But Groupon could finally be turning a corner: today’s results show that it’s finances are shaping up nicely, with a $559.3m turnover in Q1, up 94% on the previous quarter, and even a whiff of upside (exceptional items notwithstanding): underlying profits came in at $39.6m.
Mason, who was criticised last year for his devil-may-care attitude to spending, has managed to rein in Groupon’s marketing budget by 49% to $116.7m. And (marketers weep) the cost-cutting has had no effect on user acquisition. Groupon claims that the same number of customers have signed up in the past three months as in the previous quarter. Worldwide user numbers now stand at 36.9 million, up 140% on last year.
Alas, the good news ends there. A slew of outgoings have eroded cash, the biggest expense being a $28m payment related to non-cash stock compensation (options and shares issued to staff), taking its toll on the balance sheet and shunting Groupon back into the red with a $3.59m-sized hole in the balance sheet. Nevertheless, Groupon’s share price is finally recovering, having lost half its value earlier this year. At the time of writing an 18.5% rise – the largest single gain since it’s IPO - has taken Groupon’s share price to 11.73.
Is this the start of a lucky streak for the beleaguered firm? Or will Groupon’s accounting errors and merchant issues come back to haunt Mason? Bring on Q2.