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, 2021

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 incorporation or organization)	(I.R.S. Employer Identification No.)
600 W Chicago Avenue	60654
Suite 400	(Zip Code)
Chicago
Illinois	(312)	334-1579
(Address of principal executive offices)	(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.0001 per share	GRPN	NASDAQ Global Select Market

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  ☒         No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).        

Yes  ☒        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 ☐                            Accelerated filer ☒        

Non-accelerated filer ☐                            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  ☒ 

As of May 3, 2021, there were 29,119,679 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, 2021 (unaudited) and December 31, 2020	4
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the three months ended March 31, 2021 and 2020 (unaudited)	5
Condensed Consolidated Statements of Stockholders' Equity for the three months ended March 31, 2021 and 2020 (unaudited)	6
Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2021 and 2020 (unaudited)	8
Notes to Condensed Consolidated Financial Statements (unaudited)	10
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	32
Item 3. Quantitative and Qualitative Disclosures about Market Risk	50
Item 4. Controls and Procedures	51
PART II. Other Information
Item 1. Legal Proceedings	52
Item 1A. Risk Factors	53
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	54
Item 5. Other Information	54
Item 6. Exhibits	55
Signatures	56

______________________________________________________

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, effects of COVID-19 or other pandemics or disease outbreaks on our business; our ability to execute, and achieve the expected benefits of, our go-forward strategy; execution of our business and marketing strategies; volatility in our operating results; 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 exit from the European Union; global economic uncertainty; retaining and adding high quality merchants; retaining existing customers and adding new customers; competing successfully in our industry; providing a compelling mobile experience for our customers; managing refund risks; retaining and attracting members of our executive team and other qualified personnel; customer and merchant fraud; payment-related risks; our reliance on email, internet search engines and mobile application marketplaces to drive traffic to our marketplace; cybersecurity breaches; maintaining and improving our information technology infrastructure; reliance on cloud-based computing platforms; completing and realizing the anticipated benefits from acquisitions, dispositions, joint ventures and strategic investments; lack of control over minority investments; managing inventory and order fulfillment risks; claims related to product and service offerings; protecting our intellectual property; maintaining a strong brand; the impact of future and pending litigation; 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 or employees; exposure to greater than anticipated tax liabilities; adoption of tax legislation; our ability to raise capital if necessary; risks related to our access to capital and outstanding indebtedness, including our convertible senior notes; our common stock, including volatility in our stock price; our ability to realize the anticipated benefits from the hedge and warrant or capped call 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, 2020 and Part II, Item 1A. Risk Factors of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2021, 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 (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," "the Company," "we," "our," "us" 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, 2021		December 31, 2020
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	676,799	$	850,587
Accounts receivable, net	45,402		42,998
Prepaid expenses and other current assets	41,261		40,441
Total current assets	763,462		934,026
Property, equipment and software, net	82,521		85,284
Right-of-use assets - operating leases, net	69,899		75,349
Goodwill	217,364		214,699
Intangible assets, net	28,684		30,151
Investments	36,008		37,671
Restricted cash	169,785		—
Other non-current assets	34,314		34,327
Total Assets	$	1,402,037	$	1,411,507
Liabilities and Equity
Current liabilities:
Short-term borrowings	$	100,000	$	200,000
Accounts payable	38,609		33,026
Accrued merchant and supplier payables	329,000		410,963
Accrued expenses and other current liabilities	299,282		294,999
Total current liabilities	766,891		938,988
Convertible senior notes, net	441,996		229,490
Operating lease obligations	83,527		90,927
Other non-current liabilities	44,003		44,428
Total Liabilities	1,336,417		1,303,833
Commitments and contingencies (see Note 6)
Stockholders' Equity
Common stock, par value $0.0001 per share, 100,500,000 shares authorized; 39,352,337 shares issued and 29,058,220 shares outstanding at March 31, 2021; 39,142,896 shares issued and 28,848,779 shares outstanding at December 31, 2020	4		4
Additional paid-in capital	2,261,095		2,348,114
Treasury stock, at cost, 10,294,117 shares at March 31, 2021 and December 31, 2020	(922,666)		(922,666)
Accumulated deficit	(1,258,283)		(1,320,886)
Accumulated other comprehensive income (loss)	(14,455)		3,109
Total Groupon, Inc. Stockholders' Equity	65,695		107,675
Noncontrolling interests	(75)		(1)
Total Equity	65,620		107,674
Total Liabilities and Equity	$	1,402,037	$	1,411,507

See Notes to Condensed Consolidated Financial Statements.

4

GROUPON, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(in thousands, except share and per share amounts)

(unaudited)

	Three Months Ended March 31,
	2021		2020
Revenue:
Service	$	172,624	$	207,028
Product	91,193		167,122
Total revenue	263,817		374,150
Cost of revenue:
Service	18,425		26,915
Product	78,409		145,988
Total cost of revenue	96,834		172,903
Gross profit	166,983		201,247
Operating expenses:
Marketing	33,666		60,130
Selling, general and administrative	127,143		207,135
Goodwill impairment	—		109,486
Long-lived asset impairment	—		22,351
Restructuring and related charges	7,422		6
Total operating expenses	168,231		399,108
Income (loss) from operations	(1,248)		(197,861)
Other income (expense), net	18,123		(18,987)
Income (loss) from continuing operations before provision (benefit) for income taxes	16,875		(216,848)
Provision (benefit) for income taxes	2,427		(5,988)
Income (loss) from continuing operations	14,448		(210,860)
Income (loss) from discontinued operations, net of tax	—		382
Net income (loss)	14,448		(210,478)
Net (income) loss attributable to noncontrolling interests	110		(3,044)
Net income (loss) attributable to Groupon, Inc.	$	14,558	$	(213,522)
Basic net income (loss) per share:
Continuing operations	$	0.50	$	(7.54)
Discontinued operations	—		0.01
Basic net income (loss) per share	$	0.50	$	(7.53)
Diluted net income (loss) per share:
Continuing operations	$	0.48	$	(7.54)
Discontinued operations	—		0.01
Diluted net income (loss) per share)	$	0.48	$	(7.53)
Weighted average number of shares outstanding
Basic	29,028,489		28,365,216
Diluted	30,265,563		28,365,216
Comprehensive income (loss):
Net income (loss)	$	14,448	$	(210,478)
Other comprehensive income (loss):
Other comprehensive income (loss) from continuing operations:
Net change in unrealized gain (loss) on foreign currency translation adjustments	(49,792)		(1,961)
Reclassification of cumulative foreign currency translation adjustments	32,228		—
Other comprehensive income (loss) from continuing operations	(17,564)		(1,961)
Other comprehensive income (loss) from discontinued operations	—		—
Other comprehensive income (loss)	(17,564)		(1,961)
Comprehensive income (loss)	(3,116)		(212,439)
Comprehensive (income) loss attributable to noncontrolling interest	110		(3,044)
Comprehensive income (loss) attributable to Groupon, Inc.	$	(3,006)	$	(215,483)

See Notes to Condensed Consolidated Financial Statements.

5

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, 2020	39,142,896	$	4	$	2,348,114	(10,294,117)	$	(922,666)	$	(1,320,886)	$	3,109	$	107,675	$	(1)	$	107,674
Cumulative effect of change in accounting principle due to adoption of ASU 2020-06, net of tax	—	—		(67,014)		—	—		48,045		—		(18,969)		—		(18,969)
Comprehensive income (loss)	—	—		—		—	—		14,558		(17,564)		(3,006)		(110)		(3,116)
Vesting of restricted stock units and performance share units	308,954	—		—		—	—		—		—		—		—		—
Shares issued under employee stock purchase plan	23,418	—		349		—	—		—		—		349		—		349
Tax withholdings related to net share settlements of stock-based compensation awards	(122,931)	—		(4,901)		—	—		—		—		(4,901)		—		(4,901)
Purchase of convertible note hedges	—	—		(23,840)		—	—		—		—		(23,840)		—		(23,840)
Stock-based compensation on equity-classified awards	—	—		8,387		—	—		—		—		8,387		—		8,387
Receipts from noncontrolling interest holders	—	—		—		—	—		—		—		—		36		36
Balance at March 31, 2021	39,352,337	$	4	$	2,261,095	(10,294,117)	$	(922,666)	$	(1,258,283)	$	(14,455)	$	65,695	$	(75)	$	65,620

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 (1)			Additional Paid-In Capital (1)		Treasury Stock (1)			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, 2019	38,584,854	$	4	$	2,310,393	(10,294,117)	$	(922,666)	$	(1,032,876)	$	39,081	$	393,936	$	1,110	$	395,046
Cumulative effect of change in accounting principle due to adoption of ASC Topic 326, net of tax	—	—		—		—	—		(79)		—		(79)		—		(79)
Comprehensive income (loss)	—	—		—		—	—		(213,522)		(1,961)		(215,483)		3,044		(212,439)
Vesting of restricted stock units and performance share units	165,705	—		—		—	—		—		—		—		—		—
Shares issued under employee stock purchase plan	28,621	—		1,163		—	—		—		—		1,163		—		1,163
Tax withholdings related to net share settlements of stock-based compensation awards	(67,135)	—		(3,684)		—	—		—		—		(3,684)		—		(3,684)
Stock-based compensation on equity-classified awards	—	—		15,345		—	—		—		—		15,345		—		15,345
Distributions to noncontrolling interest holders	—	—		—		—	—		—		—		—		(3,845)		(3,845)
Balance at March 31, 2020	38,712,045	$	4	$	2,323,217	(10,294,117)	$	(922,666)	$	(1,246,477)	$	37,120	$	191,198	$	309	$	191,507

(1)All share information and balances have been retroactively adjusted to reflect a reverse stock split. See Note 7, Stockholders' Equity and Compensation Arrangements, for additional information.

See Notes to Condensed Consolidated Financial Statements.

7

GROUPON, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

	Three Months Ended March 31,
	2021		2020
Operating activities
Net income (loss)	$	14,448	$	(210,478)
Less: Income (loss) from discontinued operations, net of tax	—		382
Income (loss) from continuing operations	14,448		(210,860)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization of property, equipment and software	14,727		23,385
Amortization of acquired intangible assets	2,292		2,524
Impairment of goodwill	—		109,486
Impairment of long-lived assets	—		22,351
Stock-based compensation	7,179		14,015
Impairment and other changes in fair value of investments	—		8,089
Amortization of debt discount on convertible senior notes	303		3,516
Foreign currency translation adjustments reclassified into earnings	(32,228)		—
Change in assets and liabilities, net of acquisitions and dispositions:
Accounts receivable	(2,812)		8,334
Prepaid expenses and other current assets	(1,640)		13,222
Right-of-use assets - operating leases	5,122		7,009
Accounts payable	5,896		5,860
Accrued merchant and supplier payables	(76,884)		(223,098)
Accrued expenses and other current liabilities	9,823		(11,970)
Operating lease obligations	(6,007)		(10,130)
Other, net	13,376		1,859
Net cash provided by (used in) operating activities from continuing operations	(46,405)		(236,408)
Net cash provided by (used in) operating activities from discontinued operations	—		—
Net cash provided by (used in) operating activities	(46,405)		(236,408)
Investing activities
Purchases of property and equipment and capitalized software	(12,040)		(10,596)
Proceeds from sale of investment	—		31,605
Acquisitions of intangible assets and other investing activities	(704)		(1,445)
Net cash provided by (used in) investing activities from continuing operations	(12,744)		19,564
Net cash provided by (used in) investing activities from discontinued operations	—		—
Net cash provided by (used in) investing activities	(12,744)		19,564
Financing activities
Proceeds from issuance of 2026 convertible notes	200,000		—
Proceeds from (payments of) borrowings under revolving credit agreement	(100,000)		150,000
Purchase of capped call transactions	(23,840)		—
Issuance costs for 2026 convertible notes and revolving credit agreement	(6,572)		—
Taxes paid related to net share settlements of stock-based compensation awards	(4,901)		(3,299)
Payments of finance lease obligations	(2,061)		(2,707)
Other financing activities	(8)		(2,682)
Net cash provided by (used in) financing activities	62,618		141,312
Effect of exchange rate changes on cash, cash equivalents and restricted cash, including cash classified within current assets of discontinued operations	(7,466)		(9,174)
Net increase (decrease) in cash, cash equivalents and restricted cash, including cash classified within current assets of discontinued operations	(3,997)		(84,706)
Less: Net increase (decrease) in cash classified within current assets of discontinued operations	—		—
Net increase (decrease) in cash, cash equivalents and restricted cash	(3,997)		(84,706)
Cash, cash equivalents and restricted cash, beginning of period (1)	851,085		752,657
Cash, cash equivalents and restricted cash, end of period (1)	$	847,088	$	667,951

Non-cash investing and financing activities
Right-of-use assets obtained in exchange for lease liabilities:
Operating leases	—	2,867

8

GROUPON, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

(1)The following table provides a reconciliation of cash, cash equivalents and restricted cash shown above to amounts reported within the condensed consolidated balance sheets as of March 31, 2021, December 31, 2020, March 31, 2020 and December 31, 2019 (in thousands):

	March 31, 2021		December 31, 2020		March 31, 2020		December 31, 2019
Cash and cash equivalents	$	676,799	$	850,587	$	666,867	$	750,887
Restricted cash included in prepaid expenses and other current assets	504		498		878		1,534
Restricted cash - non-current	169,785		—		—		—
Restricted cash included in other non-current assets	—		—		206		236
Cash, cash equivalents and restricted cash	$	847,088	$	851,085	$	667,951	$	752,657

See Notes to Condensed Consolidated Financial Statements.

9

GROUPON, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Company Information

Groupon, Inc. and its subsidiaries, which commenced operations in October 2008, is a global scaled two-sided marketplace that connects consumers to merchants by offering goods and services, generally at a discount. Consumers access those marketplaces through our mobile applications and our websites, primarily localized groupon.com sites in many countries.

Our operations are organized into two segments: North America and International. See Note 13, Segment Information.

Reverse Stock Split

In June 2020, we effectuated a reverse stock split of our common stock at a ratio of 1-for-20. See Note 7, Stockholders' Equity and Compensation Arrangements, for additional information. As a result, the number of shares and income (loss) per share disclosed throughout this Quarterly Report on Form 10-Q have been retrospectively adjusted to reflect the reverse stock split.

COVID-19 Pandemic

Since March 2020, the COVID-19 pandemic has led to a significant decrease in consumer demand, a decrease in customer redemptions and elevated refund levels due to changes in consumer behavior and actions taken by governments to control the spread of COVID-19, including quarantines, travel restrictions, as well as business restrictions and shutdowns. The COVID-19 pandemic has had an adverse impact on our financial condition, results of operations and cash flows, which included impairments of our goodwill and long-lived assets in 2020. Recovery from the COVID-19 pandemic could be volatile and prolonged given the unprecedented and continuously evolving nature of the situation. We continue to monitor the impact of COVID-19 on our business.

Unaudited Interim Financial Information

We have prepared the accompanying condensed consolidated financial statements pursuant to the rules and regulations of the SEC for interim financial reporting. These condensed consolidated financial statements are unaudited and, in our opinion, include all adjustments, consisting of normal recurring adjustments and accruals, necessary for a fair presentation of the condensed consolidated balance sheets, statements of operations and comprehensive income (loss), cash flows and stockholders' equity for the periods presented. These condensed consolidated financial statements and notes should be read in conjunction with the audited consolidated financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2020.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of Groupon, Inc. and its wholly-owned subsidiaries, majority-owned subsidiaries over which we exercise control and variable interest entities for which we are the primary beneficiary. All intercompany accounts and transactions have been eliminated in consolidation. Outside stockholders' interests in subsidiaries are shown on the condensed consolidated financial statements as Noncontrolling interests. Investments in entities in which we do not have a controlling financial interest are accounted for at fair value, as available-for-sale securities or at cost adjusted for observable price changes and impairments, as appropriate.

10

GROUPON, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles ("GAAP") requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Estimates in our financial statements include, but are not limited to, the following: variable consideration from unredeemed vouchers; income taxes; leases; initial valuation and subsequent impairment testing of goodwill, other intangible assets and long-lived assets; investments; receivables; customer refunds and other reserves; contingent liabilities; and the useful lives of property, equipment and software and intangible assets. Actual results could differ materially from those estimates.

Reclassifications

Certain reclassifications have been made to the condensed consolidated financial statements of prior periods to conform to the current period presentation.

Adoption of New Accounting Standards

We adopted the guidance in ASU 2019-12, Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes, on January 1, 2021. This ASU simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. The adoption of ASU 2019-12 did not have a material impact on the condensed consolidated financial statements.

We adopted the guidance in ASU 2020-03, Codification Improvements to Financial Instruments, on January 1, 2021. This ASU amends a wide variety of Topics in the Codification, including revolving-debt arrangements and allowance for credit losses related to leases. The adoption of ASU 2020-03 did not have a material impact on the condensed consolidated financial statements.

We early adopted the guidance in ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity, on January 1, 2021. The ASU removes the separation models for convertible debt with a cash conversion feature or convertible instruments with a beneficial conversion feature. Additionally, the ASU removes certain conditions for equity classification related to contracts in an entity’s own equity (e.g., warrants) and amends certain guidance related to the computation of earnings per share for convertible instruments and contracts in an entity’s own equity. As a result of adopting ASU 2020-06, we recorded a $67.0 million net reduction to additional paid-in capital, a $19.0 million increase to non-current liabilities and a $48.0 million reduction to our opening accumulated deficit as of January 1, 2021. See Note 5, Financing Arrangements, for additional information.

2. GOODWILL AND LONG-LIVED ASSETS

During the first quarter 2020, the significant deterioration in our financial performance due to the disruption in our operations from COVID-19 and the sustained decrease in our stock price required us to evaluate our goodwill and long-lived assets for impairment. In determining fair values for our reporting units, we used the discounted cash flow method and the market multiple valuation approach that use Level 3 inputs. For the three months ended March 31, 2020, we recognized $109.5 million of goodwill impairment and $22.4 million of long-lived asset impairment within our International segment related to our EMEA operations.

Future events and changing market conditions due to the impact of COVID-19 could require us to re-evaluate the estimates used in our fair value measurements, potentially resulting in additional impairment of long-lived assets or goodwill in future periods.

11

GROUPON, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

The following table summarizes impairment for long-lived assets by asset type for the three months ended March 31, 2020 (in thousands):

	Impairment
Property, equipment and software, net
Furniture and fixtures	$	413
Leasehold improvements	2,806
Office equipment	198
Purchased software	14
Computer hardware	2,842
Right-of-use assets - finance leases, net	1,318
Capitalized software	304
Internally-developed software	2,988
Total Property, equipment and software, net	$	10,883
Right-of-use assets - operating leases, net	10,494
Intangible assets, net	103
Other non-current assets	871
Total long-lived assets	$	22,351

The following table summarizes goodwill activity by segment for the three months ended March 31, 2021 (in thousands):

	North America		International		Consolidated
Balance as of December 31, 2020	$	178,685	$	36,014	$	214,699
Other (1)	—		3,776		3,776
Foreign currency translation	—		(1,111)		(1,111)
Balance as of March 31, 2021	$	178,685	$	38,679	$	217,364

(1)Represents the reclassification between Right-of-use assets - operating leases, net and Goodwill due to an adjustment in the allocation of impairments recorded in 2020 between those two accounts.

The following table summarizes intangible assets as of March 31, 2021 and December 31, 2020 (in thousands):

	March 31, 2021						December 31, 2020
	Gross Carrying Value		Accumulated Amortization		Net Carrying Value		Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Merchant relationships	$	20,378	$	10,187	$	10,191	$	20,208	$	9,236	$	10,972
Trade names	9,671		8,009		1,662		9,651		7,921		1,730
Developed technology	1,688		1,585		103		2,121		1,863		258
Patents	11,104		4,859		6,245		10,813		4,697		6,116
Other intangible assets	17,829		7,346		10,483		17,823		6,748		11,075
Total	$	60,670	$	31,986	$	28,684	$	60,616	$	30,465	$	30,151

Amortization of intangible assets is computed using the straight-line method over their estimated useful lives, which range from 1 to 10 years. Amortization expense related to intangible assets was $2.3 million and $2.5 million for the three months ended March 31, 2021 and 2020. As of March 31, 2021, estimated future amortization expense related to intangible assets is as follows (in thousands):

12

GROUPON, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Remaining amounts in 2021	$	6,412
2022	8,130
2023	6,952
2024	3,219
2025	1,627
Thereafter	2,344
Total	$	28,684

3. INVESTMENTS

The following table summarizes investments as of March 31, 2021 and December 31, 2020 (dollars in thousands):

	March 31, 2021		Percent Ownership of Voting Stock			December 31, 2020		Percent Ownership of Voting Stock
Other equity investments	$	36,008	1%	to	19%	$	37,671	1%	to	19%
Available-for-sale securities - redeemable preferred shares (1)	—		19%	to	25%	—		19%	to	25%
Fair value option investments (1)	—		10%	to	19%	—		10%	to	19%
Total investments	$	36,008				$	37,671

(1)We hold available-for-sale securities and fair value option investments in various entities that were written down to zero prior to December 31, 2020. During the first quarter 2020, we recognized a $1.4 million loss from changes in the fair value of our fair value option investments.

Other Equity Investments

Other equity investments represent equity investments without readily determinable fair values recorded at cost adjusted for observable price changes and impairments. During the first quarter 2020, we sold 50% of our shares in an other equity investment for total cash consideration of $34.0 million.

In addition, we recorded a $6.7 million impairment during the first quarter 2020 to an other equity investment as a result of revised cash flow projections and a deterioration in financial condition due to COVID-19. We did not recognize any impairments during the three months ended March 31, 2021.

4. SUPPLEMENTAL CONDENSED CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF OPERATIONS INFORMATION

The following table summarizes other income (expense), net for the three months ended March 31, 2021 and 2020 (in thousands):

	Three Months Ended March 31,
	2021		2020
Interest income	$	1,155	$	2,556
Interest expense	(5,116)		(6,958)
Foreign currency gains (losses), net (1)	22,084		(6,496)
Impairment and other changes in fair value of investments	—		(8,089)
Other income (expense), net	$	18,123	$	(18,987)

(1)Foreign currency gains (losses), net for the three months ended March 31, 2021 includes a $32.2 million cumulative foreign currency translation adjustment gain that was reclassified into earnings as a result of the substantial liquidation of our subsidiary in Japan as part of our restructuring actions. Refer to Note 9, Restructuring and Related Charges, for additional information.

13

GROUPON, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

The following table summarizes prepaid expenses and other current assets as of March 31, 2021 and December 31, 2020 (in thousands):

	March 31, 2021		December 31, 2020
Prepaid expenses	$	20,588	$	18,038
Income taxes receivable	5,282		5,437
Other	15,391		16,966
Total prepaid expenses and other current assets	$	41,261	$	40,441

The following table summarizes other non-current assets as of March 31, 2021 and December 31, 2020 (in thousands):

	March 31, 2021		December 31, 2020
Deferred income tax	$	11,438	$	11,593
Debt issue costs, net	1,489		1,852
Deferred contract acquisition costs	5,957		5,315
Deferred cloud implementation costs	10,494		10,402
Other	4,936		5,165
Total other non-current assets	$	34,314	$	34,327

The following table summarizes accrued merchant and supplier payables as of March 31, 2021 and December 31, 2020 (in thousands):

	March 31, 2021		December 31, 2020
Accrued merchant payables	$	280,298	$	303,260
Accrued supplier payables (1)	48,702		107,703
Total accrued merchant and supplier payables	$	329,000	$	410,963

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

The following table summarizes accrued expenses and other current liabilities as of March 31, 2021 and December 31, 2020 (in thousands):

	March 31, 2021		December 31, 2020
Refund reserve	$	35,740	$	33,173
Compensation and benefits	60,685		54,958
Accrued marketing	14,589		15,299
Restructuring-related liabilities	17,620		13,746
Customer credits	62,824		61,006
Income taxes payable	6,975		7,862
Deferred revenue	8,857		11,223
Deferred payroll taxes (1)	2,922		2,922
Operating and finance lease obligations	36,652		37,755
Deferred cloud computing contract incentive	3,000		3,000
Other	49,418		54,055
Total accrued expenses and other current liabilities	$	299,282	$	294,999

(1)We have elected to defer certain payroll taxes under the Coronavirus Aid, Relief and Economic Security ("CARES") Act. These amounts are due by December 31, 2021.

14

GROUPON, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

The following table summarizes other non-current liabilities as of March 31, 2021 and December 31, 2020 (in thousands):

	March 31, 2021		December 31, 2020
Contingent income tax liabilities	$	27,105	$	25,593
Finance lease obligations	468		730
Restructuring-related liabilities	385		385
Deferred income taxes	3,474		3,170
Deferred payroll taxes (1)	2,922		2,922
Deferred cloud computing contract incentive	3,500		4,250
Other	6,149		7,378
Total other non-current liabilities	$	44,003	$	44,428

(1)We have elected to defer certain payroll taxes under the Coronavirus Aid, Relief, and Economic Security ("CARES") Act. These amounts are due by December 31, 2022.

5. FINANCING ARRANGEMENTS

Adoption of ASU 2020-06

On January 1, 2021, we early adopted ASU 2020-06 using the modified retrospective method. The ASU eliminates the requirement to separately recognize an equity component when accounting for convertible debt that may be cash-settled upon conversion or convertible instruments with a beneficial conversion feature. Additionally, the ASU removes certain conditions for equity classification related to contracts in an entity’s own equity (e.g., warrants) and amends certain guidance related to the computation of earnings per share for convertible instruments and contracts in an entity’s own equity.

Beginning January 1, 2021, our condensed consolidated financials are presented in accordance with ASU 2020-06, while prior period amounts are not adjusted and continue to be reported in accordance with our historical policies. The new guidance changes the accounting for our 3.25% Convertible Senior Notes, due 2022, as discussed below.

3.25% Convertible Senior Notes due 2022

In April 2016, we issued $250.0 million in aggregate principal amount of convertible senior notes (the "Atairos 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 our Board of Directors (the "Board") in connection with the issuance of the Atairos Notes. Atairos controls the voting power of AGH. The net proceeds from this offering were $243.2 million. The Atairos Notes bear interest at a rate of 3.25% per annum, payable annually in arrears on April 1 of each year. Each $1,000 of principal amount of the Atairos Notes initially is convertible into 9.25926 shares of common stock, which is equivalent to an initial conversion price of $108.00 per share, subject to adjustment upon the occurrence of specified events. Upon conversion, we can elect to settle the conversion value in cash, shares of our common stock, or any combination of cash and shares of our common stock. In May 2021, we entered into an agreement with AGH pursuant to which we will repurchase the Atairos Notes on or before May 14, 2021. For additional information, see Part II, Item 5. Other Information.

Prior to the adoption of ASU 2020-06, we separated the Atairos Notes into their liability and equity components. The liability was initially calculated by measuring the fair value of a similar liability without an associated conversion feature. The difference between the principal amount of the Atairos Notes and the liability component was recognized in equity, effectively resulting in a debt discount. We incurred transaction costs of $6.8 million related to the issuance of the Atairos Notes. Transaction costs attributable to the liability component of $4.8 million were also recorded as a debt discount in the condensed consolidated balance sheets. The debt discount was amortized to interest expense over the term of the Atairos Notes. Together with the cash interest, this resulted in an effective interest rate of 9.75%. Transaction costs attributable to the equity component of $2.0 million were recorded in stockholders' equity as a reduction of the equity component.

Following the adoption of ASU 2020-06, the previously bifurcated equity component of our Atairos Notes was recombined with the liability component, resulting in a single liability-classified instrument. The carrying value of the Atairos Notes at transition was determined by recalculating the basis of the notes as if the conversion option had not been bifurcated at issuance. Transaction costs related to the issuance of the Atairos Notes that were allocated to the equity component were reclassified out of Additional paid-in-capital and the amortization and the related debt discount associated with these costs was recalculated through the transition date. The transaction costs continue to be recorded as a debt discount in the condensed consolidated balance sheets and are amortized to interest expense over the remaining term of the Atairos Notes. Together with the cash interest, this results in an effective interest rate of 3.76%. As a result of adopting ASU 2020-06, we recorded a $67.0 million net reduction to additional paid-in capital, $19.0 million increase to non-current liabilities and a $48.0 million reduction to our opening accumulated deficit as of January 1, 2021 related to the Atairos Notes. See Note 12, Income (Loss) Per Share, for additional information on the effect on diluted per-share amounts.

The carrying amount of the Atairos Notes consisted of the following as of March 31, 2021 and December 31, 2020 (in thousands):

	March 31, 2021		December 31, 2020
Liability component:
Principal amount	$	250,000	$	250,000
Less: debt discount - transaction costs	(1,239)		(1,459)
Less: debt discount - equity	—		(19,051)
Net carrying amount of liability component	$	248,761	$	229,490
Net carrying amount of equity component	$	—	$	67,014

We classified the fair value of the Atairos Notes as a Level 3 measurement due to the lack of observable market data over fair value inputs such as our stock price volatility over the term of the Atairos Notes and our cost of debt. The estimated fair value of the Atairos Notes as of March 31, 2021 and December 31, 2020 was $262.2 million and $263.3 million, and was determined using a lattice model.

As of March 31, 2021, the remaining term of the Atairos Notes is approximately 1 year. During the three months ended March 31, 2021 and 2020, we recognized interest costs on the Atairos Notes as follows (in thousands):

	Three Months Ended March 31,
	2021		2020
Contractual interest (3.25% of the principal amount per annum)	$	2,032	$	2,032
Amortization of debt discount	303		3,516
Total	$	2,335	$	5,548

Note Hedges and Warrants

In May 2016, we purchased convertible note hedges with respect to our common stock for a cost of $59.1 million from certain bank counterparties. The convertible note hedges provide us with the right to purchase up to 2.3 million shares of our common stock at an initial strike price of $108.00 per share, which corresponds to the initial conversion price of the Atairos Notes, and are exercisable upon conversion of the Atairos Notes. The convertible note hedges are intended to reduce the potential economic dilution upon conversion of the Atairos Notes. The convertible note hedges are separate transactions and are not part of the terms of the Atairos Notes. Holders of the Atairos Notes do not have any rights with respect to the convertible note hedges.

In May 2016, we 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 2.3 million shares of our common stock at a strike price of $170.00 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 Atairos Notes or convertible note hedges. Holders of the Atairos 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, 2021 and December 31, 2020. 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 Atairos Notes, while the proceeds received from the warrants are not taxable. In connection with the repurchase of the Atairos Notes, we intend to unwind the related note hedge and warrants.

Under the if-converted method, the shares of common stock underlying the conversion option in the Atairos Notes are included in the diluted earnings per share denominator and the interest expense and amortization of the transaction costs on the Atairos Notes, net of tax, is added to the numerator. 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 Atairos Notes and to effectively increase the overall conversion price from $108.00 to $170.00 per share.

1.125% Convertible Senior Notes due 2026

In March 2021, we issued $200.0 million aggregate principal amount of convertible senior notes due 2026 (the "2026 Notes") in a private offering to qualified institutional buyers. The net proceeds from this offering were $193.0 million. The 2026 Notes bear interest at a rate of 1.125% per annum, payable semiannually in arrears on March 15 and September 15 of each year, beginning on September 15, 2021. The 2026 Notes will mature on March 15, 2026, subject to earlier repurchase, redemption or conversion.

We used $23.8 million of the net proceeds from the offering to pay the cost of certain related capped call transactions, and intend to use the remaining net proceeds, together with cash on hand, to repay or repurchase, the Atairos Notes. As of March 31, 2021, the remaining net proceeds from this offering and related transactions of $169.8 million is presented in Restricted cash in our condensed consolidated balance sheets. The use of the net proceeds from the offering is subject to the terms of our second amendment to the revolving credit agreement, as described in the Revolving Credit Agreement section below.

In April 2021, we issued an additional $30.0 million aggregate principal amount of 2026 Notes following the exercise by the initial purchasers of their option to purchase additional 2026 Notes, and we entered into additional capped call transactions in connection therewith. The net proceeds from the sale of the additional 2026 Notes were $29.1 million. We used $3.6 million of the net proceeds to pay the cost of the additional capped call transactions and intend to use the remainder of the net proceeds from the over-allotment option to repay or repurchase the Atairos Notes.

Each $1,000 of principal amount of the 2026 Notes initially is convertible into 14.6800 shares of common stock, which is equivalent to an initial conversion price of $68.12 per share, subject to adjustment upon the occurrence of specified events. In addition, upon the occurrence of a make-whole fundamental change (as defined in the Indenture governing the 2026 Notes) or if we issue a notice of redemption, we will, in certain circumstances, increase the conversion rate by a number of additional shares for a holder that elects to convert its 2026 Notes in connection with such make-whole fundamental change or redemption.

Upon conversion, we can elect to settle the conversion value in cash, shares of our common stock, or any combination of cash and shares of our common stock. Subject to certain conditions, holders of the 2026 Notes may convert the 2026 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, we 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. Based on the closing price of the common stock of $50.55 as of March 31, 2021, the if-converted value of the 2026 Notes was less than the principal amount.

Certain conditions apply to the conversion by holders and redemption by us of the 2026 Notes, which are set forth in the Indenture governing the 2026 Notes. In addition, upon the occurrence of a fundamental change (as defined in the Indenture) prior to the maturity date, holders may require us to repurchase all or a portion of the 2026 Notes for cash.

The 2026 Notes are our senior unsecured obligations and will rank senior in right of payment to any of our indebtedness that is expressly subordinated in right of payment to the 2026 Notes; equal in right of payment to any of our unsecured indebtedness that is not so subordinated; effectively junior in right of payment to any of our secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities of current or future subsidiaries (including trade payables).

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 2026 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 2026 Notes and any accrued and unpaid interest would automatically become immediately due and payable.

We account for the 2026 Notes as a single liability-classified instrument measured at amortized cost due to the adoption of ASU 2020-06. The carrying value of the 2026 Notes was determined by deducting transaction costs incurred in connection with the issuance of the 2026 Notes of $6.8 million from the principal amount. Those transaction costs were recorded as a debt discount in the condensed consolidated balance sheets and are amortized to interest expense. Together with the cash interest, this results in an effective interest rate of 1.84% over the term of the 2026 Notes. We have presented the 2026 Notes in non-current liabilities in the accompanying condensed consolidated balance sheets.

The carrying amount of the 2026 Notes consisted of the following as of March 31, 2021 (in thousands):

	March 31, 2021
Principal amount	$	200,000
Less: debt discount	(6,765)
Net carrying amount of liability	$	193,235

We classified the fair value of the 2026 Notes as a Level 3 measurement due to the lack of observable market data over fair value inputs such as our stock price volatility over the term of the 2026 Notes and our cost of debt. The estimated fair value of the 2026 Notes as of March 31, 2021 was $205.4 million and was determined using a lattice model.

Capped Call Transactions

In March and April 2021, in connection with the offering of the 2026 Notes, we entered into privately negotiated capped call transactions with each of Barclays Bank PLC, BNP Paribas and Mizuho Markets Americas LLC. The capped call transactions cover, subject to customary adjustments, the number of shares of common stock initially underlying the 2026 Notes. The capped call transactions are expected generally to reduce potential dilution to our common stock upon any conversion of the 2026 Notes and/or offset any cash payments we are required to make in excess of the principal amount of converted notes, with such reduction and/or offset subject to a cap initially equal to $104.80 (which represents a premium of 100% over the last reported sale price of our common stock on The Nasdaq Global Select Market on March 22, 2021), subject to certain adjustments under the terms of the capped call transactions.

The capped call transactions are accounted for as freestanding derivatives and recorded at the initial fair value in additional paid-in-capital in the condensed consolidated balance sheets with no recorded subsequent change to fair value as long as they meet the criteria for equity classification.

Under the if-converted method, the shares of common stock underlying the conversion option in the 2026 Notes are included in the diluted earnings per share denominator and the interest expense and amortization of the debt discount on the 2026 Notes, net of tax, is added to the numerator. However, upon conversion, there will be minimized economic dilution from the 2026 Notes, as exercise of the capped call transactions reduces dilution

from the 2026 Notes that would have otherwise occurred when the price of our common stock exceeds the conversion price. The capped call transactions are intended to offset actual dilution from the conversion of the 2026 Notes and to effectively increase the overall conversion price from $68.12 to $104.80 per share.

Revolving Credit Agreement

In May 2019, we entered into a second amended and restated senior secured revolving credit agreement which provided for aggregate principal borrowings of up to $400.0 million (prior to the Amendments described below) and matures in May 2024.

In July 2020, we entered into an amendment to the revolving credit agreement (the "First Amendment") in order to provide us with, among other things, operational flexibility and covenant relief through the end of the first quarter of 2021 in light of the ongoing impacts of COVID-19 on our business. In addition to the covenant relief described below, the First Amendment permanently reduces borrowing capacity under our senior secured revolving credit facility from $400.0 million to $225.0 million.

In March 2021, we entered into a second amendment to the revolving credit agreement (the "Second Amendment" and the revolving credit agreement as amended, the "Amended Credit Agreement") to extend the suspension period provided by the First Amendment through the fourth quarter 2021 (the "Suspension Period"), amend and remove certain financial covenants applicable after the amended Suspension Period ends and permit the issuance of the 2026 Notes and related capped call transactions. The Second Amendment requires that the net proceeds from the 2026 Notes be used to repay or repurchase the Atairos Notes.

We deferred debt issuance costs of $3.5 million as a result of entering into the Amended Credit Agreement. Deferred debt issuance costs are included within Other non-current assets on the condensed consolidated balance sheets as of March 31, 2021 and are amortized to interest expense over the term of the respective agreement.

Pursuant to the Amendments, during the Suspension Period, we will be exempt from certain covenant restrictions, namely the requirements to maintain a maximum funded indebtedness to EBITDA ratio, and a minimum liquidity balance (including any undrawn amounts under the credit facility) of at least 70% of our accrued merchant and supplier payables balance (which covenant will apply again upon termination of the Suspension Period). Additionally, the Amendments provide that, during the Suspension Period, we will be required to maintain specified minimum quarterly EBITDA levels and to maintain a monthly minimum liquidity balance (including any undrawn amounts under the credit facility) of at least 100% of our accrued merchant and supplier payables balance for such month plus $50.0 million. The Second Amendment also permanently removes requirements (which previously only applied after the Suspension Period) that we maintain (i) a maximum senior secured indebtedness to EBITDA ratio and (ii) unrestricted cash of not less than $250 million. Finally, the Second Amendment changes the requirement to maintain a minimum fixed charge coverage ratio (which requirement applies only after the Suspension Period ends) to a requirement to maintain a minimum interest coverage ratio.

In addition, under the Amended Credit Agreement, we are subject to various covenants, including customary restrictive covenants that limit our ability to, among other things: incur additional indebtedness; make dividend and other restricted payments, including limiting the amount of our 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 related parties and other affiliates. The Amendments further restrict certain of these negative covenants during the Suspension Period, including our ability to make share repurchases, acquisitions, investments and to incur additional indebtedness and liens.

Non-compliance with the covenants under the Amended Credit Agreement may result in termination of the commitments thereunder and any then outstanding borrowings may be declared due and payable immediately. We have the right to terminate the Amended Credit Agreement or reduce the available commitments at any time.

The Amendments also increased interest rates through the end of the Suspension Period, raising the alternative base rate and Canadian prime spreads to 1.50%, the fixed rate spreads to 2.50% and the commitment fee to 0.4% on the daily amount of the unused commitments under the Amended Credit Agreement. Following the Suspension Period, the applicable spread and commitment fee will revert to pre-Amendment levels, which provides for (a) interest at a rate per annum equal to (i) an adjusted LIBO rate or (ii) a customary base rate (with loans denominated in certain currencies bearing interest at rates specific to such currencies) plus an additional margin ranging between 0.50% and 2.00% and (b) commitment fees ranging from 0.25% to 0.35% on the daily amount of unused commitments. The Amended Credit Agreement also provides for the issuance of up to $75.0 million in letters of credit, provided that the sum of outstanding borrowings and letters of credit do not exceed the maximum funding commitment of $225.0 million.

The Amended Credit Agreement is secured by substantially all of our tangible and intangible assets, including a pledge of 100% of the outstanding capital stock of substantially all of our 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 our domestic and foreign subsidiaries are guarantors under the Amended Credit Agreement.

We had $100.0 million of outstanding borrowings and $23.1 million of outstanding letters of credit as of March 31, 2021, and $200.0 million of outstanding borrowings and $20.6 million of outstanding letters of credit as of December 31, 2020 under the Amended Credit Agreement.

6. COMMITMENTS AND CONTINGENCIES

Our contractual obligations and commitments and future operating income under our operating subleases as of March 31, 2021 and through the date of this report, did not materially change from the amounts set forth in our 2020 Annual Report on Form 10-K.

Legal Matters and Other Contingencies

From time to time, we are party to various legal proceedings incident to the operation of our business. For example, we currently are involved in proceedings brought by merchants, employment and related matters, intellectual property infringement suits, customer lawsuits, stockholder claims relating to U.S. securities law, consumer class actions and suits alleging, among other things, violations of state consumer protection or privacy laws.

On April 28, 2020, an individual plaintiff filed a securities fraud class action complaint in the United States District Court for the Northern District of Illinois, and in July 2020, another individual was appointed as lead plaintiff. The lawsuit covers the time period from July 30, 2019 through February 18, 2020. The lead plaintiff alleges that Groupon and certain of its officers made materially false and/or misleading statements or omissions regarding its business, operations and prospects, specifically as it relates to reiterating its full year guidance on November 4, 2019 and the Groupon Select program. Groupon filed a motion to dismiss the complaint and, on April 28, 2021, the Court granted this motion and dismissed the complaint without prejudice. The Court provided the plaintiff with the opportunity to file a motion to seek leave to file an amended complaint. It set a deadline of May 19, 2021 for plaintiff to file this motion. We intend to continue to vigorously defend the case, which we believe to be without merit.

In addition, third parties have from time to time claimed, and others may claim in the future, that we have infringed their intellectual property rights. We are subject to intellectual property disputes, including patent infringement claims, and expect that we will continue to be subject to intellectual property infringement claims as our services expand in scope and complexity. In the past, we have litigated such claims, and we are presently involved in several patent infringement and other intellectual property-related claims, including pending litigation or trademark disputes relating to, for example, our Goods category, some of which could involve potentially substantial claims for damages or injunctive relief. We may also become more vulnerable to third-party claims as laws such as the Digital Millennium Copyright Act are interpreted by the courts, and we become subject to laws in jurisdictions where the underlying laws with respect to the potential liability of online intermediaries are either unclear or less favorable. We believe that additional lawsuits alleging that we have violated patent, copyright or

trademark laws may be filed against us. Intellectual property claims, whether meritorious or not, are time consuming and often costly to resolve, could require expensive changes in our methods of doing business or the goods we sell, or could require us to enter into costly royalty or licensing agreements.

We also are 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 us to change our business practices, sometimes in expensive ways.

We are also subject to, or in the future may become subject to, a variety of regulatory inquiries, audits, and investigations across the jurisdictions where we conduct our 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 us, 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 us to change our business practices in expensive ways, require significant amounts of management time, result in the diversion of significant operational resources, materially damage our brand or reputation, or otherwise harm our business.

We establish 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, we believe that the amount of reasonably possible losses in excess of the amounts accrued for those matters would not have a material adverse effect on our business, condensed consolidated financial position, results of operations or cash flows. Our 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 us because of defense and settlement costs, diversion of management resources and other factors.

Indemnifications

In connection with the disposition of our operations in Latin America in 2017, we recorded $5.4 million in indemnification liabilities for certain tax and other matters upon the closing of the transactions as an adjustment to the net loss on the dispositions within discontinued operations at their fair value. We estimated the indemnification liabilities using a probability-weighted expected cash flow approach. Our remaining indemnification liabilities were $2.8 million as of March 31, 2021. We estimate that the total amount of obligations that are reasonably possible to arise under the indemnifications in excess of amounts accrued as of March 31, 2021 is approximately $11.7 million.

In the normal course of business to facilitate transactions related to our operations, we indemnify certain parties, including employees, lessors, service providers, merchants, and counterparties to investment agreements and asset and stock purchase agreements with respect to various matters. We have 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. We are also subject to increased exposure to various claims as a result of our divestitures and acquisitions, particularly in cases where we are entering into new businesses in connection with such acquisitions. We may also become more vulnerable to claims as we expand the range and scope of our services and are subject to laws in jurisdictions where the underlying laws with respect to potential liability are either unclear or less favorable. In addition, we have entered into indemnification agreements with our officers, directors and underwriters, and our 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 we have made under these agreements have not had a material impact on our operating results, financial position or cash flows.

7. STOCKHOLDERS' EQUITY AND COMPENSATION ARRANGEMENTS

Reverse Stock Split

On June 9, 2020, our stockholders approved amendments to our Restated Certificate of Incorporation to effect a reverse stock split of our shares of common stock, and our Board approved a final reverse stock split ratio of 1-for-20 and a corresponding reduction in the number of authorized shares of our common stock. The reverse stock split became effective on June 10, 2020. Accordingly, the number of shares, equity awards, and income (loss) per share disclosed throughout this Quarterly Report on Form 10-Q have been retrospectively adjusted to reflect the reverse stock split for all prior periods presented.

Common Stock

Pursuant to our restated certificate of incorporation, as of March 31, 2021, the Board had the authority to issue up to a total of 100,500,000 shares of common stock. Each holder of common stock is entitled to one vote per share on any matter that is submitted to a vote of stockholders. In addition, holders of our 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 us to repurchase up to $300.0 million of our common stock under our share repurchase program. During the three months ended March 31, 2021 and 2020, we did not purchase any shares under the program. As of March 31, 2021, up to $245.0 million of common stock remained available for purchase under our program. The timing and amount of share repurchases, if any, will be determined based on market conditions, limitations under the Amended Credit Agreement, share price, available cash 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"). As of March 31, 2021, 3,212,132 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 are presented within the following line items of the condensed consolidated statements of operations for the three months ended March 31, 2021 and 2020 (in thousands):

	Three Months Ended March 31,
	2021		2020
Cost of revenue	$	171	$	259
Marketing	135		874
Selling, general and administrative	6,873		12,882
Total stock-based compensation expense	$	7,179	$	14,015

We capitalized $0.9 million and $1.1 million of stock-based compensation for the three months ended March 31, 2021 and 2020 in connection with internally-developed software and cloud computing arrangements.

15

GROUPON, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Employee Stock Purchase Plan

The Groupon, Inc. 2012 Employee Stock Purchase Plan, as amended, ("ESPP") authorizes us to grant up to 1,000,000 shares of common stock under that plan as of March 31, 2021. For the three months ended March 31, 2021 and 2020, 23,418 and 28,621 shares of common stock 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 and are amortized on a straight-line basis over their requisite service period.

The table below summarizes restricted stock unit activity under the Plans for the three months ended March 31, 2021:

	Restricted Stock Units	Weighted-Average Grant Date Fair Value (per unit)
Unvested at December 31, 2020	1,853,007	$	31.91
Granted	129,827	32.87
Vested	(222,244)	27.60
Forfeited	(125,053)	32.39
Unvested at March 31, 2021	1,635,537	$	32.37

As of March 31, 2021, $31.4 million of unrecognized compensation costs related to unvested restricted stock units are expected to be recognized over a remaining weighted-average period of 0.94 years.

Performance Share Units

We grant performance share units under the Plans that vest in shares of our common stock upon the achievement of financial and operational targets specified in the respective award agreement ("Performance Share Units"). During the year ended December 31, 2019, we also granted performance share units subject to a market condition ("Market-based Performance Share Units").

Our Performance Share Units and Market-based Performance Share Units are subject to continued employment through the performance period dictated by the award and certification by the Compensation Committee that the specified performance conditions have been achieved.

The table below summarizes Performance Share Unit activity under the Plans for the three months ended March 31, 2021:

	Performance Share Units	Weighted-Average Grant Date Fair Value (per unit)		Market-based Performance Share Units	Weighted-Average Grant Date Fair Value (per unit)
Unvested at December 31, 2020	124,709	$	29.73	57,668	$	60.60
Granted (1)	41,729	15.44		—	—
Vested	(86,710)	24.36		—	—
Forfeited	(282)	69.00		—	—
Unvested at March 31, 2021	79,446	27.95		57,668	60.60
Maximum shares issuable upon vesting at March 31, 2021	79,446			57,668

(1)Performance Share Units granted during the three months ended March 31, 2021 relate to the issuance of incremental shares upon the Compensation Committee's certification of the achievement of the 2020 performance metrics.

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GROUPON, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

As of March 31, 2021, $1.0 million of unrecognized compensation costs related to unvested Performance Share Units are expected to be recognized over a remaining weighted-average period of 1.35 years. We have recognized all compensation costs related to our unvested Market-Based Performance Share Units.

8. REVENUE RECOGNITION

Refer to Note 13, Segment Information, for revenue summarized by reportable segment and category for the three months ended March 31, 2021 and 2020.

Contract Balances

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. Our deferred revenue was $8.9 million as of March 31, 2021. As of December 31, 2020, our deferred revenue was $11.2 million, which was substantially recognized during the three months ended March 31, 2021.

Customer Credits

We issue credits to customers that can be applied to future purchases through our online marketplaces. Credits are primarily issued as consideration for refunds. To a lesser extent, credits are issued for customer relationship purposes. The following table summarizes the activity in the liability for customer credits for the three months ended March 31, 2021 (in thousands):

	Customer Credits
Balance as of December 31, 2020	$	61,006
Credits issued	50,051
Credits redeemed (1)	(41,283)
Breakage revenue recognized	(6,205)
Foreign currency translation	(745)
Balance as of March 31, 2021	$	62,824

(1)Customer credits can be redeemed through our online marketplaces for goods or services provided by a third-party merchant or for merchandise inventory sold by us. 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 us, product revenue is recognized on a gross basis equal to the amount of the customer credit liability derecognized. Historically, customer credits have primarily been used within one year of issuance; however, usage patterns have been impacted from changes in customer behavior due to COVID-19.

Costs of Obtaining Contracts

Incremental costs to obtain contracts with third-party merchants, such as sales commissions, are deferred and recognized over the expected period of the merchant arrangement, generally from 12 to 18 months. Deferred contract acquisition costs are presented within the following line items of the condensed consolidated balance sheets as of March 31, 2021 and December 31, 2020 (in thousands):

	March 31, 2021		December 31, 2020
Prepaid expenses and other current assets	$	973	$	1,009
Other non-current assets	5,957		5,315

The amortization of deferred contract acquisition costs is classified within Selling, general and administrative expense in the condensed consolidated statements of operations. We amortized $2.6 million and $4.7 million of deferred contract acquisition costs during the three months ended March 31, 2021 and 2020. We did not recognize any impairments in relation to the deferred contract acquisition costs during the three months ended March 31, 2021 and 2020.

17

GROUPON, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Allowance for Expected Credit Losses on Accounts Receivable

We establish an allowance for expected credit losses on accounts receivables based on identifying the following customer risk characteristics: size, type of customer, and payment terms offered in the normal course of business. Receivables with similar risk characteristics are grouped into pools. For each pool, we consider the historical credit loss experience, current economic conditions, bankruptcy filings, published or estimated credit default rates, age of the receivable and any recoveries in assessing the lifetime expected credit losses.

The following table summarizes the activity in the allowance for expected credit losses on accounts receivables for the three months ended March 31, 2021 (in thousands):

	Allowance for Expected Credit Losses
Balance as of December 31, 2020	$	9,756
Change in provision	(244)
Write-offs	(292)
Foreign currency translation	(3)
Balance as of March 31, 2021	$	9,217

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 our online marketplaces until the customer redeems the related voucher. If the customer does not redeem a voucher with such merchant payment terms, we retain all of the gross billings for that voucher, rather than retaining only our net commission. We estimate the variable consideration from vouchers that will not ultimately be redeemed using our historical voucher redemption experience and recognize that amount as revenue at the time of sale. We apply a constraint to ensure it is probable that a significant reversal of revenue will not occur in future periods. Beginning in 2020, we increased our constraint on revenue from unredeemed vouchers to reflect ongoing uncertainty in future customer redemption behavior due to the impacts of COVID-19. If actual redemptions differ from our estimates, the effects could be material to the condensed consolidated financial statements. During the three months ended March 31, 2021, we recognized an immaterial amount of variable consideration from unredeemed vouchers that were sold in a prior period.

9. RESTRUCTURING AND RELATED CHARGES

In April 2020, the Board approved a multi-phase restructuring plan of up to $105.0 million of total pretax charges related to our previously announced strategic shift and as part of the cost cutting measures implemented in response to the impact of COVID-19 on our business. We expect to incur total pretax charges of $75.0 million to $105.0 million in connection with the restructuring actions through the end of 2021. Our restructuring plan includes workforce reductions of approximately 1,200 positions globally, the exit or discontinuation of the use of certain leases and other assets, impairments of our right-of-use and other long-lived assets, and the exit of our operations in Japan and New Zealand. In the first quarter 2021, we substantially liquidated our subsidiary in Japan and reclassified $32.2 million of cumulative foreign currency translation gains into earnings, which is presented in Other income (expense), net on the condensed consolidated statement of operations for the three months ended March 31, 2021.

The majority of our restructuring charges are expected to be paid in cash and primarily relate to employee severance and benefits expenses, facilities-related costs and professional advisory fees. We will continue to evaluate our cost structure, including additional workforce reductions, as part of our restructuring plan. Costs incurred related to the restructuring plan are classified as Restructuring and related charges on the condensed consolidated statements of operations.

18

GROUPON, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

The following table summarizes costs incurred by segment related to the restructuring plans for the three months ended March 31, 2021 (in thousands):

	Three Months Ended March 31, 2021
	Employee Severance and Benefit Costs		Legal and Advisory Costs		Lease-related Charges (Credits)		Total Restructuring Charges (Credits)
North America	$	442	$	807	$	741	$	1,990
International	6,460		(22)		(1,006)		5,432
Consolidated	$	6,902	$	785	$	(265)	$	7,422

As a part of our restructuring plan, we vacated several of our leased facilities, and many of those facilities are being actively marketed for sublease or we are in negotiations with the landlord to potentially terminate or modify those leases. Rent expense, including amortization of the right-of-use asset and accretion of the operating lease liability, sublease income and other variable lease costs related to the leased facilities vacated as part of our restructuring plan are presented within Restructuring and related charges in the condensed consolidated statements of operations. The current and non-current liabilities associated with these leases continue to be presented within Other current liabilities and Operating lease obligations in the condensed consolidated balance sheets.

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

	Employee Severance and Benefit Costs		Other Exit Costs		Total
Balance as of December 31, 2019 (1)	$	699	$	—	$	699
Charges payable in cash (2)	36,266		2,137		38,403
Cash payments	(25,328)		(1,289)		(26,617)
Foreign currency translation	1,660		(14)		1,646
Balance as of December 31, 2020	13,297		834		14,131
Charges payable in cash	6,902		785		7,687
Cash payments	(2,431)		(812)		(3,243)
Foreign currency translation	(570)		—		(570)
Balance as of March 31, 2021	$	17,198	$	807	$	18,005

(1)Amounts included in the year ended December 31, 2019 are related to prior restructuring plans and the liabilities under those plans have been substantially settled.

(2)Excludes stock-based compensation of $1.7 million related to accelerated vesting of stock-based compensation awards for certain employees terminated as a result of our restructuring activities.

10. INCOME TAXES

Our income tax provision for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items.

Provision (benefit) for income taxes and income (loss) from continuing operations before provision (benefit) for income taxes for the three months ended March 31, 2021 and 2020 was as follows (in thousands):

	Three Months Ended March 31,
	2021		2020
Provision (benefit) for income taxes	$	2,427	$	(5,988)
Income (loss) from continuing operations before provision (benefit) for income taxes	16,875		(216,848)

Our U.S. Federal income tax rate is 21%. The effective tax rate for the three months ended March 31, 2021 was lower than the U.S. statutory federal income tax rate due to the benefit of non-taxable items and the U.S. research and development tax credit. The three months ended March 31, 2021 and 2020 were also impacted

by the pretax losses incurred in jurisdictions that have valuation allowances against their net deferred tax assets. The three months ended March 31, 2020 was impacted by the reversals of reserves for uncertain tax positions due to the closure of tax audits and by the carryback of federal net operating losses due to the income tax relief provided by the CARES Act. 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.

We are 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 and completion of those audits. We are subject to claims for tax assessments by foreign jurisdictions, including a proposed assessment for $122.4 million, inclusive of estimated incremental interest from the original assessment. We believe that the assessment, which primarily relates to transfer pricing on transactions occurring in 2011, is without merit and we intend to vigorously defend ourselves in that matter. In addition to any potential increases in our liabilities for uncertain tax positions from the ultimate resolution of that assessment, we believe that it is reasonably possible that reductions of up to $3.4 million in unrecognized tax benefits may occur within the 12 months following March 31, 2021 upon closing of income tax audits or the expiration of applicable statutes of limitations.

In general, it is our practice and intention to reinvest the earnings of our non-U.S. subsidiaries in those operations. Additionally, while we did not incur the deemed repatriation tax, 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, 2021 and December 31, 2020 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.

11. 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.

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

Fair value option investments and available-for-sale securities. We have fair value option investments and available-for-sale securities that we measure using the income approach. We have classified these investments as Level 3 due to the lack of observable market data over fair value inputs such as cash flow projections and discount rates.

Contingent consideration. During the three months ended March 31, 2021, we settled a contingent consideration arrangement to the former owners of a business acquired in 2018. We use the income approach to value contingent consideration obligations based on future financial performance. We have classified our contingent consideration as Level 3 due to the lack of relevant observable market data over fair value inputs such as probability-weighting of payment outcomes.

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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, 2021 and 2020 (in thousands):

	Three Months Ended March 31,
	2021		2020
Assets
Fair value option investments:
Beginning Balance	$	—	$	1,405
Total gains (losses) included in earnings	—		(1,405)
Ending Balance	$	—	$	—
Unrealized gains (losses) still held (1)	$	—	$	(1,405)
Liabilities
Contingent Consideration:
Beginning Balance	$	326	$	1,298
Settlements of contingent consideration liabilities	(393)		—
Total losses (gains) included in earnings	—		4
Foreign currency translation	67		(83)
Ending Balance	$	—	$	1,219
Unrealized gains (losses) still held (1)	$	—	$	4

(1)Represents the unrealized gains or losses 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.

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 or increased due to an observable price change in an orderly transaction.

We recognized $109.5 million in non-cash impairment charges related to goodwill and $22.4 million in non-cash impairment charges related to long-lived assets during the three months ended March 31, 2020. See Note 2, Goodwill and Long-Lived Assets, for additional information.

We recognized $6.7 million in impairment charges related to an other equity method investment during the three months ended March 31, 2020. See Note 3, Investments, for additional information.

We did not record any other significant nonrecurring fair value measurements after initial recognition for the three months ended March 31, 2021 and 2020.

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

Our financial instruments not carried at fair value consist primarily of accounts receivable, restricted cash, short-term borrowings, accounts payable, accrued merchant and supplier payables and accrued expenses. The carrying values of those assets and liabilities approximate their respective fair values as of March 31, 2021 and December 31, 2020 due to their short-term nature.

12. 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, 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 using the treasury stock method, except for the convertible senior

20

GROUPON, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

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, 2021 and 2020 (in thousands, except share amounts and per share amounts):

	Three Months Ended March 31,
	2021		2020
Basic and diluted net income (loss) per share:
Numerator
Net income (loss) - continuing operations	$	14,448	$	(210,860)
Less: Net income (loss) attributable to noncontrolling interests	(110)		3,044
Basic net income (loss) attributable to common stockholders - continuing operations	14,558		(213,904)
Net income (loss) attributable to common stockholders - discontinued operations	—		382
Basic net income (loss) attributable to common stockholders	$	14,558	$	(213,522)
Add: Effect of assumed conversion of convertible senior notes due 2026, net of tax (1)	$	72	$	—
Diluted net income (loss) attributable to common stockholders - continuing operations	14,630		(213,904)
Net income (loss) attributable to common stockholders - discontinued operations	—		382
Diluted net income (loss) attributable to common stockholders	$	14,630	$	(213,522)
Denominator
Shares used in computation of basic net income (loss) per share	29,028,489		28,365,216
Weighted-average effect of diluted securities
Restricted stock units	931,922		—
Performance share units and other stock-based compensation awards	109,419		—
Convertible senior notes due 2026 (1)	195,733		—
Shares used in computation of diluted net income (loss) per share	30,265,563		28,365,216
Basic net income (loss) per share:
Continuing operations	$	0.50	$	(7.54)
Discontinued operations	—		0.01
Basic net income (loss) per share	$	0.50	$	(7.53)
Diluted net income (loss) per share:
Continuing operations	$	0.48	$	(7.54)
Discontinued operations	—		0.01
Diluted net income (loss) per share	$	0.48	$	(7.53)

(1)We apply the if-converted method in computing the effect of our convertible senior notes on diluted net income (loss) per share, whereby the numerator of our diluted net income (loss) per share computations are adjusted for interest expense, net of tax, and the denominator is adjusted for the number shares into which the convertible senior notes could be converted. The effect is only included in the calculation of earnings per share for those instruments for which it would reduce earnings per share. Beginning January 1, 2021, the interest expense, net of tax, included in the numerator adjustment is calculated in accordance with ASU 2020-06, while prior period interest expense, net of tax, included in the numerator adjustment continues to be calculated in accordance with the historical policies and remains unchanged. See Note 5, Financing Arrangements, for additional information.

21

GROUPON, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

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,
	2021	2020
Restricted stock units	172,015	1,657,810
Performance share units and other stock-based compensation awards	—	279,243
Convertible senior notes due 2022 (1)	2,314,815	2,314,815
Warrants	2,314,815	2,314,815
Capped call transactions	195,733	—
Total	4,997,378	6,566,683

(1)We apply the if-converted method in computing the effect of our convertible senior notes on diluted net income (loss) per share, whereby the numerator of our diluted net income (loss) per share computations are adjusted for interest expense, net of tax, and the denominator is adjusted for the number shares into which the convertible senior notes could be converted. The effect is only included in the calculation of earnings per share for those instruments for which it would reduce earnings per share. See Note 5, Financing Arrangements, for additional information.

We had outstanding Market-based Performance share units as of March 31, 2021 and 2020 that were eligible to vest into shares of common stock subject to the achievement of specified performance or market 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. As of March 31, 2021, there were up to 57,668 shares of common stock issuable upon vesting of outstanding Market-based Performance Share Units that were excluded from the table above as the performance or market conditions were not satisfied as of the end of the period.

22

GROUPON, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

13. SEGMENT INFORMATION

The segment information reported in the tables below reflects the operating results that are regularly reviewed by our chief operating decision maker to assess performance and make resource allocation decisions. Our operations are organized into two segments: North America and International. Our measure of segment profitability is contribution profit, defined as gross profit less marketing expense, which is consistent with how management reviews the operating results of the segments. Contribution profit measures the amount of marketing investment needed to generate gross profit. Other operating expenses are excluded from contribution profit as management does not review those expenses by segment.

The following table summarizes revenue by reportable segment and category for the three months ended March 31, 2021 and 2020 (in thousands):

	Three Months Ended March 31,
	2021		2020
North America
Service revenue:
Local	$	125,374	$	142,660
Goods	15,285		3,745
Travel	5,959		6,449
Total service revenue	146,618		152,854
Product revenue - Goods	626		82,275
Total North America revenue (1)	147,244		235,129
International
Service revenue:
Local	23,189		48,668
Goods	1,970		2,233
Travel	847		3,273
Total service revenue	26,006		54,174
Product revenue - Goods	90,567		84,847
Total International revenue (1)	$	116,573	$	139,021

(1)North America includes revenue from the United States of $145.0 million and $230.9 million for the three months ended March 31, 2021 and 2020. International includes revenue from the United Kingdom and France of $42.1 million and $28.5 million for the three months ended March 31, 2021, and United Kingdom of $49.5 million for the three months ended March 31, 2020. There were no other individual countries that represented more than 10% of consolidated total revenue for the three months ended March 31, 2021 and 2020. Revenue is attributed to individual countries based on the location of the customer.

23

GROUPON, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

The following table summarizes gross profit by reportable segment and category for the three months ended March 31, 2021 and 2020 (in thousands):

	Three Months Ended March 31,
	2021		2020
North America
Service gross profit:
Local	$	112,426	$	123,859
Goods	13,056		3,008
Travel	4,718		3,962
Total service gross profit	130,200		130,829
Product gross profit - Goods	168		12,942
Total North America gross profit	130,368		143,771
International
Service gross profit:
Local	21,427		44,524
Goods	1,859		2,016
Travel	713		2,744
Total service gross profit	23,999		49,284
Product gross profit - Goods	12,616		8,192
Total International gross profit	$	36,615	$	57,476

24

GROUPON, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

The following table summarizes contribution profit by reportable segment for the three months ended March 31, 2021 and 2020 (in thousands):

	Three Months Ended March 31,
	2021		2020
North America
Gross profit	$	130,368	$	143,771
Marketing	22,768		39,409
Contribution profit	107,600		104,362
International
Gross profit	36,615		57,476
Marketing	10,898		20,721
Contribution profit	25,717		36,755
Consolidated
Gross profit	166,983		201,247
Marketing	33,666		60,130
Contribution profit	133,317		141,117
Selling, general and administrative	127,143		207,135
Goodwill impairment	—		109,486
Long-lived asset impairment	—		22,351
Restructuring and related charges	7,422		6
Income (loss) from operations	$	(1,248)	$	(197,861)

The following table summarizes total assets by reportable segment as of March 31, 2021 and December 31, 2020 (in thousands):

	March 31, 2021		December 31, 2020
Total assets:
North America (1)	$	1,056,466	$	971,110
International (1)	345,571		440,397
Consolidated total assets	$	1,402,037	$	1,411,507

(1)North America contains assets from the United States of $1,032.9 million and $948.1 million as of March 31, 2021 and December 31, 2020. International contained assets from Switzerland of $151.7 million as of December 31, 2020. There were no other individual countries that represented more than 10% of consolidated total assets as of March 31, 2021 and December 31, 2020.

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GROUPON, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

14. SUBSEQUENT EVENTS

In April 2021, we issued an additional $30.0 million aggregate principal amount of 2026 Notes following the exercise by the initial purchasers of their option to purchase additional 2026 Notes, and we entered into additional capped call transactions in connection therewith. See Note 5, Financing Arrangements, for additional information.

In May 2021, we entered into an agreement with AGH to repurchase the Atairos Notes on or before May 14, 2021 for a purchase price equal to the $250.0 million outstanding principal amount of the Atairos Notes, any accrued and unpaid interest through the repurchase date, and $4.0 million of cash consideration. Funds for the repurchase, excluding any interest, are expected to come from the following (in millions):

Restricted cash held as of March 31, 2021	$	169.8
Additional net proceeds from 2026 Notes issued in April 2021	25.5
Unrestricted cash	58.7

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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 Part II, Item 1A, Risk Factors, and elsewhere in this Quarterly Report. See Part I, Financial Information, Forward-Looking Statements, for additional information.

Overview

Groupon is a global scaled two-sided marketplace that connects consumers to merchants. Consumers access our marketplace through our mobile applications and our websites, primarily localized groupon.com sites in many countries. We operate in two segments, North America and International, and operate in three categories, Local, Goods and Travel. See Item 1, Note 13, Segment Information, for additional information.

Currently, we generate product and service revenue from the following business operations.

Service Revenue from Local, Travel, and Goods Categories: Service revenue primarily represents the net commissions earned from selling goods or services on behalf of third-party merchants. Service revenue 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 also earn commissions when customers make purchases with retailers using digital coupons listed on our localized groupon.com sites.

Product Revenue from Goods Category: We generate product revenue from sales of our first-party Goods merchandise inventory. For product revenue transactions, we are the primary party responsible for providing the merchandise to the customer, we have inventory risk and we have 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 the merchandise is delivered to the customer. During 2020, we transitioned to a third-party marketplace in North America and we plan to begin the transition to a third-party marketplace in International in the second quarter 2021. In a third-party marketplace model, our merchants generally assume inventory and refund risk, and as such our Goods category will primarily generate revenue on a net basis following our transition.

Strategy

Our mission is to be the destination for experiences where consumers discover fun things to do and local businesses thrive. Our strategic priorities are to expand our Local inventory and modernize our marketplace by improving the merchant and customer experiences. While both of these are important to building a successful marketplace, in the immediate term, we believe the most critical of these is expanding Local inventory.

To validate our strategic priority to expand Local inventory, in mid-2020, we launched a test in four markets in North America to determine if growing inventory would result in improved gross billings and unit performance. To grow Local supply, we are focused on leveraging three types of inventory: Deals with fewer restrictions, a new lower discount inventory product called Offers, and Market Rate supply. At the conclusion of our test we determined that we reached our test goals, and we intend to scale elements of our inventory strategy more broadly throughout our marketplace in 2021. In North America, we have begun scaling the removal of Deal repeat purchase restrictions to all merchants and the launch of Offers to Beauty & Wellness merchants.

To support our strategic priority of improving the merchant and customer experience, we are reducing friction and making it easier for our customers to find, buy, and redeem a Groupon. In April 2021, we started to roll out a new customer experience to North America app and mobile web users, which we believe will drive engagement, conversion, and customer purchase frequency. On the merchant side, we are continuing to build out tools that will help us be a better partner to our merchants, including our self-service tool, advertising products and booking tool features.

COVID-19, Restructuring and Cost Reduction

Since March 2020, the COVID-19 pandemic has led to a significant decrease in consumer demand, a decrease in customer redemptions and elevated refund levels due to changes in consumer behavior and actions taken by governments to control the spread of COVID-19, including quarantines, travel restrictions, as well as business restrictions and shutdowns. The COVID-19 pandemic has had an adverse impact on our financial condition, results of operations and cash flows, which included impairments of our goodwill and long-lived assets in 2020.

In April 2020, the Board approved a multi-phase restructuring plan related to our previously announced strategic shift and as part of the cost cutting measures implemented in response to the impact of COVID-19 on our business. We expect to incur total pre-tax charges of $75.0 million to $105.0 million in connection with our restructuring plan through the end of 2021. Once fully implemented, we expect our restructuring plan to result in $225.0 million in annualized cost savings. During the three months ended March 31, 2021, we recorded $7.4 million in pre-tax charges in connection with our restructuring actions. See Note 9, Restructuring and Related Charges, for additional information.

In March 2021, we entered into the Amended Credit Agreement to extend covenant relief through the fourth quarter 2021 and we issued $200.0 million of convertible notes. See Note 5, Financing Arrangements, for additional information. We plan to continue to actively manage and optimize our cash balances and liquidity, working capital and operating expenses, although there can be no assurances that we will be able to do so.

Recovery from the COVID-19 pandemic could be volatile and prolonged given the unprecedented and continuously evolving nature of the situation. The future impact of COVID-19 on our business, results of operations, financial condition and liquidity is highly uncertain and will ultimately depend on future developments, including the magnitude and duration of the pandemic, the protective measures taken to reduce its spread, and the vaccine supply and demand. We continue to monitor the impact of COVID-19 on our business, including the developing situation in India, where we operate a shared service center.

How We Measure Our Business

We use several operating and financial 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 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.

Operating Metrics

•Gross billings is the total dollar value of customer purchases of goods and services. Gross billings is presented net of customer refunds, order discounts and sales and related taxes. The substantial majority of our service revenue transactions are comprised of 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. For these 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. Gross billings is an 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. However, we are focused on achieving long-term gross profit and Adjusted EBITDA growth.

•Units are the number of purchases during the reporting period, before refunds and cancellations, made either through one of our online marketplaces, a third-party marketplace, or directly with a merchant for which we earn a commission. We do not include purchases with retailers using digital coupons accessed through our websites and mobile applications in our units metric. We consider units to be an important

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indicator of the total volume of business conducted through our marketplaces. We report units on a gross basis prior to the consideration of customer refunds and therefore units are not always a good proxy for gross billings.

•Active customers are 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. We do not include consumers who solely make purchases with retailers using digital coupons accessed through our websites and mobile applications in our active customer metric, nor do we include consumers who solely make purchases of our inventory through third-party marketplaces with which we partner.

Our gross billings, units, and TTM active customers for the three months ended March 31, 2021 and 2020 were as follows (in thousands):

	Three Months Ended March 31,
	2021		2020
Gross billings	$	553,972	$	806,399
Units	17,803		29,766
TTM Active Customers	25,754		41,837

Financial Metrics

•Revenue is currently earned through product and service revenue transactions. We earn service revenue from transactions in which we generate commissions by selling goods or services on behalf of third-party merchants. Service revenue from those transactions is reported on a net basis as the purchase price collected from the customer for the offering less an agreed upon portion of the purchase price paid to the third-party merchant. Service revenue also includes commissions we earn when customers make purchases with retailers using digital coupons accessed through our digital properties. We generate product revenue from our sales of first-party Goods inventory. Our product revenue from these first-party transactions, which are direct sales of merchandise inventory, is the purchase price received from the customer. During 2020, we transitioned to a third-party marketplace in North America and we plan to begin to transition to a third-party marketplace in International in the second quarter 2021. Following the International transition, we expect our Goods category to primarily generate revenue on a net basis within service revenue.

•Gross profit reflects the net margin we earn 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 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 net income (loss) from continuing operations, refer to our discussion under Non-GAAP Financial Measures in the Results of Operations section.

•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. 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.

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The following table presents the above financial metrics for the three months ended March 31, 2021 and 2020 (in thousands):

	Three Months Ended March 31,
	2021		2020
Revenue	$	263,817	$	374,150
Gross profit	166,983		201,247
Adjusted EBITDA	30,372		(22,464)
Free cash flow	(58,445)		(247,004)

Operating Expenses

•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 have offerings from 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 performance.

•Selling, general and administrative ("SG&A") expenses include selling expenses such as 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 SG&A expense as a percentage of gross profit because it gives us an indication of our operating efficiency.

•Restructuring and related charges represent severance and benefit costs for workforce reductions, impairments and other facilities-related costs and professional advisory fees. See Note 9, Restructuring and Related Charges, for additional information about our restructuring plan.

Factors Affecting Our Performance

Impact of COVID-19. During the COVID-19 pandemic, actions taken by governments to control the spread of COVID-19, and changes in consumer behavior have had a negative impact on our business, which relies on customers' purchases of local experiences, including events and activities, beauty and wellness, travel and dining. Recovery from the COVID-19 pandemic could be volatile and prolonged given the unprecedented and continuously evolving nature of the situation. We continue to monitor the impact of COVID-19 on our business, particularly in our International segment where restrictions have been more prolonged and stricter than in North America, surges in virus cases continue to occur and the vaccination rollout has been slower. We also continue to monitor the developing situation in India, where we operate a shared service center.

Attracting and retaining local merchants. As we focus on our local experiences marketplace, we depend on our ability to attract and retain merchants who are willing to offer their experiences on our platform. Merchants can generally withdraw their offerings from our marketplace at any time, and their willingness to continue offering services through our marketplace depends on the effectiveness of our marketing and promotional services. Since the widespread economic impacts of COVID-19 began in March 2020, we are prioritizing opportunities to help drive demand for our merchants and highlighting offers that customers can enjoy right now. As we continue to navigate through the volatility of the COVID-19 recovery period, we intend to take a market-by-market approach to attracting and retaining local merchants.

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Driving purchase frequency and re-engaging and retaining customers. In light of significant declines in consumer demand for local and travel services due to COVID-19, we must highlight offers that customers can enjoy right now in order to drive purchase frequency and retain customers. This includes surfacing the relevant Local inventory in each market depending on the government restrictions currently in place and continuing to leverage our Goods category in the near-term. We also must continue to focus on expanding inventory through our three inventory products - Deals with fewer restrictions, Offers, and Market Rate. On the customer experience side, we must continue to improve our websites and mobile applications; launch innovative products that remove friction from the customer journey and drive awareness to our supply; and grow our high-quality, bookable inventory.

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Results of Operations

North America

Operating Metrics

North America segment gross billings, units, and TTM active customers for the three months ended March 31, 2021 and 2020 were as follows (in thousands):

	Three Months Ended March 31,
	2021		2020		% Change
Gross billings
Service gross billings:
Local	$	281,296	$	392,609	(28.4)	%
Goods	69,142		18,119		281.6
Travel	31,460		33,660		(6.5)
Total service gross billings	381,898		444,388		(14.1)
Product gross billings - Goods	626		82,275		(99.2)
Total gross billings	$	382,524	$	526,663	(27.4)
Units
Local	8,266		14,132		(41.5)	%
Goods	3,081		3,742		(17.7)
Travel	193		312		(38.1)
Total units	11,540		18,186		(36.5)
TTM Active customers	15,204		25,340		(40.0)	%

Comparison of the Three Months Ended March 31, 2021 and 2020:

North America gross billings and units declined by $144.1 million and 6.6 million for the three months ended March 31, 2021. TTM active customers declined by 10.1 million for the three months ended March 31, 2021. These declines were primarily due to the significant decrease in consumer demand due to changes in consumer behavior and actions taken by governments to control the spread of COVID-19, including quarantines and travel restrictions, as well as business restrictions and shutdowns. These declines were partially offset by a shift in mix to higher-priced offerings.

North America units and gross billings declined in January and February 2021 compared with the prior year, and increased in March 2021 due to the timing of the onset of the pandemic in March 2020.

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Financial Metrics

North America segment revenue, cost of revenue and gross profit for the three months ended March 31, 2021 and 2020 were as follows (dollars in thousands):

	Three Months Ended March 31,
	2021			2020			% Change
Revenue
Service revenue
Local	$	125,374		$	142,660		(12.1)	%
Goods	15,285			3,745			308.1
Travel	5,959			6,449			(7.6)
Total service revenue	146,618			152,854			(4.1)
Product revenue - Goods	626			82,275			(99.2)
Total revenue	$	147,244		$	235,129		(37.4)
Cost of revenue
Service cost of revenue
Local	$	12,948		$	18,801		(31.1)	%
Goods	2,229			737			202.4
Travel	1,241			2,487			(50.1)
Total service cost of revenue	16,418			22,025			(25.5)
Product cost of revenue - Goods	458			69,333			(99.3)
Total cost of revenue	$	16,876		$	91,358		(81.5)
Gross profit
Service gross profit
Local	$	112,426		$	123,859		(9.2)	%
Goods	13,056			3,008			334.0
Travel	4,718			3,962			19.1
Total service gross profit	130,200			130,829			(0.5)
Product gross profit - Goods	168			12,942			(98.7)
Total gross profit	$	130,368		$	143,771		(9.3)
Service margin (1)	38.4		%	34.4		%
% of Consolidated revenue	55.8		%	62.8		%
% of Consolidated cost of revenue	17.4			52.8
% of Consolidated gross profit	78.1			71.4

(1)     Represents the percentage of service gross billings that we retained after deducting the merchant's share from revenue.

Comparison of the Three Months Ended March 31, 2021 and 2020:

North America revenue and gross profit decreased by $87.9 million and $13.4 million for the three months ended March 31, 2021. Those decreases were primarily driven by a decline in gross billings and transaction volume due to the impacts of COVID-19. Revenue also declined due to the transition of Goods to a third party marketplace model. In a third-party marketplace model, we generate service revenue which is presented on a net basis.

Cost of revenue decreased by $74.5 million for the three months ended March 31, 2021 primarily due to the impacts of the transition of Goods to a third-party marketplace model.

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Marketing and Contribution Profit

We define contribution profit as gross profit less marketing expense. North America contribution profit for the three months ended March 31, 2021 and 2020 was as follows (dollars in thousands):

	Three Months Ended March 31,
	2021			2020			% Change
Marketing	$	22,768		$	39,409		(42.2)	%
% of Gross profit:	17.5		%	27.4		%
Contribution profit	$	107,600		$	104,362		3.1%

Comparison of the Three Months Ended March 31, 2021 and 2020:

North America marketing expense and marketing expense as a percentage of gross profit declined for the three months ended March 31, 2021 due to accelerated traffic declines, significantly shortened payback thresholds and lower investment in our offline marketing and brand spend in light of COVID-19.

The increase in our North America contribution profit for the three months ended March 31, 2021 was primarily attributable to a $16.6 million decrease in marketing, partially offset by a decrease in gross profit.

International

Operating Metrics

International segment gross billings, units, and TTM active customers for the three months ended March 31, 2021 and 2020 were as follows (in thousands):

	Three Months Ended March 31,
	2021		2020		% Change
Gross billings
Service gross billings:
Local	$	69,674	$	157,401	(55.7)	%
Goods	7,748		10,657		(27.3)
Travel	3,459		26,831		(87.1)
Total service gross billings	80,881		194,889		(58.5)
Product gross billings - Goods	90,567		84,847		6.7
Total gross billings	$	171,448	$	279,736	(38.7)
Units
Local	2,091		6,844		(69.4)	%
Goods	4,121		4,487		(8.2)
Travel	51		249		(79.5)
Total units	6,263		11,580		(45.9)
TTM Active customers	10,550		16,497		(36.0)	%

Comparison of the Three Months Ended March 31, 2021 and 2020:

International gross billings and units decreased by $108.3 million and 5.3 million for the three months ended March 31, 2021. TTM active customers declined by 5.9 million for the three months ended March 31, 2021. These declines were primarily due to the significant decrease in consumer demand due to changes in consumer behavior and actions taken by governments to control the spread of COVID-19, including quarantines and travel restrictions, as well as business restrictions and shutdowns. The decline in gross billings was partially offset by a $15.1 million favorable impact from year-over-year changes in foreign currency exchange rates.

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Financial Metrics

International segment revenue, cost of revenue and gross profit for the three months ended March 31, 2021 and 2020 were as follows (dollars in thousands):

	Three Months Ended March 31,
	2021			2020			% Change
Revenue
Service revenue:
Local	$	23,189		$	48,668		(52.4)	%
Goods	1,970			2,233			(11.8)
Travel	847			3,273			(74.1)
Total service revenue	26,006			54,174			(52.0)
Product revenue - Goods	90,567			84,847			6.7
Total revenue	$	116,573		$	139,021		(16.1)
Cost of revenue
Service cost of revenue:
Local	$	1,762		$	4,144		(57.5)	%
Goods	111			217			(48.8)
Travel	134			529			(74.7)
Total service revenue	2,007			4,890			(59.0)
Product cost of revenue - Goods	77,951			76,655			1.7
Total cost of revenue	$	79,958		$	81,545		(1.9)
Gross profit
Service gross profit:
Local	$	21,427		$	44,524		(51.9)	%
Goods	1,859			2,016			(7.8)
Travel	713			2,744			(74.0)
Total service gross profit	23,999			49,284			(51.3)
Product gross profit - Goods	12,616			8,192			54.0
Total gross profit	$	36,615		$	57,476		(36.3)
Service margin (1)	32.2		%	27.8		%
% of Consolidated revenue	44.2		%	37.2		%
% of Consolidated cost of revenue	82.6			47.2
% of Consolidated gross profit	21.9			28.6

(1)     Represents the percentage of service gross billings that we retained after deducting the merchant's share from revenue.

Comparison of the Three Months Ended March 31, 2021 and 2020

International revenue and gross profit decreased by $22.4 million and $20.9 million for the three months ended March 31, 2021. Those decreases were primarily driven by a decline in gross billings due to the impacts of COVID-19 as discussed above. The decreases in revenue and gross profit were partially offset by favorable impacts of $10.0 million and $3.2 million from year-over-year changes in foreign currency exchange rates.

Cost of revenue decreased by $1.6 million for the three months ended March 31, 2021 primarily due to the decrease in transaction volume and gross billings, partially offset by a $6.8 million unfavorable impact from year-over-year changes in foreign currency exchange rates.

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Marketing and Contribution Profit

International marketing and contribution profit for the three months ended March 31, 2021 and 2020 was as follows (dollars in thousands):

	Three Months Ended March 31,
	2021			2020			% Change
Marketing	$	10,898		$	20,721		(47.4)	%
% of Gross profit:	29.8		%	36.1		%
Contribution profit	$	25,717		$	36,755		(30.0)	%

Comparison of the Three Months Ended March 31, 2021 and 2020:

International marketing expense and marketing expense as a percentage of gross profit declined for the three months ended March 31, 2021 due to accelerated traffic declines, significantly shortened payback thresholds and lower investment in our offline marketing and brand spend in light of COVID-19.

The decrease in International contribution profit for the three months ended March 31, 2021 was primarily attributable to a $20.9 million decrease in gross profit, partially offset by a $9.8 million decrease in marketing expense.

Operating Expenses

Operating expenses for the three months ended March 31, 2021 and 2020 were as follows (dollars in thousands):

	Three Months Ended March 31,
	2021			2020			% Change
Marketing	$	33,666		$	60,130		(44.0)	%
Selling, general and administrative	127,143			207,135			(38.6)
Goodwill impairment	—			109,486			(100.0)
Long-lived asset impairment	—			22,351			(100.0)
Restructuring and related charges	7,422			6			NM
Total Operating expenses	$	168,231		$	399,108		(57.8)
% of Gross profit:
Marketing	20.2		%	29.9		%
Selling, general and administrative	76.1		%	102.9		%

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Comparison of the Three Months Ended March 31, 2021 and 2020:

Marketing expense and marketing expense as a percentage of gross profit declined for the three months ended March 31, 2021 due to accelerated traffic declines, significantly shortened payback thresholds and lower investment in our offline marketing and brand spend in light of COVID-19, partially offset by a $0.9 million unfavorable impact from year-over-year change in foreign currency exchange rates.

SG&A decreased for the three months ended March 31, 2021 primarily due to lower payroll-related expenses due to restructuring actions and lower consulting and facilities-related expenses, partially offset by a $4.4 million unfavorable impact from year-over-year changes in foreign currency exchange rates. SG&A as a percentage of gross profit decreased for the three months ended March 31, 2021 due to the decline in fixed costs as a result of our restructuring actions.

During the first quarter 2020, we performed an interim quantitative assessment of goodwill and long-lived assets as a result of significant deterioration in our financial performance due to the impact of COVID-19. As a result, we recognized goodwill impairment of $109.5 million, that represented the excess of the EMEA reporting unit's carrying value over its fair value, and long-lived asset impairment of $22.4 million for the three months ended March 31, 2020. See Note 2, Goodwill and Long-Lived Assets, for additional information.

Restructuring and related charges for the three months ended March 31, 2021 primarily represent severance and benefit costs for workforce reductions See Note 9, Restructuring and Related Charges, for additional information.

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.

Other income (expense), net for the three months ended March 31, 2021 and 2020 was as follows (dollars in thousands):

	Three Months Ended March 31,
	2021		2020
Interest income	$	1,155	$	2,556
Interest expense	(5,116)		(6,958)
Foreign currency gains (losses), net	22,084		(6,496)
Impairment and other changes in fair value of investments	—		(8,089)
Other income (expense), net	$	18,123	$	(18,987)

Comparison of the Three Months Ended March 31, 2021 and 2020:

The change in Other income (expense), net for the three months ended March 31, 2021 as compared with the prior year period is primarily related to a change in foreign currency gains and losses of $28.6 million due to a $32.2 million cumulative foreign currency translation adjustment gain that was reclassified into earnings as a result of the substantial liquidation of our subsidiary in Japan as part of our restructuring actions, as well as a $8.1 million impairment and other changes in fair value of investments.

Provision (Benefit) for Income Taxes

Provision (benefit) for income taxes for the three months ended March 31, 2021 and 2020 was as follows (dollars in thousands):

	Three Months Ended March 31,
	2021			2020			% Change
Provision (benefit) for income taxes	$	2,427		$	(5,988)		(140.5)	%
Effective tax rate	14.4		%	2.8		%

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Comparison of the Three Months Ended March 31, 2021 and 2020:

The effective tax rate for the three months ended March 31, 2021 was lower than the U.S. statutory federal income tax rate due to the benefit of non-taxable items and the U.S. research and development tax credit. The three months ended March 31, 2021 and 2020 were also impacted by the pretax losses incurred in jurisdictions that have valuation allowances against their net deferred tax assets. The three months ended March 31, 2020 was impacted by the reversals of reserves for uncertain tax positions due to the closure of tax audits and by the carryback of federal net operating losses due to the income tax relief provided by the CARES Act. 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. See Note 10, Income Taxes, for additional information relating to tax audits and assessments and regulatory and legal developments that may impact our business and results of operations in the future.

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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, 2021, special charges and credits included charges related to our restructuring plan. For the three months ended March 31, 2020, special charges and credits included goodwill and long-lived asset impairments and strategic advisor costs. 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, 2021 and 2020 (in thousands):

	Three Months Ended March 31,
	2021		2020
Income (loss) from continuing operations	$	14,448	$	(210,860)
Adjustments:
Stock-based compensation	7,179		14,015
Depreciation and amortization	17,019		25,909
Acquisition-related expense (benefit), net	—		4
Restructuring and related charges	7,422		6
Goodwill impairment	—		109,486
Long-lived asset impairment	—		22,351
Strategic advisor costs	—		3,626
Other (income) expense, net (1)	(18,123)		18,987
Provision (benefit) for income taxes	2,427		(5,988)
Total adjustments	15,924		188,396
Adjusted EBITDA	$	30,372	$	(22,464)

(1)Other (income) expense, net for the three months ended March 31, 2021 includes a $32.2 million cumulative foreign currency translation adjustment gain that was reclassified into earnings as a result of the substantial liquidation of our subsidiary in Japan as part of our restructuring actions. Refer to Note 9, Restructuring and Related Charges, for additional information.

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. 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 condensed 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.

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The following table represents the effect on our condensed consolidated statements of operations from changes in exchange rates versus the U.S. dollar for the three months ended March 31, 2021 (in thousands):

	Three Months Ended March 31, 2021
	At Avg. Q1 2020 Rates (1)		Exchange Rate Effect (2)		As Reported
Gross billings	$	538,882	$	15,090	$	553,972
Revenue	253,798		10,019		263,817
Cost of revenue	89,994		6,840		96,834
Gross profit	163,804		3,179		166,983
Marketing	32,790		876		33,666
Selling, general and administrative	122,773		4,370		127,143
Restructuring and related charges	6,897		525		7,422
Income (loss) from operations	1,344		(2,592)		(1,248)

(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.

Liquidity and Capital Resources

Our principal sources of liquidity are cash flows from operations and cash balances, which primarily consist of bank deposits and government money market funds. As of March 31, 2021, cash balances, including outstanding borrowings under the Amended Credit Agreement, were $676.8 million. We also have $169.8 million in restricted cash as of March 31, 2021 (which is a portion of the net proceeds from the 2026 Notes offering) that will be used to repurchase the Atairos Notes in May 2021.

Our net cash flows from operating, investing and financing activities from continuing operations for the three months ended March 31, 2021 and 2020 were as follows (in thousands):

	Three Months Ended March 31,
	2021		2020
Cash provided by (used in):
Operating activities	$	(46,405)	$	(236,408)
Investing activities	(12,744)		19,564
Financing activities	62,618		141,312

Our free cash flow for the three months ended March 31, 2021 and 2020 and a reconciliation 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,
	2021		2020
Net cash provided by (used in) operating activities from continuing operations	$	(46,405)	$	(236,408)
Purchases of property and equipment and capitalized software	(12,040)		(10,596)
Free cash flow	$	(58,445)	$	(247,004)

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 upon the customer's redemption of the related voucher or fixed payment terms, which are generally biweekly throughout the term of the merchant's offering. Historically, we have primarily paid merchants on fixed payment terms in North America and upon voucher redemption internationally. In the third quarter 2020, we largely completed a transition to redemption payment terms in North America.

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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 the three months ended March 31, 2021, our net cash used in operating activities from continuing operations was $46.4 million, as compared with $14.4 million net income from continuing operations. That difference is primarily due to a $53.1 million net decrease from changes in working capital and other assets and liabilities. The working capital impact was related to seasonal timing of payments to inventory suppliers and the impact of COVID-19. The difference between our net cash used in operating activities and our net income from continuing operations is also due to $7.7 million of non-cash items, including a $32.2 million foreign currency translation gain that was reclassified into earnings due to our substantial liquidation of Japan, depreciation and amortization and stock-based compensation.

For the three months ended March 31, 2020, our net cash used in operating activities from continuing operations was $236.4 million, as compared with a $210.9 million net loss from continuing operations. That difference is primarily due to a $208.9 million net decrease from changes in working capital and other assets and liabilities. The working capital impact was related to the seasonal timing of payments to inventory suppliers and the impact of COVID-19. The difference between our net cash used in operating activities and our net loss from continuing operations due to changes in working capital was partially offset by $183.4 million of non-cash items, including $109.5 million of goodwill impairment, $22.4 million of long-lived asset impairments, depreciation and amortization and stock-based compensation.

For the three months ended March 31, 2021, our net cash used in investing activities from continuing operations was $12.7 million, which included purchases of property and equipment and capitalized software of $12.0 million.

For the three months ended March 31, 2020, our net cash provided by investing activities from continuing operations was $19.6 million. Our net cash provided by investing activities from continuing operations included the proceeds from the sale of an investment of $31.6 million, which was partially offset by purchases of property and equipment and capitalized software of $10.6 million.

For the three months ended March 31, 2021, our net cash provided by financing activities was $62.6 million. Our net cash provided by financing activities included $200.0 million of proceeds received from the issuance of the 2026 Notes, partially offset by $6.6 million in cash paid for issuance costs for the 2026 Notes and the revolving credit agreement, $23.8 million related to the purchase of capped call transactions, and $100.0 million in payments under our revolving credit agreement. As noted above, we have classified $169.8 million of the proceeds of the 2026 Notes that will be used to repurchase the Atairos Notes in restricted cash.

For the three months ended March 31, 2020, our net cash provided by financing activities was $141.3 million. Our net cash provided by financing activities included $150.0 million of borrowings under our revolving credit facility, partially offset by $3.8 million of distributions to noncontrolling interest holders and $3.3 million in taxes paid related to net share settlements of stock-based compensation awards.

In July 2020, we entered into the First Amendment of our Credit Agreement in order to, among other things, provide us operational flexibility and covenant relief in light of the ongoing impacts of COVID-19 on our business. In March 2021, we entered into the Second Amendment to, among other things, extend the covenant relief through the fourth quarter 2021. In March and April 2021, we also issued the 2026 Notes and used a portion of the net proceeds from the 2026 Notes offering to purchase the capped call transactions. We intend to use the remaining net proceeds, together with cash on hand, to repurchase the Atairos Notes in May 2021. See Note 5, Financing Arrangements, for additional information.

We believe that our cash balances, excluding borrowings under the Amended Credit Agreement, and cash generated from operations will be sufficient to meet our working capital requirements and capital expenditures for at least the next 12 months. We plan to continue to actively manage and optimize our cash balances and liquidity, working capital and operating expenses, although there can be no assurances that we will be able to do so.

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As of March 31, 2021, we had $176.8 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. 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 authorized us to repurchase up to $300.0 million of our common stock under our share repurchase program. As of March 31, 2021, up to $245.0 million of common stock remained available for purchase under our program. The timing and amount of share repurchases, if any, will be determined based on market conditions, limitations under the Amended Credit Agreement, share price, available cash and other factors, and the share repurchase 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.

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Contractual Obligations and Commitments

Our contractual obligations and commitments as of March 31, 2021 did not materially change from the amounts set forth in our 2020 Annual Report on Form 10-K, except as disclosed in Note 6, Commitments and Contingencies.

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements as of March 31, 2021.

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 disclosure 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.

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 Item 2, Note 2, Summary of Significant Accounting Policies in our Annual Report on Form 10-K for the year ended December 31, 2020. 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, 2020.

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Recently Issued Accounting Standards

In October 2020, the FASB issued ASU 2020-10, Codification Improvements. This ASU amends a variety of Topics, including presentation and disclosures of financial statements, interim reporting, accounting changes and error corrections. This ASU will be effective for annual reporting periods beginning after December 15, 2021 and interim periods within those annual periods beginning after December 15, 2022 and early adoption is permitted. We are still assessing the impact of ASU 2020-10 on our condensed consolidated financial statements.

There are no other accounting standards that have been issued but not yet adopted that are expected to have a material impact on our condensed consolidated financial statements.

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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 these 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, 2021, we derived approximately 44.2% 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 these 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, 2021 and December 31, 2020.

As of March 31, 2021, our net working capital deficit (defined as current assets less current liabilities) from subsidiaries that are subject to foreign currency translation risk was $27.2 million. The potential increase in this working capital deficit from a hypothetical 10% adverse change in quoted foreign currency exchange rates would be $2.7 million. This compares with an $11.4 million working capital surplus subject to foreign currency exposure as of December 31, 2020, for which a 10% adverse change would have resulted in a potential increase in this working capital surplus of $1.1 million.

Interest Rate Risk

Our cash balance as of March 31, 2021 consists of bank deposits and government money market funds, so exposure to market risk for changes in interest rates is limited. In April 2016, we issued convertible notes with an aggregate principal amount of $250.0 million and in March 2021, we issued convertible notes with an aggregate principal amount of $200.0 million. See Item 1, Note 5, 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. Our Amended Credit Agreement provides for aggregate principal borrowings of up to $225.0 million. As of March 31, 2021, we had $100.0 million of borrowings outstanding and $23.1 million of outstanding letters of credit under the Amended Credit Agreement. See Item 2, Liquidity and Capital Resources for additional information. Because borrowings under the Amended Credit Agreement bear interest at a variable rate, we are exposed to market risk relating to changes in interest rates if we borrow under the Amended Credit Agreement. We have $120.6 million of lease obligations as of March 31, 2021. Interest rates on existing leases typically do not change unless there is a modification to a lease agreement and as such, we do not believe that the interest rate risk on the lease obligations 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, 2021.

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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, 2021, 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

There was no change 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 quarter ended March 31, 2021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. As a result of the COVID-19 pandemic, our employees have been working remotely. We have not identified any material changes to our internal controls over financial reporting as a result of COVID-19 or related changes to our working environment. We are continually monitoring and assessing the impact the COVID-19 pandemic and related restrictions have on our own internal controls to minimize the effect on their design and operating effectiveness.

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 Item 1, Note 6, Commitments and Contingencies, to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

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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, 2020 except as supplemented and updated below:

COVID-19 pandemic has, and is expected to continue to, materially affect our business, financial condition and results of operations, and any future outbreaks of contagious diseases and other adverse public health developments could materially affect our business.

The COVID-19 pandemic has had a material impact on our business and results of operations. COVID-19 has resulted in significant governmental measures being implemented to control the spread of the virus, including quarantines, travel restrictions, business shutdowns and restrictions on the movement and gathering of people in the United States and abroad. Our business has been adversely affected in jurisdictions that have imposed mandatory closures of our merchants, sought voluntary closures or imposed restrictions on operations of our merchants and activities of consumers, and the continued implementation of such measures may further adversely affect our business. Even if such measures are not implemented, the perceived risk of infection or significant health risk may adversely affect our business. Further, the timing of global vaccination distribution and administration and the long-term effectiveness of any vaccines against COVID-19 and any variants is not certain. The outbreak and the preventive or protective actions that governments or our merchants and consumers have taken and may take in the future in response to COVID-19 has resulted, and may continue to result, in a period of business disruption, reduced voucher and travel sales and increased refunds. Further, any future outbreaks of contagious diseases and other adverse public health developments could materially affect our business.

Such risks could also adversely affect consumers’ financial condition, resulting in reduced spending on our offerings and increased refunds, even after restrictions to everyday activities are lifted. COVID-19 may also adversely affect our ability to implement our strategy to focus on growing our local marketplace.

The impact of COVID-19 as well as our cost-saving actions, remote working environment, and other actions we have taken to attempt to address and mitigate the effects of COVID-19 on our business may lead to disruptions in our business or workforce, inability to grow and evolve our brand, reduced employee morale, engagement and productivity, increased attrition, problems retaining existing and recruiting future employees, limited resources to complete projects efficiently or on anticipated timelines, and increased workload for employees all of which could negatively impact our business, results of operations, financial condition and create risks to the effectiveness of our internal controls. Such disruption also could negatively impact our ability to realize the full benefits of our strategy.

These and other potential impacts of COVID-19 have and are expected to continue to adversely affect our business, financial condition and results of operations. The ultimate extent of the impact of COVID-19 (or any epidemic, pandemic or other health crisis) will depend on future developments, which are highly uncertain and cannot be predicted, including new information that may emerge concerning the severity of COVID-19, emerging virus variants and the actions taken to contain COVID-19 and address its impact. Further, we may continue to experience different or more prolonged impacts in certain locations where we operate, particularly in our International segment where restrictions have been more prolonged and stricter than in North America, surges in virus cases continue to occur and the vaccination rollout has been slower.

The potential effects of COVID-19 also could intensify or otherwise affect many of our other risk factors that are included in our Annual Report and this Quarterly Report, including, but not limited to, risks related to the execution of our strategy, customer and merchant acquisition and retention, macroeconomic factors beyond our control, risks of doing business outside of the United States, including risks relating to the staffing and effectiveness of our centralized shared service centers in locations such as India, and risks related to our indebtedness. Because the COVID-19 situation is unprecedented and continuously evolving, the other potential impacts to our risk factors that are further described in our Annual Report and this Quarterly Report are uncertain.

Furthermore, because the COVID-19 pandemic did not impact our results until late in the first quarter of 2020, such impact may not be directly comparable to any historical period and is not necessarily indicative of any future impact that the COVID-19 pandemic may have on our results for subsequent periods.

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

Recent Sales of Unregistered Securities

During the three months ended March 31, 2021, we did not issue any unregistered equity securities.

Issuer Purchases of Equity Securities

In May 2018, the Board authorized us to repurchase up to $300.0 million of our common stock under our share repurchase program. As of March 31, 2021, up to $245.0 million of common stock remained available for purchase under our program. The timing and amount of share repurchases, if any, will be determined based on market conditions, limitations under the Amended Credit Agreement, share price, available cash and other factors, and the share repurchase 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 share repurchases when we might otherwise be precluded from doing so. See Item 1, Note 7, Stockholders' Equity and Compensation Arrangements, for information 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, 2021 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, 2021	70,152	$	37.49	—	—
February 1-28, 2021	39,962	38.29		—	—
March 1-31, 2021	12,817	57.81		—	—
Total	122,931	$	39.87	—	—

(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

Atairos Note Repurchase

On May 5, 2021, the Company entered into a Note Repurchase Agreement (the “Note Repurchase Agreement”) with AGH to repurchase all of the outstanding $250.0 million aggregate principal amount of the Company’s 3.25% Convertible Senior Notes due 2022. Pursuant to the Note Repurchase Agreement, the Company will pay AGH an amount equal to $254.0 million (i.e., principal and a prepayment fee of $4.0 million), plus accrued and unpaid interest to, and including, the repurchase date. The closing of the repurchase transaction is expected to occur on or before May 14, 2021. In connection with the repurchase of the Atairos Notes, we intend to unwind the related note hedge and warrants.

Pursuant to the terms of the Note Repurchase Agreement, Michael Angelakis, who serves on the Company’s Board of Directors (the “Board”) as the designee of AGH, has tendered his resignation from the Board to be effective concurrent with the closing of the repurchase transaction.

The foregoing description is qualified in its entirety by reference to the text of the Note Repurchase Agreement, which is attached as Exhibit 10.2 to this Quarterly Report on Form 10-Q and incorporated herein by reference.

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2021 Executive Compensation Update

As previously disclosed, in February 2021, the Compensation Committee of the Board of Directors of the Company approved annual performance share unit (“PSU”) awards under the Groupon, Inc. 2011 Incentive Plan, as amended, including PSUs with a value equal to $1,680,000 for Aaron Cooper, Interim Chief Executive Officer, $552,000 for Melissa Thomas, Chief Financial Officer, and $352,000 for Dane Drobny, Chief Administrative Officer and General Counsel (collectively, the “2021 PSU Awards”). The performance metrics for the 2021 PSU awards were not determined at that time and were to be set by the Compensation Committee at a later date.

On May 5, 2021, the Compensation Committee approved the conversion of the 2021 PSU Awards at their target levels into RSUs with a two-year vesting schedule (consistent with the existing vesting schedule of the 2021 PSU Awards). The Compensation Committee took this action in response to continued challenges in establishing meaningful and measurable long-term performance metrics (different from the metric already approved for the 2021 annual cash incentive plan) due to the unprecedented and continuously evolving circumstances created by the COVID-19 pandemic and resulting volatility. This represents a one-time conversion of PSUs for our named executive officers, and the Compensation Committee currently intends to again award performance-based equity awards as part of the Company’s executive compensation program in 2022.

ITEM 6. EXHIBITS

Exhibit Number	Description
4.1	Indenture, dated March 25, 2021, between Groupon, Inc. and U.S. Bank National Association (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed on March 25, 2021)
4.2	Form of 1.125% Convertible Senior Note due 2026 (included in Exhibit 4.1 and incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K filed on March 25, 2021)
10.1	Form of Capped Call Confirmation (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on March 25, 2021)
10.2	Note Repurchase Agreement, dated May 5, 2021, between Groupon, Inc. and A-G Holdings, L.P.
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
104 **	Cover Page Interactive Data File

_____________________________________

** The XBRL Instance Document and Cover Page Interactive Data File do not appear in the Interactive Data File because their XBRL tags are embedded within the Inline XBRL document

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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 6th day of May 2021.

GROUPON, INC.
By:	/s/ Melissa Thomas
	Name:	Melissa Thomas
	Title:	Chief Financial Officer

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EX-10.2

NOTE REPURCHASE AGREEMENT

THIS NOTE REPURCHASE AGREEMENT (this “Agreement”) is made and entered into as of May 5, 2021 by and between A-G Holdings, L.P., a Delaware limited partnership (the “Holder”), and Groupon, Inc. (the “Company”). Capitalized terms used but not otherwise defined herein shall have the meanings given to such terms in that certain Investment Agreement, dated as of April 3, 2016, by and between the Company and the Holder (the “Investment Agreement”).

RECITALS

    WHEREAS, the Holder is the owner and legal and beneficial holder of $250,000,000 aggregate principal amount of the Company’s 3.25% Convertible Senior Notes due 2022 (the “Notes”), issued pursuant to an Indenture, dated as of April 4, 2016, by and between the Company and U.S. Bank National Association, as Trustee (the “Trustee”).

    WHEREAS, the Notes, to date, have not matured; and

WHEREAS, the Holder desires and is willing to sell to the Company, and the Company desires to repurchase from the Holder, the Notes, upon and subject to the terms and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the premises and the mutual covenants, agreements and representations of the parties contained in this Agreement, the payments provided for in this Agreement and other good and valuable consideration, the receipt and sufficiency of which the parties acknowledge, the parties mutually agree as follows:

AGREEMENT

1.Sale and Repurchase of Notes. Subject to the terms and conditions of this Agreement, the Company agrees to purchase from the Holder, and the Holder agrees to sell to the Company, the Notes (the “Transaction”) at an aggregate purchase price of Two Hundred Fifty-Four Million Dollars ($254,000,000), plus accrued and unpaid interest on the Notes to, and including, the Closing Date (as defined below) (the “Purchase Price”).

2.Closing and Closing Deliverables; Cancellation of Notes. The closing of the Transaction (the “Closing”) shall take place electronically at 10:00 a.m. Eastern Time on a business day on or before May 14, 2021 (the “Closing Date”) selected by the Company, subject to the satisfaction or waiver of the conditions set forth in Sections 5 and 6 on such date; provided that the Company shall provide the Holder with at least two business days’ notice of the Closing Date if the Closing Date will occur prior to May 14, 2021.

(a)At the Closing:

(i)the Company shall pay to the Holder, by wire transfer of immediately available funds to the account specified on Exhibit A, the Purchase Price; and

(ii)the Holder shall deliver to the Trustee the Notes, free and clear of all liens, encumbrances, security interests, options, preferences, priorities claims, charges and restrictions of any kind (“Encumbrances”) (other than Encumbrances under the Investment Agreement, those created by or resulting from actions of the Company or any of its Subsidiaries and those arising solely under the Securities Act of 1933, as amended, and the rules and regulations of the

AmericasActive:15578564.9

#94527418v3    

Securities and Exchange Commission promulgated thereunder, or under similar state securities laws (“Permitted Encumbrances”)), duly endorsed or accompanied by an assignment duly endorsed in a form acceptable to the Company and the Trustee, or by means of the book-entry transfer procedures of the Depositary Trust Company, as depository for the Notes, or by means of transfer acceptable to the Company, against payment by the Company of the Purchase Price.

(b)Upon consummation of the Transaction, the Company will instruct the Trustee to cancel the Notes, and thereafter the Notes shall be null and void, and any and all rights arising thereunder shall be extinguished.

3.Representations and Warranties of the Holder. The Holder hereby represents and warrants to the Company, as of the date hereof and as of the Closing Date, as follows:

(a)Authorization; Enforceability. The Holder has the power and capacity to enter into this Agreement and to consummate the Transaction. This Agreement has been duly and validly executed and delivered by the Holder and constitutes the legal, valid and binding obligation of the Holder, enforceable in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or similar laws from time to time in effect that affect creditors’ rights generally, and by legal and equitable limitations on the availability of specific remedies.

(b)No Conflict; No Consent. The execution, delivery and performance by the Holder of this Agreement and consummation by the Holder of the Transaction do not and will not: (i) violate any decree or judgment of any court or other governmental authority applicable to or binding on the Holder; (ii) violate any provision of any federal or state statute, rule or regulation which is, to the Holder’s knowledge, applicable to the Holder; (iii) conflict with, or result in any violation of, any provision of any organizational document of the Holder; or (iv) violate or result in a default under any material contract to which the Holder or any of its assets or properties are bound. No consent or approval of, or filing with, any governmental authority or other person not a party hereto is required for the execution, delivery and performance by the Holder of this Agreement or the consummation of the Transaction, other than as may be required by the rules and regulations of the Securities and Exchange Commission.

(c)Ownership. The Holder is the record and beneficial owner of the Notes, free and clear of any Encumbrances (other than Permitted Encumbrances), and upon the transfer of the Notes to the Company, the Company will acquire good and marketable title thereto, free and clear of any Encumbrances or restrictions on transfer, other than Permitted Encumbrances.

(d)Disclosure of Information. The Holder, by reason of, among other things, its business and financial experience, is capable of evaluating the merits and risks of the Transaction and of protecting the Holder’s own interests in connection with the Transaction. The Holder has acquired sufficient information about the Company to reach an informed and knowledgeable decision to sell the Notes. The Holder acknowledges that (i) the Company has not made any representation or warranty, express or implied, except as set forth in Section 4, regarding any aspect of the sale and purchase of the Notes, the operation or financial condition of the Company or the value of the Notes, (ii) the Company may be in possession of substantial information which may be material and/or nonpublic (the “Company Information”) and which, if publicly disclosed, could foreseeably affect the trading price of the Notes or which, if known to the Holder, could foreseeably have impacted the Holder’ decision to sell the Notes or to enter into this Agreement, (iii) it is not relying upon the Company in making its decision to sell the

2

Notes to the Company pursuant to this Agreement and (iv) the Company is relying upon the truth of the representations and warranties in this Section 3 in connection with the purchase of the Notes hereunder.

(e)Independent Advisors. The Holder has been given the opportunity to consult with its own counsel and financial and other advisors, including tax advisors, with respect to this Agreement and the terms hereof and the Transaction to be consummated. The Holder is relying solely on such advisors in connection with this Agreement and not on any statements or representations of the Company, except for those representations and warranties of the Company expressly set forth in Section 4.

4.Representations and Warranties of the Company. The Company hereby represents and warrants to the Holder, as of the date hereof and as of the Closing Date, as follows:

(a)Authorization; Enforceability. The Company has the power and capacity to enter into this Agreement and to consummate the Transaction. This Agreement has been duly and validly executed and delivered by the Company and constitutes the legal, valid and binding obligation of the Company, enforceable in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or similar laws from time to time in effect that affect creditors’ rights generally, and by legal and equitable limitations on the availability of specific remedies.

(b)No Conflict; No Consent. The execution, delivery and performance by the Company of this Agreement and consummation by the Company of the Transaction do not and will not: (i) violate any decree or judgment of any court or other governmental authority applicable to or binding on the Company; (ii) violate any provision of any federal or state statute, rule or regulation which is, to the Company’s knowledge, applicable to the Company; (iii) conflict with, or result in any violation of, any provision of any organizational document of the Company; or (iv) violate or result in a default under any material contract to which the Company or any of the Company’s assets or properties are bound. No consent or approval of, or filing with, any governmental authority or other person not a party hereto is required for the execution, delivery and performance by the Company of this Agreement or the consummation of the Transaction, other than as may be required by the rules and regulations of the Securities and Exchange Commission.

(c)No Other Representations. The Company acknowledges that (i) the Holder has not made any representation or warranty, express or implied, except as set forth in Section 3, regarding any aspect of the sale and purchase of the Notes or the value of the Notes and (ii) the Company is relying upon the truth of the representations and warranties in this Section 3 in connection with the sale of the Notes hereunder.

5.Conditions to the Holder’s Obligation to Close. The obligation of the Holder hereunder to consummate the Transaction are subject to the satisfaction (or, to the extent permissible under applicable law, waiver by the Holder) of each of the following conditions:

(a)each of the representations and warranties of the Company contained in Section 4 shall be true and correct in all material respects on and as of the Closing Date with the same effect as though such representations and warranties had been made on and as of the Closing Date;

3

(b)the Company shall have performed all of its covenants required to be performed hereunder prior to such time in all material respects; and

(c)since the date of this Agreement, no statute, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction and shall be continuing that prohibits the consummation of the Transaction.

6.Conditions to the Company’s Obligation to Close. The obligation of the Company hereunder to consummate the transactions contemplated by this Agreement are subject to the satisfaction (or, to the extent permissible under applicable law, waiver by the Company) of each of the following conditions:

(a)each of the representations and warranties of the Holder contained in Section 3 shall be true and correct in all material respects on and as of the Closing Date with the same effect as though such representations and warranties had been made on and as of the Closing Date;

(b)the Holder shall have performed all of its covenants required to be performed hereunder prior to such time in all material respects; and

(c)since the date of this Agreement, no statute, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction and shall be continuing that prohibits the consummation of the Transaction.

7.Other Agreements.

(a)No Further Obligations Under the Notes. The Holder acknowledges and agrees that the sale of the Notes by the Holder and the purchase of the Notes by the Company pursuant to the Transaction shall constitute the final disposition of the Notes by the Holder, and, following the consummation of the Transaction and the Holder’s receipt of the Purchase Price as full consideration for the Notes, the Holder shall have no further rights or obligations with respect to the Notes, and shall not be entitled to any additional consideration in respect of the Notes by virtue of any of the foregoing actions on the part of the Company or its representatives and waives any and all rights thereto, including any rights with respect to the prepayment of the Notes and the consideration therefor.

(b)Resignation of Purchaser Designee. Concurrently herewith, Michael Angelakis, the Purchaser Designee, has delivered a written resignation from the Board, contingent and effective upon Closing.

(c)Effect on Other Agreements. Effective as of the Closing, except as otherwise provided herein, the Investment Agreement and the Voting Agreement shall terminate and shall cease to be of any further force and effect; provided, however, that Sections 4.03, 4.07(f), 4.08, 4.12 and 4.16 and Article 6 of the Investment Agreement shall survive the termination thereof in accordance with their respective terms; provided that Section 4.16 shall cease to apply and shall cease to have any further force and effect on the third anniversary of the date hereof.

(d)Director Indemnification. Beginning on the Closing Date and continuing until the sixth anniversary of the Closing Date, the Company (i) shall maintain in effect all rights to

4

indemnification, advancement of expenses, exculpation and other limitations on liability to the extent provided in the Company’s certificate of incorporation, bylaws or other governing documents as in effect as of the date of this Agreement (“D&O Provisions”) in favor of Michael Angelakis as a current or former director of the Company (to the extent permitted by applicable law), (ii) shall not amend, repeal or modify in a manner adverse to Michael Angelakis any provision in the D&O Provisions as it relates to Michael Angelakis as a current or former director of the Company without the written consent of Michael Angelakis (unless any such amendment, repeal or modification is required by applicable law) and (iii) shall indemnify and hold harmless Michael Angelakis as a current or former director of the Company against any costs or expenses (including reasonable attorneys’ fees), judgments, fines, losses, claims, damages or liabilities incurred in connection with any claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, arising out of or pertaining to matters existing or occurring at or prior to the Closing, whether asserted or claimed prior to, at or after the Closing, to the fullest extent that the Company would have been permitted under applicable law, the D&O Provisions or any director indemnification agreement in effect on the date of this Agreement to indemnify Michael Angelakis (the “Director Indemnification Agreement”) (including the advancing of expenses as incurred to the fullest extent permitted under applicable law); provided, however, that all rights to indemnification, exculpation or advancement of expenses in respect of any legal proceedings pending or asserted or any claim made within such period shall continue until the disposition of such legal proceeding or resolution of such claim. In the event that the Company or any of its successors or assigns consolidates with or merges into any other Person and is not the continuing or surviving corporation or entity of such consolidation or merger or transfers or conveys all or substantially all its properties and assets to any Person, the Company shall cause proper provisions to be made so that the successors and assigns of the Company assume the obligations set forth in this Section 7(d). The rights of Michael Angelakis hereunder shall be in addition to, and not in limitation of, any other rights such person may have under the D&O Provisions, any other indemnification arrangement, any legal requirement or otherwise. The provisions of this Section 7(d) are expressly intended to benefit, and are enforceable by, Michael Angelakis, who is an intended third-party beneficiary of this Section 7(d).

(e)RSU Award Acceleration. Prior to the Closing, the Compensation Committee of the Board shall take all actions necessary (including the adoption of any resolutions) to cause 4,859 restricted stock units in respect of shares of common stock of the Company (“RSUs”) granted to Michael Angelakis under the Company’s 2011 Incentive Plan (the “Incentive Plan”) that are outstanding and unvested as of immediately prior to the Closing to become fully vested. The accelerated vesting of the RSUs under this Section 7(e) will be (x) approved in accordance with the terms of the 2011 Incentive Plan (and any applicable award agreement thereunder) and the Company’s Non-Employee Directors’ Compensation Plan and (y) subject to, and effective as of, the Closing. Any resolutions or other documentation relating to the actions contemplated by this Section 7(e) shall be subject to the prior reasonable review and comment of the Holder. The Company shall provide the Holder with documentation (including any resolutions) evidencing satisfaction of the requirements of this Section 7(e) prior to the Closing.

(f)Section 16(b) Exemption. Prior to the Closing, the Board (or a committee of the Board comprised solely of two or more “non-employee directors” (as defined under Rule 16b-3(b)(3) under the Exchange Act)) shall, with respect to the Holder, its Affiliates and Michael Angelakis, take all actions necessary (including the adoption of any resolutions) to approve or otherwise cause the Transaction to be exempt from Section 16(b) of the Exchange Act pursuant to Rule 16b-3(e) under the Exchange Act. Any resolutions or other documentation relating to the actions contemplated by this Section 7(f) shall be subject to the prior reasonable review and comment of the Holder. The Company

5

shall provide the Holder with documentation (including any resolutions) evidencing satisfaction of the requirements of this Section 7(f) prior to the Closing.

8.Miscellaneous.

(a)Expenses. Each party hereto shall pay all of its expenses arising in connection with the negotiation, execution and consummation of the Transaction (including attorneys’ fees and expenses).

(b)Further Assurances. Each of the parties hereto agrees to use its reasonable efforts promptly to take or cause to be taken all action, and promptly to do or cause to be done all things necessary, proper or advisable under applicable laws and regulations to consummate and make effective the Transaction, subject to the terms and conditions hereof and compliance with applicable law. In case at any time before or after the Closing any further action is necessary or desirable to carry out the purposes of the Transaction, the proper officers, managers and directors of each party to this Agreement shall take all such necessary action as may be reasonably requested by the requesting party.

(a)Complete Agreement. This Agreement and the other agreements referred to herein constitute the entire agreement between the parties hereto regarding the subject matter of this Agreement and supersede and preempt any prior understandings, agreements or representations, written or oral, which may have related to the subject matter hereof. The recitals hereto are hereby incorporated herein in their entirety.

(b)Severability. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or any other jurisdiction, but this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.

(c)Counterparts. This Agreement may be signed in two or more counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. Counterparts may be delivered via facsimile, electronic mail (including any electronic signature covered by the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act, the Electronic Signatures and Records Act or other applicable law, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

(d)Waivers and Amendments. Any waiver, alteration, amendment or modification of any of the terms of this Agreement shall be valid only if made in writing and signed by the party(ies) against whom enforcement is sought. No waiver by any of the parties hereto of their rights hereunder shall be deemed to constitute a waiver with respect to any subsequent occurrences or transactions hereunder unless such waiver specifically states that it is to be construed as a continuing waiver.

(e)Choice of Law. This Agreement shall be governed by the laws of the State of Delaware without regard to any state’s rules regarding conflicts of laws. The parties agree that all disputes arising under this Agreement shall be submitted exclusively to the state and/or federal courts located in Delaware Court of Chancery and any state appellate court therefrom within the State of Delaware (or, solely if the Delaware Court of Chancery declines to accept jurisdiction over a particular

6

matter, any state or federal court within the State of Delaware), and the parties hereby irrevocably waive any objection it may now or hereafter have as to the convenience of such forum. EACH PARTY HERETO HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT.

(f)Termination of Agreement. If the Closing shall not have occurred on or before May 14, 2021, then either the Company or the Holder shall have the right to terminate this Agreement at any time on or after May 15, 2021; provided, however, that the right to terminate this Agreement under this Section 8(f) shall not be available to any party hereto if the failure of the Transaction to have been consummated by such date is the result of such party’s breach of this Agreement. Nothing contained in this Section 8(f) shall be deemed to release any party from any liability for any breach by such party of the terms and provisions of this Agreement or to impair the right of any party to compel specific performance by any other party of its obligations under this Agreement.

(g)Remedies. Each party hereto acknowledges that monetary damages would not be an adequate remedy in the event that any covenant or agreement in this Agreement is not performed in accordance with its terms, and it is therefore agreed that, in addition to and without limiting any other remedy or right it may have, the non-breaching party will have the right to an injunction, temporary restraining order or other equitable relief in any court of competent jurisdiction enjoining any such breach and enforcing specifically the terms and provisions hereof. Each party hereto agrees not to oppose the granting of such relief in the event a court determines that such a breach has occurred, and to waive any requirement for the securing or posting of any bond in connection with such remedy. All rights, powers and remedies provided under this Agreement or otherwise available in respect hereof at law or in equity shall be cumulative and not alternative, and the exercise or beginning of the exercise of any thereof by any party shall not preclude the simultaneous or later exercise of any other such right, power or remedy by such party.

[Signature Page Follows]

7

The undersigned have executed this Note Repurchase Agreement as of the date first above written.

COMPANY:

GROUPON, INC.

By:    /s/ Eric DeLau                        
    Name: Eric DeLau

    Title: Vice President & Treasurer

HOLDER:

A-G HOLDINGS, L.P.

By: A-G HOLDINGS GP, LLC, its general partner

By: ATAIROS GROUP, INC., its sole member and manager


By:    /s/ Michael J. Angelakis                        
    Name: Michael J. Angelakis

    Title: Chairman and Chief Executive Officer

Signature Page to Note Repurchase Agreement

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Aaron Cooper, 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 6, 2021                    /s/ Aaron Cooper

                            Aaron Cooper

                            Interim Chief Executive Officer

                            (Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Melissa Thomas, 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 6, 2021                        /s/ Melissa Thomas

                                Melissa Thomas

                                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, 2021, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Aaron Cooper, Interim Chief Executive Officer of the Company, and Melissa Thomas, 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/ Aaron Cooper

    Aaron Cooper

    Interim Chief Executive Officer

    (Principal Executive Officer)

By:    /s/ Melissa Thomas

    Melissa Thomas

    Chief Financial Officer

    (Principal Financial Officer)

Date: May 6, 2021

XML

Cover Page - shares	3 Months Ended
	Mar. 31, 2021	May 03, 2021
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2021
Document Transition Report	false
Entity File Number	1-35335
Entity Registrant Name	Groupon, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	27-0903295
Entity Address, Address Line One	600 W Chicago Avenue
Entity Address, Address Line Two	Suite 400
Entity Address, City or Town	Chicago
Entity Address, State or Province	IL
Entity Address, Postal Zip Code	60654
City Area Code	(312)
Local Phone Number	334-1579
Title of 12(b) Security	Common stock, par value $0.0001 per share
Trading Symbol	GRPN
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Smaller Reporting Company	false
Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		29,119,679
Entity Central Index Key	0001490281
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q1

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Current assets:
Cash and cash equivalents	$ 676,799	$ 850,587
Accounts receivable, net	45,402	42,998
Prepaid expenses and other current assets	41,261	40,441
Total current assets	763,462	934,026
Property, equipment and software, net	82,521	85,284
Right-of-use assets - operating leases, net	69,899	75,349
Goodwill	217,364	214,699
Intangible assets, net	28,684	30,151
Investments	36,008	37,671
Restricted cash	169,785	0
Other non-current assets	34,314	34,327
Total Assets	1,402,037	1,411,507
Current liabilities:
Short-term borrowings	100,000	200,000
Accounts payable	38,609	33,026
Accrued merchant and supplier payables	329,000	410,963
Accrued expenses and other current liabilities	299,282	294,999
Total current liabilities	766,891	938,988
Convertible senior notes, net	441,996	229,490
Operating lease obligations	83,527	90,927
Total other non-current liabilities	44,003	44,428
Total Liabilities	1,336,417	1,303,833
Commitments and contingencies (see Note 6)
Stockholders' Equity
Common stock, par value $0.0001 per share, 100,500,000 shares authorized; 39,352,337 shares issued and 29,058,220 shares outstanding at March 31, 2021; 39,142,896 shares issued and 28,848,779 shares outstanding at December 31, 2020	4	4
Additional paid-in capital	2,261,095	2,348,114
Treasury stock, at cost, 10,294,117 shares at March 31, 2021 and December 31, 2020	(922,666)	(922,666)
Accumulated deficit	(1,258,283)	(1,320,886)
Accumulated other comprehensive income (loss)	(14,455)	3,109
Total Groupon, Inc. Stockholders' Equity	65,695	107,675
Noncontrolling interests	(75)	(1)
Total Equity	65,620	107,674
Total Liabilities and Equity	$ 1,402,037	$ 1,411,507

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2021	Dec. 31, 2020
Statement of Financial Position [Abstract]
Common stock, par value (in usd per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	100,500,000	100,500,000
Common stock, shares issued (in shares)	39,352,337	39,142,896
Common stock, shares outstanding (in shares)	29,058,220	28,848,779
Treasury stock (in shares)	10,294,117	10,294,117

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Revenue:
Total revenue	$ 263,817	$ 374,150
Cost of revenue:
Total cost of revenue	96,834	172,903
Gross profit	166,983	201,247
Operating expenses:
Marketing	33,666	60,130
Selling, general and administrative	127,143	207,135
Goodwill impairment	0	109,486
Long-lived asset impairment	0	22,351
Restructuring and related charges	7,422	6
Total operating expenses	168,231	399,108
Income (loss) from operations	(1,248)	(197,861)
Other income (expense), net	18,123	(18,987)
Income (loss) from continuing operations before provision (benefit) for income taxes	16,875	(216,848)
Provision (benefit) for income taxes	2,427	(5,988)
Income (loss) from continuing operations	14,448	(210,860)
Income (loss) from discontinued operations, net of tax	0	382
Net income (loss)	14,448	(210,478)
Net (income) loss attributable to noncontrolling interests	110	(3,044)
Net income (loss) attributable to Groupon, Inc.	$ 14,558	$ (213,522)
Basic net income (loss) per share:
Continuing operations (in usd per share)	$ 0.50	$ (7.54)
Discontinued operations (in usd per share)	0	0.01
Basic net income (loss) per share (in usd per share)	0.50	(7.53)
Diluted net income (loss) per share:
Continuing operations (in usd per share)	0.48	(7.54)
Discontinued operations (in usd per share)	0	0.01
Diluted net income (loss) per share (in usd per share)	$ 0.48	$ (7.53)
Weighted average number of shares outstanding
Basic (in shares)	29,028,489	28,365,216
Diluted (in shares)	30,265,563	28,365,216
Comprehensive income (loss):
Net change in unrealized gain (loss) on foreign currency translation adjustments	$ (49,792)	$ (1,961)
Reclassification of cumulative foreign currency translation adjustments	32,228	0
Other comprehensive income (loss)	(17,564)	(1,961)
Comprehensive income (loss)	(3,116)	(212,439)
Comprehensive (income) loss attributable to noncontrolling interest	110	(3,044)
Comprehensive income (loss) attributable to Groupon, Inc.	(3,006)	(215,483)
Service
Revenue:
Total revenue	172,624	207,028
Cost of revenue:
Total cost of revenue	18,425	26,915
Product
Revenue:
Total revenue	91,193	167,122
Cost of revenue:
Total cost of revenue	78,409	145,988
Continuing Operations
Comprehensive income (loss):
Other comprehensive income (loss)	(17,564)	(1,961)
Discontinued Operations
Comprehensive income (loss):
Other comprehensive income (loss)	$ 0	$ 0

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CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands		Total	Cumulative Effect, Period of Adoption, Adjustment	Common Stock		Additional Paid-In Capital		Additional Paid-In Capital Cumulative Effect, Period of Adoption, Adjustment	Treasury Stock		Accumulated Deficit	Accumulated Deficit Cumulative Effect, Period of Adoption, Adjustment	Accumulated Other Comprehensive Income (Loss)	Total Groupon, Inc. Stockholders' Equity	Total Groupon, Inc. Stockholders' Equity Cumulative Effect, Period of Adoption, Adjustment	Non-controlling Interests
Beginning balance (in shares) at Dec. 31, 2019	[1]			38,584,854					(10,294,117)
Beginning balance at Dec. 31, 2019		$ 395,046	$ (79)	$ 4	[1]	$ 2,310,393	[1]		$ (922,666)	[1]	$ (1,032,876)	$ (79)	$ 39,081	$ 393,936	$ (79)	$ 1,110
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Comprehensive income (loss)		(212,439)									(213,522)		(1,961)	(215,483)		3,044
Vesting of restricted stock units and performance share units (in shares)	[1]			165,705
Shares issued under employee stock purchase plan (in shares)	[1]			28,621
Shares issued under employee stock purchase plan		1,163				1,163	[1]							1,163
Tax withholdings related to net share settlements of stock-based compensation awards (in shares)	[1]			(67,135)
Tax withholdings related to net share settlements of stock-based compensation awards		(3,684)				(3,684)	[1]							(3,684)
Stock-based compensation on equity-classified awards		15,345				15,345	[1]							15,345
Distributions to noncontrolling interest holders		(3,845)														(3,845)
Ending balance (in shares) at Mar. 31, 2020	[1]			38,712,045					(10,294,117)
Ending balance at Mar. 31, 2020		191,507		$ 4	[1]	2,323,217	[1]		$ (922,666)	[1]	(1,246,477)		37,120	191,198		309
Beginning balance (in shares) at Dec. 31, 2019	[1]			38,584,854					(10,294,117)
Beginning balance at Dec. 31, 2019		$ 395,046	(79)	$ 4	[1]	2,310,393	[1]		$ (922,666)	[1]	(1,032,876)	(79)	39,081	393,936	(79)	1,110
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Accounting Standards Update [Extensible List]		Accounting Standards Update 2020-06
Ending balance (in shares) at Dec. 31, 2020				39,142,896					(10,294,117)
Ending balance at Dec. 31, 2020		$ 107,674	$ (18,969)	$ 4		2,348,114		$ (67,014)	$ (922,666)		(1,320,886)	$ 48,045	3,109	107,675	$ (18,969)	(1)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Comprehensive income (loss)		(3,116)									14,558		(17,564)	(3,006)		(110)
Vesting of restricted stock units and performance share units (in shares)				308,954
Shares issued under employee stock purchase plan (in shares)				23,418
Shares issued under employee stock purchase plan		349				349								349
Tax withholdings related to net share settlements of stock-based compensation awards (in shares)				(122,931)
Tax withholdings related to net share settlements of stock-based compensation awards		(4,901)				(4,901)								(4,901)
Purchase of convertible note hedges		(23,840)				(23,840)								(23,840)
Stock-based compensation on equity-classified awards		8,387				8,387								8,387
Receipts from noncontrolling interest holders		36														36
Ending balance (in shares) at Mar. 31, 2021				39,352,337					(10,294,117)
Ending balance at Mar. 31, 2021		$ 65,620		$ 4		$ 2,261,095			$ (922,666)		$ (1,258,283)		$ (14,455)	$ 65,695		$ (75)

[1] All share information and balances have been retroactively adjusted to reflect a reverse stock split. See Note 7, Stockholders' Equity and Compensation Arrangements, for additional information.

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands		3 Months Ended
		Mar. 31, 2021	Mar. 31, 2020
Operating activities
Net income (loss)		$ 14,448	$ (210,478)
Less: Income (loss) from discontinued operations, net of tax		0	382
Income (loss) from continuing operations		14,448	(210,860)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization of property, equipment and software		14,727	23,385
Amortization of acquired intangible assets		2,292	2,524
Impairment of goodwill		0	109,486
Impairment of long-lived assets		0	22,351
Stock-based compensation		7,179	14,015
Impairment and other changes in fair value of investments		0	8,089
Amortization of debt discount on convertible senior notes		303	3,516
Foreign currency translation adjustments reclassified into earnings		(32,228)	0
Change in assets and liabilities, net of acquisitions and dispositions:
Accounts receivable		(2,812)	8,334
Prepaid expenses and other current assets		(1,640)	13,222
Right-of-use assets - operating leases		5,122	7,009
Accounts payable		5,896	5,860
Accrued merchant and supplier payables		(76,884)	(223,098)
Accrued expenses and other current liabilities		9,823	(11,970)
Operating lease obligations		(6,007)	(10,130)
Other, net		13,376	1,859
Net cash provided by (used in) operating activities from continuing operations		(46,405)	(236,408)
Net cash provided by (used in) operating activities from discontinued operations		0	0
Net cash provided by (used in) operating activities		(46,405)	(236,408)
Investing activities
Purchases of property and equipment and capitalized software		(12,040)	(10,596)
Proceeds from sale of investment		0	31,605
Acquisitions of intangible assets and other investing activities		(704)	(1,445)
Net cash provided by (used in) investing activities from continuing operations		(12,744)	19,564
Net cash provided by (used in) investing activities from discontinued operations		0	0
Net cash provided by (used in) investing activities		(12,744)	19,564
Financing activities
Proceeds from issuance of 2026 convertible notes		200,000	0
Proceeds from (payments of) borrowings under revolving credit agreement		(100,000)	150,000
Purchase of capped call transactions		(23,840)	0
Issuance costs for 2026 convertible notes and revolving credit agreement		(6,572)	0
Taxes paid related to net share settlements of stock-based compensation awards		(4,901)	(3,299)
Payments of finance lease obligations		(2,061)	(2,707)
Other financing activities		(8)	(2,682)
Net cash provided by (used in) financing activities		62,618	141,312
Effect of exchange rate changes on cash, cash equivalents and restricted cash, including cash classified within current assets of discontinued operations		(7,466)	(9,174)
Net increase (decrease) in cash, cash equivalents and restricted cash, including cash classified within current assets of discontinued operations		(3,997)	(84,706)
Less: Net increase (decrease) in cash classified within current assets of discontinued operations		0	0
Net increase (decrease) in cash, cash equivalents and restricted cash		(3,997)	(84,706)
Cash, cash equivalents and restricted cash, beginning of period	[1]	851,085	752,657
Cash, cash equivalents and restricted cash, end of period	[1]	847,088	667,951
Non-cash investing and financing activities
Right-of-use assets obtained in exchange for operating leases liabilities		$ 0	$ 2,867

[1] The following table provides a reconciliation of cash, cash equivalents and restricted cash shown above to amounts reported within the condensed consolidated balance sheets as of March 31, 2021, December 31, 2020, March 31, 2020 and December 31, 2019 (in thousands): March 31, 2021December 31, 2020March 31, 2020December 31, 2019Cash and cash equivalents$676,799 $850,587 $666,867 $750,887 Restricted cash included in prepaid expenses and other current assets504 498 878 1,534 Restricted cash - non-current169,785 — — — Restricted cash included in other non-current assets— — 206 236 Cash, cash equivalents and restricted cash$847,088 $851,085 $667,951 $752,657 

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands		Mar. 31, 2021	Dec. 31, 2020	Mar. 31, 2020	Dec. 31, 2019
Restricted Cash [Abstract]
Cash and cash equivalents		$ 676,799	$ 850,587	$ 666,867	$ 750,887
Restricted cash included in prepaid expenses and other current assets		504	498	878	1,534
Restricted cash - non-current		169,785	0	206	236
Cash, cash equivalents and restricted cash	[1]	$ 847,088	$ 851,085	$ 667,951	$ 752,657

[1] The following table provides a reconciliation of cash, cash equivalents and restricted cash shown above to amounts reported within the condensed consolidated balance sheets as of March 31, 2021, December 31, 2020, March 31, 2020 and December 31, 2019 (in thousands): March 31, 2021December 31, 2020March 31, 2020December 31, 2019Cash and cash equivalents$676,799 $850,587 $666,867 $750,887 Restricted cash included in prepaid expenses and other current assets504 498 878 1,534 Restricted cash - non-current169,785 — — — Restricted cash included in other non-current assets— — 206 236 Cash, cash equivalents and restricted cash$847,088 $851,085 $667,951 $752,657 

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DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

3 Months Ended

Mar. 31, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Company Information

Groupon, Inc. and its subsidiaries, which commenced operations in October 2008, is a global scaled two-sided marketplace that connects consumers to merchants by offering goods and services, generally at a discount. Consumers access those marketplaces through our mobile applications and our websites, primarily localized groupon.com sites in many countries.

Our operations are organized into two segments: North America and International. See Note 13, Segment Information.

Reverse Stock Split

In June 2020, we effectuated a reverse stock split of our common stock at a ratio of 1-for-20. See Note 7, Stockholders' Equity and Compensation Arrangements, for additional information. As a result, the number of shares and income (loss) per share disclosed throughout this Quarterly Report on Form 10-Q have been retrospectively adjusted to reflect the reverse stock split.

COVID-19 Pandemic

Since March 2020, the COVID-19 pandemic has led to a significant decrease in consumer demand, a decrease in customer redemptions and elevated refund levels due to changes in consumer behavior and actions taken by governments to control the spread of COVID-19, including quarantines, travel restrictions, as well as business restrictions and shutdowns. The COVID-19 pandemic has had an adverse impact on our financial condition, results of operations and cash flows, which included impairments of our goodwill and long-lived assets in 2020. Recovery from the COVID-19 pandemic could be volatile and prolonged given the unprecedented and continuously evolving nature of the situation. We continue to monitor the impact of COVID-19 on our business.

Unaudited Interim Financial Information

We have prepared the accompanying condensed consolidated financial statements pursuant to the rules and regulations of the SEC for interim financial reporting. These condensed consolidated financial statements are unaudited and, in our opinion, include all adjustments, consisting of normal recurring adjustments and accruals, necessary for a fair presentation of the condensed consolidated balance sheets, statements of operations and comprehensive income (loss), cash flows and stockholders' equity for the periods presented. These condensed consolidated financial statements and notes should be read in conjunction with the audited consolidated financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2020.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of Groupon, Inc. and its wholly-owned subsidiaries, majority-owned subsidiaries over which we exercise control and variable interest entities for which we are the primary beneficiary. All intercompany accounts and transactions have been eliminated in consolidation. Outside stockholders' interests in subsidiaries are shown on the condensed consolidated financial statements as Noncontrolling interests. Investments in entities in which we do not have a controlling financial interest are accounted for at fair value, as available-for-sale securities or at cost adjusted for observable price changes and impairments, as appropriate.

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles ("GAAP") requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Estimates in our financial statements include, but are not limited to, the following: variable consideration from unredeemed vouchers; income taxes; leases; initial valuation and subsequent impairment testing of goodwill, other intangible assets and long-lived assets; investments; receivables; customer refunds and other reserves; contingent liabilities; and the useful lives of property, equipment and software and intangible assets. Actual results could differ materially from those estimates.

Reclassifications

Certain reclassifications have been made to the condensed consolidated financial statements of prior periods to conform to the current period presentation.

Adoption of New Accounting Standards

We adopted the guidance in ASU 2019-12, Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes, on January 1, 2021. This ASU simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. The adoption of ASU 2019-12 did not have a material impact on the condensed consolidated financial statements.

We adopted the guidance in ASU 2020-03, Codification Improvements to Financial Instruments, on January 1, 2021. This ASU amends a wide variety of Topics in the Codification, including revolving-debt arrangements and allowance for credit losses related to leases. The adoption of ASU 2020-03 did not have a material impact on the condensed consolidated financial statements.

We early adopted the guidance in ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity, on January 1, 2021. The ASU removes the separation models for convertible debt with a cash conversion feature or convertible instruments with a beneficial conversion feature. Additionally, the ASU removes certain conditions for equity classification related to contracts in an entity’s own equity (e.g., warrants) and amends certain guidance related to the computation of earnings per share for convertible instruments and contracts in an entity’s own equity. As a result of adopting ASU 2020-06, we recorded a $67.0 million net reduction to additional paid-in capital, a $19.0 million increase to non-current liabilities and a $48.0 million reduction to our opening accumulated deficit as of January 1, 2021. See Note 5, Financing Arrangements, for additional information.

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GOODWILL AND LONG-LIVED ASSETS

3 Months Ended

Mar. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND LONG-LIVED ASSETS

GOODWILL AND LONG-LIVED ASSETS

During the first quarter 2020, the significant deterioration in our financial performance due to the disruption in our operations from COVID-19 and the sustained decrease in our stock price required us to evaluate our goodwill and long-lived assets for impairment. In determining fair values for our reporting units, we used the discounted cash flow method and the market multiple valuation approach that use Level 3 inputs. For the three months ended March 31, 2020, we recognized $109.5 million of goodwill impairment and $22.4 million of long-lived asset impairment within our International segment related to our EMEA operations.

Future events and changing market conditions due to the impact of COVID-19 could require us to re-evaluate the estimates used in our fair value measurements, potentially resulting in additional impairment of long-lived assets or goodwill in future periods.

The following table summarizes impairment for long-lived assets by asset type for the three months ended March 31, 2020 (in thousands):

	Impairment
Property, equipment and software, net
Furniture and fixtures	$	413
Leasehold improvements	2,806
Office equipment	198
Purchased software	14
Computer hardware	2,842
Right-of-use assets - finance leases, net	1,318
Capitalized software	304
Internally-developed software	2,988
Total Property, equipment and software, net	$	10,883
Right-of-use assets - operating leases, net	10,494
Intangible assets, net	103
Other non-current assets	871
Total long-lived assets	$	22,351

The following table summarizes goodwill activity by segment for the three months ended March 31, 2021 (in thousands):

	North America		International		Consolidated
Balance as of December 31, 2020	$	178,685	$	36,014	$	214,699
Other (1)	—		3,776		3,776
Foreign currency translation	—		(1,111)		(1,111)
Balance as of March 31, 2021	$	178,685	$	38,679	$	217,364

(1)Represents the reclassification between Right-of-use assets - operating leases, net and Goodwill due to an adjustment in the allocation of impairments recorded in 2020 between those two accounts.

The following table summarizes intangible assets as of March 31, 2021 and December 31, 2020 (in thousands):

	March 31, 2021						December 31, 2020
	Gross Carrying Value		Accumulated Amortization		Net Carrying Value		Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Merchant relationships	$	20,378	$	10,187	$	10,191	$	20,208	$	9,236	$	10,972
Trade names	9,671		8,009		1,662		9,651		7,921		1,730
Developed technology	1,688		1,585		103		2,121		1,863		258
Patents	11,104		4,859		6,245		10,813		4,697		6,116
Other intangible assets	17,829		7,346		10,483		17,823		6,748		11,075
Total	$	60,670	$	31,986	$	28,684	$	60,616	$	30,465	$	30,151

Amortization of intangible assets is computed using the straight-line method over their estimated useful lives, which range from 1 to 10 years. Amortization expense related to intangible assets was $2.3 million and $2.5 million for the three months ended March 31, 2021 and 2020. As of March 31, 2021, estimated future amortization expense related to intangible assets is as follows (in thousands):

Remaining amounts in 2021	$	6,412
2022	8,130
2023	6,952
2024	3,219
2025	1,627
Thereafter	2,344
Total	$	28,684

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INVESTMENTS

3 Months Ended

Mar. 31, 2021

Equity Method Investments and Joint Ventures [Abstract]

INVESTMENTS

INVESTMENTS

The following table summarizes investments as of March 31, 2021 and December 31, 2020 (dollars in thousands):

	March 31, 2021		Percent Ownership of Voting Stock			December 31, 2020		Percent Ownership of Voting Stock
Other equity investments	$	36,008	1%	to	19%	$	37,671	1%	to	19%
Available-for-sale securities - redeemable preferred shares (1)	—		19%	to	25%	—		19%	to	25%
Fair value option investments (1)	—		10%	to	19%	—		10%	to	19%
Total investments	$	36,008				$	37,671

(1)We hold available-for-sale securities and fair value option investments in various entities that were written down to zero prior to December 31, 2020. During the first quarter 2020, we recognized a $1.4 million loss from changes in the fair value of our fair value option investments.

Other Equity Investments

Other equity investments represent equity investments without readily determinable fair values recorded at cost adjusted for observable price changes and impairments. During the first quarter 2020, we sold 50% of our shares in an other equity investment for total cash consideration of $34.0 million.

In addition, we recorded a $6.7 million impairment during the first quarter 2020 to an other equity investment as a result of revised cash flow projections and a deterioration in financial condition due to COVID-19. We did not recognize any impairments during the three months ended March 31, 2021.

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SUPPLEMENTAL CONDENSED CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF OPERATIONS INFORMATION

3 Months Ended

Mar. 31, 2021

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

SUPPLEMENTAL CONDENSED CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF OPERATIONS INFORMATION

SUPPLEMENTAL CONDENSED CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF OPERATIONS INFORMATION

The following table summarizes other income (expense), net for the three months ended March 31, 2021 and 2020 (in thousands):

	Three Months Ended March 31,
	2021		2020
Interest income	$	1,155	$	2,556
Interest expense	(5,116)		(6,958)
Foreign currency gains (losses), net (1)	22,084		(6,496)
Impairment and other changes in fair value of investments	—		(8,089)
Other income (expense), net	$	18,123	$	(18,987)

(1)Foreign currency gains (losses), net for the three months ended March 31, 2021 includes a $32.2 million cumulative foreign currency translation adjustment gain that was reclassified into earnings as a result of the substantial liquidation of our subsidiary in Japan as part of our restructuring actions. Refer to Note 9, Restructuring and Related Charges, for additional information.

The following table summarizes prepaid expenses and other current assets as of March 31, 2021 and December 31, 2020 (in thousands):

	March 31, 2021		December 31, 2020
Prepaid expenses	$	20,588	$	18,038
Income taxes receivable	5,282		5,437
Other	15,391		16,966
Total prepaid expenses and other current assets	$	41,261	$	40,441

The following table summarizes other non-current assets as of March 31, 2021 and December 31, 2020 (in thousands):

	March 31, 2021		December 31, 2020
Deferred income tax	$	11,438	$	11,593
Debt issue costs, net	1,489		1,852
Deferred contract acquisition costs	5,957		5,315
Deferred cloud implementation costs	10,494		10,402
Other	4,936		5,165
Total other non-current assets	$	34,314	$	34,327

The following table summarizes accrued merchant and supplier payables as of March 31, 2021 and December 31, 2020 (in thousands):

	March 31, 2021		December 31, 2020
Accrued merchant payables	$	280,298	$	303,260
Accrued supplier payables (1)	48,702		107,703
Total accrued merchant and supplier payables	$	329,000	$	410,963

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

The following table summarizes accrued expenses and other current liabilities as of March 31, 2021 and December 31, 2020 (in thousands):

	March 31, 2021		December 31, 2020
Refund reserve	$	35,740	$	33,173
Compensation and benefits	60,685		54,958
Accrued marketing	14,589		15,299
Restructuring-related liabilities	17,620		13,746
Customer credits	62,824		61,006
Income taxes payable	6,975		7,862
Deferred revenue	8,857		11,223
Deferred payroll taxes (1)	2,922		2,922
Operating and finance lease obligations	36,652		37,755
Deferred cloud computing contract incentive	3,000		3,000
Other	49,418		54,055
Total accrued expenses and other current liabilities	$	299,282	$	294,999

(1)We have elected to defer certain payroll taxes under the Coronavirus Aid, Relief and Economic Security ("CARES") Act. These amounts are due by December 31, 2021.

The following table summarizes other non-current liabilities as of March 31, 2021 and December 31, 2020 (in thousands):

	March 31, 2021		December 31, 2020
Contingent income tax liabilities	$	27,105	$	25,593
Finance lease obligations	468		730
Restructuring-related liabilities	385		385
Deferred income taxes	3,474		3,170
Deferred payroll taxes (1)	2,922		2,922
Deferred cloud computing contract incentive	3,500		4,250
Other	6,149		7,378
Total other non-current liabilities	$	44,003	$	44,428

(1)We have elected to defer certain payroll taxes under the Coronavirus Aid, Relief, and Economic Security ("CARES") Act. These amounts are due by December 31, 2022.

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FINANCING ARRANGEMENTS

3 Months Ended

Mar. 31, 2021

Debt Disclosure [Abstract]

FINANCING ARRANGEMENTS

FINANCING ARRANGEMENTS

Adoption of ASU 2020-06

On January 1, 2021, we early adopted ASU 2020-06 using the modified retrospective method. The ASU eliminates the requirement to separately recognize an equity component when accounting for convertible debt that may be cash-settled upon conversion or convertible instruments with a beneficial conversion feature. Additionally, the ASU removes certain conditions for equity classification related to contracts in an entity’s own equity (e.g., warrants) and amends certain guidance related to the computation of earnings per share for convertible instruments and contracts in an entity’s own equity.

Beginning January 1, 2021, our condensed consolidated financials are presented in accordance with ASU 2020-06, while prior period amounts are not adjusted and continue to be reported in accordance with our historical policies. The new guidance changes the accounting for our 3.25% Convertible Senior Notes, due 2022, as discussed below.

3.25% Convertible Senior Notes due 2022

In April 2016, we issued $250.0 million in aggregate principal amount of convertible senior notes (the "Atairos 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 our Board of Directors (the "Board") in connection with the issuance of the Atairos Notes. Atairos controls the voting power of AGH. The net proceeds from this offering were $243.2 million. The Atairos Notes bear interest at a rate of 3.25% per annum, payable annually in arrears on April 1 of each year. Each $1,000 of principal amount of the Atairos Notes initially is convertible into 9.25926 shares of common stock, which is equivalent to an initial conversion price of $108.00 per share, subject to adjustment upon the occurrence of specified events. Upon conversion, we can elect to settle the conversion value in cash, shares of our common stock, or any combination of cash and shares of our common stock. In May 2021, we entered into an agreement with AGH pursuant to which we will repurchase the Atairos Notes on or before May 14, 2021. For additional information, see Part II, Item 5. Other Information.

Prior to the adoption of ASU 2020-06, we separated the Atairos Notes into their liability and equity components. The liability was initially calculated by measuring the fair value of a similar liability without an associated conversion feature. The difference between the principal amount of the Atairos Notes and the liability component was recognized in equity, effectively resulting in a debt discount. We incurred transaction costs of $6.8 million related to the issuance of the Atairos Notes. Transaction costs attributable to the liability component of $4.8 million were also recorded as a debt discount in the condensed consolidated balance sheets. The debt discount was amortized to interest expense over the term of the Atairos Notes. Together with the cash interest, this resulted in an effective interest rate of 9.75%. Transaction costs attributable to the equity component of $2.0 million were recorded in stockholders' equity as a reduction of the equity component.

Following the adoption of ASU 2020-06, the previously bifurcated equity component of our Atairos Notes was recombined with the liability component, resulting in a single liability-classified instrument. The carrying value of the Atairos Notes at transition was determined by recalculating the basis of the notes as if the conversion option had not been bifurcated at issuance. Transaction costs related to the issuance of the Atairos Notes that were allocated to the equity component were reclassified out of Additional paid-in-capital and the amortization and the related debt discount associated with these costs was recalculated through the transition date. The transaction costs continue to be recorded as a debt discount in the condensed consolidated balance sheets and are amortized to interest expense over the remaining term of the Atairos Notes. Together with the cash interest, this results in an effective interest rate of 3.76%. As a result of adopting ASU 2020-06, we recorded a $67.0 million net reduction to additional paid-in capital, $19.0 million increase to non-current liabilities and a $48.0 million reduction to our opening accumulated deficit as of January 1, 2021 related to the Atairos Notes. See Note 12, Income (Loss) Per Share, for additional information on the effect on diluted per-share amounts.

The carrying amount of the Atairos Notes consisted of the following as of March 31, 2021 and December 31, 2020 (in thousands):

	March 31, 2021		December 31, 2020
Liability component:
Principal amount	$	250,000	$	250,000
Less: debt discount - transaction costs	(1,239)		(1,459)
Less: debt discount - equity	—		(19,051)
Net carrying amount of liability component	$	248,761	$	229,490
Net carrying amount of equity component	$	—	$	67,014

We classified the fair value of the Atairos Notes as a Level 3 measurement due to the lack of observable market data over fair value inputs such as our stock price volatility over the term of the Atairos Notes and our cost of debt. The estimated fair value of the Atairos Notes as of March 31, 2021 and December 31, 2020 was $262.2 million and $263.3 million, and was determined using a lattice model.

As of March 31, 2021, the remaining term of the Atairos Notes is approximately 1 year. During the three months ended March 31, 2021 and 2020, we recognized interest costs on the Atairos Notes as follows (in thousands):

	Three Months Ended March 31,
	2021		2020
Contractual interest (3.25% of the principal amount per annum)	$	2,032	$	2,032
Amortization of debt discount	303		3,516
Total	$	2,335	$	5,548

Note Hedges and Warrants

In May 2016, we purchased convertible note hedges with respect to our common stock for a cost of $59.1 million from certain bank counterparties. The convertible note hedges provide us with the right to purchase up to 2.3 million shares of our common stock at an initial strike price of $108.00 per share, which corresponds to the initial conversion price of the Atairos Notes, and are exercisable upon conversion of the Atairos Notes. The convertible note hedges are intended to reduce the potential economic dilution upon conversion of the Atairos Notes. The convertible note hedges are separate transactions and are not part of the terms of the Atairos Notes. Holders of the Atairos Notes do not have any rights with respect to the convertible note hedges.

In May 2016, we 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 2.3 million shares of our common stock at a strike price of $170.00 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 Atairos Notes or convertible note hedges. Holders of the Atairos 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, 2021 and December 31, 2020. 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 Atairos Notes, while the proceeds received from the warrants are not taxable. In connection with the repurchase of the Atairos Notes, we intend to unwind the related note hedge and warrants.

Under the if-converted method, the shares of common stock underlying the conversion option in the Atairos Notes are included in the diluted earnings per share denominator and the interest expense and amortization of the transaction costs on the Atairos Notes, net of tax, is added to the numerator. 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 Atairos Notes and to effectively increase the overall conversion price from $108.00 to $170.00 per share.

1.125% Convertible Senior Notes due 2026

In March 2021, we issued $200.0 million aggregate principal amount of convertible senior notes due 2026 (the "2026 Notes") in a private offering to qualified institutional buyers. The net proceeds from this offering were $193.0 million. The 2026 Notes bear interest at a rate of 1.125% per annum, payable semiannually in arrears on March 15 and September 15 of each year, beginning on September 15, 2021. The 2026 Notes will mature on March 15, 2026, subject to earlier repurchase, redemption or conversion.

We used $23.8 million of the net proceeds from the offering to pay the cost of certain related capped call transactions, and intend to use the remaining net proceeds, together with cash on hand, to repay or repurchase, the Atairos Notes. As of March 31, 2021, the remaining net proceeds from this offering and related transactions of $169.8 million is presented in Restricted cash in our condensed consolidated balance sheets. The use of the net proceeds from the offering is subject to the terms of our second amendment to the revolving credit agreement, as described in the Revolving Credit Agreement section below.

In April 2021, we issued an additional $30.0 million aggregate principal amount of 2026 Notes following the exercise by the initial purchasers of their option to purchase additional 2026 Notes, and we entered into additional capped call transactions in connection therewith. The net proceeds from the sale of the additional 2026 Notes were $29.1 million. We used $3.6 million of the net proceeds to pay the cost of the additional capped call transactions and intend to use the remainder of the net proceeds from the over-allotment option to repay or repurchase the Atairos Notes.

Each $1,000 of principal amount of the 2026 Notes initially is convertible into 14.6800 shares of common stock, which is equivalent to an initial conversion price of $68.12 per share, subject to adjustment upon the occurrence of specified events. In addition, upon the occurrence of a make-whole fundamental change (as defined in the Indenture governing the 2026 Notes) or if we issue a notice of redemption, we will, in certain circumstances, increase the conversion rate by a number of additional shares for a holder that elects to convert its 2026 Notes in connection with such make-whole fundamental change or redemption.

Upon conversion, we can elect to settle the conversion value in cash, shares of our common stock, or any combination of cash and shares of our common stock. Subject to certain conditions, holders of the 2026 Notes may convert the 2026 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, we 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. Based on the closing price of the common stock of $50.55 as of March 31, 2021, the if-converted value of the 2026 Notes was less than the principal amount.

Certain conditions apply to the conversion by holders and redemption by us of the 2026 Notes, which are set forth in the Indenture governing the 2026 Notes. In addition, upon the occurrence of a fundamental change (as defined in the Indenture) prior to the maturity date, holders may require us to repurchase all or a portion of the 2026 Notes for cash.

The 2026 Notes are our senior unsecured obligations and will rank senior in right of payment to any of our indebtedness that is expressly subordinated in right of payment to the 2026 Notes; equal in right of payment to any of our unsecured indebtedness that is not so subordinated; effectively junior in right of payment to any of our secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities of current or future subsidiaries (including trade payables).

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 2026 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 2026 Notes and any accrued and unpaid interest would automatically become immediately due and payable.

We account for the 2026 Notes as a single liability-classified instrument measured at amortized cost due to the adoption of ASU 2020-06. The carrying value of the 2026 Notes was determined by deducting transaction costs incurred in connection with the issuance of the 2026 Notes of $6.8 million from the principal amount. Those transaction costs were recorded as a debt discount in the condensed consolidated balance sheets and are amortized to interest expense. Together with the cash interest, this results in an effective interest rate of 1.84% over the term of the 2026 Notes. We have presented the 2026 Notes in non-current liabilities in the accompanying condensed consolidated balance sheets.

The carrying amount of the 2026 Notes consisted of the following as of March 31, 2021 (in thousands):

	March 31, 2021
Principal amount	$	200,000
Less: debt discount	(6,765)
Net carrying amount of liability	$	193,235

We classified the fair value of the 2026 Notes as a Level 3 measurement due to the lack of observable market data over fair value inputs such as our stock price volatility over the term of the 2026 Notes and our cost of debt. The estimated fair value of the 2026 Notes as of March 31, 2021 was $205.4 million and was determined using a lattice model.

Capped Call Transactions

In March and April 2021, in connection with the offering of the 2026 Notes, we entered into privately negotiated capped call transactions with each of Barclays Bank PLC, BNP Paribas and Mizuho Markets Americas LLC. The capped call transactions cover, subject to customary adjustments, the number of shares of common stock initially underlying the 2026 Notes. The capped call transactions are expected generally to reduce potential dilution to our common stock upon any conversion of the 2026 Notes and/or offset any cash payments we are required to make in excess of the principal amount of converted notes, with such reduction and/or offset subject to a cap initially equal to $104.80 (which represents a premium of 100% over the last reported sale price of our common stock on The Nasdaq Global Select Market on March 22, 2021), subject to certain adjustments under the terms of the capped call transactions.

The capped call transactions are accounted for as freestanding derivatives and recorded at the initial fair value in additional paid-in-capital in the condensed consolidated balance sheets with no recorded subsequent change to fair value as long as they meet the criteria for equity classification.

Under the if-converted method, the shares of common stock underlying the conversion option in the 2026 Notes are included in the diluted earnings per share denominator and the interest expense and amortization of the debt discount on the 2026 Notes, net of tax, is added to the numerator. However, upon conversion, there will be minimized economic dilution from the 2026 Notes, as exercise of the capped call transactions reduces dilution

from the 2026 Notes that would have otherwise occurred when the price of our common stock exceeds the conversion price. The capped call transactions are intended to offset actual dilution from the conversion of the 2026 Notes and to effectively increase the overall conversion price from $68.12 to $104.80 per share.

Revolving Credit Agreement

In May 2019, we entered into a second amended and restated senior secured revolving credit agreement which provided for aggregate principal borrowings of up to $400.0 million (prior to the Amendments described below) and matures in May 2024.

In July 2020, we entered into an amendment to the revolving credit agreement (the "First Amendment") in order to provide us with, among other things, operational flexibility and covenant relief through the end of the first quarter of 2021 in light of the ongoing impacts of COVID-19 on our business. In addition to the covenant relief described below, the First Amendment permanently reduces borrowing capacity under our senior secured revolving credit facility from $400.0 million to $225.0 million.

In March 2021, we entered into a second amendment to the revolving credit agreement (the "Second Amendment" and the revolving credit agreement as amended, the "Amended Credit Agreement") to extend the suspension period provided by the First Amendment through the fourth quarter 2021 (the "Suspension Period"), amend and remove certain financial covenants applicable after the amended Suspension Period ends and permit the issuance of the 2026 Notes and related capped call transactions. The Second Amendment requires that the net proceeds from the 2026 Notes be used to repay or repurchase the Atairos Notes.

We deferred debt issuance costs of $3.5 million as a result of entering into the Amended Credit Agreement. Deferred debt issuance costs are included within Other non-current assets on the condensed consolidated balance sheets as of March 31, 2021 and are amortized to interest expense over the term of the respective agreement.

Pursuant to the Amendments, during the Suspension Period, we will be exempt from certain covenant restrictions, namely the requirements to maintain a maximum funded indebtedness to EBITDA ratio, and a minimum liquidity balance (including any undrawn amounts under the credit facility) of at least 70% of our accrued merchant and supplier payables balance (which covenant will apply again upon termination of the Suspension Period). Additionally, the Amendments provide that, during the Suspension Period, we will be required to maintain specified minimum quarterly EBITDA levels and to maintain a monthly minimum liquidity balance (including any undrawn amounts under the credit facility) of at least 100% of our accrued merchant and supplier payables balance for such month plus $50.0 million. The Second Amendment also permanently removes requirements (which previously only applied after the Suspension Period) that we maintain (i) a maximum senior secured indebtedness to EBITDA ratio and (ii) unrestricted cash of not less than $250 million. Finally, the Second Amendment changes the requirement to maintain a minimum fixed charge coverage ratio (which requirement applies only after the Suspension Period ends) to a requirement to maintain a minimum interest coverage ratio.

In addition, under the Amended Credit Agreement, we are subject to various covenants, including customary restrictive covenants that limit our ability to, among other things: incur additional indebtedness; make dividend and other restricted payments, including limiting the amount of our 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 related parties and other affiliates. The Amendments further restrict certain of these negative covenants during the Suspension Period, including our ability to make share repurchases, acquisitions, investments and to incur additional indebtedness and liens.

Non-compliance with the covenants under the Amended Credit Agreement may result in termination of the commitments thereunder and any then outstanding borrowings may be declared due and payable immediately. We have the right to terminate the Amended Credit Agreement or reduce the available commitments at any time.

The Amendments also increased interest rates through the end of the Suspension Period, raising the alternative base rate and Canadian prime spreads to 1.50%, the fixed rate spreads to 2.50% and the commitment fee to 0.4% on the daily amount of the unused commitments under the Amended Credit Agreement. Following the Suspension Period, the applicable spread and commitment fee will revert to pre-Amendment levels, which provides for (a) interest at a rate per annum equal to (i) an adjusted LIBO rate or (ii) a customary base rate (with loans denominated in certain currencies bearing interest at rates specific to such currencies) plus an additional margin ranging between 0.50% and 2.00% and (b) commitment fees ranging from 0.25% to 0.35% on the daily amount of unused commitments. The Amended Credit Agreement also provides for the issuance of up to $75.0 million in letters of credit, provided that the sum of outstanding borrowings and letters of credit do not exceed the maximum funding commitment of $225.0 million.

The Amended Credit Agreement is secured by substantially all of our tangible and intangible assets, including a pledge of 100% of the outstanding capital stock of substantially all of our 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 our domestic and foreign subsidiaries are guarantors under the Amended Credit Agreement.

We had $100.0 million of outstanding borrowings and $23.1 million of outstanding letters of credit as of March 31, 2021, and $200.0 million of outstanding borrowings and $20.6 million of outstanding letters of credit as of December 31, 2020 under the Amended Credit Agreement.

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COMMITMENTS AND CONTINGENCIES

3 Months Ended

Mar. 31, 2021

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

Our contractual obligations and commitments and future operating income under our operating subleases as of March 31, 2021 and through the date of this report, did not materially change from the amounts set forth in our 2020 Annual Report on Form 10-K.

Legal Matters and Other Contingencies

From time to time, we are party to various legal proceedings incident to the operation of our business. For example, we currently are involved in proceedings brought by merchants, employment and related matters, intellectual property infringement suits, customer lawsuits, stockholder claims relating to U.S. securities law, consumer class actions and suits alleging, among other things, violations of state consumer protection or privacy laws.

On April 28, 2020, an individual plaintiff filed a securities fraud class action complaint in the United States District Court for the Northern District of Illinois, and in July 2020, another individual was appointed as lead plaintiff. The lawsuit covers the time period from July 30, 2019 through February 18, 2020. The lead plaintiff alleges that Groupon and certain of its officers made materially false and/or misleading statements or omissions regarding its business, operations and prospects, specifically as it relates to reiterating its full year guidance on November 4, 2019 and the Groupon Select program. Groupon filed a motion to dismiss the complaint and, on April 28, 2021, the Court granted this motion and dismissed the complaint without prejudice. The Court provided the plaintiff with the opportunity to file a motion to seek leave to file an amended complaint. It set a deadline of May 19, 2021 for plaintiff to file this motion. We intend to continue to vigorously defend the case, which we believe to be without merit.

In addition, third parties have from time to time claimed, and others may claim in the future, that we have infringed their intellectual property rights. We are subject to intellectual property disputes, including patent infringement claims, and expect that we will continue to be subject to intellectual property infringement claims as our services expand in scope and complexity. In the past, we have litigated such claims, and we are presently involved in several patent infringement and other intellectual property-related claims, including pending litigation or trademark disputes relating to, for example, our Goods category, some of which could involve potentially substantial claims for damages or injunctive relief. We may also become more vulnerable to third-party claims as laws such as the Digital Millennium Copyright Act are interpreted by the courts, and we become subject to laws in jurisdictions where the underlying laws with respect to the potential liability of online intermediaries are either unclear or less favorable. We believe that additional lawsuits alleging that we have violated patent, copyright or

trademark laws may be filed against us. Intellectual property claims, whether meritorious or not, are time consuming and often costly to resolve, could require expensive changes in our methods of doing business or the goods we sell, or could require us to enter into costly royalty or licensing agreements.

We also are 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 us to change our business practices, sometimes in expensive ways.

We are also subject to, or in the future may become subject to, a variety of regulatory inquiries, audits, and investigations across the jurisdictions where we conduct our 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 us, 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 us to change our business practices in expensive ways, require significant amounts of management time, result in the diversion of significant operational resources, materially damage our brand or reputation, or otherwise harm our business.

We establish 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, we believe that the amount of reasonably possible losses in excess of the amounts accrued for those matters would not have a material adverse effect on our business, condensed consolidated financial position, results of operations or cash flows. Our 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 us because of defense and settlement costs, diversion of management resources and other factors.

Indemnifications

In connection with the disposition of our operations in Latin America in 2017, we recorded $5.4 million in indemnification liabilities for certain tax and other matters upon the closing of the transactions as an adjustment to the net loss on the dispositions within discontinued operations at their fair value. We estimated the indemnification liabilities using a probability-weighted expected cash flow approach. Our remaining indemnification liabilities were $2.8 million as of March 31, 2021. We estimate that the total amount of obligations that are reasonably possible to arise under the indemnifications in excess of amounts accrued as of March 31, 2021 is approximately $11.7 million.

In the normal course of business to facilitate transactions related to our operations, we indemnify certain parties, including employees, lessors, service providers, merchants, and counterparties to investment agreements and asset and stock purchase agreements with respect to various matters. We have 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. We are also subject to increased exposure to various claims as a result of our divestitures and acquisitions, particularly in cases where we are entering into new businesses in connection with such acquisitions. We may also become more vulnerable to claims as we expand the range and scope of our services and are subject to laws in jurisdictions where the underlying laws with respect to potential liability are either unclear or less favorable. In addition, we have entered into indemnification agreements with our officers, directors and underwriters, and our 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 we have made under these agreements have not had a material impact on our operating results, financial position or cash flows.

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STOCKHOLDERS' EQUITY AND COMPENSATION ARRANGEMENTS

3 Months Ended

Mar. 31, 2021

Share-based Payment Arrangement [Abstract]

STOCKHOLDERS' EQUITY AND COMPENSATION ARRANGEMENTS

STOCKHOLDERS' EQUITY AND COMPENSATION ARRANGEMENTS

Reverse Stock Split

On June 9, 2020, our stockholders approved amendments to our Restated Certificate of Incorporation to effect a reverse stock split of our shares of common stock, and our Board approved a final reverse stock split ratio of 1-for-20 and a corresponding reduction in the number of authorized shares of our common stock. The reverse stock split became effective on June 10, 2020. Accordingly, the number of shares, equity awards, and income (loss) per share disclosed throughout this Quarterly Report on Form 10-Q have been retrospectively adjusted to reflect the reverse stock split for all prior periods presented.

Common Stock

Pursuant to our restated certificate of incorporation, as of March 31, 2021, the Board had the authority to issue up to a total of 100,500,000 shares of common stock. Each holder of common stock is entitled to one vote per share on any matter that is submitted to a vote of stockholders. In addition, holders of our 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 us to repurchase up to $300.0 million of our common stock under our share repurchase program. During the three months ended March 31, 2021 and 2020, we did not purchase any shares under the program. As of March 31, 2021, up to $245.0 million of common stock remained available for purchase under our program. The timing and amount of share repurchases, if any, will be determined based on market conditions, limitations under the Amended Credit Agreement, share price, available cash 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"). As of March 31, 2021, 3,212,132 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 are presented within the following line items of the condensed consolidated statements of operations for the three months ended March 31, 2021 and 2020 (in thousands):

	Three Months Ended March 31,
	2021		2020
Cost of revenue	$	171	$	259
Marketing	135		874
Selling, general and administrative	6,873		12,882
Total stock-based compensation expense	$	7,179	$	14,015

We capitalized $0.9 million and $1.1 million of stock-based compensation for the three months ended March 31, 2021 and 2020 in connection with internally-developed software and cloud computing arrangements.

Employee Stock Purchase Plan

The Groupon, Inc. 2012 Employee Stock Purchase Plan, as amended, ("ESPP") authorizes us to grant up to 1,000,000 shares of common stock under that plan as of March 31, 2021. For the three months ended March 31, 2021 and 2020, 23,418 and 28,621 shares of common stock 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 and are amortized on a straight-line basis over their requisite service period.

The table below summarizes restricted stock unit activity under the Plans for the three months ended March 31, 2021:

	Restricted Stock Units	Weighted-Average Grant Date Fair Value (per unit)
Unvested at December 31, 2020	1,853,007	$	31.91
Granted	129,827	32.87
Vested	(222,244)	27.60
Forfeited	(125,053)	32.39
Unvested at March 31, 2021	1,635,537	$	32.37

As of March 31, 2021, $31.4 million of unrecognized compensation costs related to unvested restricted stock units are expected to be recognized over a remaining weighted-average period of 0.94 years.

Performance Share Units

We grant performance share units under the Plans that vest in shares of our common stock upon the achievement of financial and operational targets specified in the respective award agreement ("Performance Share Units"). During the year ended December 31, 2019, we also granted performance share units subject to a market condition ("Market-based Performance Share Units").

Our Performance Share Units and Market-based Performance Share Units are subject to continued employment through the performance period dictated by the award and certification by the Compensation Committee that the specified performance conditions have been achieved.

The table below summarizes Performance Share Unit activity under the Plans for the three months ended March 31, 2021:

	Performance Share Units	Weighted-Average Grant Date Fair Value (per unit)		Market-based Performance Share Units	Weighted-Average Grant Date Fair Value (per unit)
Unvested at December 31, 2020	124,709	$	29.73	57,668	$	60.60
Granted (1)	41,729	15.44		—	—
Vested	(86,710)	24.36		—	—
Forfeited	(282)	69.00		—	—
Unvested at March 31, 2021	79,446	27.95		57,668	60.60
Maximum shares issuable upon vesting at March 31, 2021	79,446			57,668

(1)Performance Share Units granted during the three months ended March 31, 2021 relate to the issuance of incremental shares upon the Compensation Committee's certification of the achievement of the 2020 performance metrics.

As of March 31, 2021, $1.0 million of unrecognized compensation costs related to unvested Performance Share Units are expected to be recognized over a remaining weighted-average period of 1.35 years. We have recognized all compensation costs related to our unvested Market-Based Performance Share Units.

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REVENUE RECOGNITION

3 Months Ended

Mar. 31, 2021

Revenue from Contract with Customer [Abstract]

REVENUE RECOGNITION

REVENUE RECOGNITION

Refer to Note 13, Segment Information, for revenue summarized by reportable segment and category for the three months ended March 31, 2021 and 2020.

Contract Balances

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. Our deferred revenue was $8.9 million as of March 31, 2021. As of December 31, 2020, our deferred revenue was $11.2 million, which was substantially recognized during the three months ended March 31, 2021.

Customer Credits

We issue credits to customers that can be applied to future purchases through our online marketplaces. Credits are primarily issued as consideration for refunds. To a lesser extent, credits are issued for customer relationship purposes. The following table summarizes the activity in the liability for customer credits for the three months ended March 31, 2021 (in thousands):

	Customer Credits
Balance as of December 31, 2020	$	61,006
Credits issued	50,051
Credits redeemed (1)	(41,283)
Breakage revenue recognized	(6,205)
Foreign currency translation	(745)
Balance as of March 31, 2021	$	62,824

(1)Customer credits can be redeemed through our online marketplaces for goods or services provided by a third-party merchant or for merchandise inventory sold by us. 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 us, product revenue is recognized on a gross basis equal to the amount of the customer credit liability derecognized. Historically, customer credits have primarily been used within one year of issuance; however, usage patterns have been impacted from changes in customer behavior due to COVID-19.

Costs of Obtaining Contracts

Incremental costs to obtain contracts with third-party merchants, such as sales commissions, are deferred and recognized over the expected period of the merchant arrangement, generally from 12 to 18 months. Deferred contract acquisition costs are presented within the following line items of the condensed consolidated balance sheets as of March 31, 2021 and December 31, 2020 (in thousands):

	March 31, 2021		December 31, 2020
Prepaid expenses and other current assets	$	973	$	1,009
Other non-current assets	5,957		5,315

The amortization of deferred contract acquisition costs is classified within Selling, general and administrative expense in the condensed consolidated statements of operations. We amortized $2.6 million and $4.7 million of deferred contract acquisition costs during the three months ended March 31, 2021 and 2020. We did not recognize any impairments in relation to the deferred contract acquisition costs during the three months ended March 31, 2021 and 2020.

Allowance for Expected Credit Losses on Accounts Receivable

We establish an allowance for expected credit losses on accounts receivables based on identifying the following customer risk characteristics: size, type of customer, and payment terms offered in the normal course of business. Receivables with similar risk characteristics are grouped into pools. For each pool, we consider the historical credit loss experience, current economic conditions, bankruptcy filings, published or estimated credit default rates, age of the receivable and any recoveries in assessing the lifetime expected credit losses.

The following table summarizes the activity in the allowance for expected credit losses on accounts receivables for the three months ended March 31, 2021 (in thousands):

	Allowance for Expected Credit Losses
Balance as of December 31, 2020	$	9,756
Change in provision	(244)
Write-offs	(292)
Foreign currency translation	(3)
Balance as of March 31, 2021	$	9,217

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 our online marketplaces until the customer redeems the related voucher. If the customer does not redeem a voucher with such merchant payment terms, we retain all of the gross billings for that voucher, rather than retaining only our net commission. We estimate the variable consideration from vouchers that will not ultimately be redeemed using our historical voucher redemption experience and recognize that amount as revenue at the time of sale. We apply a constraint to ensure it is probable that a significant reversal of revenue will not occur in future periods. Beginning in 2020, we increased our constraint on revenue from unredeemed vouchers to reflect ongoing uncertainty in future customer redemption behavior due to the impacts of COVID-19. If actual redemptions differ from our estimates, the effects could be material to the condensed consolidated financial statements. During the three months ended March 31, 2021, we recognized an immaterial amount of variable consideration from unredeemed vouchers that were sold in a prior period.

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RESTRUCTURING AND RELATED CHARGES

3 Months Ended

Mar. 31, 2021

Restructuring and Related Activities [Abstract]

RESTRUCTURING AND RELATED CHARGES

RESTRUCTURING AND RELATED CHARGES

In April 2020, the Board approved a multi-phase restructuring plan of up to $105.0 million of total pretax charges related to our previously announced strategic shift and as part of the cost cutting measures implemented in response to the impact of COVID-19 on our business. We expect to incur total pretax charges of $75.0 million to $105.0 million in connection with the restructuring actions through the end of 2021. Our restructuring plan includes workforce reductions of approximately 1,200 positions globally, the exit or discontinuation of the use of certain leases and other assets, impairments of our right-of-use and other long-lived assets, and the exit of our operations in Japan and New Zealand. In the first quarter 2021, we substantially liquidated our subsidiary in Japan and reclassified $32.2 million of cumulative foreign currency translation gains into earnings, which is presented in Other income (expense), net on the condensed consolidated statement of operations for the three months ended March 31, 2021.

The majority of our restructuring charges are expected to be paid in cash and primarily relate to employee severance and benefits expenses, facilities-related costs and professional advisory fees. We will continue to evaluate our cost structure, including additional workforce reductions, as part of our restructuring plan. Costs incurred related to the restructuring plan are classified as Restructuring and related charges on the condensed consolidated statements of operations.

The following table summarizes costs incurred by segment related to the restructuring plans for the three months ended March 31, 2021 (in thousands):

	Three Months Ended March 31, 2021
	Employee Severance and Benefit Costs		Legal and Advisory Costs		Lease-related Charges (Credits)		Total Restructuring Charges (Credits)
North America	$	442	$	807	$	741	$	1,990
International	6,460		(22)		(1,006)		5,432
Consolidated	$	6,902	$	785	$	(265)	$	7,422

As a part of our restructuring plan, we vacated several of our leased facilities, and many of those facilities are being actively marketed for sublease or we are in negotiations with the landlord to potentially terminate or modify those leases. Rent expense, including amortization of the right-of-use asset and accretion of the operating lease liability, sublease income and other variable lease costs related to the leased facilities vacated as part of our restructuring plan are presented within Restructuring and related charges in the condensed consolidated statements of operations. The current and non-current liabilities associated with these leases continue to be presented within Other current liabilities and Operating lease obligations in the condensed consolidated balance sheets.

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

	Employee Severance and Benefit Costs		Other Exit Costs		Total
Balance as of December 31, 2019 (1)	$	699	$	—	$	699
Charges payable in cash (2)	36,266		2,137		38,403
Cash payments	(25,328)		(1,289)		(26,617)
Foreign currency translation	1,660		(14)		1,646
Balance as of December 31, 2020	13,297		834		14,131
Charges payable in cash	6,902		785		7,687
Cash payments	(2,431)		(812)		(3,243)
Foreign currency translation	(570)		—		(570)
Balance as of March 31, 2021	$	17,198	$	807	$	18,005

(1)Amounts included in the year ended December 31, 2019 are related to prior restructuring plans and the liabilities under those plans have been substantially settled.

(2)Excludes stock-based compensation of $1.7 million related to accelerated vesting of stock-based compensation awards for certain employees terminated as a result of our restructuring activities.

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INCOME TAXES

3 Months Ended

Mar. 31, 2021

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

Our income tax provision for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items.

Provision (benefit) for income taxes and income (loss) from continuing operations before provision (benefit) for income taxes for the three months ended March 31, 2021 and 2020 was as follows (in thousands):

	Three Months Ended March 31,
	2021		2020
Provision (benefit) for income taxes	$	2,427	$	(5,988)
Income (loss) from continuing operations before provision (benefit) for income taxes	16,875		(216,848)

Our U.S. Federal income tax rate is 21%. The effective tax rate for the three months ended March 31, 2021 was lower than the U.S. statutory federal income tax rate due to the benefit of non-taxable items and the U.S. research and development tax credit. The three months ended March 31, 2021 and 2020 were also impacted

by the pretax losses incurred in jurisdictions that have valuation allowances against their net deferred tax assets. The three months ended March 31, 2020 was impacted by the reversals of reserves for uncertain tax positions due to the closure of tax audits and by the carryback of federal net operating losses due to the income tax relief provided by the CARES Act. 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.

We are 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 and completion of those audits. We are subject to claims for tax assessments by foreign jurisdictions, including a proposed assessment for $122.4 million, inclusive of estimated incremental interest from the original assessment. We believe that the assessment, which primarily relates to transfer pricing on transactions occurring in 2011, is without merit and we intend to vigorously defend ourselves in that matter. In addition to any potential increases in our liabilities for uncertain tax positions from the ultimate resolution of that assessment, we believe that it is reasonably possible that reductions of up to $3.4 million in unrecognized tax benefits may occur within the 12 months following March 31, 2021 upon closing of income tax audits or the expiration of applicable statutes of limitations.

In general, it is our practice and intention to reinvest the earnings of our non-U.S. subsidiaries in those operations. Additionally, while we did not incur the deemed repatriation tax, 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, 2021 and December 31, 2020 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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FAIR VALUE MEASUREMENTS

3 Months Ended

Mar. 31, 2021

Fair Value Disclosures [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.

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

Fair value option investments and available-for-sale securities. We have fair value option investments and available-for-sale securities that we measure using the income approach. We have classified these investments as Level 3 due to the lack of observable market data over fair value inputs such as cash flow projections and discount rates.

Contingent consideration. During the three months ended March 31, 2021, we settled a contingent consideration arrangement to the former owners of a business acquired in 2018. We use the income approach to value contingent consideration obligations based on future financial performance. We have classified our contingent consideration 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 table provides a roll forward of the fair value of recurring Level 3 fair value measurements for the three months ended March 31, 2021 and 2020 (in thousands):

	Three Months Ended March 31,
	2021		2020
Assets
Fair value option investments:
Beginning Balance	$	—	$	1,405
Total gains (losses) included in earnings	—		(1,405)
Ending Balance	$	—	$	—
Unrealized gains (losses) still held (1)	$	—	$	(1,405)
Liabilities
Contingent Consideration:
Beginning Balance	$	326	$	1,298
Settlements of contingent consideration liabilities	(393)		—
Total losses (gains) included in earnings	—		4
Foreign currency translation	67		(83)
Ending Balance	$	—	$	1,219
Unrealized gains (losses) still held (1)	$	—	$	4

(1)Represents the unrealized gains or losses 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.

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 or increased due to an observable price change in an orderly transaction.

We recognized $109.5 million in non-cash impairment charges related to goodwill and $22.4 million in non-cash impairment charges related to long-lived assets during the three months ended March 31, 2020. See Note 2, Goodwill and Long-Lived Assets, for additional information.

We recognized $6.7 million in impairment charges related to an other equity method investment during the three months ended March 31, 2020. See Note 3, Investments, for additional information.

We did not record any other significant nonrecurring fair value measurements after initial recognition for the three months ended March 31, 2021 and 2020.

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

Our financial instruments not carried at fair value consist primarily of accounts receivable, restricted cash, short-term borrowings, accounts payable, accrued merchant and supplier payables and accrued expenses. The carrying values of those assets and liabilities approximate their respective fair values as of March 31, 2021 and December 31, 2020 due to their short-term nature.

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INCOME (LOSS) PER SHARE

3 Months Ended

Mar. 31, 2021

Earnings Per Share [Abstract]

INCOME (LOSS) PER SHARE

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, 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 using 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, 2021 and 2020 (in thousands, except share amounts and per share amounts):

	Three Months Ended March 31,
	2021		2020
Basic and diluted net income (loss) per share:
Numerator
Net income (loss) - continuing operations	$	14,448	$	(210,860)
Less: Net income (loss) attributable to noncontrolling interests	(110)		3,044
Basic net income (loss) attributable to common stockholders - continuing operations	14,558		(213,904)
Net income (loss) attributable to common stockholders - discontinued operations	—		382
Basic net income (loss) attributable to common stockholders	$	14,558	$	(213,522)
Add: Effect of assumed conversion of convertible senior notes due 2026, net of tax (1)	$	72	$	—
Diluted net income (loss) attributable to common stockholders - continuing operations	14,630		(213,904)
Net income (loss) attributable to common stockholders - discontinued operations	—		382
Diluted net income (loss) attributable to common stockholders	$	14,630	$	(213,522)
Denominator
Shares used in computation of basic net income (loss) per share	29,028,489		28,365,216
Weighted-average effect of diluted securities
Restricted stock units	931,922		—
Performance share units and other stock-based compensation awards	109,419		—
Convertible senior notes due 2026 (1)	195,733		—
Shares used in computation of diluted net income (loss) per share	30,265,563		28,365,216
Basic net income (loss) per share:
Continuing operations	$	0.50	$	(7.54)
Discontinued operations	—		0.01
Basic net income (loss) per share	$	0.50	$	(7.53)
Diluted net income (loss) per share:
Continuing operations	$	0.48	$	(7.54)
Discontinued operations	—		0.01
Diluted net income (loss) per share	$	0.48	$	(7.53)

(1)We apply the if-converted method in computing the effect of our convertible senior notes on diluted net income (loss) per share, whereby the numerator of our diluted net income (loss) per share computations are adjusted for interest expense, net of tax, and the denominator is adjusted for the number shares into which the convertible senior notes could be converted. The effect is only included in the calculation of earnings per share for those instruments for which it would reduce earnings per share. Beginning January 1, 2021, the interest expense, net of tax, included in the numerator adjustment is calculated in accordance with ASU 2020-06, while prior period interest expense, net of tax, included in the numerator adjustment continues to be calculated in accordance with the historical policies and remains unchanged. See Note 5, Financing Arrangements, for additional information.

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,
	2021	2020
Restricted stock units	172,015	1,657,810
Performance share units and other stock-based compensation awards	—	279,243
Convertible senior notes due 2022 (1)	2,314,815	2,314,815
Warrants	2,314,815	2,314,815
Capped call transactions	195,733	—
Total	4,997,378	6,566,683

(1)We apply the if-converted method in computing the effect of our convertible senior notes on diluted net income (loss) per share, whereby the numerator of our diluted net income (loss) per share computations are adjusted for interest expense, net of tax, and the denominator is adjusted for the number shares into which the convertible senior notes could be converted. The effect is only included in the calculation of earnings per share for those instruments for which it would reduce earnings per share. See Note 5, Financing Arrangements, for additional information.

We had outstanding Market-based Performance share units as of March 31, 2021 and 2020 that were eligible to vest into shares of common stock subject to the achievement of specified performance or market 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. As of March 31, 2021, there were up to 57,668 shares of common stock issuable upon vesting of outstanding Market-based Performance Share Units that were excluded from the table above as the performance or market conditions were not satisfied as of the end of the period.

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SEGMENT INFORMATION

3 Months Ended

Mar. 31, 2021

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION

The segment information reported in the tables below reflects the operating results that are regularly reviewed by our chief operating decision maker to assess performance and make resource allocation decisions. Our operations are organized into two segments: North America and International. Our measure of segment profitability is contribution profit, defined as gross profit less marketing expense, which is consistent with how management reviews the operating results of the segments. Contribution profit measures the amount of marketing investment needed to generate gross profit. Other operating expenses are excluded from contribution profit as management does not review those expenses by segment.

The following table summarizes revenue by reportable segment and category for the three months ended March 31, 2021 and 2020 (in thousands):

	Three Months Ended March 31,
	2021		2020
North America
Service revenue:
Local	$	125,374	$	142,660
Goods	15,285		3,745
Travel	5,959		6,449
Total service revenue	146,618		152,854
Product revenue - Goods	626		82,275
Total North America revenue (1)	147,244		235,129
International
Service revenue:
Local	23,189		48,668
Goods	1,970		2,233
Travel	847		3,273
Total service revenue	26,006		54,174
Product revenue - Goods	90,567		84,847
Total International revenue (1)	$	116,573	$	139,021

(1)North America includes revenue from the United States of $145.0 million and $230.9 million for the three months ended March 31, 2021 and 2020. International includes revenue from the United Kingdom and France of $42.1 million and $28.5 million for the three months ended March 31, 2021, and United Kingdom of $49.5 million for the three months ended March 31, 2020. There were no other individual countries that represented more than 10% of consolidated total revenue for the three months ended March 31, 2021 and 2020. Revenue is attributed to individual countries based on the location of the customer.

The following table summarizes gross profit by reportable segment and category for the three months ended March 31, 2021 and 2020 (in thousands):

	Three Months Ended March 31,
	2021		2020
North America
Service gross profit:
Local	$	112,426	$	123,859
Goods	13,056		3,008
Travel	4,718		3,962
Total service gross profit	130,200		130,829
Product gross profit - Goods	168		12,942
Total North America gross profit	130,368		143,771
International
Service gross profit:
Local	21,427		44,524
Goods	1,859		2,016
Travel	713		2,744
Total service gross profit	23,999		49,284
Product gross profit - Goods	12,616		8,192
Total International gross profit	$	36,615	$	57,476

The following table summarizes contribution profit by reportable segment for the three months ended March 31, 2021 and 2020 (in thousands):

	Three Months Ended March 31,
	2021		2020
North America
Gross profit	$	130,368	$	143,771
Marketing	22,768		39,409
Contribution profit	107,600		104,362
International
Gross profit	36,615		57,476
Marketing	10,898		20,721
Contribution profit	25,717		36,755
Consolidated
Gross profit	166,983		201,247
Marketing	33,666		60,130
Contribution profit	133,317		141,117
Selling, general and administrative	127,143		207,135
Goodwill impairment	—		109,486
Long-lived asset impairment	—		22,351
Restructuring and related charges	7,422		6
Income (loss) from operations	$	(1,248)	$	(197,861)

The following table summarizes total assets by reportable segment as of March 31, 2021 and December 31, 2020 (in thousands):

	March 31, 2021		December 31, 2020
Total assets:
North America (1)	$	1,056,466	$	971,110
International (1)	345,571		440,397
Consolidated total assets	$	1,402,037	$	1,411,507

(1)North America contains assets from the United States of $1,032.9 million and $948.1 million as of March 31, 2021 and December 31, 2020. International contained assets from Switzerland of $151.7 million as of December 31, 2020. There were no other individual countries that represented more than 10% of consolidated total assets as of March 31, 2021 and December 31, 2020.

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SUBSEQUENT EVENTS

3 Months Ended

Mar. 31, 2021

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

In April 2021, we issued an additional $30.0 million aggregate principal amount of 2026 Notes following the exercise by the initial purchasers of their option to purchase additional 2026 Notes, and we entered into additional capped call transactions in connection therewith. See Note 5, Financing Arrangements, for additional information.

In May 2021, we entered into an agreement with AGH to repurchase the Atairos Notes on or before May 14, 2021 for a purchase price equal to the $250.0 million outstanding principal amount of the Atairos Notes, any accrued and unpaid interest through the repurchase date, and $4.0 million of cash consideration. Funds for the repurchase, excluding any interest, are expected to come from the following (in millions):

Restricted cash held as of March 31, 2021	$	169.8
Additional net proceeds from 2026 Notes issued in April 2021	25.5
Unrestricted cash	58.7

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DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Policies)

3 Months Ended

Mar. 31, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Principles of Consolidation

Principles of Consolidation

The condensed consolidated financial statements include the accounts of Groupon, Inc. and its wholly-owned subsidiaries, majority-owned subsidiaries over which we exercise control and variable interest entities for which we are the primary beneficiary. All intercompany accounts and transactions have been eliminated in consolidation. Outside stockholders' interests in subsidiaries are shown on the condensed consolidated financial statements as Noncontrolling interests. Investments in entities in which we do not have a controlling financial interest are accounted for at fair value, as available-for-sale securities or at cost adjusted for observable price changes and impairments, as appropriate.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles ("GAAP") requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Estimates in our financial statements include, but are not limited to, the following: variable consideration from unredeemed vouchers; income taxes; leases; initial valuation and subsequent impairment testing of goodwill, other intangible assets and long-lived assets; investments; receivables; customer refunds and other reserves; contingent liabilities; and the useful lives of property, equipment and software and intangible assets. Actual results could differ materially from those estimates.

Reclassifications

Reclassifications

Certain reclassifications have been made to the condensed consolidated financial statements of prior periods to conform to the current period presentation.

Adoption of New Accounting Standards

Adoption of New Accounting Standards

We adopted the guidance in ASU 2019-12, Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes, on January 1, 2021. This ASU simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. The adoption of ASU 2019-12 did not have a material impact on the condensed consolidated financial statements.

We adopted the guidance in ASU 2020-03, Codification Improvements to Financial Instruments, on January 1, 2021. This ASU amends a wide variety of Topics in the Codification, including revolving-debt arrangements and allowance for credit losses related to leases. The adoption of ASU 2020-03 did not have a material impact on the condensed consolidated financial statements.

We early adopted the guidance in ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity, on January 1, 2021. The ASU removes the separation models for convertible debt with a cash conversion feature or convertible instruments with a beneficial conversion feature. Additionally, the ASU removes certain conditions for equity classification related to contracts in an entity’s own equity (e.g., warrants) and amends certain guidance related to the computation of earnings per share for convertible instruments and contracts in an entity’s own equity. As a result of adopting ASU 2020-06, we recorded a $67.0 million net reduction to additional paid-in capital, a $19.0 million increase to non-current liabilities and a $48.0 million reduction to our opening accumulated deficit as of January 1, 2021. See Note 5, Financing Arrangements, for additional information.

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GOODWILL AND LONG-LIVED ASSETS (Tables)

3 Months Ended

Mar. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Long-lived Assets Impairment

The following table summarizes impairment for long-lived assets by asset type for the three months ended March 31, 2020 (in thousands):

	Impairment
Property, equipment and software, net
Furniture and fixtures	$	413
Leasehold improvements	2,806
Office equipment	198
Purchased software	14
Computer hardware	2,842
Right-of-use assets - finance leases, net	1,318
Capitalized software	304
Internally-developed software	2,988
Total Property, equipment and software, net	$	10,883
Right-of-use assets - operating leases, net	10,494
Intangible assets, net	103
Other non-current assets	871
Total long-lived assets	$	22,351

Schedule of Goodwill

The following table summarizes goodwill activity by segment for the three months ended March 31, 2021 (in thousands):

	North America		International		Consolidated
Balance as of December 31, 2020	$	178,685	$	36,014	$	214,699
Other (1)	—		3,776		3,776
Foreign currency translation	—		(1,111)		(1,111)
Balance as of March 31, 2021	$	178,685	$	38,679	$	217,364

(1)Represents the reclassification between Right-of-use assets - operating leases, net and Goodwill due to an adjustment in the allocation of impairments recorded in 2020 between those two accounts.

Schedule of Intangible Assets

The following table summarizes intangible assets as of March 31, 2021 and December 31, 2020 (in thousands):

	March 31, 2021						December 31, 2020
	Gross Carrying Value		Accumulated Amortization		Net Carrying Value		Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Merchant relationships	$	20,378	$	10,187	$	10,191	$	20,208	$	9,236	$	10,972
Trade names	9,671		8,009		1,662		9,651		7,921		1,730
Developed technology	1,688		1,585		103		2,121		1,863		258
Patents	11,104		4,859		6,245		10,813		4,697		6,116
Other intangible assets	17,829		7,346		10,483		17,823		6,748		11,075
Total	$	60,670	$	31,986	$	28,684	$	60,616	$	30,465	$	30,151

Schedule of Estimated Future Amortization Expense

As of March 31, 2021, estimated future amortization expense related to intangible assets is as follows (in thousands):

Remaining amounts in 2021	$	6,412
2022	8,130
2023	6,952
2024	3,219
2025	1,627
Thereafter	2,344
Total	$	28,684

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INVESTMENTS (Tables)

3 Months Ended

Mar. 31, 2021

Equity Method Investments and Joint Ventures [Abstract]

Summary of Investments

The following table summarizes investments as of March 31, 2021 and December 31, 2020 (dollars in thousands):

	March 31, 2021		Percent Ownership of Voting Stock			December 31, 2020		Percent Ownership of Voting Stock
Other equity investments	$	36,008	1%	to	19%	$	37,671	1%	to	19%
Available-for-sale securities - redeemable preferred shares (1)	—		19%	to	25%	—		19%	to	25%
Fair value option investments (1)	—		10%	to	19%	—		10%	to	19%
Total investments	$	36,008				$	37,671

(1)We hold available-for-sale securities and fair value option investments in various entities that were written down to zero prior to December 31, 2020. During the first quarter 2020, we recognized a $1.4 million loss from changes in the fair value of our fair value option investments.

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SUPPLEMENTAL CONDENSED CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF OPERATIONS INFORMATION (Tables)

3 Months Ended

Mar. 31, 2021

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

Schedule of Other Income (Expense)

The following table summarizes other income (expense), net for the three months ended March 31, 2021 and 2020 (in thousands):

	Three Months Ended March 31,
	2021		2020
Interest income	$	1,155	$	2,556
Interest expense	(5,116)		(6,958)
Foreign currency gains (losses), net (1)	22,084		(6,496)
Impairment and other changes in fair value of investments	—		(8,089)
Other income (expense), net	$	18,123	$	(18,987)

(1)Foreign currency gains (losses), net for the three months ended March 31, 2021 includes a $32.2 million cumulative foreign currency translation adjustment gain that was reclassified into earnings as a result of the substantial liquidation of our subsidiary in Japan as part of our restructuring actions. Refer to Note 9, Restructuring and Related Charges, for additional information.

Schedule of Prepaid and Other Current Assets

The following table summarizes prepaid expenses and other current assets as of March 31, 2021 and December 31, 2020 (in thousands):

	March 31, 2021		December 31, 2020
Prepaid expenses	$	20,588	$	18,038
Income taxes receivable	5,282		5,437
Other	15,391		16,966
Total prepaid expenses and other current assets	$	41,261	$	40,441

Schedule of Other Non-Current Assets

The following table summarizes other non-current assets as of March 31, 2021 and December 31, 2020 (in thousands):

	March 31, 2021		December 31, 2020
Deferred income tax	$	11,438	$	11,593
Debt issue costs, net	1,489		1,852
Deferred contract acquisition costs	5,957		5,315
Deferred cloud implementation costs	10,494		10,402
Other	4,936		5,165
Total other non-current assets	$	34,314	$	34,327

Schedule of Accrued Merchant and Supplier Payables

The following table summarizes accrued merchant and supplier payables as of March 31, 2021 and December 31, 2020 (in thousands):

	March 31, 2021		December 31, 2020
Accrued merchant payables	$	280,298	$	303,260
Accrued supplier payables (1)	48,702		107,703
Total accrued merchant and supplier payables	$	329,000	$	410,963

(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 accrued expenses and other current liabilities as of March 31, 2021 and December 31, 2020 (in thousands):

	March 31, 2021		December 31, 2020
Refund reserve	$	35,740	$	33,173
Compensation and benefits	60,685		54,958
Accrued marketing	14,589		15,299
Restructuring-related liabilities	17,620		13,746
Customer credits	62,824		61,006
Income taxes payable	6,975		7,862
Deferred revenue	8,857		11,223
Deferred payroll taxes (1)	2,922		2,922
Operating and finance lease obligations	36,652		37,755
Deferred cloud computing contract incentive	3,000		3,000
Other	49,418		54,055
Total accrued expenses and other current liabilities	$	299,282	$	294,999

(1)We have elected to defer certain payroll taxes under the Coronavirus Aid, Relief and Economic Security ("CARES") Act. These amounts are due by December 31, 2021.

Schedule of Other Non-current Liabilities

The following table summarizes other non-current liabilities as of March 31, 2021 and December 31, 2020 (in thousands):

	March 31, 2021		December 31, 2020
Contingent income tax liabilities	$	27,105	$	25,593
Finance lease obligations	468		730
Restructuring-related liabilities	385		385
Deferred income taxes	3,474		3,170
Deferred payroll taxes (1)	2,922		2,922
Deferred cloud computing contract incentive	3,500		4,250
Other	6,149		7,378
Total other non-current liabilities	$	44,003	$	44,428

(1)We have elected to defer certain payroll taxes under the Coronavirus Aid, Relief, and Economic Security ("CARES") Act. These amounts are due by December 31, 2022.

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FINANCING ARRANGEMENTS (Tables)

3 Months Ended

Mar. 31, 2021

Debt Disclosure [Abstract]

Schedule of Notes

The carrying amount of the Atairos Notes consisted of the following as of March 31, 2021 and December 31, 2020 (in thousands):

	March 31, 2021		December 31, 2020
Liability component:
Principal amount	$	250,000	$	250,000
Less: debt discount - transaction costs	(1,239)		(1,459)
Less: debt discount - equity	—		(19,051)
Net carrying amount of liability component	$	248,761	$	229,490
Net carrying amount of equity component	$	—	$	67,014

The carrying amount of the 2026 Notes consisted of the following as of March 31, 2021 (in thousands):

	March 31, 2021
Principal amount	$	200,000
Less: debt discount	(6,765)
Net carrying amount of liability	$	193,235

Schedule of Convertible Debt Interest Expense

During the three months ended March 31, 2021 and 2020, we recognized interest costs on the Atairos Notes as follows (in thousands):

	Three Months Ended March 31,
	2021		2020
Contractual interest (3.25% of the principal amount per annum)	$	2,032	$	2,032
Amortization of debt discount	303		3,516
Total	$	2,335	$	5,548

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STOCKHOLDERS' EQUITY AND COMPENSATION ARRANGEMENTS (Tables)

3 Months Ended

Mar. 31, 2021

Share-based Payment Arrangement [Abstract]

Share-based Payment Arrangement, Activity

The stock-based compensation expense related to stock awards issued under the Plans are presented within the following line items of the condensed consolidated statements of operations for the three months ended March 31, 2021 and 2020 (in thousands):

	Three Months Ended March 31,
	2021		2020
Cost of revenue	$	171	$	259
Marketing	135		874
Selling, general and administrative	6,873		12,882
Total stock-based compensation expense	$	7,179	$	14,015

Schedule of Restricted Stock Unit Activity

The table below summarizes restricted stock unit activity under the Plans for the three months ended March 31, 2021:

	Restricted Stock Units	Weighted-Average Grant Date Fair Value (per unit)
Unvested at December 31, 2020	1,853,007	$	31.91
Granted	129,827	32.87
Vested	(222,244)	27.60
Forfeited	(125,053)	32.39
Unvested at March 31, 2021	1,635,537	$	32.37

Schedule of Performance and Market-based Performance Share Unit Activity

The table below summarizes Performance Share Unit activity under the Plans for the three months ended March 31, 2021:

	Performance Share Units	Weighted-Average Grant Date Fair Value (per unit)		Market-based Performance Share Units	Weighted-Average Grant Date Fair Value (per unit)
Unvested at December 31, 2020	124,709	$	29.73	57,668	$	60.60
Granted (1)	41,729	15.44		—	—
Vested	(86,710)	24.36		—	—
Forfeited	(282)	69.00		—	—
Unvested at March 31, 2021	79,446	27.95		57,668	60.60
Maximum shares issuable upon vesting at March 31, 2021	79,446			57,668

(1)Performance Share Units granted during the three months ended March 31, 2021 relate to the issuance of incremental shares upon the Compensation Committee's certification of the achievement of the 2020 performance metrics.

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REVENUE RECOGNITION (Tables)

3 Months Ended

Mar. 31, 2021

Revenue from Contract with Customer [Abstract]

Schedule of Liability for Customer Credits

The following table summarizes the activity in the liability for customer credits for the three months ended March 31, 2021 (in thousands):

	Customer Credits
Balance as of December 31, 2020	$	61,006
Credits issued	50,051
Credits redeemed (1)	(41,283)
Breakage revenue recognized	(6,205)
Foreign currency translation	(745)
Balance as of March 31, 2021	$	62,824

(1)Customer credits can be redeemed through our online marketplaces for goods or services provided by a third-party merchant or for merchandise inventory sold by us. 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 us, product revenue is recognized on a gross basis equal to the amount of the customer credit liability derecognized. Historically, customer credits have primarily been used within one year of issuance; however, usage patterns have been impacted from changes in customer behavior due to COVID-19.

Schedule of Costs of Obtaining Contracts

Incremental costs to obtain contracts with third-party merchants, such as sales commissions, are deferred and recognized over the expected period of the merchant arrangement, generally from 12 to 18 months. Deferred contract acquisition costs are presented within the following line items of the condensed consolidated balance sheets as of March 31, 2021 and December 31, 2020 (in thousands):

	March 31, 2021		December 31, 2020
Prepaid expenses and other current assets	$	973	$	1,009
Other non-current assets	5,957		5,315

Schedule of Expected Credit Losses on Accounts Receivable

The following table summarizes the activity in the allowance for expected credit losses on accounts receivables for the three months ended March 31, 2021 (in thousands):

	Allowance for Expected Credit Losses
Balance as of December 31, 2020	$	9,756
Change in provision	(244)
Write-offs	(292)
Foreign currency translation	(3)
Balance as of March 31, 2021	$	9,217

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RESTRUCTURING AND RELATED CHARGES (Tables)

3 Months Ended

Mar. 31, 2021

Restructuring and Related Activities [Abstract]

Schedule of Restructuring Costs by Segment

The following table summarizes costs incurred by segment related to the restructuring plans for the three months ended March 31, 2021 (in thousands):

	Three Months Ended March 31, 2021
	Employee Severance and Benefit Costs		Legal and Advisory Costs		Lease-related Charges (Credits)		Total Restructuring Charges (Credits)
North America	$	442	$	807	$	741	$	1,990
International	6,460		(22)		(1,006)		5,432
Consolidated	$	6,902	$	785	$	(265)	$	7,422

Schedule of Restructuring Liability Activity

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

	Employee Severance and Benefit Costs		Other Exit Costs		Total
Balance as of December 31, 2019 (1)	$	699	$	—	$	699
Charges payable in cash (2)	36,266		2,137		38,403
Cash payments	(25,328)		(1,289)		(26,617)
Foreign currency translation	1,660		(14)		1,646
Balance as of December 31, 2020	13,297		834		14,131
Charges payable in cash	6,902		785		7,687
Cash payments	(2,431)		(812)		(3,243)
Foreign currency translation	(570)		—		(570)
Balance as of March 31, 2021	$	17,198	$	807	$	18,005

(1)Amounts included in the year ended December 31, 2019 are related to prior restructuring plans and the liabilities under those plans have been substantially settled.

(2)Excludes stock-based compensation of $1.7 million related to accelerated vesting of stock-based compensation awards for certain employees terminated as a result of our restructuring activities.

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INCOME TAXES (Tables)

3 Months Ended

Mar. 31, 2021

Income Tax Disclosure [Abstract]

Schedule of Components of Income Tax Expense (Benefit)

Provision (benefit) for income taxes and income (loss) from continuing operations before provision (benefit) for income taxes for the three months ended March 31, 2021 and 2020 was as follows (in thousands):

	Three Months Ended March 31,
	2021		2020
Provision (benefit) for income taxes	$	2,427	$	(5,988)
Income (loss) from continuing operations before provision (benefit) for income taxes	16,875		(216,848)

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FAIR VALUE MEASUREMENTS (Tables)

3 Months Ended

Mar. 31, 2021

Fair Value Disclosures [Abstract]

Schedule of Recurring Level 3 Fair Value Measurements

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, 2021 and 2020 (in thousands):

	Three Months Ended March 31,
	2021		2020
Assets
Fair value option investments:
Beginning Balance	$	—	$	1,405
Total gains (losses) included in earnings	—		(1,405)
Ending Balance	$	—	$	—
Unrealized gains (losses) still held (1)	$	—	$	(1,405)
Liabilities
Contingent Consideration:
Beginning Balance	$	326	$	1,298
Settlements of contingent consideration liabilities	(393)		—
Total losses (gains) included in earnings	—		4
Foreign currency translation	67		(83)
Ending Balance	$	—	$	1,219
Unrealized gains (losses) still held (1)	$	—	$	4

(1)Represents the unrealized gains or losses 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.

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INCOME (LOSS) PER SHARE (Tables)

3 Months Ended

Mar. 31, 2021

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, 2021 and 2020 (in thousands, except share amounts and per share amounts):

	Three Months Ended March 31,
	2021		2020
Basic and diluted net income (loss) per share:
Numerator
Net income (loss) - continuing operations	$	14,448	$	(210,860)
Less: Net income (loss) attributable to noncontrolling interests	(110)		3,044
Basic net income (loss) attributable to common stockholders - continuing operations	14,558		(213,904)
Net income (loss) attributable to common stockholders - discontinued operations	—		382
Basic net income (loss) attributable to common stockholders	$	14,558	$	(213,522)
Add: Effect of assumed conversion of convertible senior notes due 2026, net of tax (1)	$	72	$	—
Diluted net income (loss) attributable to common stockholders - continuing operations	14,630		(213,904)
Net income (loss) attributable to common stockholders - discontinued operations	—		382
Diluted net income (loss) attributable to common stockholders	$	14,630	$	(213,522)
Denominator
Shares used in computation of basic net income (loss) per share	29,028,489		28,365,216
Weighted-average effect of diluted securities
Restricted stock units	931,922		—
Performance share units and other stock-based compensation awards	109,419		—
Convertible senior notes due 2026 (1)	195,733		—
Shares used in computation of diluted net income (loss) per share	30,265,563		28,365,216
Basic net income (loss) per share:
Continuing operations	$	0.50	$	(7.54)
Discontinued operations	—		0.01
Basic net income (loss) per share	$	0.50	$	(7.53)
Diluted net income (loss) per share:
Continuing operations	$	0.48	$	(7.54)
Discontinued operations	—		0.01
Diluted net income (loss) per share	$	0.48	$	(7.53)

(1)We apply the if-converted method in computing the effect of our convertible senior notes on diluted net income (loss) per share, whereby the numerator of our diluted net income (loss) per share computations are adjusted for interest expense, net of tax, and the denominator is adjusted for the number shares into which the convertible senior notes could be converted. The effect is only included in the calculation of earnings per share for those instruments for which it would reduce earnings per share. Beginning January 1, 2021, the interest expense, net of tax, included in the numerator adjustment is calculated in accordance with ASU 2020-06, while prior period interest expense, net of tax, included in the numerator adjustment continues to be calculated in accordance with the historical policies and remains unchanged. See Note 5, Financing Arrangements, for additional information.

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,
	2021	2020
Restricted stock units	172,015	1,657,810
Performance share units and other stock-based compensation awards	—	279,243
Convertible senior notes due 2022 (1)	2,314,815	2,314,815
Warrants	2,314,815	2,314,815
Capped call transactions	195,733	—
Total	4,997,378	6,566,683

(1)We apply the if-converted method in computing the effect of our convertible senior notes on diluted net income (loss) per share, whereby the numerator of our diluted net income (loss) per share computations are adjusted for interest expense, net of tax, and the denominator is adjusted for the number shares into which the convertible senior notes could be converted. The effect is only included in the calculation of earnings per share for those instruments for which it would reduce earnings per share. See Note 5, Financing Arrangements, for additional information.

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SEGMENT INFORMATION (Tables)

3 Months Ended

Mar. 31, 2021

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, 2021 and 2020 (in thousands):

	Three Months Ended March 31,
	2021		2020
North America
Service revenue:
Local	$	125,374	$	142,660
Goods	15,285		3,745
Travel	5,959		6,449
Total service revenue	146,618		152,854
Product revenue - Goods	626		82,275
Total North America revenue (1)	147,244		235,129
International
Service revenue:
Local	23,189		48,668
Goods	1,970		2,233
Travel	847		3,273
Total service revenue	26,006		54,174
Product revenue - Goods	90,567		84,847
Total International revenue (1)	$	116,573	$	139,021

(1)North America includes revenue from the United States of $145.0 million and $230.9 million for the three months ended March 31, 2021 and 2020. International includes revenue from the United Kingdom and France of $42.1 million and $28.5 million for the three months ended March 31, 2021, and United Kingdom of $49.5 million for the three months ended March 31, 2020. There were no other individual countries that represented more than 10% of consolidated total revenue for the three months ended March 31, 2021 and 2020. Revenue is attributed to individual countries based on the location of the customer.

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, 2021 and 2020 (in thousands):

	Three Months Ended March 31,
	2021		2020
North America
Service gross profit:
Local	$	112,426	$	123,859
Goods	13,056		3,008
Travel	4,718		3,962
Total service gross profit	130,200		130,829
Product gross profit - Goods	168		12,942
Total North America gross profit	130,368		143,771
International
Service gross profit:
Local	21,427		44,524
Goods	1,859		2,016
Travel	713		2,744
Total service gross profit	23,999		49,284
Product gross profit - Goods	12,616		8,192
Total International gross profit	$	36,615	$	57,476

Schedule of Operating Income by Reportable Segment

The following table summarizes contribution profit by reportable segment for the three months ended March 31, 2021 and 2020 (in thousands):

	Three Months Ended March 31,
	2021		2020
North America
Gross profit	$	130,368	$	143,771
Marketing	22,768		39,409
Contribution profit	107,600		104,362
International
Gross profit	36,615		57,476
Marketing	10,898		20,721
Contribution profit	25,717		36,755
Consolidated
Gross profit	166,983		201,247
Marketing	33,666		60,130
Contribution profit	133,317		141,117
Selling, general and administrative	127,143		207,135
Goodwill impairment	—		109,486
Long-lived asset impairment	—		22,351
Restructuring and related charges	7,422		6
Income (loss) from operations	$	(1,248)	$	(197,861)

Schedule of Total Assets by Segment

The following table summarizes total assets by reportable segment as of March 31, 2021 and December 31, 2020 (in thousands):

	March 31, 2021		December 31, 2020
Total assets:
North America (1)	$	1,056,466	$	971,110
International (1)	345,571		440,397
Consolidated total assets	$	1,402,037	$	1,411,507

(1)North America contains assets from the United States of $1,032.9 million and $948.1 million as of March 31, 2021 and December 31, 2020. International contained assets from Switzerland of $151.7 million as of December 31, 2020. There were no other individual countries that represented more than 10% of consolidated total assets as of March 31, 2021 and December 31, 2020.

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SUBSEQUENT EVENTS (Tables)

3 Months Ended

Mar. 31, 2021

Subsequent Events [Abstract]

Summary of Funds for Debt Repurchase

Funds for the repurchase, excluding any interest, are expected to come from the following (in millions):

Restricted cash held as of March 31, 2021	$	169.8
Additional net proceeds from 2026 Notes issued in April 2021	25.5
Unrestricted cash	58.7

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DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Details) $ in Thousands		3 Months Ended
	Jun. 10, 2020	Mar. 31, 2021 USD ($) segment	Jan. 01, 2021 USD ($)	Dec. 31, 2020 USD ($)	Mar. 31, 2020 USD ($)		Dec. 31, 2019 USD ($)
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of operating segments | segment		2
Stock split ratio, common stock	0.05
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Stockholders' equity		$ 65,620		$ 107,674	$ 191,507		$ 395,046
Additional Paid-In Capital
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Stockholders' equity		$ 2,261,095		2,348,114	$ 2,323,217	[1]	2,310,393	[1]
Cumulative Effect, Period of Adoption, Adjustment
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Stockholders' equity				(18,969)			$ (79)
Cumulative Effect, Period of Adoption, Adjustment | Accounting Standards Update 2020-06
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Non-current liabilities			$ 19,000
Cumulative Effect, Period of Adoption, Adjustment | Additional Paid-In Capital
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Stockholders' equity				$ (67,014)
Cumulative Effect, Period of Adoption, Adjustment | Additional Paid-In Capital | Accounting Standards Update 2020-06
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Stockholders' equity			$ (67,000)

[1] All share information and balances have been retroactively adjusted to reflect a reverse stock split. See Note 7, Stockholders' Equity and Compensation Arrangements, for additional information.

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GOODWILL AND LONG-LIVED ASSETS - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Finite-Lived Intangible Assets [Line Items]
Goodwill impairment	$ 0	$ 109,486
Impairment of long-lived assets	0	22,351
Intangible asset amortization expense	$ 2,292	2,524
International
Finite-Lived Intangible Assets [Line Items]
Goodwill impairment		109,500
Impairment of long-lived assets		$ 22,400
Minimum
Finite-Lived Intangible Assets [Line Items]
Intangible assets, useful life	1 year
Maximum
Finite-Lived Intangible Assets [Line Items]
Intangible assets, useful life	10 years

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GOODWILL AND LONG-LIVED ASSETS - Long-lived Assets Impairment (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Impaired Long-Lived Assets Held and Used [Line Items]
Tangible asset impairment		$ 10,883
Right-of-use assets - operating leases, net		10,494
Intangible assets, net		103
Other non-current assets		871
Total long-lived assets	$ 0	22,351
Furniture and fixtures
Impaired Long-Lived Assets Held and Used [Line Items]
Tangible asset impairment		413
Leasehold improvements
Impaired Long-Lived Assets Held and Used [Line Items]
Tangible asset impairment		2,806
Office equipment
Impaired Long-Lived Assets Held and Used [Line Items]
Tangible asset impairment		198
Purchased software
Impaired Long-Lived Assets Held and Used [Line Items]
Tangible asset impairment		14
Computer hardware
Impaired Long-Lived Assets Held and Used [Line Items]
Tangible asset impairment		2,842
Right-of-use assets - finance leases, net
Impaired Long-Lived Assets Held and Used [Line Items]
Tangible asset impairment		1,318
Capitalized software
Impaired Long-Lived Assets Held and Used [Line Items]
Tangible asset impairment		304
Internally-developed software
Impaired Long-Lived Assets Held and Used [Line Items]
Tangible asset impairment		$ 2,988

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GOODWILL AND LONG-LIVED ASSETS - Schedule of Goodwill (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2021 USD ($)
Goodwill [Roll Forward]
Goodwill, beginning balance	$ 214,699
Other	3,776
Foreign currency translation	(1,111)
Goodwill, ending balance	217,364
North America
Goodwill [Roll Forward]
Goodwill, beginning balance	178,685
Other	0
Foreign currency translation	0
Goodwill, ending balance	178,685
International
Goodwill [Roll Forward]
Goodwill, beginning balance	36,014
Other	3,776
Foreign currency translation	(1,111)
Goodwill, ending balance	$ 38,679

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GOODWILL AND LONG-LIVED ASSETS - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	$ 60,670	$ 60,616
Accumulated Amortization	31,986	30,465
Net Carrying Value	28,684	30,151
Merchant relationships
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	20,378	20,208
Accumulated Amortization	10,187	9,236
Net Carrying Value	10,191	10,972
Trade names
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	9,671	9,651
Accumulated Amortization	8,009	7,921
Net Carrying Value	1,662	1,730
Developed technology
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	1,688	2,121
Accumulated Amortization	1,585	1,863
Net Carrying Value	103	258
Patents
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	11,104	10,813
Accumulated Amortization	4,859	4,697
Net Carrying Value	6,245	6,116
Other intangible assets
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	17,829	17,823
Accumulated Amortization	7,346	6,748
Net Carrying Value	$ 10,483	$ 11,075

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GOODWILL AND LONG-LIVED ASSETS - Schedule of Estimated Future Amortization Expense (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Goodwill and Intangible Assets Disclosure [Abstract]
Remaining amounts in 2021	$ 6,412
2022	8,130
2023	6,952
2024	3,219
2025	1,627
Thereafter	2,344
Net Carrying Value	$ 28,684	$ 30,151

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INVESTMENTS - Summary of Investments (Details) - USD ($)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2021	Dec. 31, 2020
Schedule of Equity Method Investments [Line Items]
Investments		$ 36,008,000	$ 37,671,000
Loss from changes in fair value of investments	$ 1,400,000
Other equity investments
Schedule of Equity Method Investments [Line Items]
Equity method investments		36,008,000	37,671,000
Redeemable preferred shares
Schedule of Equity Method Investments [Line Items]
Available-for-sale securities		0	0
Fair value option investments
Schedule of Equity Method Investments [Line Items]
Equity method investments		$ 0	$ 0
Minimum
Schedule of Equity Method Investments [Line Items]
Available for sale securities, percent ownership of voting stock		19.00%	19.00%
Minimum | Other equity investments
Schedule of Equity Method Investments [Line Items]
Equity method investment, percent ownership of voting stock		1.00%	1.00%
Minimum | Fair value option investments
Schedule of Equity Method Investments [Line Items]
Equity method investment, percent ownership of voting stock		10.00%	10.00%
Maximum
Schedule of Equity Method Investments [Line Items]
Available for sale securities, percent ownership of voting stock		25.00%	25.00%
Maximum | Other equity investments
Schedule of Equity Method Investments [Line Items]
Equity method investment, percent ownership of voting stock		19.00%	19.00%
Maximum | Fair value option investments
Schedule of Equity Method Investments [Line Items]
Equity method investment, percent ownership of voting stock		19.00%	19.00%

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INVESTMENTS - Narrative (Details) - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Schedule of Equity Method Investments [Line Items]
Other than temporary impairments on equity method investments		$ 6,700,000
Other equity investments
Schedule of Equity Method Investments [Line Items]
Percentage of other equity investment sold		50.00%
Proceeds from sale of other equity investment		$ 34,000,000.0
Other than temporary impairments on equity method investments	$ 0	$ 6,700,000

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SUPPLEMENTAL CONDENSED CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF OPERATIONS INFORMATION - Schedule of Other Income (Expense) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Supplemental Consolidated Balance Sheet & Statement of Operations Information [Abstract]
Interest income	$ 1,155	$ 2,556
Interest expense	(5,116)	(6,958)
Foreign currency gains (losses), net	22,084	(6,496)
Impairment and other changes in fair value of investments	0	(8,089)
Other income (expense), net	18,123	(18,987)
Foreign currency translation adjustments reclassified into earnings	$ (32,228)	$ 0

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SUPPLEMENTAL CONDENSED CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF OPERATIONS INFORMATION - Schedule of Prepaid and Other Current Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Supplemental Consolidated Balance Sheet & Statement of Operations Information [Abstract]
Prepaid expenses	$ 20,588	$ 18,038
Income taxes receivable	5,282	5,437
Other	15,391	16,966
Total prepaid expenses and other current assets	$ 41,261	$ 40,441

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SUPPLEMENTAL CONDENSED CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF OPERATIONS INFORMATION - Schedule of Other Non-Current Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Supplemental Consolidated Balance Sheet & Statement of Operations Information [Abstract]
Deferred income tax	$ 11,438	$ 11,593
Debt issue costs, net	1,489	1,852
Deferred contract acquisition costs	5,957	5,315
Deferred cloud implementation costs	10,494	10,402
Other	4,936	5,165
Total other non-current assets	$ 34,314	$ 34,327

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SUPPLEMENTAL CONDENSED CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF OPERATIONS INFORMATION - Schedule of Accrued Merchant and Supplier Payables (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Supplemental Consolidated Balance Sheet & Statement of Operations Information [Abstract]
Accrued merchant payables	$ 280,298	$ 303,260
Accrued supplier payables	48,702	107,703
Total accrued merchant and supplier payables	$ 329,000	$ 410,963

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SUPPLEMENTAL CONDENSED CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF OPERATIONS INFORMATION - Schedule of Accrued Expense and Other Current Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Supplemental Consolidated Balance Sheet & Statement of Operations Information [Abstract]
Refund reserve	$ 35,740	$ 33,173
Compensation and benefits	60,685	54,958
Accrued marketing	14,589	15,299
Restructuring-related liabilities	17,620	13,746
Customer credits	62,824	61,006
Income taxes payable	6,975	7,862
Deferred revenue	8,857	11,223
Deferred payroll taxes	2,922	2,922
Operating and finance lease obligations	36,652	37,755
Deferred cloud computing contract incentive	3,000	3,000
Other	49,418	54,055
Total accrued expenses and other current liabilities	$ 299,282	$ 294,999

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SUPPLEMENTAL CONDENSED CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF OPERATIONS INFORMATION - Schedule of Other Non-current Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Supplemental Consolidated Balance Sheet & Statement of Operations Information [Abstract]
Contingent income tax liabilities	$ 27,105	$ 25,593
Finance lease obligations	468	730
Restructuring-related liabilities	385	385
Deferred income taxes	3,474	3,170
Deferred payroll taxes	2,922	2,922
Deferred cloud computing contract incentive	3,500	4,250
Other	6,149	7,378
Total other non-current liabilities	$ 44,003	$ 44,428

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FINANCING ARRANGEMENTS - 3.25% Convertible Senior Notes due 2022 (Details)		1 Months Ended
	Mar. 31, 2021 USD ($)	Apr. 30, 2016 USD ($) $ / shares	Jan. 01, 2021 USD ($)	Dec. 31, 2020 USD ($)	Mar. 31, 2020 USD ($)		Dec. 31, 2019 USD ($)
Debt Instrument [Line Items]
Stockholders' equity	$ 65,620,000			$ 107,674,000	$ 191,507,000		$ 395,046,000
Additional Paid-In Capital
Debt Instrument [Line Items]
Stockholders' equity	2,261,095,000			2,348,114,000	2,323,217,000	[1]	2,310,393,000	[1]
Accumulated Deficit
Debt Instrument [Line Items]
Stockholders' equity	(1,258,283,000)			(1,320,886,000)	$ (1,246,477,000)		(1,032,876,000)
Cumulative Effect, Period of Adoption, Adjustment
Debt Instrument [Line Items]
Stockholders' equity				(18,969,000)			(79,000)
Cumulative Effect, Period of Adoption, Adjustment | Additional Paid-In Capital
Debt Instrument [Line Items]
Stockholders' equity				(67,014,000)
Cumulative Effect, Period of Adoption, Adjustment | Accumulated Deficit
Debt Instrument [Line Items]
Stockholders' equity				48,045,000			$ (79,000)
Cumulative Effect, Period of Adoption, Adjustment | Accounting Standards Update 2020-06
Debt Instrument [Line Items]
Non-current liabilities			$ 19,000,000.0
Cumulative Effect, Period of Adoption, Adjustment | Accounting Standards Update 2020-06 | Additional Paid-In Capital
Debt Instrument [Line Items]
Stockholders' equity			(67,000,000.0)
Cumulative Effect, Period of Adoption, Adjustment | Accounting Standards Update 2020-06 | Accumulated Deficit
Debt Instrument [Line Items]
Stockholders' equity			$ 48,000,000.0
3.25% Convertible Senior Notes due 2022 | Senior Notes
Debt Instrument [Line Items]
Stated interest rate		3.25%
Principal amount	250,000,000	$ 250,000,000.0		250,000,000
Net proceeds from issuance of debt		$ 243,200,000
Debt conversion ratio		0.00925926
Conversion price (in usd per share) | $ / shares		$ 108.00
Debt related commitment fees and issuance costs		$ 6,800,000
Debt issuance costs	$ 0	$ 4,800,000		19,051,000
Effective interest rate	3.76%	9.75%
Equity component of convertible debt		$ 2,000,000.0
Estimated fair value of convertible notes	$ 262,200,000			$ 263,300,000
Debt remaining term	1 year

[1] All share information and balances have been retroactively adjusted to reflect a reverse stock split. See Note 7, Stockholders' Equity and Compensation Arrangements, for additional information.

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FINANCING ARRANGEMENTS - Schedule of Notes (Details) - Senior Notes - USD ($)	Mar. 31, 2021	Dec. 31, 2020	Apr. 30, 2016
3.25% Convertible Senior Notes due 2022
Debt Instrument [Line Items]
Principal amount	$ 250,000,000	$ 250,000,000	$ 250,000,000.0
Less: debt discount - transaction costs	(1,239,000)	(1,459,000)
Less: debt discount - equity	0	(19,051,000)	$ (4,800,000)
Net carrying amount of liability component	248,761,000	229,490,000
Net carrying amount of equity component	0	$ 67,014,000
1.125% Convertible Senior Notes due 2026
Debt Instrument [Line Items]
Principal amount	200,000,000.0
Less: debt discount - equity	(6,765,000)
Net carrying amount of liability component	$ 193,235,000

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FINANCING ARRANGEMENTS - Schedule of Convertible Debt Interest Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Apr. 30, 2016
Debt Instrument [Line Items]
Amortization of debt discount	$ 303	$ 3,516
Senior Notes | 3.25% Convertible Senior Notes due 2022
Debt Instrument [Line Items]
Stated interest rate			3.25%
Contractual interest (3.25% of the principal amount per annum)	2,032	2,032
Amortization of debt discount	303	3,516
Total	$ 2,335	$ 5,548

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FINANCING ARRANGEMENTS - Note Hedges and Warrants (Details) $ / shares in Units, shares in Millions, $ in Millions	1 Months Ended
	May 31, 2016 USD ($) $ / shares shares
Debt Disclosure [Abstract]
Cost of convertible note hedges	$ 59.1
Number of shares available to be purchased (in shares) | shares	2.3
Cash proceeds from issuance of warrants	$ 35.5
Exercise price (in usd per share) | $ / shares	$ 170.00

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FINANCING ARRANGEMENTS - 1.125% Convertible Senior Notes due 2026 (Details)	1 Months Ended
	Apr. 30, 2021 USD ($) $ / shares	Mar. 31, 2021 USD ($) $ / shares	Apr. 30, 2016	Dec. 31, 2020 USD ($)	Mar. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)
Debt Instrument [Line Items]
Restricted cash - non-current		$ 169,785,000		$ 0	$ 206,000	$ 236,000
Share price (in usd per share) | $ / shares		$ 50.55
1.125% Convertible Senior Notes due 2026 | Senior Notes
Debt Instrument [Line Items]
Stated interest rate		1.125%
Principal amount		$ 200,000,000.0
Net proceeds from issuance of debt		193,000,000.0
Proceeds from debt used for capped call transactions payment		23,800,000
Restricted cash - non-current		$ 169,800,000
Debt conversion ratio			0.0146800
Conversion price (in usd per share) | $ / shares		$ 68.12
Debt related commitment fees and issuance costs		$ 6,800,000
Effective interest rate		1.84%
Fair value of debt		$ 205,400,000
Debt conversion price, premium on stock price		100.00%
1.125% Convertible Senior Notes due 2026 | Senior Notes | Subsequent Event | Maximum
Debt Instrument [Line Items]
Conversion price (in usd per share) | $ / shares	$ 104.80
2026 Notes, Additional | Senior Notes | Subsequent Event
Debt Instrument [Line Items]
Principal amount	$ 30,000,000.0
Net proceeds from issuance of debt	29,100,000
Proceeds from debt used for capped call transactions payment	$ 3,600,000

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FINANCING ARRANGEMENTS - Revolving Credit Facility (Details) - USD ($)	1 Months Ended		3 Months Ended
	Mar. 31, 2021	Jul. 31, 2020	Mar. 31, 2021	Dec. 31, 2020	May 30, 2019
Debt Instrument [Line Items]
Amount of borrowings	$ 100,000,000.0		$ 100,000,000.0	$ 200,000,000.0
Outstanding letters of credit	$ 23,100,000		$ 23,100,000	$ 20,600,000
2020 First Amended Credit Agreement
Debt Instrument [Line Items]
Unused commitment fee percentage			0.40%
Maximum funding commitment		$ 225,000,000.0
Debt collateral, percentage of outstanding capital stock, domestic subsidiaries	100.00%		100.00%
Debt collateral, percentage of outstanding capital stock, first-tier foreign subsidiaries	65.00%		65.00%
2020 First Amended Credit Agreement | Minimum
Debt Instrument [Line Items]
Basis spread on variable rate		0.50%
Commitment fee percentage, daily amount of unused commitments		0.25%
2020 First Amended Credit Agreement | Maximum
Debt Instrument [Line Items]
Commitment fee percentage, daily amount of unused commitments		0.35%
2020 First Amended Credit Agreement | Canadian Prime Rate
Debt Instrument [Line Items]
Basis spread on variable rate		1.50%
2020 First Amended Credit Agreement | Fixed Rate
Debt Instrument [Line Items]
Basis spread on variable rate		2.50%
2020 First Amended Credit Agreement | LIBOR | Maximum
Debt Instrument [Line Items]
Basis spread on variable rate		2.00%
Revolving Credit Facility | 2019 Credit Agreement
Debt Instrument [Line Items]
Aggregate principal amount					$ 400,000,000.0
Revolving Credit Facility | 2020 First Amended Credit Agreement
Debt Instrument [Line Items]
Aggregate principal amount		$ 225,000,000.0
Revolving Credit Facility | 2021 Second Amended Credit Agreement
Debt Instrument [Line Items]
Debt issuance costs	$ 3,500,000		$ 3,500,000
Minimum liquidity as a percentage of accrued merchant and supplier payables required under debt agreement	70.00%
Monthly liquidity required as a percentage of accrued merchant and supplier payables required under debt agreement	100.00%
Monthly liquidity required in addition to minimum	$ 50,000,000.0		50,000,000.0
Minimum liquidity required under debt agreement	$ 250,000,000		$ 250,000,000
Letter of Credit | 2020 First Amended Credit Agreement
Debt Instrument [Line Items]
Aggregate principal amount		$ 75,000,000.0

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COMMITMENTS AND CONTINGENCIES - Narrative (Details) - USD ($) $ in Millions	Mar. 31, 2021	Dec. 31, 2017
Recorded Unconditional Purchase Obligation [Line Items]
Indemnification liabilities	$ 2.8
Maximum exposure of indemnification liability	$ 11.7
Groupon Latin America
Recorded Unconditional Purchase Obligation [Line Items]
Estimated indemnification liability		$ 5.4

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STOCKHOLDERS' EQUITY AND COMPENSATION ARRANGEMENTS - Narrative (Details)		3 Months Ended
	Jun. 10, 2020	Mar. 31, 2021 USD ($) vote shares	Mar. 31, 2020 shares	May 31, 2018 USD ($)
Share-based Payment Arrangement [Abstract]
Stock split ratio, common stock	0.05
Number of shares available for issuance (in shares)		100,500,000
Common stock, vote per share | vote		1
Authorized repurchase amount | $				$ 300,000,000.0
Stock repurchased during period (in shares)		0	0
Value of common stock remaining available for repurchase | $		$ 245,000,000.0
Number of shares available for future issuance (in shares)		3,212,132

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STOCKHOLDERS' EQUITY AND COMPENSATION ARRANGEMENTS - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 7,179	$ 14,015
Capitalized amount of stock-based compensation	900	1,100
Cost of revenue
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	171	259
Marketing
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	135	874
Selling, general and administrative
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 6,873	$ 12,882

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STOCKHOLDERS' EQUITY AND COMPENSATION ARRANGEMENTS - ESPP (Details) - shares	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares available for issuance (in shares)	100,500,000
Employee Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares available for issuance (in shares)	1,000,000
Shares issued under employee stock purchase plan (in shares)	23,418	28,621

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STOCKHOLDERS' EQUITY AND COMPENSATION ARRANGEMENTS - RSU (Details) - Restricted stock units $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2021 USD ($) $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Beginning balance (in shares) | shares	1,853,007
Granted (in shares) | shares	129,827
Vested (in shares) | shares	(222,244)
Forfeited (in shares) | shares	(125,053)
Ending balance (in shares) | shares	1,635,537
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Beginning balance (in dollars per share) | $ / shares	$ 31.91
Granted (in dollars per share) | $ / shares	32.87
Vested (in dollars per share) | $ / shares	27.60
Forfeited (in dollars per share) | $ / shares	32.39
Ending balance (in dollars per share) | $ / shares	$ 32.37
Unrecognized compensation costs | $	$ 31.4
Weighted-average period of recognition	11 months 8 days
Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	1 year
Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	4 years

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STOCKHOLDERS' EQUITY AND COMPENSATION ARRANGEMENTS - PSU (Details) $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2021 USD ($) $ / shares shares
Performance Share Units
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Beginning balance (in shares)	124,709
Granted (in shares)	41,729
Vested (in shares)	(86,710)
Forfeited (in shares)	(282)
Ending balance (in shares)	79,446
Maximum shares issuable (in shares)	79,446
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Beginning balance (in dollars per share) | $ / shares	$ 29.73
Granted (in dollars per share) | $ / shares	15.44
Vested (in dollars per share) | $ / shares	24.36
Forfeited (in dollars per share) | $ / shares	69.00
Ending balance (in dollars per share) | $ / shares	$ 27.95
Unrecognized compensation costs | $	$ 1.0
Weighted-average period of recognition	1 year 4 months 6 days
Market-based performance share units
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Beginning balance (in shares)	57,668
Granted (in shares)	0
Vested (in shares)	0
Forfeited (in shares)	0
Ending balance (in shares)	57,668
Maximum shares issuable (in shares)	57,668
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Beginning balance (in dollars per share) | $ / shares	$ 60.60
Granted (in dollars per share) | $ / shares	0
Vested (in dollars per share) | $ / shares	0
Forfeited (in dollars per share) | $ / shares	0
Ending balance (in dollars per share) | $ / shares	$ 60.60

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REVENUE RECOGNITION - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Revenue from Contract with Customer [Abstract]
Deferred revenue	$ 8.9		$ 11.2
Amortization of deferred contract costs	$ 2.6	$ 4.7

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REVENUE RECOGNITION - Customer Credits (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2021 USD ($)
Customer Credits [Roll Forward]
Customer credits, beginning balance	$ 61,006
Credits issued	50,051
Credits redeemed	(41,283)
Breakage revenue recognized	(6,205)
Foreign currency translation	(745)
Customer credits, ending balance	$ 62,824

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REVENUE RECOGNITION - Deferred contract acquisition costs (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Minimum
Capitalized Contract Cost [Line Items]
Deferred contract acquisition cost recognition period	12 months
Maximum
Capitalized Contract Cost [Line Items]
Deferred contract acquisition cost recognition period	18 months
Prepaid expenses and other current assets
Capitalized Contract Cost [Line Items]
Deferred contract acquisition costs	$ 973	$ 1,009
Other non-current assets
Capitalized Contract Cost [Line Items]
Deferred contract acquisition costs	$ 5,957	$ 5,315

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REVENUE RECOGNITION - Allowance for Credit Losses (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2021 USD ($)
Accounts Receivable, Allowance for Credit Loss [Roll Forward]
Allowance for credit loss on accounts receivable, beginning balance	$ 9,756
Change in provision	(244)
Write-offs	(292)
Foreign currency translation	(3)
Allowance for credit loss on accounts receivable, ending balance	$ 9,217

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RESTRUCTURING AND RELATED CHARGES - Narrative (Details) $ in Thousands	1 Months Ended	3 Months Ended
	Apr. 30, 2020 USD ($) position	Mar. 31, 2021 USD ($)	Mar. 31, 2020 USD ($)
Restructuring Cost and Reserve [Line Items]
Expected restructuring cost	$ 105,000
Reduction in number of positions (in employees) | position	1,200
Foreign currency translation adjustments reclassified into earnings		$ (32,228)	$ 0
Minimum
Restructuring Cost and Reserve [Line Items]
Expected restructuring cost	$ 75,000
Maximum
Restructuring Cost and Reserve [Line Items]
Expected restructuring cost	$ 105,000

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RESTRUCTURING AND RELATED CHARGES - Schedule of Restructuring Costs by Segment (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Restructuring Cost and Reserve [Line Items]
Employee Severance and Benefit Costs	$ 6,902
Legal and Advisory Costs	785
Lease-related Charges (Credits)	(265)
Restructuring and related charges	7,422	$ 6
North America
Restructuring Cost and Reserve [Line Items]
Employee Severance and Benefit Costs	442
Legal and Advisory Costs	807
Lease-related Charges (Credits)	741
Restructuring and related charges	1,990
International
Restructuring Cost and Reserve [Line Items]
Employee Severance and Benefit Costs	6,460
Legal and Advisory Costs	(22)
Lease-related Charges (Credits)	(1,006)
Restructuring and related charges	$ 5,432

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RESTRUCTURING AND RELATED CHARGES - Schedule of Restructuring Liability Activity (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Restructuring Reserve [Roll Forward]
Restructuring reserve, beginning balance	$ 14,131	$ 699	$ 699
Charges payable in cash	7,687		38,403
Cash payments	(3,243)		(26,617)
Foreign currency translation	(570)		1,646
Restructuring reserve, ending balance	18,005		14,131
Stock-based compensation expense related to accelerated vesting of awards	7,179	14,015
Employee Severance and Benefit Costs
Restructuring Reserve [Roll Forward]
Restructuring reserve, beginning balance	13,297	699	699
Charges payable in cash	6,902		36,266
Cash payments	(2,431)		(25,328)
Foreign currency translation	(570)		1,660
Restructuring reserve, ending balance	17,198		13,297
Stock-based compensation expense related to accelerated vesting of awards	1,700
Other Exit Costs
Restructuring Reserve [Roll Forward]
Restructuring reserve, beginning balance	834	$ 0	0
Charges payable in cash	785		2,137
Cash payments	(812)		(1,289)
Foreign currency translation	0		(14)
Restructuring reserve, ending balance	$ 807		$ 834

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INCOME TAXES (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Income Taxes [Line Items]
Provision (benefit) for income taxes	$ 2,427	$ (5,988)
Income (loss) from continuing operations before provision (benefit) for income taxes	16,875	$ (216,848)
International
Income Taxes [Line Items]
Proposed assessment for claims	122,400
Decrease in unrecognized tax benefits reasonably possible	$ 3,400

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FAIR VALUE MEASUREMENTS - Fair Value, Assets and Liabilities, Reconciliation of Level 3 Inputs (Details) - Level 3 - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Contingent Consideration [Roll Forward]
Contingent consideration, beginning balance	$ 326	$ 1,298
Settlements of contingent consideration liabilities	(393)	0
Total losses (gains) included in earnings	0	4
Foreign currency translation	67	(83)
Contingent consideration, ending balance	0	1,219
Unrealized gains (losses) still held	0	4
Fair value option investments
Equity Method Investments [Roll Forward]
Fair value option investments, beginning balance	0	1,405
Total gains (losses) included in earnings	0	(1,405)
Fair value option investments, ending balance	0	0
Unrealized gains (losses) still held	$ 0	$ (1,405)

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FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Fair Value Disclosures [Abstract]
Goodwill impairment	$ 0	$ 109,486
Long-lived asset impairment	$ 0	22,351
Other than temporary impairments on equity method investments		$ 6,700

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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, 2021	Mar. 31, 2020
Numerator
Income (loss) from continuing operations	$ 14,448	$ (210,860)
Less: Net income (loss) attributable to noncontrolling interests	(110)	3,044
Basic net income (loss) attributable to common stockholders - continuing operations	14,558	(213,904)
Income (loss) from discontinued operations, net of tax	0	382
Basic net income (loss) attributable to common stockholders	14,558	(213,522)
Add: Effect of assumed conversion of convertible senior notes due 2026, net of tax	72	0
Diluted net income (loss) attributable to common stockholders - continuing operations	14,630	(213,904)
Net income (loss) attributable to common stockholders - discontinued operations	0	382
Diluted net income (loss) attributable to common stockholders	$ 14,630	$ (213,522)
Denominator
Shares used in computation of basic net income (loss) per share (in shares)	29,028,489	28,365,216
Weighted-average effect of diluted securities
Shares used in computation of diluted net income (loss) per share (in shares)	30,265,563	28,365,216
Basic net income (loss) per share:
Continuing operations (in usd per share)	$ 0.50	$ (7.54)
Discontinued operations (in usd per share)	0	0.01
Basic net income (loss) per share (in usd per share)	0.50	(7.53)
Diluted net income (loss) per share:
Continuing operations (in usd per share)	0.48	(7.54)
Discontinued operations (in usd per share)	0	0.01
Diluted net income (loss) per share (in usd per share)	$ 0.48	$ (7.53)
Restricted stock units
Weighted-average effect of diluted securities
Dilutive effect of share-based payment arrangements (in shares)	109,419	0
Performance share units and other stock-based compensation awards
Weighted-average effect of diluted securities
Dilutive effect of share-based payment arrangements (in shares)	931,922	0
Convertible senior notes due 2026
Weighted-average effect of diluted securities
Dilutive effect of convertible senior notes (in shares)	195,733	0

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INCOME (LOSS) PER SHARE - Schedule of Weighted-Average Potentially Dilutive Instruments (Details) - shares	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	4,997,378	6,566,683
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)	172,015	1,657,810
Performance share units and 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)	0	279,243
Convertible senior notes due 2022
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	2,314,815	2,314,815
Warrants
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	2,314,815	2,314,815
Capped call transactions
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	195,733	0
Market-based performance share units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Shares issuable upon vesting of outstanding performance share units (in shares)	57,668

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SEGMENT INFORMATION - Schedule of Revenue by Segment (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2021 USD ($) segment	Mar. 31, 2020 USD ($)
Schedule of Revenue by Segment [Line Items]
Number of operating segments | segment	2
Total revenue	$ 263,817	$ 374,150
North America
Schedule of Revenue by Segment [Line Items]
Total revenue	147,244	235,129
North America | United States
Schedule of Revenue by Segment [Line Items]
Total revenue	145,000	230,900
International
Schedule of Revenue by Segment [Line Items]
Total revenue	116,573	139,021
International | United Kingdom
Schedule of Revenue by Segment [Line Items]
Total revenue	42,100	49,500
International | France
Schedule of Revenue by Segment [Line Items]
Total revenue	28,500
Service
Schedule of Revenue by Segment [Line Items]
Total revenue	172,624	207,028
Service | North America
Schedule of Revenue by Segment [Line Items]
Total revenue	146,618	152,854
Service | International
Schedule of Revenue by Segment [Line Items]
Total revenue	26,006	54,174
Local | North America
Schedule of Revenue by Segment [Line Items]
Total revenue	125,374	142,660
Local | International
Schedule of Revenue by Segment [Line Items]
Total revenue	23,189	48,668
Goods | North America
Schedule of Revenue by Segment [Line Items]
Total revenue	15,285	3,745
Goods | International
Schedule of Revenue by Segment [Line Items]
Total revenue	1,970	2,233
Travel | North America
Schedule of Revenue by Segment [Line Items]
Total revenue	5,959	6,449
Travel | International
Schedule of Revenue by Segment [Line Items]
Total revenue	847	3,273
Product
Schedule of Revenue by Segment [Line Items]
Total revenue	91,193	167,122
Product | North America
Schedule of Revenue by Segment [Line Items]
Total revenue	626	82,275
Product | International
Schedule of Revenue by Segment [Line Items]
Total revenue	$ 90,567	$ 84,847

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SEGMENT INFORMATION - Schedule of Gross Profit by Segment (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Segment Reporting Information [Line Items]
Gross profit	$ 166,983	$ 201,247
North America
Segment Reporting Information [Line Items]
Gross profit	130,368	143,771
International
Segment Reporting Information [Line Items]
Gross profit	36,615	57,476
Service | North America
Segment Reporting Information [Line Items]
Gross profit	130,200	130,829
Service | International
Segment Reporting Information [Line Items]
Gross profit	23,999	49,284
Local | North America
Segment Reporting Information [Line Items]
Gross profit	112,426	123,859
Local | International
Segment Reporting Information [Line Items]
Gross profit	21,427	44,524
Goods | North America
Segment Reporting Information [Line Items]
Gross profit	13,056	3,008
Goods | International
Segment Reporting Information [Line Items]
Gross profit	1,859	2,016
Travel | North America
Segment Reporting Information [Line Items]
Gross profit	4,718	3,962
Travel | International
Segment Reporting Information [Line Items]
Gross profit	713	2,744
Product | North America
Segment Reporting Information [Line Items]
Gross profit	168	12,942
Product | International
Segment Reporting Information [Line Items]
Gross profit	$ 12,616	$ 8,192

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SEGMENT INFORMATION - Schedule of Contribution Profit by Segment (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Schedule of Operating Income (Loss) by Segment
Gross profit	$ 166,983	$ 201,247
Marketing	33,666	60,130
Contribution profit	133,317	141,117
Selling, general and administrative	127,143	207,135
Goodwill impairment	0	109,486
Long-lived asset impairment	0	22,351
Restructuring and related charges	7,422	6
Income (loss) from operations	(1,248)	(197,861)
North America
Schedule of Operating Income (Loss) by Segment
Gross profit	130,368	143,771
Marketing	22,768	39,409
Contribution profit	107,600	104,362
Restructuring and related charges	1,990
International
Schedule of Operating Income (Loss) by Segment
Gross profit	36,615	57,476
Marketing	10,898	20,721
Contribution profit	25,717	36,755
Goodwill impairment		109,500
Long-lived asset impairment		$ 22,400
Restructuring and related charges	$ 5,432

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SEGMENT INFORMATION - Schedule of Total Assets by Segment (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Segment Reporting, Asset Reconciling Item [Line Items]
Assets	$ 1,402,037	$ 1,411,507
North America
Segment Reporting, Asset Reconciling Item [Line Items]
Assets	1,056,466	971,110
International
Segment Reporting, Asset Reconciling Item [Line Items]
Assets	345,571	440,397
United States | North America
Segment Reporting, Asset Reconciling Item [Line Items]
Assets	$ 1,032,900	948,100
Switzerland | International
Segment Reporting, Asset Reconciling Item [Line Items]
Assets		$ 151,700

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SUBSEQUENT EVENTS (Details) - USD ($)		1 Months Ended
	May 06, 2021	Apr. 30, 2021	Mar. 31, 2021	Dec. 31, 2020	Mar. 31, 2020	Dec. 31, 2019	Apr. 30, 2016
Subsequent Event [Line Items]
Restricted cash			$ 169,785,000	$ 0	$ 206,000	$ 236,000
Senior Notes | 3.25% Convertible Senior Notes due 2022
Subsequent Event [Line Items]
Principal amount			$ 250,000,000	$ 250,000,000			$ 250,000,000.0
Subsequent Event
Subsequent Event [Line Items]
Unrestricted cash used for debt repurchase	$ 58,700,000
Subsequent Event | Senior Notes | 2026 Notes, Additional
Subsequent Event [Line Items]
Principal amount		$ 30,000,000.0
Proceeds from sale of convertible debt, portion used for debt repurchase		$ 25,500,000
Subsequent Event | Senior Notes | 3.25% Convertible Senior Notes due 2022
Subsequent Event [Line Items]
Repurchased debt outstanding principal amount	250,000,000.0
Payments for repurchase of debt	$ 4,000,000.0

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Label	Element	Value
Accounting Standards Update [Extensible List]	us-gaap_AccountingStandardsUpdateExtensibleList	us-gaap:AccountingStandardsUpdate201613Member