets	$	89,282	$	94,025

Schedule of Accrued Merchant and Supplier Payables

The following table summarizes the Company's accrued merchant and supplier payables as of March 31, 2018 and December 31, 2017 (in thousands):

	March 31, 2018		December 31, 2017
Accrued merchant payables	$	395,085	$	459,662
Accrued supplier payables (1)	173,485		310,673
Total accrued merchant and supplier payables	$	568,570	$	770,335

(1) Amounts include payables to suppliers of inventories and providers of shipping and fulfillment services.

Schedule of Accrued Expenses and Other Current Liabilities

The following table summarizes the Company's accrued expenses and other current liabilities as of March 31, 2018 and December 31, 2017 (in thousands):

	March 31, 2018		December 31, 2017
Refunds reserve	$	29,434	$	31,275
Compensation and benefits	47,255		73,096
Customer credits	18,761		28,487
Income taxes payable	12,239		9,645
Deferred revenue	22,185		29,539
Current portion of capital lease obligations	22,023		25,958
Other	114,023		133,196
Total accrued expenses and other current liabilities	$	265,920	$	331,196

Schedule of Other Non-current Liabilities

The following table summarizes the Company's other non-current liabilities as of March 31, 2018 and December 31, 2017 (in thousands):

	March 31, 2018		December 31, 2017
Contingent income tax liabilities	$	45,469	$	43,699
Capital lease obligations	15,448		18,500
Deferred income taxes	880		811
Other	40,250		39,398
Total other non-current liabilities	$	102,047	$	102,408

Schedule of Accumulated Other Comprehensive Income (Loss)

The following table summarizes the components of accumulated other comprehensive income (loss) as of March 31, 2018 and December 31, 2017 (in thousands):

	Foreign currency translation adjustments			Unrealized gain (loss) on available-for-sale securities			Total
Balance as of December 31, 2017	$	30,962		$	882		$	31,844
Reclassification for impact of U.S. tax rate change	—			161			161
Other comprehensive income (loss)	(1,568		)	(501		)	(2,069		)
Balance as of March 31, 2018	$	29,394		$	542		$	29,936

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FINANCING ARRANGEMENTS Schedule of Convertible Debt (Tables)

3 Months Ended

Mar. 31, 2018

Debt Disclosure [Abstract]

Schedule of Notes

The carrying amount of the Notes consisted of the following as of March 31, 2018 and December 31, 2017 (in thousands):

	March 31, 2018			December 31, 2017
Liability component:
Principal amount	$	250,000		$	250,000
Less: debt discount	(57,381		)	(60,247		)
Net carrying amount of liability component	$	192,619		$	189,753
Net carrying amount of equity component	$	67,014		$	67,014

Schedule of Convertible Debt Interest Expense

During the three months ended March 31, 2018 and 2017, the Company recognized interest expense on the Notes as follows (in thousands):

	Three Months Ended March 31,
	2018		2017
Contractual interest expense (3.25% of the principal amount per annum)	$	2,032	$	2,032
Amortization of debt discount	2,866		2,587
Total interest expense	$	4,898	$	4,619

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COMMITMENTS AND CONTINGENCIES Commitment and Contingencies (Tables)

3 Months Ended

Mar. 31, 2018

Commitments and Contingencies Disclosure [Abstract]

Long-term Purchase Commitment [Table Text Block]

In the first quarter 2018, the Company entered into a non-cancelable arrangement for cloud computing services. As of March 31, 2018, future payments under that contractual obligation are as follows (in thousands):

2018	$	1,500
2019	3,400
2020	3,400
2021	3,400
2022	3,400
Total	$	15,100

Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block]

In May 2018, the Company entered into a new office lease for one of its foreign locations. The future payments under that operating lease for each of the next five years and thereafter are as follows (in thousands):

2018	$	2,461
2019	2,749
2020	2,749
2021	2,749
2022	2,749
Thereafter	6,187
Total minimum lease payments	$	19,644

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STOCKHOLDERS' EQUITY AND COMPENSATION ARRANGEMENTS Stock Plan (Tables)

3 Months Ended

Mar. 31, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

The Groupon, Inc. Stock Plans (the "Plans") are administered by the Compensation Committee of the Board (the "Compensation Committee"), which determines the number of awards to be issued, the corresponding vesting schedule and the exercise price for options. As of March 31, 2018, 63,923,154 shares of common stock were available for future issuance under the Plans.

The stock-based compensation expense related to stock awards issued under the Plans and acquisition-related awards are presented within the following line items of the condensed consolidated statements of operations for the three months ended March 31, 2018 and 2017 (in thousands):

	Three Months Ended March 31,
	2018		2017
Cost of revenue	$	396	$	663
Marketing	1,794		1,802
Selling, general and administrative	17,088		17,185
Other income (expense)	48		51
Total stock-based compensation expense	$	19,326	$	19,701

The Company also capitalized $1.7 million and $1.5 million of stock-based compensation for the three months ended March 31, 2018 and 2017, respectively, in connection with internally-developed software. As of March 31, 2018, a total of $107.9 million of unrecognized compensation costs related to unvested employee stock awards are expected to be recognized over a remaining weighted-average period of 1.32 years.

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REVENUE RECOGNITION (Tables)

3 Months Ended

Mar. 31, 2018

Revenue from Contract with Customer [Abstract]

Schedule of Prospective Adoption of New Accounting Pronouncements

Impacts on Condensed Consolidated Financial Statements

The following tables summarize the impacts of adopting Topic 606 on the Company's condensed consolidated financial statements as of and for the three months ended March 31, 2018 (in thousands):

Condensed Consolidated Balance Sheet

	March 31, 2018
	As reported		Adjustments			Balances without adoption of Topic 606
Total assets	$	1,502,928	$	(13,082	)	$	1,489,846
Total liabilities	1,152,556		84,185			1,236,741
Total Groupon, Inc. stockholders' equity	350,372		(97,267		)	253,105

Condensed Consolidated Statement of Operations

	Three Months Ended March 31, 2018
	As reported			Adjustments			Balances without adoption of Topic 606
Revenue:
Service revenue (1)	$	301,797		$	(1,779	)	$	300,018
Product revenue	324,743			—			324,743
Total revenue	626,540			(1,779		)	624,761
Cost of revenue:
Service cost of revenue (2)	31,145			6,275			37,420
Product cost of revenue	270,510			—			270,510
Cost of revenue (2)	301,655			6,275			307,930
Gross profit	324,885			(8,054		)	316,831
Operating expenses:
Marketing (3)	99,156			1,573			100,729
Selling, general and administrative (4)	222,061			(1,264		)	220,797
Restructuring charges	283			—			283
Total operating expenses	321,500			309			321,809
Income (loss) from operations	3,385			(8,363		)	(4,978		)
Other income (expense), net	(8,515		)	—			(8,515		)
Income (loss) before provision (benefit) for income taxes	(5,130		)	(8,363		)	(13,493		)
Provision (benefit) for income taxes (5)	(2,335		)	(1,019		)	(3,354		)
Net income (loss)	$	(2,795	)	$	(7,344	)	$	(10,139	)

Disaggregation of Revenue

	Three Months Ended March 31, 2018
	As reported		Adjustments			Balances without adoption of Topic 606
North America
Service revenue:
Local	$	187,411	$	3,613		$	191,024
Goods	4,874		—			4,874
Travel	20,084		(3,080		)	17,004
Product revenue - Goods	180,887		—			180,887
Total North America revenue	393,256		533			393,789
International
Service revenue:
Local	74,578		(1,445		)	73,133
Goods	3,414		(239		)	3,175
Travel	11,436		(628		)	10,808
Product revenue - Goods	143,856		—			143,856
Total International revenue	233,284		(2,312		)	230,972
Consolidated
Service revenue:
Local	261,989		2,168			264,157
Goods	8,288		(239		)	8,049
Travel	31,520		(3,708		)	27,812
Product revenue - Goods	324,743		—			324,743
Total Consolidated Revenue	$	626,540	$	(1,779	)	$	624,761

Deferred Revenue, by Arrangement, Disclosure

The following table summarizes the activity in revenue deferred from contracts with customers for the three months ended March 31, 2018 (in thousands):

	Deferred Revenue
Balance as of January 1, 2018	$	25,763
Revenue deferred	22,185
Revenue recognized	(25,935		)
Foreign currency translation	172
Balance as of March 31, 2018	$	22,185

The following table summarizes the activity in the liability for customer credits for the three months ended March 31, 2018 (in thousands):

	Customer Credits
Balance as of January 1, 2018	$	19,414
Credits issued	32,386
Credits redeemed (1)	(28,167		)
Breakage revenue recognized	(5,036		)
Foreign currency translation	164
Balance as of March 31, 2018	$	18,761

(1) Customer credits can be redeemed through the Company's online marketplaces for goods or services provided by a third-party merchant or for merchandise inventory sold by the Company. When customer credits are redeemed for goods or services provided by a third-party merchant, service revenue is recognized on a net basis as the difference between the carrying amount of the customer credit liability derecognized and the amount due to the merchant for the related transaction. When customer credits are redeemed for merchandise inventory sold by the Company, product revenue is recognized on a gross basis equal to the amount of the customer credit liability derecognized. Customer credits are primarily used within one year of issuance.

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RESTRUCTURING (Tables)

3 Months Ended

Mar. 31, 2018

Restructuring and Related Activities [Abstract]

Summary of Costs Incurred by Segment Related to Restructuring

The following tables summarize the costs incurred by segment related to the Company’s restructuring plan for the three months ended March 31, 2018 and 2017 (in thousands):

	Three Months Ended March 31, 2018
	Employee Severance and Benefit Costs (1)		Other Exit Costs (1)		Total Restructuring Charges
North America	$	—	$	—	$	—
International	230		53		283
Consolidated	$	230	$	53	$	283

	Three Months Ended March 31, 2017
	Employee Severance and Benefit Costs (2)		Other Exit Costs		Total Restructuring Charges
North America	$	1,778	$	177	$	1,955
International	523		253		776
Consolidated	$	2,301	$	430	$	2,731

(1)

Schedule of Restructuring Liability

The following table summarizes the restructuring liability activity for each period (in thousands):

	Employee Severance and Benefit Costs			Other Exit Costs			Total
Balance as of December 31, 2017	$	3,817		$	304		$	4,121
Charges payable in cash	230			53			283
Cash payments	(720		)	(53		)	(773		)
Foreign currency translation	71			—			71
Balance as of March 31, 2018	$	3,398		$	304		$	3,702

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FAIR VALUE MEASUREMENTS Schedule of Fair Value, Assets and Liabilities Measured on a Reoccuring Basis (Tables)

3 Months Ended

Mar. 31, 2018

Mar. 31, 2017

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The following tables summarize the Company's assets that are measured at fair value on a recurring basis as of March 31, 2018 and December 31, 2017 (in thousands):

			Fair Value Measurement at Reporting Date Using
	March 31, 2018		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents	$	93,325	$	93,325	$	—	$	—
Fair value option investments	77,933		—		—		77,933
Available-for-sale securities:
Convertible debt securities	11,070		—		—		11,070
Redeemable preferred shares	14,576		—		—		14,576

			Fair Value Measurement at Reporting Date Using
	December 31, 2017		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents	$	137,975	$	137,975	$	—	$	—
Fair value option investments	82,966		—		—		82,966
Available-for-sale securities:
Convertible debt securities	11,354		—		—		11,354
Redeemable preferred shares	15,431		—		—		15,431

Fair Value, Assets and Liabilities, Reconciliation of Level 3 Inputs

The following table provides a roll-forward of the fair value of recurring Level 3 fair value measurements for the three months ended March 31, 2018 and 2017 (in thousands):

	Three Months Ended March 31,
	2018			2017
Assets
Fair value option investments:
Beginning Balance	$	82,966		$	82,584
Total gains (losses) included in earnings	(5,033		)	303
Ending Balance	$	77,933		$	82,887
Unrealized gains (losses) still held (1)	$	(5,033	)	$	303
Available-for-sale securities
Convertible debt securities:
Beginning Balance	$	11,354		$	10,038
Acquisition of convertible debt security	—			1,612
Total gains (losses) included in other comprehensive income (loss)	(501		)	42
Total gains (losses) included in earnings (2)	217			239
Ending Balance	$	11,070		$	11,931
Unrealized gains (losses) still held (1)	$	(284	)	$	281
Redeemable preferred shares:
Beginning Balance	$	15,431		$	17,444
Total gains (losses) included in other comprehensive income (loss)	—			344
Impairment included in earnings	(855		)	—
Ending Balance	$	14,576		$	17,788
Unrealized (losses) gains still held (1)	$	(855	)	$	344
Liabilities
Contingent Consideration:
Beginning Balance	$	—		$	14,588
Total losses (gains) included in earnings (3)	—			12
Ending Balance	$	—		$	14,600
Unrealized losses (gains) still held (1)	$	—		$	12

Fair Value of Financial Assets and Liabilities not Measured at Fair Value

The following table presents the carrying amount and fair value of equity securities that were classified as cost method investments as of December 31, 2017 (in thousands):

	December 31, 2017
	Carrying Amount		Fair Value
Cost method investments (1)	$	25,438	$	32,792

(1) See Note 2, Adoption of New Accounting Standards, and Note 5, Investments, for information about the Company's adoption of ASU 2016-01 on January 1, 2018 and its impact on accounting for equity investments without readily determinable fair values that were previously subject to the cost method of accounting.

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INCOME (LOSS) PER SHARE (Tables)

3 Months Ended

Mar. 31, 2018

Earnings Per Share [Abstract]

Schedule of Computation of Basic and Diluted Net Income (Loss) Per Share

The following table sets forth the computation of basic and diluted net income (loss) per share of common stock for the three months ended March 31, 2018 and 2017 (in thousands, except share amounts and per share amounts):

	Three Months Ended March 31,
	2018			2017
Basic and diluted net income (loss) per share:
Numerator
Net income (loss) - continuing operations	$	(2,795	)	$	(20,869	)
Less: Net income (loss) attributable to noncontrolling interests	4,093			4,032
Net income (loss) attributable to common stockholders - continuing operations	(6,888		)	(24,901		)
Net income (loss) attributable to common stockholders - discontinued operations	—			487
Net income (loss) attributable to common stockholders	$	(6,888	)	$	(24,414	)
Denominator
Weighted-average common shares outstanding	561,735,937			562,195,243
Basic and diluted net income (loss) per share (1):
Continuing operations	$	(0.01	)	$	(0.04	)
Discontinued operations	0.00			0.00
Basic and diluted net income (loss) per share	$	(0.01	)	$	(0.04	)

(1) The potentially dilutive impacts of outstanding equity awards, warrants and convertible senior notes have been excluded from the calculation of dilutive net income (loss) per share for the three months ended March 31, 2018 and 2017 as their effect on net income (loss) per share from continuing operations was antidilutive.

Schedule of Weighted-Average Potentially Dilutive Instruments

The following weighted-average potentially dilutive instruments are not included in the diluted net income (loss) per share calculations above because they would have had an antidilutive effect on the net income (loss) per share from continuing operations:

	Three Months Ended March 31,
	2018	2017
Restricted stock units	28,033,489	24,360,648
Other stock-based compensation awards	3,212,026	3,813,848
Convertible senior notes	46,296,300	46,296,300
Warrants	46,296,300	46,296,300
Total	123,838,115	120,767,096

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SEGMENT INFORMATION (Tables)

3 Months Ended

Mar. 31, 2018

Segment Reporting [Abstract]

Schedule of Revenue by Reportable Segment

The following table summarizes revenue by reportable segment and category for the three months ended March 31, 2018 and 2017 (in thousands):

	Three Months Ended March 31,
	2018		2017
North America
Service revenue:
Local	$	187,411	$	200,545
Goods	4,874		1,704
Travel	20,084		20,462
Product revenue - Goods	180,887		250,646
Total North America revenue (1)	393,256		473,357
International
Service revenue:
Local	74,578		63,575
Goods	3,414		4,289
Travel	11,436		11,002
Product revenue - Goods	143,856		121,403
Total International revenue (1)	$	233,284	$	200,269

(1) North America includes revenue from the United States of $385.4 million and $464.7 million for the three months ended March 31, 2018 and 2017, respectively. International includes revenue from the United Kingdom of $83.0 million and $65.5 million for the three months ended March 31, 2018 and 2017, respectively. There were no other individual countries that represented more than 10% of consolidated total revenue for the three months ended March 31, 2018 and 2017. Prior to the second quarter of 2017, revenue was attributed to individual countries based on the domicile of the legal entities within the Company's consolidated group that undertook those transactions. Beginning in the second quarter of 2017, the Company updated its attribution of revenue by country in the current period to be based on the location of the customer. Revenue amounts by country for the three months ended March 31, 2017 have been retrospectively adjusted to reflect that change in attribution.

Schedule of Gross Profit by Reportable Segment

The following table summarizes gross profit by reportable segment and category for the three months ended March 31, 2018 and 2017 (in thousands):

	Three Months Ended March 31,
	2018		2017
North America
Service gross profit:
Local	$	166,756	$	169,342
Goods	3,941		1,307
Travel	16,002		15,165
Product gross profit - Goods	32,981		35,123
Total North America gross profit	219,680		220,937
International
Service gross profit:
Local	70,215		59,194
Goods	3,087		3,660
Travel	10,651		10,036
Product gross profit - Goods	21,252		15,624
Total International gross profit	$	105,205	$	88,514

Schedule of Operating Income by Reportable Segment

The following table summarizes operating income by reportable segment for the three months ended March 31, 2018 and 2017 (in thousands):

	Three Months Ended March 31,
	2018			2017
Operating income (loss) (1) (2):
North America	$	(1,860	)	$	(14,783	)
International	5,245			3,103
Total operating income (loss)	$	3,385		$	(11,680	)

(1) Includes stock-based compensation of $17.9 million and $18.3 million for North America for the three months ended March 31, 2018 and 2017, respectively, and $1.4 million for International for the three months ended March 31, 2018 and 2017.

(2) Includes restructuring charges of $2.0 million for North America for the three months ended March 31, 2017 and $0.3 million and $0.8 million for International for the three months ended March 31, 2018 and 2017, respectively.

Schedule of Total Assets by Segment

The following table summarizes the Company's total assets by reportable segment as of March 31, 2018 and December 31, 2017 (in thousands):

	March 31, 2018		December 31, 2017
Total assets:
North America (1)	$	920,834	$	1,045,072
International (1)	582,094		632,433
Consolidated total assets	$	1,502,928	$	1,677,505

(1) North America contains assets from the United States of $877.8 million and $1,006.2 million as of March 31, 2018 and December 31, 2017, respectively. International contains assets from Ireland of $167.1 million and $219.7 million as of March 31, 2018 and December 31, 2017, respectively. There were no other individual countries that represented more than 10% of consolidated total assets as of March 31, 2018 and December 31, 2017.

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ADOPTION OF NEW ACCOUNTING STANDARDS - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Reclassification from AOCI, Current Period, Stranded Tax Effects ASU 2018-02, Tax	$ 161
Amortization	6,800
Accounting Standards Update 2016-18
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Increase to net cash used in operating activities		$ 1,600
Other Current Assets [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Deferred Costs	3,900
Other Noncurrent Assets [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Deferred Costs	$ 12,500

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ADOPTION OF NEW ACCOUNTING STANDARDS - Schedule of Reconciliation of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017	Mar. 31, 2017	Dec. 31, 2016
Accounting Policies [Abstract]
Cash and cash equivalents	$ 725,909	$ 880,129	$ 690,975
Restricted cash included in prepaid expenses and other current assets	4,332	4,932	5,250
Restricted cash included in other non-current assets	403	420	5,043
Cash, cash equivalents and restricted cash	$ 730,644	$ 885,481	$ 701,268	$ 874,906

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DISCONTINUED OPERATIONS AND OTHER BUSINESS DISPOSITIONS (Details) - USD ($) $ in Thousands		3 Months Ended
		Mar. 31, 2018		Mar. 31, 2017
Disposal Group, Including Discontinued Operation, Additional Disclosures [Abstract]
Fair value of minority investments retained or acquired		$ 0		$ 2,022
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract]
Service revenue		(301,797)	[1]	(301,577)
Product revenue		324,743		372,049
Service cost of revenue		(31,145)	[2]	(42,873)
Product cost of revenue		(270,510)		(321,302)
Marketing expense		(99,156)	[3]	(86,342)
Selling, general and administrative expense		222,061	[4]	232,058
Restructuring		(283)		(2,731)
Other income, net		(8,515)		(4,602)
Income (loss) from discontinued operations, net of tax		$ 0		487	[5]
Discontinued Operations, Disposed of by Sale
Disposal Group, Including Discontinued Operation, Additional Disclosures [Abstract]
Fair value of minority investments retained or acquired				2,021
Cash proceeds received				3,462
Cash receivable from disposition				2,000
Less: transaction costs				1,394
Total net consideration received				6,089
Cumulative translation gain reclassified to earnings				14,718
Less: Net book value upon closing of the transactions				14,596
Less: Indemnification liabilities	[6]			5,365
Less: Unfavorable contract liability for transition services				2,114
Loss on dispositions	[5]			(1,268)
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract]
Service revenue	[5]			(12,602)
Product revenue	[5]			2,962
Service cost of revenue	[5]			(2,557)
Product cost of revenue	[5]			(3,098)
Marketing expense	[5]			(1,239)
Selling, general and administrative expense	[5]			9,908
Restructuring	[5]			(778)
Other income, net	[5]			3,852
Income (loss) from discontinued operations before loss on dispositions and provision for income taxes	[5]			1,836
Provision for income taxes	[5]			$ (81)

[1] (1)Reflects decreases of $5.6 million related to the timing of recognition of variable consideration from unredeemed vouchers, $3.3 million related to the timing of recognition of revenue from hotel reservation offerings and $0.7 million related to the timing of recognition of breakage revenue from customer credits that are not expected to be used, partially offset by a $7.8 million increase for refunds on service revenue transactions for which the merchant's share is not recoverable and customer credits issued for relationship purposes, which are classified as reductions of revenue under Topic 606.

[2] (2)Reflects an increase for refunds on service revenue transactions for which the merchant's share is not recoverable, which are classified as a reduction of revenue under Topic 606.

[3] (3)Reflects an increase for customer credits issued for relationship purposes, which are classified as a reduction of revenue under Topic 606.

[4] (4)Reflects the amortization of deferred contract acquisition costs in excess of amounts capitalized in the current period.

[5] (1)The income (loss) from discontinued operations before loss on dispositions and provision for income taxes for the three months ended March 31, 2017 includes the results of each business through its respective disposition date.

[6] (1)See Note 8, Commitments and Contingencies, for additional information about the indemnification liabilities.

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GOODWILL AND OTHER INTANGIBLE ASSETS - Schedule of Goodwill (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Goodwill [Line Items]
Goodwill	$ 289,945	$ 286,989
Goodwill, Foreign Currency Translation Gain (Loss)	2,956
North America
Goodwill [Line Items]
Goodwill	178,685	178,685
Goodwill, Foreign Currency Translation Gain (Loss)	0
International
Goodwill [Line Items]
Goodwill	111,260	$ 108,304
Goodwill, Foreign Currency Translation Gain (Loss)	$ 2,956

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GOODWILL AND OTHER INTANGIBLE ASSETS - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	$ 149,039	$ 147,194
Accumulated Amortization	132,114	127,998
Net Carrying Value	16,925	19,196
Customer relationships
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	57,573	56,749
Accumulated Amortization	48,845	46,513
Net Carrying Value	8,728	10,236
Merchant relationships
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	11,755	11,598
Accumulated Amortization	10,302	9,853
Net Carrying Value	1,453	1,745
Trade names
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	12,212	12,077
Accumulated Amortization	10,891	10,469
Net Carrying Value	1,321	1,608
Developed technology
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	37,045	36,864
Accumulated Amortization	37,045	36,864
Net Carrying Value	0	0
Patents
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	19,697	19,031
Accumulated Amortization	15,563	15,204
Net Carrying Value	4,134	3,827
Other intangible assets
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	10,757	10,875
Accumulated Amortization	9,468	9,095
Net Carrying Value	$ 1,289	$ 1,780

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GOODWILL AND OTHER INTANGIBLE ASSETS - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Finite-Lived Intangible Assets [Line Items]
Amortization of acquired intangible assets	$ 2,940	$ 5,400
Minimum
Finite-Lived Intangible Assets [Line Items]
Intangible assets, useful life	1 year
Maximum
Finite-Lived Intangible Assets [Line Items]
Intangible assets, useful life	5 years

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GOODWILL AND OTHER INTANGIBLE ASSETS - Schedule of Estimated Future Amortization Expense (Details) $ in Thousands	Mar. 31, 2018 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
Remaining amounts in 2018	$ 7,870
2019	6,790
2020	1,280
2021	641
2022	325
Thereafter	19
Total	$ 16,925

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INVESTMENTS - Summary of Investments (Details) - USD ($) $ in Thousands		Mar. 31, 2018	Dec. 31, 2017
Schedule of Equity Method Investments [Line Items]
Available-for-sale securities		$ 25,646	$ 26,785
Total investments		129,373	135,189
Convertible Debt Securities
Schedule of Equity Method Investments [Line Items]
Available-for-sale securities		11,070	11,354
Redeemable Preferred Stock
Schedule of Equity Method Investments [Line Items]
Available-for-sale securities		14,576	15,431
Fair Value Option Investments
Schedule of Equity Method Investments [Line Items]
Equity method investments		77,933	82,966
Other Equity Investments
Schedule of Equity Method Investments [Line Items]
Equity method investments	[1]	$ 25,794	$ 25,438
Minimum
Schedule of Equity Method Investments [Line Items]
Available for sale securities, percent ownership of voting stock		19.00%	19.00%
Minimum | Fair Value Option Investments
Schedule of Equity Method Investments [Line Items]
Equity method investment, percent ownership of voting stock		10.00%	10.00%
Minimum | Other Equity Investments
Schedule of Equity Method Investments [Line Items]
Equity method investment, percent ownership of voting stock		1.00%	1.00%
Maximum
Schedule of Equity Method Investments [Line Items]
Available for sale securities, percent ownership of voting stock		25.00%	25.00%
Maximum | Fair Value Option Investments
Schedule of Equity Method Investments [Line Items]
Equity method investment, percent ownership of voting stock		19.00%	19.00%
Maximum | Other Equity Investments
Schedule of Equity Method Investments [Line Items]
Equity method investment, percent ownership of voting stock		19.00%	19.00%

[1] Represents equity investments without readily determinable fair values. Those investments were previously accounted for using the cost method of accounting. Under the cost method, investments were carried at cost and adjusted only for other-than-temporary declines in fair value, certain distributions and additional investments. The Company adopted the guidance in ASU 2016-01 on January 1, 2018. Under that guidance, the Company has elected to record equity investments without readily determinable fair values at cost adjusted for observable price changes and impairments. There were no adjustments for observable price changes or impairments related to these investments for the three months ended March 31, 2018.

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INVESTMENTS - Schedule of Activity for Available For Sale Securities (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities, Amortized Cost	$ 24,998	$ 25,636
Available-for-sale securities, Gross Unrealized Gain	1,176	1,653
Available-for-sale Securities, Gross Unrealized Loss	(528)	(504)
Available-for-sale securities, Fair Value	(25,646)	(26,785)
Convertible Debt Securities
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities, Amortized Cost	10,422	10,205
Available-for-sale securities, Gross Unrealized Gain	1,176	1,653
Available-for-sale Securities, Gross Unrealized Loss	(528)	(504)
Available-for-sale securities, Fair Value	(11,070)	(11,354)
Redeemable Preferred Stock
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities, Amortized Cost	14,576	15,431
Available-for-sale securities, Gross Unrealized Gain	0	0
Available-for-sale Securities, Gross Unrealized Loss	0	0
Available-for-sale securities, Fair Value	$ (14,576)	$ (15,431)

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INVESTMENTS - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Schedule of Equity Method Investments [Line Items]
Gain (loss) from changes in fair value of investments	$ (5,033)	$ 303
Monster LP
Schedule of Equity Method Investments [Line Items]
Fair value of investments	73,700		$ 78,900
Gain (loss) from changes in fair value of investments	(5,200)	2,400
Nearbuy
Schedule of Equity Method Investments [Line Items]
Fair value of investments	4,200		$ 4,000
Gain (loss) from changes in fair value of investments	$ 200	$ (2,100)

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SUPPLEMENTAL CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF OPERATIONS INFORMATION - Schedule of Other Income (Expense) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Supplemental Consolidated Balance Sheet & Statement of Operations Information [Abstract]
Document Fiscal Year Focus	2018
Interest income	$ 1,509	$ 602
Interest expense	(5,493)	(5,319)
Gains (losses), net on changes in fair value of investments	(5,033)	303
Foreign currency gains (losses), net	1,398	51
Other than Temporary Impairment Losses, Investments, Portion Recognized in Earnings, Net	(855)	0
Other	(41)	(239)
Other income (expense), net	$ (8,515)	$ (4,602)

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SUPPLEMENTAL CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF OPERATIONS INFORMATION - Schedule of Prepaid and Other Current Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Supplemental Consolidated Balance Sheet & Statement of Operations Information [Abstract]
Merchandise inventories	$ 24,771	$ 25,528
Prepaid expenses	34,668	40,399
Income taxes receivable	9,918	10,299
Other	19,925	17,799
Total prepaid expenses and other current assets	$ 89,282	$ 94,025

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SUPPLEMENTAL CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF OPERATIONS INFORMATION - Schedule of Accrued Merchant and Supplier Payables (Details) - USD ($) $ in Thousands		Mar. 31, 2018	Dec. 31, 2017
Supplemental Consolidated Balance Sheet & Statement of Operations Information [Abstract]
Accrued merchant payables		$ 395,085	$ 459,662
Accrued supplier payables (1)	[1]	173,485	310,673
Total accrued merchant and supplier payables		$ 568,570	$ 770,335

[1] (1)Amounts include payables to suppliers of inventories and providers of shipping and fulfillment services.

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SUPPLEMENTAL CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF OPERATIONS INFORMATION - Schedule of Accrued Expense and Other Current Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Supplemental Consolidated Balance Sheet & Statement of Operations Information [Abstract]
Refunds reserve	$ 29,434	$ 31,275
Compensation and benefits	47,255	73,096
Customer credits	18,761	28,487
Income taxes payable	12,239	9,645
Deferred revenue	22,185	29,539
Current portion of capital lease obligations	22,023	25,958
Other	114,023	133,196
Total accrued expenses and other current liabilities	$ 265,920	$ 331,196

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SUPPLEMENTAL CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF OPERATIONS INFORMATION - Schedule of Other Non-current Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Supplemental Consolidated Balance Sheet & Statement of Operations Information [Abstract]
Contingent income tax liabilities	$ 45,469	$ 43,699
Capital lease obligations	15,448	18,500
Deferred income taxes	880	811
Other	40,250	39,398
Total other non-current liabilities	$ 102,047	$ 102,408

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SUPPLEMENTAL CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF OPERATIONS INFORMATION - Schedule of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated other comprehensive income (loss)	$ 29,936		$ 31,844
Other Comprehensive Income (Loss), Unrealized Holding Gain (Loss) on Securities Arising During Period, Net of Tax	161
Other Comprehensive Income (Loss), Net of Tax	(2,069)	$ 1,254
Foreign currency translation adjustments
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Net of Tax	29,394		30,962
Other Comprehensive Income (Loss), Unrealized Holding Gain (Loss) on Securities Arising During Period, Net of Tax	0
Other Comprehensive Income (Loss), Net of Tax	(1,568)
Unrealized gain (loss) on available-for-sale securities
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated Other Comprehensive Income (Loss), Available-for-sale Securities Adjustment, Net of Tax	542		882
Other Comprehensive Income (Loss), Net of Tax	(501)
Total Groupon, Inc. Stockholders' Equity
Accumulated Other Comprehensive Income (Loss) [Line Items]
Other Comprehensive Income (Loss), Net of Tax	(2,069)
Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated other comprehensive income (loss)	$ 29,936		$ 31,844

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FINANCING ARRANGEMENTS - Schedule of Notes (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Principal amount	$ 250,000	$ 250,000
Less: debt discount	(57,381)	(60,247)
Net carrying amount of liability component	192,619	$ 189,753
Additional Paid-In Capital
Debt Instrument [Line Items]
Net carrying amount of equity component	$ 67,014

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FINANCING ARRANGEMENTS - Schedule of Convertible Debt Interest Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Debt Disclosure [Abstract]
Contractual interest expense (3.25% of the principal amount per annum)	$ 2,032	$ 2,032
Amortization of debt discount	2,866	2,587
Total interest expense	$ 4,898	$ 4,619

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FINANCING ARRANGEMENTS - Convertible Senior Notes (Details)		1 Months Ended	3 Months Ended	12 Months Ended
	Apr. 04, 2016 USD ($) $ / shares shares	Apr. 20, 2020	Mar. 31, 2016 USD ($)	Dec. 31, 2017 USD ($)	Mar. 31, 2018 USD ($) $ / shares
Debt Instrument [Line Items]
Net proceeds				$ 243,200,000
Stated interest rate	3.25%
Principal amount converted initially	$ 1,000
Number of shares converted (in shares) | shares	185.1852
Conversion price (in usd per share) | $ / shares	$ 5.40
Common stock, par value (in usd per share) | $ / shares					$ 4.34
Closing price of stock, trigger price (in usd per share)	150.00%
Effective interest rate				9.75%
Debt related commitment fees and issuance costs				$ 6,800,000
Debt issuance costs				4,800,000
Equity component of convertible debt			$ 2,000,000
Estimated fair value of convertible notes				$ 285,600,000	$ 281,500,000
Senior Notes
Debt Instrument [Line Items]
Aggregate principal amount of convertible senior notes	$ 250,000,000
Subsequent Event
Debt Instrument [Line Items]
Number of threshold trading days		20
Consecutive trading days		30

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FINANCING ARRANGEMENTS - Note Hedges and Warrants (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions		3 Months Ended	12 Months Ended
	May 09, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Sep. 30, 2016
Debt Disclosure [Abstract]
Cost of convertible note hedges		$ 59.1
Number of shares available to be purchased (in shares)	46.3
Strike price (in usd per share)	$ 5.40
Cash proceeds from issuance of warrants				$ 35.5
Incremental common shares attributable to dilutive effect			46.3
Exercise price (in usd per share)			$ 8.50		$ 8.50

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FINANCING ARRANGEMENTS - Revolving Credit Facility (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2016	Apr. 04, 2016
Debt Instrument [Line Items]
Aggregate principal amount	$ 250.0
Stated interest rate				3.25%
Unrestricted cash covenant amount			$ 400.0
Amount of accounts held with lenders			$ 200.0
Outstanding amount of lines of credit	$ 23.4	$ 22.7
Minimum
Debt Instrument [Line Items]
Unused commitment fee percentage	0.25%
Maximum
Debt Instrument [Line Items]
Unused commitment fee percentage	0.40%
Letter of Credit
Debt Instrument [Line Items]
Aggregate principal amount	$ 45.0
Letter of Credit | Base Rate | Minimum
Debt Instrument [Line Items]
Stated interest rate	0.50%
Letter of Credit | Base Rate | Maximum
Debt Instrument [Line Items]
Stated interest rate	2.25%
Geographic Distribution, Domestic
Debt Instrument [Line Items]
Outstanding stock percentage	100.00%
Geographic Distribution, Foreign
Debt Instrument [Line Items]
Outstanding stock percentage	65.00%

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COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Sep. 30, 2017	Mar. 09, 2017
Loss Contingencies [Line Items]
Operating Leases, Future Minimum Payments Due, Next Twelve Months	$ 2,461
Operating Leases, Future Minimum Payments Due, Next Twelve Months	1,500
Maximum exposure of indemnification liability		$ 19,000
Operating Leases, Future Minimum Payments, Due in Two Years	3,400
Operating Leases, Future Minimum Payments, Due in Three Years	3,400
Operating Leases, Future Minimum Payments, Due in Four Years	3,400
Operating Leases, Future Minimum Payments, Due in Five Years	3,400
Operating Leases, Future Minimum Payments Due	15,100
Operating Leases, Future Minimum Payments, Due in Two Years	2,749
Operating Leases, Future Minimum Payments, Due in Three Years	2,749
Operating Leases, Future Minimum Payments, Due in Four Years	2,749
Operating Leases, Future Minimum Payments, Due in Five Years	2,749
Operating Leases, Future Minimum Payments, Due Thereafter	6,187
Operating Leases, Future Minimum Payments Due	$ 19,644
Groupon Latin America
Loss Contingencies [Line Items]
Estimated indemnification liability			$ 5,400

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STOCKHOLDERS' EQUITY AND COMPENSATION ARRANGEMENTS Stock-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands			3 Months Ended		12 Months Ended
		Feb. 28, 2018	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017	Dec. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Available-for-sale Securities			$ 25,646		$ 26,785
Fair Value, Measurement with Unobservable Inputs Reconciliations, Recurring Basis, Liability Value			$ 0	$ 14,600	$ 0	$ 14,588
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Number of Outstanding Options			883,180		885,580
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Exercisable Options, Weighted Average Exercise Price			$ 0.61		$ 0.62
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term			1 year 6 months 2 days		1 year 9 months 2 days
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value			$ 3,294		$ 3,967
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value			$ 3.78
Stock-based compensation			$ 19,326	$ 19,701
Stock Issued During Period, Shares, Employee Stock Purchase Plans				877,845
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized			3,283,114
Stock Issued During Period, Shares, Issued for Services			278,635
Common Stock, No Par Value					$ 5.20
Performance Share Units, Total Grant Date Fair Value, Conditions Met			$ 8,500
Deferred Compensation Arrangement with Individual, Shares Issued			1,240,379
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number			(2,400)
Share-based Compensation Arrangements by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price			$ 2.36
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested Options Forfeited, Number of Shares			0
Share-based Compensation Arrangements by Share-based Payment Award, Options, Forfeitures in Period, Weighted Average Exercise Price			$ 0.00
Fair Value, Measurement with Unobservable Inputs, Unrealized Gain Loss	[1]		$ 0	$ 12
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage			25.00%
Preferred Stock, Capital Shares Reserved for Future Issuance			50,000,000
Preferred Stock, Shares Outstanding			0		0
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant			2,010,000,000
Stock Repurchase Program, Authorized Amount			$ 300,000
Payments for Repurchase of Common Stock		$ 135,200	$ 0	27,234
Common Stock, Capital Shares Reserved for Future Issuance			63,923,154
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost			$ 1,700	1,500
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized			$ 107,900
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition			1 year 3 months 25 days
Carrying Amount	[2]				$ 25,438
Cost of Sales [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation				663
Selling and Marketing Expense [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation			$ 1,794	1,802
Selling, General and Administrative Expenses [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation			17,088	17,185
Other Income [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation			48	$ 51
Cost of Sales [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation			396
Convertible Debt Securities | Fair Value, Measurements, Recurring
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Available-for-sale Securities			11,070		11,354
Convertible Debt Securities | Fair Value, Measurements, Recurring | Level 1
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Available-for-sale Securities			0		0
Convertible Debt Securities | Fair Value, Measurements, Recurring | Level 2
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Available-for-sale Securities			0		0
Redeemable Preferred Stock | Fair Value, Measurements, Recurring
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Available-for-sale Securities			14,576		15,431
Redeemable Preferred Stock | Fair Value, Measurements, Recurring | Level 1
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Available-for-sale Securities			0		0
Redeemable Preferred Stock | Fair Value, Measurements, Recurring | Level 2
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Available-for-sale Securities			$ 0		$ 0
Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Employee Stock Ownership Plan (ESOP), Number of Allocated Shares			26,063,046		28,939,110
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value			$ 4.40		$ 4.32
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross			2,610,912
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value			$ 5.24
Vesting of restricted stock units and performance share units (in shares)			3,878,827
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Weighted Average Grant Date Fair Value			$ 4.53
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period			(1,608,149)
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested Options Forfeited, Weighted Average Grant Date Fair Value			$ 4.02
Minimum | Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period			3 years
Maximum | Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period			4 years

[1] (1)Represents the unrealized losses or gains recorded in earnings and/or other comprehensive income (loss) during the period for assets and liabilities classified as Level 3 that are still held (or outstanding) at the end of the period.

[2] (1)See Note 2, Adoption of New Accounting Standards, and Note 5, Investments, for information about the Company's adoption of ASU 2016-01 on January 1, 2018 and its impact on accounting for equity investments without readily determinable fair values that were previously subject to the cost method of accounting.

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REVENUE RECOGNITION - Additional Information (Details)	3 Months Ended
	Mar. 31, 2018 number_of_day
Minimum
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Contract with customer, billing cycle	30
Maximum
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Contract with customer, billing cycle	150

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REVENUE RECOGNITION - Impact of Topic 606 on Condensed Consolidated Financial Statements (Details) - USD ($)		3 Months Ended
		Mar. 31, 2018		Mar. 31, 2017	Dec. 31, 2017
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Revenue recognized from unredeemed vouchers		$ 5,600,000
Hotel reservation offering revenues		3,300,000
Breakage revenue		700,000
Increase related to refunds on service revenue transactions		7,800,000
Cumulative effect of change in accounting principle, net of tax		88,945,000
Assets	[1]	(1,502,928,000)			$ (1,677,505,000)
Deferred Revenue		22,185,000			25,763,000
Deferred Revenue, Additions		22,185,000
Deferred Revenue, Revenue Recognized		(25,935,000)
Foreign Currency Translation, Deferred Revenue		172,000
Sales Revenue, Services, Net		301,797,000	[2]	$ 301,577,000
Sales Revenue, Goods, Net		324,743,000		372,049,000
Revenue, Net		626,540,000	[3]	673,626,000
Cost of Services		31,145,000	[4]	42,873,000
Cost of Goods Sold		270,510,000		321,302,000
Cost of Revenue		301,655,000	[4]	364,175,000
Gross Profit		324,885,000		309,451,000
Marketing Expense		99,156,000	[5]	86,342,000
Selling, general and administrative		222,061,000	[6]	232,058,000
Restructuring charges		283,000		2,731,000
Operating Expenses		321,500,000		321,131,000
Operating Income (Loss)	[7],[8]	3,385,000		(11,680,000)
Other Nonoperating Income (Expense)		(8,515,000)		(4,602,000)
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest		(5,130,000)		(16,282,000)
Income Tax Expense (Benefit)		(2,335,000)		4,587,000
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest		(2,795,000)		(20,382,000)
Liabilities		1,152,556,000			1,425,660,000
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest		350,372,000			251,845,000
International
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Assets	[1]	(582,094,000)			(632,433,000)
Revenue, Net	[3]	233,284,000		200,269,000
Gross Profit		105,205,000		88,514,000
Restructuring charges		283,000		800,000
Operating Income (Loss)	[7],[8]	5,245,000		3,103,000
North America
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Assets	[1]	(920,834,000)			(1,045,072,000)
Revenue, Net	[3]	393,256,000		473,357,000
Gross Profit		219,680,000		220,937,000
Restructuring charges		0		1,955,000
Operating Income (Loss)	[7],[8]	(1,860,000)		(14,783,000)
Local [Member]
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Sales Revenue, Services, Net		261,989,000
Local [Member] | International
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Sales Revenue, Services, Net		74,578,000		63,575,000
Local [Member] | North America
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Sales Revenue, Services, Net		187,411,000		200,545,000
Goods [Member]
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Sales Revenue, Services, Net		8,288,000
Sales Revenue, Goods, Net		324,743,000
Goods [Member] | International
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Sales Revenue, Services, Net		3,414,000		4,289,000
Sales Revenue, Goods, Net		143,856,000		121,403,000
Goods [Member] | North America
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Sales Revenue, Services, Net		4,874,000		1,704,000
Sales Revenue, Goods, Net		180,887,000		250,646,000
Travel [Member]
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Sales Revenue, Services, Net		31,520,000
Travel [Member] | International
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Sales Revenue, Services, Net		11,436,000		11,002,000
Travel [Member] | North America
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Sales Revenue, Services, Net		20,084,000		$ 20,462,000
Calculated under Revenue Guidance in Effect before Topic 606 [Member]
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Assets		(1,489,846,000)
Sales Revenue, Services, Net		300,018,000
Sales Revenue, Goods, Net		324,743,000
Revenue, Net	[3]	624,761,000
Cost of Services		37,420,000
Cost of Goods Sold		270,510,000
Cost of Revenue		307,930,000
Gross Profit		316,831,000
Marketing Expense		100,729,000
Selling, general and administrative		220,797,000
Restructuring charges		283,000
Operating Expenses		321,809,000
Operating Income (Loss)		(4,978,000)
Other Nonoperating Income (Expense)		(8,515,000)
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest		(13,493,000)
Income Tax Expense (Benefit)		(3,354,000)
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest		(10,139,000)
Liabilities		1,236,741,000
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest		253,105,000
Calculated under Revenue Guidance in Effect before Topic 606 [Member] | International
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Revenue, Net	[3]	230,972,000
Calculated under Revenue Guidance in Effect before Topic 606 [Member] | North America
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Revenue, Net	[3]	393,789,000
Calculated under Revenue Guidance in Effect before Topic 606 [Member] | Local [Member]
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Sales Revenue, Services, Net		264,157,000
Calculated under Revenue Guidance in Effect before Topic 606 [Member] | Local [Member] | International
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Sales Revenue, Services, Net		73,133,000
Calculated under Revenue Guidance in Effect before Topic 606 [Member] | Local [Member] | North America
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Sales Revenue, Services, Net		191,024,000
Calculated under Revenue Guidance in Effect before Topic 606 [Member] | Goods [Member]
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Sales Revenue, Services, Net		8,049,000
Sales Revenue, Goods, Net		324,743,000
Calculated under Revenue Guidance in Effect before Topic 606 [Member] | Goods [Member] | International
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Sales Revenue, Services, Net		3,175,000
Sales Revenue, Goods, Net		143,856,000
Calculated under Revenue Guidance in Effect before Topic 606 [Member] | Goods [Member] | North America
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Sales Revenue, Services, Net		4,874,000
Sales Revenue, Goods, Net		180,887,000
Calculated under Revenue Guidance in Effect before Topic 606 [Member] | Travel [Member]
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Sales Revenue, Services, Net		27,812,000
Calculated under Revenue Guidance in Effect before Topic 606 [Member] | Travel [Member] | International
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Sales Revenue, Services, Net		10,808,000
Calculated under Revenue Guidance in Effect before Topic 606 [Member] | Travel [Member] | North America
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Sales Revenue, Services, Net		17,004,000
Difference between Revenue Guidance in Effect before and after Topic 606 [Member]
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Assets		(13,082,000)
Sales Revenue, Services, Net		(1,779,000)
Sales Revenue, Goods, Net		0
Revenue, Net	[3]	(1,779,000)
Cost of Services		6,275,000
Cost of Goods Sold		0
Cost of Revenue		6,275,000
Gross Profit		(8,054,000)
Marketing Expense		1,573,000
Selling, general and administrative		(1,264,000)
Restructuring charges		0
Operating Expenses		309,000
Operating Income (Loss)		(8,363,000)
Other Nonoperating Income (Expense)		0
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest		(8,363,000)
Income Tax Expense (Benefit)		(1,019,000)
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest		(7,344,000)
Liabilities		84,185,000
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest		(97,267,000)
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | International
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Revenue, Net	[3]	(2,312,000)
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | North America
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Revenue, Net	[3]	533,000
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Local [Member]
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Sales Revenue, Services, Net		2,168,000
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Local [Member] | International
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Sales Revenue, Services, Net		(1,445,000)
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Local [Member] | North America
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Sales Revenue, Services, Net		3,613,000
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Goods [Member]
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Sales Revenue, Services, Net		(239,000)
Sales Revenue, Goods, Net		0
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Goods [Member] | International
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Sales Revenue, Services, Net		(239,000)
Sales Revenue, Goods, Net		0
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Goods [Member] | North America
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Sales Revenue, Services, Net		0
Sales Revenue, Goods, Net		0
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Travel [Member]
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Sales Revenue, Services, Net		(3,708,000)
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Travel [Member] | International
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Sales Revenue, Services, Net		(628,000)
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Travel [Member] | North America
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Sales Revenue, Services, Net		(3,080,000)
Total Groupon, Inc. Stockholders' Equity
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Cumulative effect of change in accounting principle, net of tax		88,945,000
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest		348,722,000			$ 250,973,000
Accounting Standards Update 2014-09
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Income Tax Expense (Benefit)		6,400,000
Accounting Standards Update 2014-09 | Total Groupon, Inc. Stockholders' Equity
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Cumulative effect of change in accounting principle, net of tax		(88,945,000)
Cumulative Effect on Retained Earnings, Tax		6,700,000
Accounting Standards Update 2014-09 | Prepaid Expenses and Other Current Assets [Member] | Total Groupon, Inc. Stockholders' Equity
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Cumulative effect of change in accounting principle, net of tax		(4,007,000)
Accounting Standards Update 2014-09 | Other Noncurrent Assets [Member] | Total Groupon, Inc. Stockholders' Equity
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Cumulative effect of change in accounting principle, net of tax		(10,223,000)
Accounting Standards Update 2014-09 | Accrued Merchant and Supplier Payable [Member] | Total Groupon, Inc. Stockholders' Equity
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Cumulative effect of change in accounting principle, net of tax		(64,970,000)
Accounting Standards Update 2014-09 | Accrued Liabilities [Member] | Total Groupon, Inc. Stockholders' Equity
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Cumulative effect of change in accounting principle, net of tax		(13,188,000)
Accounting Standards Update 2014-09 | Other Noncurrent Liabilities [Member] | Total Groupon, Inc. Stockholders' Equity
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Cumulative effect of change in accounting principle, net of tax		$ 3,443,000

[1] (1)North America contains assets from the United States of $877.8 million and $1,006.2 million as of March 31, 2018 and December 31, 2017, respectively. International contains assets from Ireland of $167.1 million and $219.7 million as of March 31, 2018 and December 31, 2017, respectively. There were no other individual countries that represented more than 10% of consolidated total assets as of March 31, 2018 and December 31, 2017.

[2] (1)Reflects decreases of $5.6 million related to the timing of recognition of variable consideration from unredeemed vouchers, $3.3 million related to the timing of recognition of revenue from hotel reservation offerings and $0.7 million related to the timing of recognition of breakage revenue from customer credits that are not expected to be used, partially offset by a $7.8 million increase for refunds on service revenue transactions for which the merchant's share is not recoverable and customer credits issued for relationship purposes, which are classified as reductions of revenue under Topic 606.

[3] (1)North America includes revenue from the United States of $385.4 million and $464.7 million for the three months ended March 31, 2018 and 2017, respectively. International includes revenue from the United Kingdom of $83.0 million and $65.5 million for the three months ended March 31, 2018 and 2017, respectively. There were no other individual countries that represented more than 10% of consolidated total revenue for the three months ended March 31, 2018 and 2017. Prior to the second quarter of 2017, revenue was attributed to individual countries based on the domicile of the legal entities within the Company's consolidated group that undertook those transactions.

[4] (2)Reflects an increase for refunds on service revenue transactions for which the merchant's share is not recoverable, which are classified as a reduction of revenue under Topic 606.

[5] (3)Reflects an increase for customer credits issued for relationship purposes, which are classified as a reduction of revenue under Topic 606.

[6] (4)Reflects the amortization of deferred contract acquisition costs in excess of amounts capitalized in the current period.

[7] (1)Includes stock-based compensation of $17.9 million and $18.3 million for North America for the three months ended March 31, 2018 and 2017, respectively, and $1.4 million for International for the three months ended March 31, 2018 and 2017.

[8] (2)Includes restructuring charges of $2.0 million for North America for the three months ended March 31, 2017 and $0.3 million and $0.8 million for International for the three months ended March 31, 2018 and 2017, respectively.

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REVENUE RECOGNITION - Liability for Customer Credits Rollforward (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2018 USD ($)
Movement in Customer Refundable Fees [Roll Forward]
Balance as of January 1, 2018	$ 19,414
Credits issued	32,386
Credits redeemed	(28,167)
Breakage revenue recognized	(5,036)
Foreign currency translation	164
Balance as of March 31, 2018	$ 18,761

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RESTRUCTURING - Summary of Costs Incurred by Segment Related to Restructuring (Details)		3 Months Ended		31 Months Ended
		Mar. 31, 2018 USD ($)	Mar. 31, 2017 USD ($) numberofemployees	Mar. 31, 2018 USD ($)	Sep. 30, 2017
Restructuring Cost and Reserve [Line Items]
Restructuring charges		$ 283,000	$ 2,731,000
Number of employees terminated | numberofemployees			200
Employee Severance and Benefit Costs
Restructuring Cost and Reserve [Line Items]
Restructuring charges	[1]	230,000	$ 2,301,000
Restructuring Costs				$ 80,500,000
Asset Impairments Related to Restructuring
Restructuring Cost and Reserve [Line Items]
Restructuring Costs				$ 7,500,000
Other Exit Costs
Restructuring Cost and Reserve [Line Items]
Restructuring charges		53,000	430,000
North America
Restructuring Cost and Reserve [Line Items]
Restructuring charges		0	1,955,000
North America | Employee Severance and Benefit Costs
Restructuring Cost and Reserve [Line Items]
Restructuring charges	[1]	0	1,778,000
North America | Other Exit Costs
Restructuring Cost and Reserve [Line Items]
Restructuring charges		0	177,000
International
Restructuring Cost and Reserve [Line Items]
Restructuring charges		283,000	800,000
International | Employee Severance and Benefit Costs
Restructuring Cost and Reserve [Line Items]
Restructuring charges	[1]	230,000	523,000
International | Other Exit Costs
Restructuring Cost and Reserve [Line Items]
Restructuring charges		$ 53,000	$ 253,000
Facility Closing | International
Restructuring Cost and Reserve [Line Items]
Number of countries in which operations were ceased within					17

[1] (1)

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RESTRUCTURING - Schedule of Restructuring Liability (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2018 USD ($)
Restructuring Liability Rollforward [Roll Forward]
Restructuring reserve, beginning balance	$ 4,121
Charges payable in cash	283
Cash payments	(773)
Foreign currency translation	71
Restructuring reserve, ending balance	3,702
Employee Severance and Benefit Costs
Restructuring Liability Rollforward [Roll Forward]
Restructuring reserve, beginning balance	3,817
Charges payable in cash	230
Cash payments	(720)
Foreign currency translation	71
Restructuring reserve, ending balance	3,398
Other Exit Costs
Restructuring Liability Rollforward [Roll Forward]
Restructuring reserve, beginning balance	304
Charges payable in cash	53
Cash payments	(53)
Foreign currency translation	0
Restructuring reserve, ending balance	$ 304

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INCOME TAXES (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Operating Loss Carryforwards [Line Items]
Income Tax Expense (Benefit)	$ (2,335)	$ 4,587
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest	(5,130)	$ (16,282)
Accounting Standards Update 2014-09
Operating Loss Carryforwards [Line Items]
Income Tax Expense (Benefit)	6,400
International
Operating Loss Carryforwards [Line Items]
Income Tax Examination, Penalties and Interest Expense			$ 141,800
Decrease in Unrecognized Tax Benefits is Reasonably Possible	$ 40,600

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FAIR VALUE MEASUREMENTS - Additional Information (Details)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Monster LP
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Discount rate	21.00%	22.00%

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FAIR VALUE MEASUREMENTS - Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017	Mar. 31, 2017	Dec. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value option investments	$ 77,933	$ 82,966	$ 82,887	$ 82,584
Available-for-sale Securities	25,646	26,785
Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	93,325	137,975
Fair value option investments	77,933	82,966
Fair Value, Measurements, Recurring | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	93,325	137,975
Fair Value, Measurements, Recurring | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	0	0
Fair Value, Measurements, Recurring | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	0	0
Fair value option investments	77,933	82,966
Convertible Debt Securities | Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	11,070	11,354
Convertible Debt Securities | Fair Value, Measurements, Recurring | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Convertible Debt Securities | Fair Value, Measurements, Recurring | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Convertible Debt Securities | Fair Value, Measurements, Recurring | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	11,070	11,354
Redeemable Preferred Stock | Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	14,576	15,431
Redeemable Preferred Stock | Fair Value, Measurements, Recurring | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Redeemable Preferred Stock | Fair Value, Measurements, Recurring | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Redeemable Preferred Stock | Fair Value, Measurements, Recurring | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	$ 14,576	$ 15,431

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FAIR VALUE MEASUREMENTS - Fair Value, Assets and Liabilities, Reconciliation of Level 3 Inputs (Details) - USD ($) $ in Thousands		3 Months Ended
		Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017	Dec. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value option investments		$ 77,933	$ 82,887	$ 82,966	$ 82,584
Fair Value, Option, Changes in Fair Value, Gain (Loss)		(5,033)	303
Unrealized Gains (Losses) Still Held - Assets	[1]	(5,033)	303
Fair Value, Measurement with Unobservable Inputs Reconciliations, Recurring Basis, Liability Value		0	14,600	0	14,588
Purchases of Convertible Debt			1,612
Other than Temporary Impairment Losses, Investments, Portion Recognized in Earnings, Net		(855)	0
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, Liability	[2]	0	12
Fair Value, Measurement with Unobservable Inputs, Unrealized Gain Loss	[1]	0	12
Redeemable Preferred Stock
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value option investments		14,576	17,788	15,431	17,444
Unrealized Gains (Losses) Still Held - Assets	[1]	(855)	344
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Gain (Loss) Included in Other Comprehensive Income (Loss)		0	344
Convertible Debt Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value option investments		11,070	11,931	$ 11,354	$ 10,038
Unrealized Gains (Losses) Still Held - Assets	[1]	(284)	281
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Gain (Loss) Included in Other Comprehensive Income (Loss)		(501)	42
Unrealized Gain (Loss) on Securities		217	$ 239
Convertible Debt Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Payments to Acquire Investments		$ 0

[1] (1)Represents the unrealized losses or gains recorded in earnings and/or other comprehensive income (loss) during the period for assets and liabilities classified as Level 3 that are still held (or outstanding) at the end of the period.

[2] (3)Changes in the fair value of contingent consideration liabilities are classified within Selling, general and administrative expense on the consolidated statements of operations.

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FAIR VALUE MEASUREMENTS - Fair Value of Financial Assets and Liabilities Not Measured at Fair Value (Details) $ in Thousands	Dec. 31, 2017 USD ($)	[1]
Fair Value Disclosures [Abstract]
Carrying Amount	$ 25,438
Fair Value	$ 32,792

[1] (1)See Note 2, Adoption of New Accounting Standards, and Note 5, Investments, for information about the Company's adoption of ASU 2016-01 on January 1, 2018 and its impact on accounting for equity investments without readily determinable fair values that were previously subject to the cost method of accounting.

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INCOME (LOSS) PER SHARE - Schedule of Computation of Basic and Diluted Net Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Numerator
Income (loss) from continuing operations	$ (2,795)	$ (20,869)
Less: Net income (loss) attributable to noncontrolling interests	4,093	4,032
Net income (loss) attributable to common stockholders - continuing operations	(6,888)	(24,901)
Income (loss) from discontinued operations, net of tax	0	487	[1]
Net income (loss) attributable to common stockholders	$ (6,888)	$ (24,414)
Basic And Diluted Net Income (Loss) Per Share, Denominator [Abstract]
Weighted-average common shares outstanding (in shares)	561,735,937	562,195,243
Continuing operations (in usd per share)	$ (0.01)	$ (0.04)
Discontinued operations (in usd per share)	0.00	0.00
Basic and diluted net income (loss) per share (in usd per share)	$ (0.01)	$ (0.04)

[1] (1)The income (loss) from discontinued operations before loss on dispositions and provision for income taxes for the three months ended March 31, 2017 includes the results of each business through its respective disposition date.

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INCOME (LOSS) PER SHARE - Schedule of Weighted-Average Potentially Dilutive Instruments (Details) - shares	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	123,838,115	120,767,096
Performance Shares
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Shares issuable upon vesting of outstanding performance share units (in shares)	3,283,114	683,076
Restricted stock units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	28,033,489	24,360,648
Other stock-based compensation awards
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	3,212,026	3,813,848
Convertible senior notes
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	46,296,300	46,296,300
Warrants
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	46,296,300	46,296,300

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SEGMENT INFORMATION Schedule of Revenue by Segment (Details) - USD ($) $ in Thousands		3 Months Ended
		Mar. 31, 2018		Mar. 31, 2017
Schedule of Revenue by Segment [Line Items]
Service revenue		$ 301,797	[1]	$ 301,577
Product revenue		324,743		372,049
Total revenue		626,540	[2]	673,626
North America
Schedule of Revenue by Segment [Line Items]
Total revenue	[2]	393,256		473,357
International
Schedule of Revenue by Segment [Line Items]
Total revenue	[2]	233,284		200,269
Local
Schedule of Revenue by Segment [Line Items]
Service revenue		261,989
Local | North America
Schedule of Revenue by Segment [Line Items]
Service revenue		187,411		200,545
Local | International
Schedule of Revenue by Segment [Line Items]
Service revenue		74,578		63,575
Goods
Schedule of Revenue by Segment [Line Items]
Service revenue		8,288
Product revenue		324,743
Goods | North America
Schedule of Revenue by Segment [Line Items]
Service revenue		4,874		1,704
Product revenue		180,887		250,646
Goods | International
Schedule of Revenue by Segment [Line Items]
Service revenue		3,414		4,289
Product revenue		143,856		121,403
Travel
Schedule of Revenue by Segment [Line Items]
Service revenue		31,520
Travel | North America
Schedule of Revenue by Segment [Line Items]
Service revenue		20,084		20,462
Travel | International
Schedule of Revenue by Segment [Line Items]
Service revenue		11,436		11,002
UNITED STATES
Schedule of Revenue by Segment [Line Items]
Revenues		385,400		464,700
UNITED KINGDOM
Schedule of Revenue by Segment [Line Items]
Revenues		$ 83,000		$ 65,500

[1] (1)Reflects decreases of $5.6 million related to the timing of recognition of variable consideration from unredeemed vouchers, $3.3 million related to the timing of recognition of revenue from hotel reservation offerings and $0.7 million related to the timing of recognition of breakage revenue from customer credits that are not expected to be used, partially offset by a $7.8 million increase for refunds on service revenue transactions for which the merchant's share is not recoverable and customer credits issued for relationship purposes, which are classified as reductions of revenue under Topic 606.

[2] (1)North America includes revenue from the United States of $385.4 million and $464.7 million for the three months ended March 31, 2018 and 2017, respectively. International includes revenue from the United Kingdom of $83.0 million and $65.5 million for the three months ended March 31, 2018 and 2017, respectively. There were no other individual countries that represented more than 10% of consolidated total revenue for the three months ended March 31, 2018 and 2017. Prior to the second quarter of 2017, revenue was attributed to individual countries based on the domicile of the legal entities within the Company's consolidated group that undertook those transactions.

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SEGMENT INFORMATION Schedule of Gross Profit by Segment (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Segment Reporting Information [Line Items]
Gross Profit	$ 324,885	$ 309,451
North America
Segment Reporting Information [Line Items]
Gross Profit	219,680	220,937
International
Segment Reporting Information [Line Items]
Gross Profit	105,205	88,514
Service | Local | North America
Segment Reporting Information [Line Items]
Gross Profit	166,756	169,342
Service | Local | International
Segment Reporting Information [Line Items]
Gross Profit	70,215	59,194
Service | Goods | North America
Segment Reporting Information [Line Items]
Gross Profit	3,941	1,307
Service | Goods | International
Segment Reporting Information [Line Items]
Gross Profit	3,087	3,660
Service | Travel | North America
Segment Reporting Information [Line Items]
Gross Profit	16,002	15,165
Service | Travel | International
Segment Reporting Information [Line Items]
Gross Profit	10,651	10,036
Product | Goods | North America
Segment Reporting Information [Line Items]
Gross Profit	32,981	35,123
Product | Goods | International
Segment Reporting Information [Line Items]
Gross Profit	$ 21,252	$ 15,624

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SEGMENT INFORMATION Schedule of Operating Income (Loss) by Segment (Details) - USD ($)		3 Months Ended
		Mar. 31, 2018	Mar. 31, 2017
Schedule of Operating Income (Loss) by Segment
Stock-based compensation		$ 19,326,000	$ 19,701,000
Total operating income (loss)	[1],[2]	3,385,000	(11,680,000)
Restructuring charges		283,000	2,731,000
North America
Schedule of Operating Income (Loss) by Segment
Stock-based compensation		17,900,000	18,300,000
Total operating income (loss)	[1],[2]	(1,860,000)	(14,783,000)
Restructuring charges		0	1,955,000
International
Schedule of Operating Income (Loss) by Segment
Stock-based compensation		1,400,000
Total operating income (loss)	[1],[2]	5,245,000	3,103,000
Restructuring charges		$ 283,000	$ 800,000

[1] (1)Includes stock-based compensation of $17.9 million and $18.3 million for North America for the three months ended March 31, 2018 and 2017, respectively, and $1.4 million for International for the three months ended March 31, 2018 and 2017.

[2] (2)Includes restructuring charges of $2.0 million for North America for the three months ended March 31, 2017 and $0.3 million and $0.8 million for International for the three months ended March 31, 2018 and 2017, respectively.

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SEGMENT INFORMATION Schedule of Total Assets by Segment (Details) - USD ($) $ in Thousands		Mar. 31, 2018	Dec. 31, 2017
Segment Reporting, Asset Reconciling Item [Line Items]
Assets	[1]	$ 1,502,928	$ 1,677,505
North America
Segment Reporting, Asset Reconciling Item [Line Items]
Assets	[1]	920,834	1,045,072
International
Segment Reporting, Asset Reconciling Item [Line Items]
Assets	[1]	582,094	632,433
UNITED STATES
Segment Reporting, Asset Reconciling Item [Line Items]
Assets		877,800	1,006,200
IRELAND
Segment Reporting, Asset Reconciling Item [Line Items]
Assets		$ 167,100	$ 219,700

[1] (1)North America contains assets from the United States of $877.8 million and $1,006.2 million as of March 31, 2018 and December 31, 2017, respectively. International contains assets from Ireland of $167.1 million and $219.7 million as of March 31, 2018 and December 31, 2017, respectively. There were no other individual countries that represented more than 10% of consolidated total assets as of March 31, 2018 and December 31, 2017.

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SUBSEQUENT EVENTS (Details) - Subsequent Event - USD ($) $ in Millions		1 Months Ended
	Apr. 30, 2018	Dec. 31, 2018
Subsequent Event [Line Items]
Percentage of outstanding shares acquired	80.00%
Payments to acquire remaining outstanding shares		$ 8.9
Business Combination, Consideration Transferred	$ 72.7
Cash paid at closing	64.1
Estimated fair value of noncontrolling interest	8.6
Working capital deficit	8.8
Cash	$ 6.6