Groupon (GRPN) Q1 2026 earnings summary

Executive summary

• Q1 2026 global billings were $383M, down 1% year-over-year, with revenue flat at $117.2M and a net loss of $12.9M compared to net income in Q1 2025.

• Adjusted EBITDA was $12.8M, slightly below guidance, impacted by $2M in severance from a 5% headcount reduction.

• Project Foundry launched to transform operations to an AI-native model, with AI agents embedded across all functions and a planned 15% global workforce reduction in Q2 2026.

• Active customers grew to 16.2 million, up 5% year-over-year, but unit sales declined 5% due to softer North America transactions.

• April performance improved, with North America Local re-accelerating and managed channels recovering.

Financial highlights

• Gross profit was $106.0M, nearly unchanged year-over-year, with gross margin stable at 90.5%.

• Adjusted EBITDA was $12.8M, down from $15.3M in Q1 2025.

• Free cash flow was negative $13.5M, compared to negative $3.8M in Q1 2025.

• Operating expenses increased to $109.4M, up 4.7% year-over-year, driven by higher marketing and SG&A costs.

• Share repurchases in Q1 totaled 1.94M shares for $21.3M, with an additional 859,860 shares for $10.1M in April.

Outlook and guidance

• Full-year 2026 guidance: billings growth of 3%-5%, revenue $513M-$523M, adjusted EBITDA $70M-$75M, and free cash flow of at least $60M.

• Q2 2026 guidance: revenue $126M–$128M, adjusted EBITDA $13M–$15M, free cash flow at least $10M.

• Management expects further cost-reduction and automation actions in 2026 as part of the AI-native transformation.

• Sufficient liquidity is expected to support ongoing operations and the 2027 Notes repayment.

• The aggregate financial impact of AI initiatives is not yet reasonably estimable.