What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2025-03-11 compared with 2024-03-15 · 564 added, 478 removed, 1067 unchanged (49% of the section changed)

47 unchanged sentences

Critical Audit Matter Description

The Company received a proposed income tax assessment from the tax authority in one foreign jurisdiction in the amount of $120.7 million, inclusive of estimated incremental interest from the original assessment.

The Company received a proposed income tax assessment from the Italian tax authority in the amount of $122.3 million, inclusive of estimated incremental interest from the original assessment.

In December 2023, the subsidiary subject to the proposed assessment received an unfavorable ruling at the lowest court level.

The subsidiary has lodged a second-level appeal and requested the suspension of a provisional payment demand of approximately $76.5 million.

In October 2024, the subsidiary subject to the proposed assessment received an unfavorable ruling at the second-tier court.

They intend to pursue a prompt appeal to the Italian Supreme Court.

The Company believes the assessment, which primarily relates to transfer pricing on transactions occurring in 2011, is without merit and has been vigorously defending the subsidiary in that matter.

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we evaluated management’s estimate of the amount of tax benefit recognized;

and, we evaluated the likelihood of suspension of the provisional payment demand.

• We assessed the basis of the Company’s analysis and measurement by:

◦ Obtaining, reading, and evaluating the outside legal opinion received by the Company supporting its position

◦ Obtaining, reading, and evaluating the written response from the outside legal counsel representing the Company provided to us as part of our annual legal inquiry process

◦ Examining communication between tax authorities and the Company or their tax legal advisors

◦ Obtaining, reading, and evaluating management’s written analysis supporting the accounting position

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◦ Evaluating any developments in the matter during the current fiscal year through inquiry of Company personnel and their outside legal counsel.

Goodwill—Refer to Notes 2 and 4 to the financial statements

Critical Audit Matter Description

The Company’s annual evaluation of goodwill impairment involves the comparison of the fair value of the Company’s North America reporting unit to its carrying value.

The Company determines the fair value of the North America reporting unit using the income approach (including discounted cash flows).

When measuring fair value based on discounted cash flows, the Company makes assumptions about risk-adjusted discount rates, including weighted average cost of capital;

rates of increase in revenue, cost of revenue and operating expenses;

rates of long-term growth;

working capital levels;

and income tax rates.

The North America goodwill balance subject to the impairment test was $178.7 million as of December 31, 2023.

Auditing the estimates and assumptions that impacted the valuation of the North America reporting unit involved especially subjective judgment, specifically related to the forecasts of revenues, cost of revenue, and operating expenses and selection of risk-adjusted discount rates.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the Company’s forecast of revenues, cost of revenue, and operating expenses and its selection of risk-adjusted discount rates included the following, among others:

• We tested the effectiveness of controls over the annual and periodic goodwill impairment assessments, including those over the forecasts.

• We evaluated management’s ability to reliably forecast by comparing actual results to management’s historical forecasts.

• We evaluated the reasonableness of management’s forecast by comparing the forecasts to (1) historical results and previous forecasts, (2) internal communications to management and the Board of Directors, (3) macroeconomic forecasts, and (4) forecasts utilized in other areas of the audit to evaluate consistency, where appropriate.

Additionally, we obtained and evaluated management’s written analysis supporting the forecasted cash flows.

• With the assistance of fair value specialists, we evaluated the reasonableness of the 1) valuation methodology, 2) risk-adjusted discount rate, and 3) the long-term growth rate by:

◦ Evaluating whether the fair value models being used are appropriate considering the Company’s circumstances and valuation premise identified

◦ Testing the source information and the mathematical accuracy of the calculation underlying the determination of the risk-adjusted discount rate, and developing a range of independent estimates and comparing those to the risk-adjusted discount rate selected by management.

/s/ Deloitte & Touche LLP

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Total assets $ 612,690 $ 570,956

Liabilities and equity

Liabilities and equity (deficit)

Current liabilities:

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2024 2023 2022

Service $ 514,910 $ 599,085 794,795

Product — — 172,313

Total revenue 514,910 599,085 967,108

$ 492,557 $ 514,910 $ 599,085

Cost of revenue

Service 64,246 76,261 82,020

Product — — 147,972

Total cost of revenue 64,246 76,261 229,992

48,251 64,246 76,261

Gross profit 444,306 450,664 522,824

5 unchanged sentences

Restructuring and related charges 1,066 8,006 12,350

(Gain) on sale of assets

( 5,160 ) — —

Total operating expenses 435,512 468,916 690,639

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$ ( 59,027 ) $ ( 55,410 ) $ ( 237,609 )

Net income (loss) per share:

Basic and diluted net income (loss) per share:

$ ( 1.51 ) $ ( 1.77 ) $ ( 7.88 )

Basic and diluted weighted average number of shares outstanding:

39,170,368 31,243,179 30,166,100

Weighted average number of shares outstanding:

Basic 31,243,179 30,166,100 29,365,880

Diluted 31,243,179 30,166,100 33,513,440

See Notes to Consolidated Financial Statements.

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Net change in unrealized gain (loss) on foreign currency translation adjustments 36,381 ( 8,589 ) 7,755

Reclassification of cumulative foreign currency translation adjustments (See Note 13)

Other comprehensive income (loss)

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Balance at December 31, 2021 40,007,255 $ 4 $ 2,294,215 ( 10,294,117 ) $ ( 922,666 ) $ ( 1,156,868 ) $ ( 4,813 ) $ 209,872 $ 424 $ 210,296

Cumulative effect of change in accounting principle due to adoption of ASU 2020-06, net of tax — — ( 64,319 ) — — 45,350 — ( 18,969 ) — ( 18,969 )

Comprehensive income (loss) — — — — — ( 237,609 ) 7,755 ( 229,854 ) 3,229 ( 226,625 )

Vesting of restricted stock units and performance share units 1,319,695 — — — — — — — — —

Shares issued under employee stock purchase plan 49,399 — 1,128 — — — — 1,128 — 1,128

Vesting of RSUs and PSUs 1,101,375 — — — — — — — — —

Shares issued under ESPP 83,551 — 1,105 — — — — 1,105 — 1,105

Tax withholdings related to net share settlements of stock-based compensation awards ( 405,185 ) — ( 6,043 ) — — — — ( 6,043 ) — ( 6,043 )

Purchase of capped call transactions, net of tax — — ( 20,502 ) — — — — ( 20,502 ) — ( 20,502 )

Settlement of convertible note hedges, net of tax — — 14,511 — — — — 14,511 — 14,511

Settlement of warrants — — ( 1,752 ) — — — — ( 1,752 ) — ( 1,752 )

Stock-based compensation on equity-classified awards — — 33,395 — — — — 33,395 — 33,395

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Comprehensive income (loss) — — — — — ( 55,410 ) ( 8,589 ) ( 63,999 ) 2,476 ( 61,523 )

Vesting of restricted stock units and performance share units 1,101,375 — — — — — — — — —

Shares issued under employee stock purchase plan 83,551 — 1,105 — — — — 1,105 — 1,105

Exercise of stock options

437,500 2,625 2,625 2,625

Vesting of RSUs and PSUs 1,385,284 — — — — — — — — —

Shares issued under ESPP 45,879 — 307 — — — — 307 — 307

Tax withholdings related to net share settlements of stock-based compensation awards ( 508,393 ) — ( 3,321 ) — — — — ( 3,321 ) — ( 3,321 )

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Comprehensive income (loss) — — — — — ( 59,027 ) 36,381 ( 22,646 ) 2,513 ( 20,133 )

Exercise of stock options

Rights Offering, net of issuance costs

7,079,646 1 79,618 — — — — 79,619 — 79,619

Vesting of restricted stock units and performance share units 1,385,284 — — — — — — — — —

Shares issued under employee stock purchase plan 45,879 — 307 — — — — 307 — 307

Vesting of RSUs and PSUs 1,029,421 — — — — — — — — —

Shares issued under ESPP

11,612 — 92 — — — — 92 — 92

Tax withholdings related to net share settlements of stock-based compensation awards ( 177,919 ) — ( 2,501 ) — — — — ( 2,501 ) — ( 2,501 )

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( 596 ) ( 729 ) ( 4,471 )

Foreign currency translation adjustments reclassified into earnings — — ( 32,273 )

Loss on extinguishment of debt

Foreign currency (gains) losses, net 30,036 ( 5,105 ) 10,934

Foreign VAT assessments

(Gain) on sale of assets

( 5,160 ) — —

Change in assets and liabilities:

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Proceeds from sale or divestment of investment — 18,924 —

Proceeds from sale of fixed assets

Proceeds from sale of assets, net 9,116 1,489 —

Acquisitions of intangible assets and other investing activities

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Payments of borrowings under revolving credit agreement ( 42,776 ) ( 32,224 ) ( 65,000 )

Proceeds from issuance of 2026 convertible notes — — 230,000

Issuance costs for 2026 convertible notes and revolving credit agreement ( 559 ) ( 490 ) ( 7,747 )

Purchase of capped call transactions — — ( 27,416 )

Payments for the repurchase of Atairos convertible notes — — ( 254,000 )

Proceeds from the settlement of convertible note hedges — — 2,315

Payments for the settlement of warrants — — ( 1,345 )

Taxes paid related to net share settlements of stock-based compensation awards

( 3,299 ) ( 6,065 ) ( 19,834 )

Proceeds from stock option exercises and employee stock purchase plan

Proceeds from issuance of 2027 Notes

Issuance costs for 2027 Notes

( 3,703 ) — —

Payments of finance lease obligations

Proceeds from Rights Offering, net of issuance costs

Taxes paid related to net share settlements of stock-based compensation awards

( 2,332 ) ( 3,299 ) ( 6,065 )

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Supplemental disclosure of cash flow information

Cash activity:

Cash paid for interest $ 3,366 $ 6,624 $ 5,940

Income tax payments 15,511 7,904 5,184

Increase (decrease) in liabilities related to purchases of property and equipment and capitalized software $ ( 1,770 ) $ 3,325 $ 672

Supplemental cash flow information on our leasing obligations

Cash paid for amounts included in the measurement of operating lease liabilities 5,508 26,686 31,508

Non-cash investing activity:

Right-of-use assets obtained in exchange for operating lease liabilities 6,456 973 2,635

Increase (decrease) in liabilities related to purchases of property and equipment and capitalized software 356 ( 1,770 ) 3,325

Non-cash financing activity:

Exchanged 2026 Notes

( 176,260 ) — —

Issuance of the 2027 Notes in exchange for 2026 Notes

$ 176,260 $ — $ —

(1) The following table provides a reconciliation of cash, cash equivalents and restricted cash shown above to amounts reported within the Consolidated Balance Sheets as of December 31, 2024, 2023 and 2022 (in thousands):

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North America and International.

See Note 18, Segment Information, for more information .

See Note 18, Segment and Geographical Information, for more information .

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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All intercompany accounts and transactions have been eliminated in consolidation.

The Consolidated Financial Statements were prepared in accordance with U.S.

generally accepted accounting principles ("GAAP") and include the assets, liabilities, revenue and expenses of all wholly-owned subsidiaries and majority-owned subsidiaries over which we exercise control and variable interest entities for which we have determined that we are the primary beneficiary.

The Consolidated Financial Statements were prepared in accordance with GAAP and include the assets, liabilities, revenue and expenses of all wholly-owned subsidiaries and majority-owned subsidiaries over which we exercise control and variable interest entities for which we have determined that we are the primary beneficiary.

Outside stockholders' interests in subsidiaries are shown on the 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.

The accompanying Consolidated Financial Statements are prepared in accordance with U.S.

GAAP applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

Beginning in the fourth quarter 2022, we disclosed conditions and events such as increasing cash outflows, operating losses and insufficient cash balances that, when considered in the aggregate, raised substantial doubt about our ability to continue as a going concern.

However, that doubt was alleviated through management's plans.

In the second quarter 2023, the addition of the maturing credit facility indicated that substantial doubt was no longer alleviated by management's plans.

In the fourth quarter of 2023, we executed a fully backstopped Rights Offering that closed in January 2024.

The Rights Offering was oversubscribed and raised $ 80.0 million.

In February 2024, we used $ 43.1 million of proceeds from the Rights Offering to repay our credit facility in advance of its maturity in May 2024.

In the fourth quarter of 2023, we also received $ 18.9 million in proceeds from the sale of a portion of our non-controlling equity interest in SumUp.

Our net cash used in operating activities has improved year-over-year, from $ 78.0 million and $ 136.0 million for the years ended December 31, 2023 and December 31, 2022, with net cash provided by operating activities of $ 54.5 million and $ 15.9 million for the three months ended December 31, 2023 and December 31, 2022.

Accordingly, management has concluded that there is no longer substantial doubt about our ability to continue as a going concern.

Adoption of New Accounting Standards

There were no new accounting standards adopted during the year ended December 31, 2023.

We adopted the guidance in ASU 2023-07 Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures as of December 31, 2024.

This ASU expands the annual and interim disclosure requirements for reportable segments, primarily through additional disclosures about significant segment expenses that are regularly provided to the chief operating decision maker and included in the segment measure of profit or loss.

It also requires an explanation of how the chief operating decision maker uses the segment measure of profit or loss to assess segment performance and allocate resources.

The adoption of ASU 2023-07 resulted in additional disclosures in the notes to our consolidated financial statements that we applied retrospectively to all prior periods presented.

Reclassifications

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Use of Estimates

The preparation of financial statements in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and accompanying notes.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and accompanying notes.

Estimates in our financial statements include, but are not limited to, the following:

GROUPON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

consideration from unredeemed vouchers;

variable consideration from unredeemed vouchers;

income taxes;

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We consider all highly liquid investments with an original maturity of three months or less from the date of purchase to be cash equivalents.

GROUPON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Accounts Receivable, Net

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Costs incurred during the application development stage related to implementation of the hosting arrangement are capitalized and included within Prepaid expenses and other current assets and Other non-current assets on the Consolidated Balance Sheets.

Amortization of implementation costs is recorded on a straight-line basis over the term of the associated hosting arrangement for each module or component of the related hosting arrangement when it is ready for its intended use.

Amortization of implementation costs is recorded on a straight-line basis over the expected term of the associated hosting arrangement for each module or component of the related hosting arrangement when it is ready for its intended use.

Amortization costs are recorded in Selling, general and administrative expense on the Consolidated Statements of Operations.

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Once goodwill has been allocated to the reporting units, it no longer retains its identification with a particular acquisition and becomes identified with the reporting unit in its entirety.

GROUPON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

We evaluate goodwill for impairment annually on October 1 or more frequently when an event occurs or circumstances change that indicates the carrying value of a reporting unit may exceed its fair value.

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If the fair value is less than the carrying value, we recognize an impairment equal to the difference between the carrying value of the reporting unit and its fair value, not to exceed the carrying value of goodwill.

GROUPON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Investments in equity shares without a readily determinable fair value and for which we do not have the ability to exercise significant influence are accounted for at cost adjusted for observable price changes and impairments, with changes in the measurement recognized through Other income (expense), net on the Consolidated Statements of Operations.

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During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain.

For example, our effective tax rate could be adversely affected by earnings being lower than anticipated in countries where it has lower statutory rates and higher than anticipated in countries where it has higher statutory rates, by changes in foreign currency exchange rates, by changes in the valuation of deferred tax assets and liabilities, by changes in the measurement of uncertain tax positions or by changes in the

GROUPON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

relevant laws, regulations, principles and interpretations.

We account for uncertainty in income taxes by recognizing the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit.

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Significant judgment is required when determining whether a contract is or contains a lease.

We review contracts to determine whether the language conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

We review contracts to determine

GROUPON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

whether the language conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

We classify leases at their commencement as either operating or finance leases.

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Those costs are expensed in the period in which they are incurred.

Loss Contingencies

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.

If the amount of loss is a range, we accrue for the best estimate within that range.

If no amount within the range is a better estimate, we accrue for the minimum amount within that range.

Revenue Recognition

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Revenue from hotel reservation offerings is recognized at the time the reservation is made, net of an allowance for estimated cancellations.

GROUPON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

We also earn commissions when customers make purchases with retailers using digital coupons accessed through our websites and mobile applications.

We recognize those commissions as revenue in the period in which the underlying transactions between the customer and the third-party merchant are completed.

Additionally, we earn advertising revenue when the advertiser's logo or website link has been included on our websites or in specified email distributions for the requisite period of time as set forth in the agreement with the advertiser.

Historically, we generated product revenue from our sales of first-party Goods transactions, which were direct sales of merchandise inventory.

For product revenue transactions, we were the primary party responsible for providing the good to the customer, we had inventory risk and we had discretion in establishing prices.

As such, product revenue was reported on a gross basis as the purchase price received from the customer.

Product revenue, including associated shipping revenue, was recognized when title passed to the customer upon delivery of the product.

We fully transitioned to a third party marketplace in North America in 2020 and in International in the fourth quarter of 2021.

In a third-party marketplace model, our merchants generally assume inventory and refund risk and for those transactions we record revenue on a net basis within service revenue.

Additionally, we earn

GROUPON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

advertising revenue when the advertiser's logo or website link has been included on our websites or in specified email distributions for the requisite period of time as set forth in the agreement with the advertiser.

Variable Consideration for Unredeemed Vouchers

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Customer credits are primarily used within one year of issuance.

GROUPON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Sales and Related Taxes

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Those costs are classified within Selling, general and administrative expense in the Consolidated Statements of Operations.

GROUPON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Cost of Revenue

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Expense is generally recognized on a straight-line basis over the service period during which awards are expected to vest, except for awards with both performance conditions and a graded vesting schedule, which are recognized using the accelerated method.

We present stock-based compensation expense within the Consolidated Statements of Operations.

We present stock-based compensation expense primarily within Selling, general, and administrative expense in the Consolidated Statements of Operations.

Foreign Currency

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Foreign currency gains and losses resulting from transactions that are denominated in currencies other than the entity's functional currency, including foreign currency gains and losses on intercompany balances that are not of a long-term investment nature, are included within Other income (expense), net on the Consolidated Statements of Operations.

Recently Issued Accounting Standards

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07 Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.

This ASU is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024.

The Company is assessing the effect this guidance may have on our disclosures.

GROUPON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Recently Issued Accounting Standards Not Yet Adopted

In December 2023, the FASB issued ASU 2023-09 Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.

This ASU is effective for annual periods beginning after December 15, 2024.

This ASU is effective for annual periods beginning after December 15, 2024 and early adoption is permitted.

The Company is assessing the effect this guidance may have on our disclosures.

In November 2024, the FASB issued ASU 2024-03 Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses .

The amendments in this update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027 and early adoption is permitted.

The Company is assessing the effect this guidance may have on our disclosures.

Additionally in November 2024, the FASB issued ASU 2024-04 Debt—Debt with Conversion and Other Options (Subtopic 470-20):

Induced Conversions of Convertible Debt Instruments .

The amendments in this update are effective for all entities for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods and early adoption is permitted.

The Company is assessing the effect this guidance may have on our disclosures.

The Company has not had any induced conversions of debt.

GROUPON, INC.

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Property, equipment and software, net $ 17,827 $ 30,530

(1) The decrease in Leasehold improvements in primarily related to the expiration of our 600 West Chicago lease.

(2) The net carrying amount of Internally-developed software was $ 17.1 million and $ 28.4 million as of December 31, 2024 and 2023.

We performed an assessment in the first, second, third and fourth quarters of 2023 and did not identify a triggering event that would have required us to test for impairment for such periods.

We performed an assessment during the years ended December 31, 2024 and 2023 and did not identify a triggering event that would have required us to test for impairment for such periods.

During the first quarter of 2022, we determined the impact to our business from the new variant of COVID-19 required us to evaluate our long-lived assets for impairment.

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As a result of our interim quantitative assessment, we recognized long-lived asset impairment related to certain asset groups within our International reporting unit.

See details in the table below.

During the fourth quarter of 2022, we determined a further downward revision of our forecast required us to evaluate our long-lived assets for impairment.

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As a result, we recognized long-lived asset impairment related to internally developed software.

See details in the table below.

During the third quarter of 2021, we recognized long-lived asset impairments for certain leasehold improvements under our 2020 Restructuring Plan.

See details in the table below and Note 13, Restructuring and Related Charges , for more information.

In order to evaluate long-lived assets for impairment in 2022 and 2021, we compared the fair value our asset groups to their carrying value.

In order to evaluate long-lived assets for impairment in 2022, we compared the fair value our asset groups to their carrying value.

In determining the fair values of our asset groups, we used the discounted cash flow method under the income approach that uses Level 3 inputs.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table summarizes impairment charges for property, equipment and software that are presented within Restructuring and related charges and Long-lived asset impairment on the Consolidated Statements of Operations for the years ended December 31, 2023, 2022 and 2021 (in thousands):

Year Ended December 31,

2023 2022 2021

Long-lived asset impairment:

North America $ — $ 753 $ —

International — 3,736 —

Long-lived asset impairment — 4,489 —

Restructuring and related charges:

North America — — 602

International — — 268

Restructuring and related charges impairment — — 870

Total property, equipment and software impairment $ — $ 4,489 $ 870

The following table summarizes impairment for long-lived assets by asset type for the years ended December 31, 2023, 2022 and 2021 (in thousands):

The following table summarizes impairment charges for property, equipment and software by segment that are presented within Long-lived asset impairment on the Consolidated Statements of Operations for the year ended December 31, 2022 (in thousands).

We did not recognize any impairment of our long-lived assets during the years ended December 31, 2024, and 2023:

Year Ended December 31, 2022

Long-Lived Asset Category 2023 2022 2021

Property, equipment and software, net

North America International Total

Property, equipment and software impairment:

Leasehold improvements $ — $ 1,747 $ 1,747

2 unchanged sentences

Other property, equipment and software, net (1)

Total $ — $ 4,489 $ 870

Total property, equipment and software impairment $ 753 $ 3,736 $ 4,489

(1) Excludes impairment of right-of-use assets - operating leases.

See Note 8, Leases, for additional information .

Depreciation and amortization expense on property, equipment and software is classified as follows in the accompanying Consolidated Statements of Operations for the years ended December 31, 2024, 2023 and 2022 (in thousands):

1 unchanged sentence

2024 2023 2022

Service cost of revenue $ 25,024 $ 32,554 $ 32,354

Product cost of revenue — — 378

Cost of revenue

$ 13,760 $ 25,024 $ 32,554

Selling, general and administrative 14,129 18,377 21,616

1 unchanged sentence

The above amounts include amortization of internally-developed software of $ 26.3 million, $ 38.1 million and $ 44.2 million for the years ended December 31, 2024, 2023 and 2022.

GROUPON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

GOODWILL AND OTHER INTANGIBLE ASSETS

The following table summarizes goodwill activity by segment for the year ended December 31, 2022 (in thousands).

There was no activity for the year ended December 31, 2023.

North America (1)

International (2)

Balance as of December 31, 2021 $ 178,685 $ 37,708 $ 216,393

Goodwill impairment — ( 35,424 ) ( 35,424 )

Foreign currency translation

— ( 2,284 ) ( 2,284 )

Balance as of December 31, 2022 $ 178,685 $ — $ 178,685

(1) As of December 31, 2023, the North America reporting unit had a negative carrying value.

(2) As of December 31, 2021, the International reporting unit had a negative carrying value.

We performed an assessment in the first, second, third and fourth quarters of 2023 and did not identify a triggering event that would have required us to test for impairment for such periods.

Additionally, we performed our annual goodwill impairment assessment as of October 1, 2023, which did no t identify any goodwill impairment.

During the first quarter of 2022, we determined the impact to our business from the new variant of COVID-19 required us to evaluate our goodwill for impairment.

As of December 31, 2024 and 2023, the balance of our goodwill was $ 178.7 million.

There was no goodwill activity during the years ended December 31, 2024 and 2023.

All goodwill is within our North America segment.

We performed an assessment in each quarter of 2024 and 2023 and did not identify a triggering event that required us to test for impairment for such periods.

Additionally, we performed our annual goodwill impairment assessment as of October 1, 2024, 2023, and 2022 which did no t identify any goodwill impairment.

During the first quarter of 2022, we determined the impact to our business from a new variant of COVID-19 required us to evaluate our goodwill for impairment.

Our interim quantitative assessment for the first quarter of 2022 did no t identify any goodwill impairment.

During the second quarter of 2022, we determined a downward revision of our forecast required us to evaluate our goodwill for impairment.

As a result of our interim quantitative assessment, we recognized goodwill impairment within our International reporting unit, representing a full impairment of goodwill for that reporting unit.

During the third quarter of 2021, we determined the prolonged recovery from the COVID-19 pandemic and the sustained decrease in our stock price required us to evaluate our goodwill for impairment.

Additionally, we performed our annual goodwill impairment assessment as of October 1, 2021.

Our assessments did not identify any goodwill impairment.

Therefore, we did no t recognize goodwill impairment for either of our reporting units during the year ended December 31, 2021.

As a result of our interim quantitative assessment, we recognized goodwill impairment within our International reporting unit, representing a full impairment of goodwill for $ 35.4 million.

In order to evaluate goodwill for impairment, we compared the fair value of our two reporting units, North America and International, to their carrying values.

In determining the fair values of our reporting units, we used the discounted cash flow method under the income approach that uses Level 3 inputs.

Other Intangible Assets

In March 2024, we entered into an agreement with a third party to sell the rights to certain intangible assets in exchange for cash consideration of $ 10.0 million, subject to license-back provisions that permit continued use of the assets in the ordinary course of our business.

The sale was completed in April 2024 and resulted in a pre-tax

GROUPON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

gain of $ 5.0 million.

The pre-tax gain is presented within Gain on sale of assets on the Consolidated Statements of Operations for the year ended December 31, 2024.

The cash activity is presented within Proceeds from sale of assets, net in the investing section on the Consolidated Statements of Cash Flows and includes cash consideration received of $ 10.0 million, less $ 1.0 million in fees.

The assets were within our North America segment.

The following table summarizes intangible assets as of December 31, 2024 and 2023 (in thousands):

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Trade names 9,425 9,027 398 9,459 8,753 706

Patents 13,235 7,237 5,998 13,341 6,701 6,640

1,250 1,008 242 13,235 7,237 5,998

Other intangible assets 10,483 6,385 4,098 9,318 5,516 3,802

Total $ 39,734 $ 34,996 $ 4,738 $ 50,854 $ 39,450 $ 11,404

(1) The change in the net carrying value is primarily due to the sale of certain intangible assets.

Amortization of intangible assets is computed using the straight-line method over their estimated useful lives, which range from 1 to 10 years.

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As of December 31, 2024, our estimated future amortization expense related to intangible assets is as follows (in thousands):

GROUPON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Total $ 4,738

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We have elected to record equity investments without readily determinable fair values at cost adjusted for observable price changes in orderly transactions and impairments.

As of December 31, 2024, SumUp is the only equity investment with a positive carrying value.

GROUPON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table summarizes other equity investment activity for the year ended December 31, 2023 (in thousands).

There was no activity for the year ended December 31, 2022:

There was no activity for the year ended December 31, 2024 and 2022.

Balance as of December 31, 2022 $ 119,541

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We hold a 1.79 % non-controlling equity interest in SumUp, a privately-held mobile payments company.

During the third quarter of 2023, we recorded a remeasurement of our investment in SumUp, resulting in a decline of $ 25.8 million based on a preliminary Share Purchase Agreement (the "Purchase Agreement").

During the third quarter of 2023, we recorded a remeasurement of our investment in SumUp, resulting in a decline of $ 25.8 million based on a preliminary Share Purchase Agreement.

This remeasurement represents non-cash investing activity.

The loss was driven by a share price reduction on a Euro basis as well as foreign currency depreciation of US dollars versus Euros.

The loss was driven by a share price reduction on a Euro basis as well as foreign currency depreciation of U.S.

dollars versus Euros.

The loss on the remeasurement is classified within Other income (expense), net on the Consolidated Statements of Operations for the year ended December 31, 2023.

1 unchanged sentence

As a result of the transaction, our non-controlling equity interest in SumUp decreased from 2.29 % to 2.08 %.

Additionally, during the fourth quarter of 2023, the Company entered into a separate Share Purchase Agreement pursuant to which it has agreed to sell shares representing approximately 11.7 % of its 2.08 % interest in SumUp at approximately the same price as agreed to in connection with the first transaction noted above and received cash of $ 10.2 million in relation to the sale.

Additionally, during the fourth quarter of 2023, the Company entered into a separate Share Purchase Agreement pursuant to which it agreed to sell shares representing approximately 11.7 % of its 2.08 % interest in SumUp at approximately the same price as agreed to in connection with the first transaction noted above and received cash of $ 10.2 million in relation to the sale.

As a result of the second transaction, our non-controlling equity interest in SumUp decreased from 2.08 % to 1.79 %.

During the third quarter 2021, we adjusted the carrying value of our other equity investment in SumUp due to observable price changes in orderly transactions, which resulted in an unrealized gain of $ 89.1 million for the year ended December 31, 2021.

The unrealized gain is presented within Other income (expense), net on the Consolidated Statements of Operations for the year ended December 31, 2021.

During the third quarter 2021, we also sold 100 % of our shares in one of our other equity investments for total cash consideration of $ 2.6 million and recognized a gain of $ 2.2 million.

During the second quarter 2021, we

GROUPON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

divested our shares in one of our other equity investments and recognized a gain and total cash consideration of $ 4.2 million.

The gains on our investments have been presented within Other income (expense), net in the Consolidated Statements of Operations for the year ended December 31, 2021.

Available-for-Sale Securities

Our available-for-sale securities had a fair value of $ 0.0 million as of December 31, 2024 and 2023 and no financial statement activity was recorded for the years ended December 31, 2024, 2023 and 2022.

During the fourth quarter 2021, one of our available-for-sale security investments completed a merger transaction in which we received equity in the surviving company as merger consideration.

We determined that the fair value of the transferred investment was zero .

Fair Value Option Investments

In connection with the dispositions of controlling stakes in Ticket Monster, an entity based in the Republic of Korea, and Groupon India in prior periods, we obtained minority investments in Monster Holdings LP ("Monster LP") and in Nearbuy Pte Ltd.

In connection with the dispositions of controlling stakes in Ticket Monster and Groupon India in prior periods, we obtained minority investments in Monster LP and in Nearbuy.

We made an irrevocable election to account for both of those investments at fair value with changes in fair value reported in earnings.

6 unchanged sentences

Income taxes receivable 2,686 5,349

Deferred cloud implementation cost 14,627 9,362

Deferred cloud implementation costs, net (1)

Restricted cash (2)

33,726 26,075

Other 4,263 7,797

Total prepaid expenses and other current assets $ 52,365 $ 63,647

(1) Primarily consists of cash collateral related to our letters of credit.

GROUPON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The decrease in Deferred cloud implementation costs, net relates to amortization.

Primarily consists of cash collateral related to our letters of credit and other cash collateral.

See Note 7, Financing Arrangements, for additional information .

1 unchanged sentence

Deferred contract acquisition costs $ 3,211 $ 2,940

Deferred cloud implementation costs 188 17,684

Security deposits

Other 2,950 1,005

Total other non-current assets $ 9,144 $ 6,095

GROUPON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table summarizes Accrued expenses and other current liabilities as of December 31, 2024 and 2023 (in thousands):

Refund reserve $ 4,445 $ 11,072

Compensation and benefits 10,717 15,005

Accrued marketing 8,771 19,596

Restructuring-related liabilities 1,641 4,782

Customer credits

Operating lease obligations 7,121 37,525

$ 22,349 $ 26,595

Accrued marketing

Compensation and benefits

11,436 10,717

Foreign VAT assessments (1)

Accrued consulting and professional fees

Refunds reserve

Deferred revenue

Current portion of lease obligations

Income taxes payable

21,612 36,187

Total accrued expenses and other current liabilities $ 97,765 $ 101,939

(1) Includes certain payroll taxes deferred under the Coronavirus Aid, Relief and Economic Security ("CARES") Act of $ 2.7 million as of December 31, 2022.

This balance was paid in January 2023.

(1) See Note 9, Commitments and Contingencies , for additional information

The following table summarizes Other non-current liabilities as of December 31, 2024 and 2023 (in thousands):

3 unchanged sentences

Total other non-current liabilities $ 16,596 $ 13,262

GROUPON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table summarizes Other income (expense), net for the years ended December 31, 2024, 2023 and 2022 (in thousands):

3 unchanged sentences

Interest expense ( 8,531 ) ( 15,718 ) ( 14,380 )

Changes in fair value of investments (1)

Loss from changes in fair value of investment (1)

— ( 25,847 ) —

Loss on extinguishment of debt (2)

( 1,631 ) — —

Foreign currency gains (losses), net and other (3)

1 unchanged sentence

Other income (expense), net $ ( 39,185 ) $ ( 25,174 ) $ ( 24,155 )

(1) The $ 25.8 million loss for the year ended December 31, 2023 relates to a remeasurement of our investment in SumUp.

The year ended December 31, 2021 includes an $ 89.1 million unrealized gain due to an upward adjustment for an observable price change of SumUp.

(2) Includes a $32.3 million cumulative foreign currency translation adjustment gain that was reclassified into earnings for the year ended December 31, 2021 as a result of the substantial liquidation of our subsidiary in Japan as part of our 2020 Restructuring Plan.

(1) Loss from changes in fair value of investment for the December 31, 2023 is due to a remeasurement of our investment in SumUp.

See Note 5, Investments, for additional information.

(2) Loss on extinguishment of debt for the year ended December 31, 2024 refers to the 2026 Notes and 2027 Notes exchange transaction.

See Note 7, Financing Arrangements , for additional information.

(3) Foreign currency gains (losses), net and other for the year ended December 31, 2024 is primarily due to unfavorable foreign currency fluctuations on intercompany balances with our subsidiaries.

FINANCING ARRANGEMENTS

As of December 31, 2024, the Company has the following material financing arrangements outstanding:

the 2027 Notes, the 2026 Notes, capped call transactions and letters of credit pursuant to the Cash Collateral Agreement.

On November 19, 2024, the Company issued $ 197.3 million aggregate principal amount of the 2027 Notes (i) in exchange for $ 176.3 million aggregate principal amount of the 2026 Notes held by the Operating Participants (ii) issued and sold to certain Offering Participants for $ 21.0 million aggregate principal amount of the 2027 Notes for gross cash proceeds of $ 19.9 million, representing an issue price of 95 %.

We assessed whether the exchange of the $ 176.3 million of the 2026 Notes resulted in an insubstantial modification or an extinguishment of the existing debt for each loan in the syndication by grouping the lenders that participated in both the 2026 Notes and the 2027 Notes.

The exchanged amount of the 2026 Notes is a non-cash financing activity.

The Company determined that $ 176.3 million of the 2026 Notes was extinguished and new debt pertaining to the 2027 Notes was obtained, resulting in a loss on extinguishment of $ 1.6 million.

In addition, the 2027 Notes raised additional cash proceeds which resulted in a cash inflow from financing activities of $ 19.9 million in the Consolidated Statements of Cash Flows.

We used the $ 19.9 million of net cash proceeds to offset the cash outflows associated with the debt issuance costs as well as for general corporate purposes.

6.25 % Convertible Senior Secured Notes due 2027

On November 19, 2024, the Company issued $ 197.3 million aggregate principal amount of the 2027 Notes to the Offering Participants in a private offering.

The 2027 Notes bear interest at a rate of 6.25 % per annum, payable semi-annually in arrears on March 15 and September 15 of each year, commencing March 15, 2025.

The 2027 Notes will mature on March 15, 2027, subject to earlier repurchase or conversion.

The initial conversion rate of the 2027 Notes is 33.333 shares of Common Stock, par value $ 0.0001 per share per $1,000 principal amount of 2027 Notes, which is the equivalent to an initial conversion price of approximately $ 30 per share, subject to customary adjustments.

Upon the occurrence of a make-whole fundamental change, we will, in certain circumstances, increase the conversion rate by a number of additional shares for a holder that elects to convert its 2027 Notes in connection with such make-whole fundamental change.

Based on the closing price of the Common Stock of $ 12.15 as of December 31, 2024, the if-converted value of the 2027 Notes was less than the principal amount.

The 2027 Notes are not redeemable by the Company.

GROUPON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FINANCING ARRANGEMENTS

Certain conditions apply to the conversion by holders of the 2027 Notes.

If the Company undergoes a fundamental change, holders of the 2027 Notes have the right to require the Company to repurchase for cash all or any portion of their 2027 Notes at a fundamental change repurchase price equal to 100 % of the principal amount of the 2027 Notes to be repurchased, plus accrued and unpaid interest, if any.

The 2027 Notes are convertible into Common Stock or a combination of cash and Common Stock, at the Company’s election.

Subject to certain conditions, holders of the 2027 Notes may convert the 2027 Notes at their option at any time on or after December 15, 2026, until the close of business on the second scheduled trading day immediately preceding the maturity date.

In addition, if specified events occur in a calendar quarter prior to December 15, 2026, the holders may elect to convert on an effective date of such event.

Pursuant to the 2027 Notes Indenture, the Company is entitled to not effect any conversion that will result in any holder thereof, together with any Attribution Parties, beneficially owning more than 9.9 % of the Company’s Common Stock (the “Exchange Cap”), after giving effect to such conversion.

The Company’s obligation to deliver any shares of Common Stock that will result in any holder thereof to exceed the Exchange Cap (the “Excess Shares”) is not extinguished and is suspended until such holder advises the Company in writing that it may receive the Excess Shares without exceeding the Exchange Cap.

The 2027 Notes are fully and unconditionally guaranteed by certain material wholly owned domestic subsidiaries of the Company (the “Guarantors”), subject to the terms of the 2027 Notes Indenture.

The 2027 Notes and related guarantees will be secured on a first-priority basis by liens on substantially all of the assets of the Company and the Guarantors, subject to certain exceptions and permitted liens.

The Company may be required to pay additional interest of 2.5 % per annum of the 2027 Notes in the event that it fails to pledge certain of its assets as part of the collateral for the 2027 Notes by November 20, 2025, unless such assets are sold.

The 2027 Notes Indenture contains customary terms and conditions as well as various affirmative and negative covenants that, among other things, may restrict the ability of the Company and its subsidiaries to incur additional indebtedness, pay dividends, repurchase stock, prepay junior or unsecured indebtedness or make certain investments.

In addition, the 2027 Notes Indenture contains limitations on the Company’s and its subsidiaries’ ability to dispose of certain assets, and, in certain circumstances, requires the Company to make an offer to repurchase the 2027 Notes using proceeds from certain asset sales at a price of par plus accrued and unpaid interest, and a premium equal to the lesser of all remaining interest on the 2027 Notes or one year of accrued interest on the 2027 Notes.

The 2027 Notes Indenture includes customary events of default.

If an event of default occurs and is continuing, the principal amount of the 2027 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 2027 Notes and any accrued and unpaid interest would automatically become immediately due and payable.

We account for the 2027 Notes as a single liability-classified instrument measured at amortized cost.

The carrying value of the 2027 Notes was determined by deducting third party transaction costs incurred in connection with the issuance of the 2027 Notes of $ 3.7 million from the 2027 Notes fair value amount of $ 196.2 million, which is based on the exchanged amount of $ 176.3 million plus the cash consideration received of $ 19.9 million.

The transaction costs were recorded as a debt discount in the Consolidated Balance Sheets and are amortized as interest expense and presented in Other income (expense) on the Consolidated Statements of Operations.

Together with the cash interest, this results in an effective interest rate of 7.17 % over the term of the 2027 Notes.

We have presented the 2027 Notes in non-current liabilities in the accompanying Consolidated Balance Sheets.

The carrying amount of the 2027 Notes consisted of the following as of December 31, 2024 (in thousands):

December 31, 2024

Fair value of principal recorded at issuance

debt discount

Total $ 192,727

GROUPON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

During the year ended December 31, 2024, we recognized interest costs on the 2027 Notes as follows (in thousands):

Year ended December 31, 2024

Contractual interest

Amortization of debt discount

Total $ 1,658

We classified the fair value of the 2027 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 2027 Notes and our cost of debt.

The estimated fair value of the 2027 Notes as of December 31, 2024 was $ 192.0 million and was determined using a lattice model.

1.125 % Convertible Senior Notes due 2026

In March and April 2021, we issued $ 230.0 million aggregate principal amount of 2026 Notes in a private offering to qualified institutional buyers.

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, with an annual effective interest rate of 1.83 %.

1 unchanged sentence

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 (the "Indenture"), 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.

In addition, upon the occurrence of a make-whole fundamental change, 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.

2 unchanged sentences

Based on the closing price of the Common Stock of $ 12.15 as of December 31, 2024, 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.

Certain conditions apply to the conversion by holders and redemption by us of the 2026 Notes.

In addition, upon the occurrence of a fundamental change 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;

2 unchanged sentences

and structurally junior to all indebtedness and other liabilities of current or future subsidiaries, including trade payables.

The Indenture includes customary events of default, including that acceleration of indebtedness under the Credit Agreement could result in an event of default under the Indenture.

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.

The 2026 Notes Indenture includes customary events of default.

If an event of default 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.

2 unchanged sentences

Those transaction costs were recorded as a debt discount in the Consolidated Balance Sheets and are amortized to interest expense.

We have presented the 2026 Notes in Convertible senior notes, net in the accompanying Consolidated Balance Sheets.

The carrying amount of the 2026 Notes consisted of the following as of December 31, 2023 and 2022 (in thousands):

Principal amount $ 230,000 $ 230,000

debt discount ( 3,530 ) ( 5,077 )

Net carrying amount of liability $ 226,470 $ 224,923

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 December 31, 2023 and 2022 was $ 141.9 million and $ 133.1 million and was determined using a lattice model.

GROUPON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

During the years ended December 31, 2023 and 2022, we recognized interest costs on the 2026 Notes as follows (in thousands):

We have presented the 2026 Notes in Convertible senior notes, net in the accompanying Consolidated Balance Sheets The carrying amount of the 2026 Notes consisted of the following as of December 31, 2024 and 2023 (in thousands):

Principal amount $ 53,740 $ 230,000

debt discount ( 454 ) ( 3,530 )

Net carrying amount of liability component $ 53,286 $ 226,470

During the years ended December 31, 2024 and 2023, we recognized interest costs and a loss on extinguishment on the 2026 Notes as follows (in thousands):

Year Ended December 31,

1 unchanged sentence

Amortization of debt discount 1,434 1,547

Loss on extinguishment of exchanged debt 1,631 —

Total $ 5,292 $ 4,135

The estimated fair value of the 2026 Notes as of December 31, 2024 and 2023 was $ 48.7 million and $ 141.9 million and was determined using a lattice model.

Capped Call Transactions

6 unchanged sentences

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.

No changes to the Capped Call Agreement occurred in connection with the Exchange and Subscription agreements pertaining to the issuance of the 2027 Notes.

Revolving Credit Agreement

In May 2019, we entered into a second amended and restated senior secured revolving credit agreement, which matures on May 14, 2024, as amended from time to time, the Credit Agreement.

On February 12, 2024, we prepaid $ 43.1 million to terminate all commitments to extend further credit under the Credit Agreement using our $ 80.0 million in proceeds received from the Rights Offering.

The terms of the Rights Offering permit the Company to use the proceeds for general corporate purposes, including the repayment of debt.

We were not subject to any early termination penalties under the Credit Agreement.

The payment of the Payoff Amount terminated our obligations under the Credit Agreement, except for ordinary and customary survival terms.

In addition, we retained access to letters of credit, originally available under the Credit Agreement.

In September 2022, we entered into the Third Amendment to the Credit Agreement to modify certain financial covenants and provide for additional flexibility in our operations, including certain modifications to our requirement to maintain (i) a maximum funded indebtedness to EBITDA ratio and (ii) a monthly minimum liquidity balance.

In addition to the modifications described below, the Third Amendment reduced our borrowing capacity under our senior secured revolving credit facility from $ 225.0 million to $ 150.0 million.

In March 2023, we entered into the Fourth Amendment to the Credit Agreement to modify certain financial covenants and provide for additional flexibility in our operations, among other changes, including certain modifications to (i) our requirements to maintain a monthly minimum liquidity balance (including any undrawn amounts under the revolving credit facility) of at least $ 50.0 million, (ii) the calculation of EBITDA under the Fourth Amendment, (iii) mandatory prepayment requirements, and (iv) certain affirmative covenants.

In addition, the Fourth Amendment reduced our borrowing capacity under our senior secured revolving credit facility from $ 150.0 million to $ 75.0 million, which provides for the issuance of up to $ 75.0 million in letters of credit, provided that the sum of

In May 2019, we entered into the Credit Agreement, as amended from time to time, with a maturity date of

GROUPON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

outstanding borrowings and letters of credit do not exceed the maximum funding commitment of $ 75.0 million.

In November, 2023, the Company entered into the Fifth amendment to the Credit Agreement to provide for additional flexibility with regards to the fully backstopped Rights Offering.

May 14, 2024.

From September 28, 2022 to June 30, 2023, the borrowing bore an (a) interest at a rate per annum equal to (i) SOFR plus 10 basis points 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 2.50 % and (b) commitment fee of 0.40 % on the daily amount of the unused commitments.

After June 30, 2023, the borrowings bore an (a) interest at a rate per annum equal to (i) SOFR plus 10 basis points or (ii) a customer 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.

Additionally, in the event the ratio of funded indebtedness to EBITDA exceeded 3.00 :1.00, ABR and Canadian prime spreads increased to 1.25 %, fixed rate spreads increased to 2.25 % and the commitment fee increased to 0.40 % on the daily amount of the unused commitments under the Credit Agreement.

In addition, the Fourth Amendment reduced our borrowing capacity under our senior secured revolving credit facility from $ 150.0 million to $ 75.0 million, with letters of credit up to $ 75.0 million, so long as that the sum of outstanding borrowings and letters of credit did not exceed the maximum funding commitment of $ 75.0 million.

In November 2023, the Company entered into the Fifth Amendment to the Credit Agreement for additional flexibility with regards to the fully backstopped Rights Offering.

See Note 10, Stockholders' Equity (Deficit), for additional information regarding the Rights Offering.

Specifically, the Company entered into the Fifth Amendment to the Credit Agreement.

The Fifth Amendment effects certain modifications to the definition of the term “Change in Control” and adds the term “Disqualified Equity Interest” to the Credit Agreement, among other changes.

In addition, the Fifth Amendment modifies the restricted payment covenant to permit the Company to declare and pay dividends with respect to its Equity Interests (other than Disqualified Equity Interests) payable solely in additional shares of its Equity Interests (other than Disqualified Equity Interests).

We deferred debt issuance costs of $ 4.6 million in aggregate in connection with the Credit Agreement.

Deferred debt issuance costs are included within Other non-current assets on the Consolidated Balance Sheets and are amortized to interest expense over the term of the respective agreement.

As of December 31, 2023, we were in compliance with the applicable covenants under the Credit Agreement.

Non-compliance with the covenants under the 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 Credit Agreement or reduce the available commitments at any time.

Borrowings under the Second Amendment bore (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 Second Amendment also includes a replacement mechanism for the discontinuation of the adjusted LIBO rate.

The Third Amendment replaced LIBOR as a benchmark interest rate under the Second Amendment with Term Secured Overnight Financing Rate ("SOFR") plus a credit spread adjustment of 10 basis points.

The Third Amendment also provides that, from the date of the Third Amendment through the fiscal quarter ending June 30, 2023, the Alternate Base Rate ("ABR") and Canadian prime spreads shall be raised to 1.50 %, the fixed rate spreads to 2.50 % and the commitment fee to 0.40 % on the daily amount of the unused commitments under the Credit Agreement.

After June 30, 2023, the applicable spreads and commitment fee will revert to the levels set by the Second Amendment, with the addition of a new tier that is applicable when the ratio of funded indebtedness to EBITDA exceeds 3.00 :1.00 and provides for ABR and Canadian prime spreads of 1.25 %, fixed rate spreads of 2.25 % and a commitment fee of 0.40 % on the daily amount of the unused commitments under the Credit Agreement.

The 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.

The Fifth Amendment effected certain modifications to the definition of the term “Change in Control” and added the term “Disqualified Equity Interest” to the Credit Agreement, among other changes.

In addition, the Fifth Amendment modified the restricted payment covenant to permit the Company to declare and pay dividends with respect to its Equity Interests, other than Disqualified Equity Interests, payable solely in additional shares of its Equity Interests, other than Disqualified Equity Interests.

The Credit Agreement was 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 Credit Agreement.

Amounts committed to outstanding borrowings and letters of credit under the Credit Agreement as of December 31, 2023 and 2022 were as follows (in thousands):

Certain of our domestic and foreign subsidiaries were guarantors under the Credit Agreement.

The terms of the Rights Offering permit the Company to use the proceeds for general corporate purposes, including the repayment of debt.

We were not subject to any early termination penalties under the Credit Agreement.

The payment of the Payoff Amount terminated our obligations under the Credit Agreement, including compliance with certain financial covenants, except for ordinary and customary survival terms.

In addition, we retained access to letters of credit, originally available under the Credit Agreement, pursuant to our pre-existing Cash Collateral Agreement.

Amounts committed to outstanding borrowings and letters of credit under the Cash Collateral Agreement and Credit Agreement as of December 31, 2024 and 2023 were as follows (in thousands):

December 31, 2024 December 31, 2023

Borrowings $ 42,776 $ 75,000

Letters of credit (1)

Letters of credit and other cash collateral (1)

$ 33,726 $ 25,200

(1) Under the Credit Agreement, cash collateral was required if letters of credit extended beyond May 14, 2024.

Cash collateral is treated as restricted cash on the Consolidated Balance Sheets.

Borrowings — 42,776

(1) Pursuant to the Cash Collateral Agreement, cash collateral is required for all letters of credit and treated as restricted cash, which is presented in Prepaid expenses and other current assets on the Consolidated Balance Sheets.

See Note 6, Supplemental Consolidated Balance Sheets and Statements of Operations Information, for additional information .

Our operating leases primarily consist of leases for real estate throughout the world with lease expirations between 2024 and 2025.

These arrangements typically do not transfer ownership of the underlying asset as we do

GROUPON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

not assume, nor do we intend to assume, the risks and rewards of ownership.

Our operating leases primarily consist of leases for real estate throughout the world with lease expirations between 2025 and 2028.

These arrangements typically do not transfer ownership of the underlying asset as we do not assume, nor do we intend to assume, the risks and rewards of ownership.

Our finance leases were related to property and equipment, primarily computer hardware, all of which expired in the year ended December 31, 2022.

In November 2023, we signed a lease for our new headquarters that continues to be located in Chicago, Illinois.

We had access to the facility effective December 2023 and the lease expires on December 15, 2025.

We previously leased our headquarters located in Chicago, Illinois ("600 West Chicago").

We gained access to the facility effective December 2023 and the lease was originally set to expire on December 15, 2025.

In October 2024, we amended the lease to extend the term through December 15, 2027.

We previously leased our headquarters located at 600 West Chicago.

During the year ended December 31, 2022, we reassessed the term of our 600 West Chicago operating lease as we were reasonably certain to exercise our option to early terminate the lease.

19 unchanged sentences

See Note 13, Restructuring and Related Charges , for more information.

Due to actions taken under our 2020 Restructuring Plan, we recognized impairment of $ 6.8 million related to right-of-use assets - operating leases for the year ended December 31, 2021, which are presented in Restructuring and related charges on the Consolidated Statements of Operations.

See Note 13, Restructuring and Related Charges , for more information.

GROUPON, INC.

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(2) Variable lease costs presented as Selling, general and administrative and Restructuring and related charges in the Consolidated Statements of Operations totaled $ 1.5 million and $( 0.1 ) million for the year ended December 31, 2024, $ 3.7 million and $ 2.6 million for the year ended December 31, 2023 and $ 5.6 million and $ 2.4 million for the year ended December 31, 2022.

(3) Sublease income, gross primarily presented as Restructuring and related charges in the Consolidated Statements of Operations for the years ended December 31, 2023 and entirely for the years ended December 31, 2022 and 2021.

Additionally, for the year ended December 31, 2023, sublease income, gross includes the settlement related to Uptake.

(3) Sublease income, gross primarily presented as Restructuring and related charges in the Consolidated Statements of Operations for the year ended December 31, 2023 and entirely for the year ended December 31, 2022, Additionally, for the year ended December 31, 2023, subl ease income, gross includes the settlement related to Uptake.

See Note 9, Commitments and Contingencies, for additional information.

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December 31, 2024 December 31, 2023

Weighted-average lease term 1 year 1 year

Weighted-average lease term 2 years 1 year

Weighted-average discount rate 6.4 % 5.8 %

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COMMITMENTS AND CONTINGENCIES

Purchase Obligations

Contractual Obligations

We have entered into non-cancelable arrangements with third-parties, primarily related to cloud computing and other information technology services.

As of December 31, 2023, future payments under these contractual obligations were as follows (in thousands):

Total purchase obligations $ 36,349

As of December 31, 2024 and through the date of this report, future payments under these contractual purchase obligations were as follows (in thousands):

2025 $ 10,441

Total contractual purchase obligations $ 32,198

Additionally, Groupon S.r.l sought and obtained approval of installment plans whereby the provisional payments may be deposited pro rata in monthly installments.

Refer to 14, Income Taxes, for additional information.

Legal Matters and Other Contingencies

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securities law, consumer class actions and suits alleging, among other things, violations of state consumer protection or privacy laws.

We sublease a portion of 600 West Chicago to Uptake.

As of December 31, 2024, we had an appeal lodged in the Portuguese courts relating to a Portugal VAT assessment for the periods from 2013 to 2015 of approximately $ 4.0 million, inclusive of penalties and interest through December 31, 2024.

After negative rulings at lower level courts in November 2023 and May 2024, we lodged a final appeal to the highest-level court.

On October 31, 2024, we learned the highest-level court declined to hear our appeal and the related assessment became final and due during the fourth quarter of 2024.

The related assessment is expected to be paid in 2025.

During the year ended December 31, 2024, we recorded a contingent liability of $ 4.1 million in our Consolidated Balance Sheets and recognized expenses in our Consolidated Statements of Operations for $ 3.3 million of taxes and penalties within Selling, general and administrative and $ 0.8 million of interest expense within Other income (expense), net.

We currently have a bank guarantee of $ 3.6 million in place relating to the assessment that is classified as restricted cash in our Consolidated Balance Sheets as of December 31, 2024.

In 2015, we lodged an appeal in the Portuguese courts relating to a Portugal VAT assessment for the periods from 2011 to 2012 of up to $ 4.3 million, inclusive of penalties and interest through December 31, 2024.

On October 31, 2024, we learned we received a negative ruling at the lowest level court.

We lodged an appeal to the second-level court to assert factual and legal challenges to the assessment.

During the year ended December 31, 2024, we recorded a contingent liability of $ 4.6 million in our Consolidated Balance Sheets and recognized expenses in our Consolidated Statement of Operations for $ 3.7 million of taxes and penalties within Selling, general and administrative and $ 0.9 million of interest expense within Other income (expense), net.

The Company recorded this liability after concluding that an adverse outcome is now probable, in light of the developments described above.

We currently have a bank guarantee of $ 3.9 million in place relating to the assessment that is classified as restricted cash in our Consolidated Balance Sheets as of December 31, 2024.

A Groupon subsidiary in Italy, Groupon S.r.l., is presently litigating a tax dispute with the Italian tax authorities relating to a $ 122.3 million Assessment, inclusive of taxes, penalties and interest through December 31, 2024.

In December 2024, we received an unfavorable ruling in the second-level appellate court in favor of the Italian tax authorities.

The decision was based on legal determinations by the Court that the Company assesses can be appealed to the Italian Supreme Court including the application or misapplication of the applicable statute of limitations.

Groupon S.r.l.

intends to file a prompt appeal to the Italian Supreme Court.

If Groupon S.r.l.

loses that appeal, Groupon S.r.l.

plans to further challenge the Assessment and seek relief in an international mutual

GROUPON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

agreement procedure that involves the tax authorities of Ireland and Italy.

The international mutual agreement procedure would adjudicate issues that are not currently under review by the Italian courts.

The Company continues to believe that the Assessment, which primarily relates to transfer pricing on transactions occurring in 2011, is without merit.

The subsidiary continues to vigorously defend itself in this matter and believes it will prevail on the merits of the case.

Refer to Note 14, Income Taxes for additional information.

We subleased a portion of 600 West Chicago to Uptake.

In the first quarter of 2023, we initiated a lawsuit against Uptake in the Circuit Court of Cook County for breach of the lease agreement.

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The settlement was recorded within Restructuring and related charges in the Consolidated Statements of Operations.

On June 13, 2023, Groupon was granted final approval of a settlement that resolved four shareholder derivative lawsuits in relation to a previously settled lawsuit that alleged 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.

Under the settlement, Groupon agreed to undertake certain corporate reforms.

The Court awarded attorneys' fees in the amount of $ 950,000 to Plaintiffs' counsel.

That amount was covered under Groupon's insurance policies and was paid directly by Groupon's insurance carriers in July 2023.

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.

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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

GROUPON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

costs of doing business through adverse judgment or settlement, or require us to change our business practices, sometimes in expensive ways.

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.

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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.

GROUPON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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.

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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.

GROUPON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

STOCKHOLDERS' EQUITY (DEFICIT)

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As of December 31, 2024, $ 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 Credit Agreement, share price, available cash and other factors, and the share repurchase program may be terminated at any time.

The timing and amount of share repurchases, if any, will be determined based on market conditions, limitations under the 2026 Notes, 2027 Notes, share price, available cash and other factors, and the share repurchase program may be terminated at any time.

Rights Offering

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See Note 7 , Financing Arrangements, for additional information.

The Rights Offering was made through the distribution of non-transferable subscription rights to purchase shares of Common Stock at a subscription price of $ 11.30 per share and otherwise on such terms and subject to such conditions as may be required to comply with any applicable Nasdaq Global Market stock exchange rules and regulations.

The subscription period for the Rights Offering expired at 5:00 p.m., New York City time, on January 17, 2024 (the "Expiration Date").

The Rights Offering was fully backstopped by Pale Fire Capital SICAV a.s.

(the “Backstop Party”), an entity affiliated with (i) Dusan Senkypl, the Company’s Interim Chief Executive Officer and a member of the Board, and (ii) Jan Barta, a member of the Board.

The Backstop Party had a binding commitment to (i) fully exercise its pro rata subscription right prior to the Expiration Date of the Rights Offering and (ii) fully purchase any and all unsubscribed shares in the Rights Offering following the Expiration Date at the same price and on the same terms and conditions as other participants in the Rights Offering.

On January 22, 2024, Groupon announced the closing of its $ 80.0 million fully backstopped Rights Offering for shares of its Common Stock, par value $ 0.0001 per share.

Pursuant to the terms of the Rights Offering, 7,079,646 shares of Common Stock were purchased at $ 11.30 per share, generating $ 80.0 million in gross proceeds to the Company.

As detailed below, the Rights Offering was oversubscribed, and the subscriptions, inclusive of the exercise of all over-subscription privileges (such aggregate number, the “Subscriptions”), well exceeded $ 80.0 million, the maximum aggregate offering size of the Rights Offering.

Through the exercise of both basic subscription rights and over-subscription privileges the Backstop Party, subscribed for approximately 7.1 million shares and other stockholders subscribed for approximately 9.7 million shares.

The Company is issuing 4,574,113 shares of Common Stock via the exercise of the basic subscription rights

GROUPON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

and 2,505,533 shares of Common Stock via the exercise of over-subscription privileges.

such conditions as may be required to comply with any applicable Nasdaq Global Market stock exchange rules and regulations.

The subscription period for the Rights Offering expired at the Expiration Date.

The Rights Offering was fully backstopped by the Backstop Party, an entity affiliated with (i) Dusan Senkypl, the Company’s Chief Executive Officer and a member of the Board, and (ii) Jan Barta, a member of the Board.

The Backstop Party had a binding commitment to (i) fully exercise its pro rata subscription right prior to the Expiration Date and (ii) fully purchase any and all unsubscribed shares in the Rights Offering following the Expiration Date at the same price and on the same terms and conditions as other participants in the Rights Offering.

On January 22, 2024, Groupon announced the closing of the fully backstopped Rights Offering, in which 7,079,646 shares of Common Stock were purchased at $ 11.30 per share, generating $ 80.0 million in gross proceeds to the Company.

As detailed below, the Rights Offering was oversubscribed, and the subscriptions, inclusive of the exercise of all over-subscription privileges well exceeded $ 80.0 million, the maximum aggregate offering size of the Rights Offering.

The Company issued 4,574,113 shares of Common Stock via the exercise of the basic subscription rights and 2,505,533 shares of Common Stock via the exercise of over-subscription privileges.

The Backstop Party purchased approximately 3.1 million shares of Common Stock in connection with the Rights Offering.

Pursuant to the Backstop Agreement, dated November 9, 2023, the Backstop Party agreed to (i) exercise its basic subscription rights in full and (ii) purchase any and all shares of Common Stock not subscribed for following the Expiration Date of the Rights Offering.

As no shares remained unsubscribed following the Expiration Date, the purchase of unsubscribed shares became unnecessary.

COMPENSATION ARRANGEMENTS

Groupon, Inc.

In August 2011, we established the Groupon, Inc.

2011 Stock Plan (the "2011 Plan"), most recently amended in March 2023, under which options, restricted stock units and performance stock units for up to 13,775,000 shares of Common Stock were authorized for future issuance to employees, consultants and directors.

The 2011 Plan is administered by the Compensation Committee of the Board (the "Compensation Committee").

In August 2011, we established the 2011 Plan under which options, RSUs, PSUs and 2024 Executive PSUs for up to 13,775,000 shares of Common Stock are authorized for future issuance to employees, consultants and directors.

The 2011 Plan is administered by the Compensation Committee.

In June 2024, at the Company's annual meeting of stockholders, the Company's stockholders approved an amendment to the 2011 Plan to increase the number of authorized shares by 7,000,000 .

Accordingly, a total of 20,775,000 shares of Common Stock have been authorized for issuance under the 2011 Plan.

As of December 31, 2024, 5,843,911 shares of Common Stock were available for future issuance under the 2011 Plan.

The stock-based compensation expense related to stock awards issued under the 2011 Plan and acquisition-related awards are presented within the following line items of the Consolidated Statements of Operations for the years ended December 31, 2023, 2022 and 2021 (in thousands):

The stock-based compensation expense, net of capitalization related to stock awards issued under the 2011 Plan are presented within the following line items of the Consolidated Statements of Operations for the years ended December 31, 2024, 2023 and 2022 (in thousands):

Year Ended December 31,

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Total stock-based compensation expense (1)

We capitalized $ 0.6 million, $ 3.4 million and $ 3.7 million of stock-based compensation for the years ended December 31, 2023, 2022 and 2021, in connection with internally-developed software and cloud computing arrangements.

$ 26,734 $ 14,481 $ 30,006

(1) Excludes expense related to the 2024 Executive PSUs that are required to be settled in cash.

Employee Stock Purchase Plan

The Groupon, Inc.

2012 Employee Stock Purchase Plan ("ESPP"), as amended, authorizes us to grant up to 1,000,000 shares of Common Stock under that plan.

The ESPP authorizes us to grant up to 1,000,000 shares of Common Stock under that plan.

For the years ended December 31, 2024, 2023 and 2022, 11,612 , 45,879 and 83,551 shares of Common Stock were issued under the ESPP.

GROUPON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Restricted Stock Units

The restricted stock units granted under the 2011 Plan ("Restricted Stock Units") 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 2011 Plan for the year ended December 31, 2023:

Restricted Stock Units Weighted- Average Grant Date Fair Value (per share)

The RSUs 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 RSUs activity under the 2011 Plan for the year ended December 31, 2024:

Weighted- Average Grant Date Fair Value (per share)

Unvested at December 31, 2023 745,840 $ 10.61

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Unvested at December 31, 2024 711,346 $ 11.18

GROUPON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The weighted-average grant date fair value of Restricted Stock Units granted in 2022 and 2021 was $ 16.95 and $ 31.48 .

The fair value of Restricted Stock Units that vested during each of the three years ended December 31, 2023, 2022 and 2021 was $ 8.9 million, $ 15.6 million and $ 48.8 million.

As of December 31, 2023, $ 4.4 million of unrecognized compensation costs related to unvested employee Restricted Stock Units are expected to be recognized over a remaining weighted-average period of 0.64 years.

The weighted-average grant date fair value of RSUs granted in 2023 and 2022 was $ 5.26 and $ 16.95 .

The fair value of RSUs that vested during each of the three years ended December 31, 2024, 2023 and 2022 was $ 8.1 million, $ 8.9 million and $ 15.6 million.

As of December 31, 2024, $ 5.4 million of unrecognized compensation costs related to unvested employee RSUs are expected to be recognized over a remaining weighted-average period of 1.28 years.

Stock Options

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Expected volatility 78.2 %

The table below summarizes stock option activity for the year ended December 31, 2023:

There were no stock options granted or exercised for the year ended December 31, 2024 and 2022.

The total intrinsic value of options that were exercised during the year ended December 31, 2023 was $ 2.0 million.

Options Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands)

Outstanding at December 31, 2023 (1)

Granted 3,500,000 6.00 3.00 —

Exercised ( 437,500 ) 6.00 — —

3,062,500 $ 6.00 2.25 $ 20,948

Outstanding at December 31, 2024 3,062,500 6.00 1.25 18,834

Exercisable at December 31, 2024 2,625,000 $ 6.00 1.25 $ 16,144

(1) Consists of 2,187,500 outstanding (unvested) stock options and 875,000 exercisable stock options as of December 31, 2023, as presented within our 2023 Annual Report on Form 10-K

As of December 31, 2024, there was $ 0.4 million of total unrecognized compensation costs related to unvested stock options granted under the 2011 Plan.

That cost is expected to be recognized over a weighted-average period of 1.25 years.

The total fair value of shares vested during the year ended December 31, 2023 was $ 0.8 million.

Performance Share Units

We have granted performance share units under the 2011 Plan 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").

Our existing Performance Share Units are subject to continued service through the performance period dictated by the award and certification by the Compensation Committee of the Board that the specified performance conditions have been achieved.

That cost is expected to be recognized over a weighted-

GROUPON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The table below summarizes Performance Share Unit activity under the 2011 Plan for the year ended December 31, 2023:

Performance Share Units Weighted-Average Grant Date Fair Value (per unit)

average period of 0.25 years.

The total fair value of shares vested during the years ended December 31, 2024, 2023 and 2022 was $ 2.2 million, $ 0.8 million and $ 0.0 million .

These stock options were granted to our CEO, who is based in the Czech Republic.

Taxes on stock options in the Czech Republic are payable upon the sale of the underlying shares.

The Company's tax liability is determined by multiplying the applicable tax rate by the difference between the value of the shares underlying the options on the date of exercise and the aggregate exercise price of the options.

These taxes will be recognized in the Consolidated Statement of Operations upon any subsequent sale of the shares acquired upon exercise of the options.

Performance Share Units

Both our PSUs and the 2024 Executive PSUs are subject to continued service through the period dictated by the award and certification by the Compensation Committee that the specified performance and market conditions have been achieved.

We have granted PSUs that vest in shares of our Common Stock upon the achievement of financial and operational targets specified in the respective award agreement.

Based on our financial and operational results for the year ended December 31, 2023, 422,368 shares became issuable upon vesting of PSUs following the Compensation Committee's certification in April 2024.

The table below summarizes PSU activity for the year ended December 31, 2024:

PSUs Weighted-Average Grant Date Fair Value (per unit)

Unvested at December 31, 2023 506,324 $ 6.34

Granted 16,417 16.68

Vested ( 422,368 ) 6.35

Forfeited ( 83,956 ) 6.31

Unvested at December 31, 2024 16,417 $ 16.68

Maximum shares issuable upon vesting at December 31, 2024

As of December 31, 2023, unrecognized compensation costs related to unvested Performance Share Units were $ 1.2 million.

That cost is expected to be recognized over a remaining weighted-average period of 0.33 years.

We have also previously granted performance share units subject to a market condition ("Market-based Performance Share Units").

As of December 31, 2023, there were no Market-based Performance Share Units outstanding.

During the year ended December 31, 2022, 24,335 Market-based Performance Share Units were forfeited and 33,333 Market-based Performance Share Units expired as the market conditions were not met.

No Market-based Performance Share Units remain unvested and all related compensation costs have been recognized as of December 31, 2022.

As of December 31, 2024, there was no remaining unrecognized compensation cost related to unvested PSUs as the specified performance conditions were not met by the end of the performance period.

As of December 31, 2024, the remaining weighted-average service period of the awards is 0.25 years.

2024 Executive PSUs

Equity-classified 2024 Executive PSUs

On June 12, 2024 and October 14, 2024, we granted 2024 Executive PSUs.

The 2024 Executive PSUs may only be earned if certain stock price hurdles are met and the recipient satisfies certain service conditions.

The achievement of the stock price hurdles is measured during a period beginning on February 2, 2025.

The 2024 Executive PSUs have four stock price hurdles:

$ 14.86 , $ 20.14 , $ 31.01 , and $ 68.82 .

The shares awarded under the 2024 Executive PSU award are divided equally between four tranches corresponding to achievement of each stock price hurdle.

Once the stock price hurdle is achieved, a service condition must also be met before the shares will vest.

Specifically, the service condition for:

(i) 33 % of the award will be met after May 1, 2025;

(ii) an additional 33 % of the award will be met after May 1, 2026;

and (ii) the final 34 % of the award will be met after May 1, 2027.

The 2024 Executive PSUs are subject to downward adjustments by the Compensation Committee.

We determined these awards are subject to a market condition, and therefore used a Monte Carlo simulation to calculate the grant date fair value of the awards and the related derived service period.

The requisite service condition period for each award exceeds the derived service period and therefore we recognize the expense over the requisite service period.

GROUPON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The key inputs used in the Monte Carlo simulation and requisite service period for the equity-classified 2024 Executive PSUs by grant date are outlined in the following table:

Equity-classified 2024 Executive PSUs

June 12, 2024 October 14, 2024

Dividend yield 0.00 % 0.00 %

Risk-free interest rate 4.46 % 3.86 %

Expected volatility 95.73 % 98.70 %

Requisite service period (in years)

The table below summarizes equity-classified 2024 Executive PSU activity for the year ended December 31, 2024:

Equity-classified 2024 Executive PSUs

Weighted-Average Grant Date Fair Value (per unit)

Unvested at December 31, 2023 — $ —

Granted 3,698,064 13.29

Forfeited — —

Unvested at December 31, 2024 3,698,064 $ 13.29

As of December 31, 2024, we had unrecognized compensation costs related to unvested equity-classified 2024 Executive PSUs of $ 29.3 million.

The cost is expected to be recognized over a remaining weighted-average period of 1.58 years.

Liability-classified 2024 Executive PSUs

In October 2024, the Compensation Committee approved a cash incentive award, which is required to be settled in cash upon vesting.

The award is subject to the same market, performance and service conditions as the 2024 Executive PSUs.

Upon vesting, the cash settlement, if any, will be calculated by multiplying the closing stock price on each vesting date by the number of shares that would have otherwise vested if the award provided for equity settlement.

The Company's compensation plan limits cash awards to $ 5.0 million per annum with any amount in excess of $ 5.0 million to be paid the following year.

The related award obligation is presented within Accrued expenses and other current liabilities

The 2.54 year service condition period exceeds the derived service period and therefore we will recognize the expense over the 2.54 year requisite period.

The total compensation expense to be recognized for the award will be based on remeasurement of the award at each interim reporting period through the final vesting date of May 1, 2027.

The key inputs used in the initial Monte Carlo simulation on the grant date were the risk-free rate of 3.86 %, dividend yield of 0.00 %, and our stock price volatility of 98.70 %.

As of December 31, 2024, the 2.33 year service condition period exceeds the derived service period and therefore we will recognize the expense over the 2.33 year requisite period.

The key inputs used in the Monte Carlo simulation as of December 31, 2024 were the risk-free rate of 4.21 %, dividend yield of 0.00 % and our stock price volatility of 100.27 %.

GROUPON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The table below summarizes liability-classified 2024 Executive PSU activity for the year ended December 31, 2024:

Liability-classified 2024 Executive PSUs

Weighted-Average Grant Date Fair Value (per unit)

Unvested at December 31, 2023 — $ —

Granted 261,365 6.70

Unvested at December 31, 2024 261,365 $ 6.70

As of December 31, 2024, we had unrecognized compensation costs related to unvested liability-classified 2024 Executive PSUs of $ 1.4 million.

The cost is expected to be recognized over a remaining weighted-average period of 2.33 years.

Defined Contribution Plans

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REVENUE RECOGNITION

See Note 18, Segment Information , for revenue summarized by reportable segment and category.

See Note 18, Segment and Geographical Information , for revenue summarized by reportable segment and category.

Contract Balances

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Balance as of December 31, 2024 $ 22,349

(1) Historically, customer credits have primarily been used within one year of issuance;

however, usage patterns were impacted from changes in customer behavior due to COVID-19.

(1) Customer credits can be redeemed through our online marketplaces for goods or services provided by a third-party merchant and 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.

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Balance as of December 31, 2024 $ 2,673

GROUPON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Variable Consideration for Unredeemed Vouchers

During the years ended December 31, 2024, 2023, and 2022, we recognized $ 9.9 million, $ 6.1 million, and $ 9.1 million of variable consideration from unredeemed vouchers that were sold in a prior year.

During the year ended December 31, 2021, the substantial majority of vouchers sold at the onset of the COVID-19 pandemic reached expiration at redemption rates lower than our historical estimates, however redemption rates for vouchers sold in more recent periods have improved.

When actual redemptions differ from our estimates, the effects could be material to the Consolidated Financial Statements.

GROUPON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

RESTRUCTURING AND RELATED CHARGES

Italy Restructuring Plan

In July 2024, Groupon S.r.l.'s Board approved the exit of the local business in Italy and the related restructuring actions associated with the exit.

We have incurred pre-tax charges of $ 2.2 million since the inception of the Italy Restructuring Plan, substantially all of which have been paid in cash as of December 31, 2024 and relate to employee severance and compensation benefits.

The Italy Restructuring Plan included a reduction of 33 positions locally, all of which were completed as of December 31, 2024.

Costs incurred related to the Italy Restructuring Plan are classified as Restructuring and related charges on the Consolidated Statements of Operations.

All activity is within our International segment.

2022 and 2020 Restructuring Plans

In August 2022 and April 2020, we initiated Board-approved restructuring plans.

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2022 Restructuring Plan

In August 2022, we initiated a multi-phase cost savings plan designed to reduce our expense structure to align with our go-forward business and financial objectives (the “2022 Cost Savings Plan”).

The 2022 Cost Savings Plan included a restructuring plan, approved by our Board on August 5, 2022 (the “2022 Restructuring Plan”).

The 2022 Restructuring Plan, including the first phase initiated August 2022, second phase initiated January 2023 and the third phase initiated July 2023 is expected to include an overall reduction of approximately 1,150 positions globally through natural attrition or involuntary termination.

The majority of these reductions were completed as of March 31, 2023 and the remainder are expected to occur by the end of 2024.

In connection with these actions, we expect to record total pre-tax charges of $ 22.0 million to $ 24.1 million.

A majority of the pre-tax charges are expected to be paid in cash and relate to employee severance and compensation benefits, with an immaterial amount of charges related to other exit costs.

We have incurred total pretax charges of $ 21.4 million since the inception of the 2022 Restructuring Plan.

In August 2022, we initiated a multi-phase cost savings plan designed to reduce our expense structure to align with our go-forward business and financial objectives.

We have incurred total pre-tax charges of $ 21.2 million since the inception of the 2022 Restructuring Plan.

A majority of the pre-tax charges have been paid in cash and relate to employee severance and compensation benefits, with an immaterial amount of charges related to other exit costs.

The 2022 Restructuring plan included an overall reduction of approximately 1,150 positions globally through natural attrition or involuntary termination.

These reductions were substantially completed as of December 31, 2024.

The following tables summarize activity by segment related to the 2022 Restructuring Plan for the years ended December 31, 2024, 2023, and 2022 (in thousands):

Year Ended December 31, 2023

Year Ending December 31, 2024

Employee Severance and Benefit Costs (Credits) (1)

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International (2)

( 292 ) — ( 292 )

Consolidated $ ( 237 ) $ 1 $ ( 236 )

(1) The employee severance and benefits costs for the year ended December 31, 2024 are related to the termination of approximately 15 employees.

Year Ended December 31, 2022

(2) The credit recorded during the year ended December 31, 2024 primarily relates to the release of our estimated accrual for certain severance benefits upon expiration of the eligible payout period.

Year Ending December 31, 2023

Employee Severance and Benefit Costs (Credits) (1)

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Year Ending December 31, 2022

Employee Severance and Benefit Costs (Credits) (1)

Other Exit Costs Total Restructuring Charges (Credits)

North America $ 8,024 $ 161 $ 8,185

International 1,464 — 1,464

Consolidated $ 9,488 $ 161 $ 9,649

(1) The employee severance and benefits costs for the year ended December 31, 2022 are related to the termination of approximately 380 employees.

The following table summarizes restructuring liability activity for the years ended December 31, 2024 and 2023 for the 2022 Restructuring Plan (in thousands):

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Balance as of December 31, 2022

$ 175 $ — $ 175

Charges payable in cash 10,862 938 11,800

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Balance as of December 31, 2023

Charges payable in cash and changes in estimate (1)

( 237 ) 1 ( 236 )

Charges payable in cash 10,862 938 11,800

Cash payments ( 249 ) ( 45 ) ( 294 )

1 unchanged sentence

Balance as of December 31, 2024

$ 544 $ 44 $ 588

(1) Substantially all of the remaining cash payments for costs related to the 2022 Restructuring Plan are expected to be disbursed by the end of 2024.

(1) The credit recorded during the year ended December 31, 2024 primarily relates to the release of our estimated accrual for certain severance benefits upon expiration of the eligible payout period.

2020 Restructuring Plan

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 (the "2020 Restructuring Plan").

We have incurred total pretax charges of $ 104.7 million since the inception of the 2020 Restructuring Plan.

Our actions under this plan were substantially completed by December 31, 2021, and our current and future charges or credits will be from changes in estimates.

Our 2020 Restructuring Plan included workforce reductions of approximately 1,600 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 New Zealand and Japan.

In the first quarter 2021, we substantially liquidated our subsidiary in Japan and reclassified $ 32.3 million of cumulative foreign currency translation gains into earnings, which is presented in Other income (expense), net on the Consolidated Statements of Operations for the year ended December 31, 2021.

The following tables summarize activity by segment related to the 2020 Restructuring Plan for the years ended December 31, 2024, 2023 and 2022 (in thousands):

Year Ended December 31, 2023

Year Ending December 31, 2024

Employee Severance and Benefit Costs (Credits) Legal and Advisory Costs (Credits)

Property, Equipment and Software Impairments Lease-related Charges (Credits)

Lease-related Charges (Credits)

Total Restructuring Charges (Credits)

North America (1)

$ — $ — $ ( 293 ) $ ( 293 )

International (2)

( 589 ) 22 ( 39 ) ( 606 )

Consolidated $ ( 589 ) $ 22 $ ( 332 ) $ ( 899 )

Year Ended December 31, 2022

(1) The credit recorded during the year ended December 31, 2024 primarily relates to an over contribution of estimated real estate taxes in 2023 for the terminated lease at 600 West Chicago.

(2) The credit recorded during the year ended December 31, 2024 primarily relates to the release of our estimated accrual for certain severance benefits upon expiration of the eligible payout period.

GROUPON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Year Ending December 31, 2023

Employee Severance and Benefit Costs (Credits) Legal and Advisory Costs (Credits)

Property, Equipment and Software Impairments Right-of-Use Asset Impairments and Lease-related Charges (Credits) Total Restructuring Charges (Credits)

Lease-related Charges (Credits)

Total Restructuring Charges (Credits)

North America (1)

$ 102 $ 9 $ ( 2,254 ) $ ( 2,143 )

International (2)

( 2,890 ) 10 1,229 ( 1,651 )

Consolidated $ ( 2,788 ) $ 19 $ ( 1,025 ) $ ( 3,794 )

GROUPON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Year Ended December 31, 2021

(1) The credit recorded during the year ended December 31, 2023 primarily relates to a $ 4.25 million settlement related to Uptake.

See Note 9, Commitments and Contingencies, for additional information.

(2) The credit recorded during the year ended December 31, 2023 primarily relates to the release of our estimated accrual for certain severance benefits upon expiration of the eligible payout period.

Year Ending December 31, 2022

Employee Severance and Benefit Costs (Credits) Legal and Advisory Costs (Credits)

Property, Equipment and Software Impairments Right-of-Use Asset Impairments and Lease-related Charges (Credits) Total Restructuring Charges (Credits)

Right-of-Use Asset Impairments and Lease-related Charges (Credits) Total Restructuring Charges (Credits)

North America $ 1 $ 155 $ 418 $ 574

International (1)

( 95 ) 92 2,130 2,127

Consolidated $ ( 94 ) $ 247 $ 2,548 $ 2,701

(1) The credit recorded during the year ended December 31, 2022 primarily relates to the release of our estimated accrual for certain severance benefits upon expiration of the eligible payout period.

As a part of our 2020 Restructuring Plan, we terminated or modified several of our leases.

In other cases we vacated our leased facilities and some of those facilities we are in negotiations with the landlord to potentially terminate or modify those leases.

The year ended December 31, 2023 includes a $ 4.25 million settlement related to Uptake in our North America segment.

See Note 9, Commitments and Contingencies, for additional information.

For the year ended December 31, 2022, we recognized long-lived asset impairment related to those leases of $ 1.8 million and $ 1.2 million in our North America and International segments.

For the year ended December 31, 2022, we recognized long-lived asset impairment related to those leases of $ 1.8 million and $ 1.2 million in our North America and International segments, respectfully.

In addition, during the year ended December 31, 2022, we recognized a gain of $ 4.5 million for one of our previously-impaired leases in our North America segment due to our reassessment of our 600 West Chicago lease given our option to early terminate.

In January 2023, we exercised our option to early terminate our lease at 600 West Chicago, now expiring on January 31, 2024, which required us to pay $ 9.6 million with our early termination notice.

For the year ended December 31, 2021, we recognized long-lived asset impairment of $ 5.5 million and $ 2.2 million in our North America and International segments.

In January 2023, we exercised our option to early terminate our lease at 600 West Chicago, which expired on January 31, 2024, which requires us to pay $ 9.6 million with our early termination notice.

See Note 3, Property, Equipment and Software, Net and Note 8, Leases, for additional information.

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The current and non-current liabilities associated with these leases continue to be presented within Accrued expenses and other current liabilities and Operating lease obligations in the Consolidated Balance Sheets.

GROUPON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table summarizes restructuring liability activity for the years ended December 31, 2024 and 2023 for the 2020 Restructuring Plan (in thousands):

1 unchanged sentence

Balance as of December 31, 2022 $ 4,306 $ 301 $ 4,607

Charges payable in cash and changes in estimate (1)

( 2,788 ) 19 ( 2,769 )

Charges payable in cash ( 94 ) 247 153

Cash payments ( 727 ) ( 113 ) ( 840 )

7 unchanged sentences

$ 94 $ 69 $ 163

(1) The credit recorded during the year ended December 31, 2023 primarily relates to the release of our estimated accrual for certain severance benefits upon expiration of the eligible payout period

(1) The credits recorded during the year ended December 31, 2024 and 2023 primarily relate to the release of our estimated accrual for certain severance benefits upon expiration of the eligible payout period

(2) Substantially all of the cash payments for the 2020 Restructuring Plan costs have been disbursed.

GROUPON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The components of pretax income (loss) for the years ended December 31, 2024, 2023 and 2022 were as follows (in thousands):

39 unchanged sentences

Asset impairments — ( 82,988 ) 7,213

( 82,988 ) 7,213 —

Observable price change on an other equity investment — — ( 17,955 )

Non-deductible or non-taxable items 8,847 5,002 ( 473 )

Convertible debt payoff

Provision (benefit) for income taxes $ 26,123 $ 9,508 $ 42,410

7 unchanged sentences

Accrued expenses and other liabilities $ 31,104 $ 33,517

Operating lease obligation — 5,602

Stock-based compensation 2,584 2,153

8 unchanged sentences

Capitalized research and development costs

16,259 12,645

Other 274 171

5 unchanged sentences

Operating lease obligation

Property, equipment and software, net — ( 1,470 )

Right-of-use assets

( 31 ) ( 1,417 )

Deferred revenue ( 7,330 ) ( 8,931 )

5 unchanged sentences

In evaluating the need for a valuation allowance, management considers both positive and negative evidence that could affect its view of the future realization of deferred tax assets and places greater weight on recent and objectively verifiable current information.

As of December 31, 2023, we continue to maintain a valuation allowance against substantially all of our U.S.

For the years ended December 31, 2024 and 2023, we continue to maintain a valuation allowance against substantially all of our U.S.

federal and state and foreign deferred tax assets.

At December 31, 2022, we were in a cumulative pre-tax loss position, adjusted for certain permanent items, in the U.S.

As of December 31, 2022, we were in a cumulative pre-tax loss position, adjusted for certain permanent items, in the U.S.

Additionally, we do not have any sources of income that support utilization of our U.S.

4 unchanged sentences

federal and state deferred tax assets, which resulted in a $ 51.9 million charge to income tax expense.

At December 31, 2021, we had demonstrated profit, which was considered to be a source of positive evidence.

In analyzing all available evidence at the time, management determined there was sufficient positive evidence outweighing negative evidence to conclude that it was more likely than not that a portion of the U.S.

deferred tax assets were realizable.

As such, for the year ended December 31, 2021, we released $ 57.7 million of the valuation allowance against a portion of our U.S.

federal and state deferred tax assets, resulting in a $ 50.3 million reduction to expense, and a $ 7.4 million adjustment to equity.

GROUPON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

We had $ 16.0 million of federal net operating loss carryforwards as of December 31, 2024 which will begin expiring in 2027.

3 unchanged sentences

Significant judgment is required in determining the worldwide provision for income taxes and recording the related income tax assets and liabilities.

We recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit.

We recognize the financial statement benefit of a tax position only after determining that the

GROUPON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

relevant tax authority would more likely than not sustain the position following an audit.

For tax positions meeting the more-likely-than-not criterion, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority.

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There are many factors, including factors outside of our control, which influence the progress and completion of those audits.

We recognized income tax benefits of $ 6.7 million, $ 12.5 million and $ 3.2 million for the years ended December 31, 2023, 2022 and 2021, as a result of new information that impacted our estimates of the amounts that are more likely than not of being realized upon settlement of the related tax positions and due to expirations of the applicable statutes of limitations.

We are subject to claims for tax assessments by foreign jurisdictions, including a proposed assessment for $ 120.7 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 the subsidiary subject to the proposed assessment has been vigorously defending itself in that matter.

In December 2023, the subsidiary received an unfavorable ruling at the lowest court level, but has lodged a second-level appeal, based on what it believes to be meritorious defenses to the assessment, and requested the suspension of a provisional payment demand of approximately $ 76.5 million.

Additionally, unrelated to this matter, in February 2024, the subsidiary received a proposed assessment of approximately $ 31.7 million related to a 2017 distribution made to its parent entity.

We believe this assessment is also without merit and the subsidiary intends to vigorously defend against this assessment.

In addition to any potential increases in our liabilities for uncertain tax positions from the ultimate resolution of these assessments, we believe that it is reasonably possible that reductions of up to $ 5.5 million in unrecognized tax benefits may occur within the 12 months following December 31, 2023 upon closing of income tax audits or the expiration of applicable statutes of limitations.

We recognized income tax benefits of $ 12.5 million, $ 6.7 million and $ 12.5 million for the years ended December 31, 2024, 2023 and 2022, as a result of new information that impacted our estimates of the amounts that are more likely than not of being realized upon settlement of the related tax positions and due to expirations of the applicable statues of limitations.

We are subject to claims for tax assessments by foreign jurisdictions, including a proposed Assess ment for $ 122.3 million , inclusive of estimated incremental interest from the original Assessment.

The subsidiary subject to the Assessment is Groupon S.r.l., one of the Company's Italian subsidiaries formerly with operations relating specifically to the local voucher business in Italy.

In December 2024, Groupon S.r.l.

received an unfavorable ruling at the second-level Tax Court.

The Company continues to believe that the Assessment is without merit and Groupon S.r.l.

intends to pursue a prompt appeal to the Italian Supreme Court.

If Groupon S.r.l.

loses that appeal, Groupon S.r.l.

plans to further challenge the Assessment and seek relief in an international mutual agreement procedure that involves the tax authorities of Ireland and Italy.

Under Italian tax court procedures, taxpayers are required to deposit “provisional payments” while tax appeals are pending, which are held in trust by tax authorities and returned to the taxpayer if the taxpayer prevails on the appeal.

At present, Groupon S.r.l.

would be required to deposit provisional amounts equal to two-thirds of the assessed amount.

However, Groupon S.r.l.

has sought and obtained approval of installment plans whereby the provisional payments may be deposited pro rata in monthly installments over seventy-two months.

A third provisional amount (equal to the remaining third of the Assessment) would be enforceable in October 2025.

However, contemporaneous with its appeal to the Italian Supreme Court, Groupon S.r.l.

intends to seek a full stay of the provisional payment obligations.

Groupon S.r.l.

expects a hearing on the possible stay of provisional payments to take place in early 2025.

If Groupon S.r.l.

does not succeed in staying the provisional payment obligation, Groupon S.r.l.

will consider its options, including making monthly installment payments up to the amount of its assets, or undertaking further restructuring actions.

Additionally, unrelated to the tax matter above, in July 2024, Groupon S.r.l.

received final assessments of approximately $ 30.9 million related to a 2017 distribution made to its parent entity.

On October 18, 2024, Groupon

GROUPON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

lodged an appeal to the first-tier court.

The hearing is expected to occur on March 28, 2025.

We believe this assessment is also without merit and Groupon S.r.l.

intends to vigorously defend against such assessment.

No liability has been recorded for either of the Groupon S.r.l.

tax assessment matters discussed above as we believe it is more likely than not that we will ultimately prevail in defending the matters.

In addition to any potential increases in our liabilities for uncertain tax positions from the ultimate resolution of these assessments, we believe it is reasonably possible that reductions of up to $ 3.2 million in unrecognized tax benefits may occur within the 12 months following December 31, 2024 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.

3 unchanged sentences

state income taxes.

Aside from limited exceptions for which the

GROUPON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

related deferred tax liabilities recognized as of December 31, 2023 and 2022 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.

Aside from limited exceptions for which the related deferred tax liabilities recognized as of December 31, 2024 and 2023 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.

1 unchanged sentence

VARIABLE INTEREST ENTITY

We have an arrangement with a strategic partner to offer deals related to live events, and a limited liability company ("LLC") has been established to administer that arrangement.

We have an arrangement with a strategic partner to offer deals related to live events, and a limited liability company has been established to administer that arrangement.

Groupon and the strategic partner each own 50 % of the outstanding LLC interests, and income and cash flows of the LLC are allocated based on agreed upon percentages specified in the related LLC agreement.

11 unchanged sentences

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 defined under 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.

2 unchanged sentences

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

GROUPON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

5 unchanged sentences

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.

GROUPON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

There was no activity in the fair value of recurring Level 3 fair value measurements for the years ended December 31, 2024, 2023, and 2022.

1 unchanged sentence

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 modified due to an observable price change in an orderly transaction.

We did not record any significant nonrecurring fair value remeasurements for the year ended December 31, 2024.

We recognized a non-cash remeasurement of our investment in SumUp of $ 25.8 million during the year ended December 31, 2023.

During the year ended December 31, 2021, we adjusted the carrying value of SumUp which resulted in an unrealized gain of $ 89.1 million and sold shares in two other equity investments for a gain of $ 6.4 million.

See Note 5, Investments , for additional information.

1 unchanged sentence

We recognized $ 15.3 million in non-cash impairment charges related to long-lived assets for the year ended December 31, 2022, of which $ 3.0 million are included in Restructuring and related charges on our Consolidated Statements of Operations.

We recognized $ 7.7 million in non-cash impairment charges related to Right-of-use assets - operating leases and leasehold improvements during the year ended December 31, 2021, which is included in Restructuring and related charges on our Consolidated Statements of Operations.

See Note 3, Property, Equipment and Software, Net, Note 4, Goodwill and Other Intangible Assets, Note 8, Leases and Note 13, Restructuring and Related Charges , for additional information.

See Note 3, Property, Equipment and Software, Net, Note 4, Goodwill and Other Intangible Assets and Note 13, Restructuring and Related Charges , for additional information.

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

4 unchanged sentences

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, ESPP shares, warrants, convertible senior notes and capped call transactions.

Potentially dilutive securities include stock options, RSUs, PSUs, ESPP shares, convertible senior notes and capped call transactions.

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.

10 unchanged sentences

( 59,027 ) ( 55,410 ) ( 237,609 )

Diluted net income (loss) attributable to common stockholders

Weighted-average common shares outstanding

39,170,368 31,243,179 30,166,100

Interest expense from assumed conversion of convertible senior notes — — 4,643

Net income (loss) attributable to common stockholders plus assumed conversions $ ( 55,410 ) $ ( 237,609 ) $ 123,311

Shares used in computation of basic net income (loss) per share 31,243,179 30,166,100 29,365,880

Weighted-average effect of diluted securities:

Restricted stock units — — 624,794

Performance share units and other stock-based compensation awards — — 89,065

Convertible senior notes due 2022 — — 858,517

Convertible senior notes due 2026 — — 2,575,184

Shares used in computation of diluted net income (loss) per share 31,243,179 30,166,100 33,513,440

Net income (loss) per share:

$ ( 1.77 ) $ ( 7.88 ) $ 4.04

Basic and diluted net income (loss) per share:

$ ( 1.51 ) $ ( 1.77 ) $ ( 7.88 )

2 unchanged sentences

2024 2023 2022

Restricted stock units 1,475,683 2,587,585 500,763

Stock options

Capped call transactions (1)

3,081,088 3,376,400 3,376,400

Performance share units and other stock-based compensation awards

Convertible senior notes due 2026 (2)

3,081,088 3,376,400 3,376,400

Stock options

3,062,500 2,477,793 —

Convertible senior notes due 2027 (2)

792,675 1,475,683 2,587,585

Warrants — — 877,595

Capped call transactions 3,376,400 3,376,400 2,575,184

280,807 110,823 16,032

11,793 28,139 81,171

Total 11,060,389 10,845,238 9,437,588

(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 is adjusted for interest expense, net of tax, and the denominator is adjusted for the number of shares into which the convertible senior notes could be converted.

(1) The capped call transactions are expected to reduce potential dilution to our Common Stock upon conversion of the 2026 Notes outstanding principal.

Upon conversion of both the capped call transactions and then-outstanding 2026 Notes, 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.

(2) 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 is adjusted for interest expense, net of tax, and loss on extinguishment of debt, and the denominator is adjusted for the number of shares into which the convertible senior notes could be converted.

The effect is only included in the calculation of income (loss) per share for those instruments for which it would reduce income (loss) per share.

See Note 7, Financing Arrangements , for additional information.

As of December 31, 2024, there were up to 3,698,064 shares of Common Stock issuable upon vesting of outstanding 2024 Executive PSUs and 16,417 shares issuable upon vesting of outstanding PSUs that were excluded from the table above, as the applicable market and performance conditions were not satisfied as of the end of the period.

See Note 11, Compensation Arrangements, for additional information.

SEGMENT AND GEOGRAPHICAL INFORMATION

In accordance with FASB ASC Topic 280, Segment Reporting , we disaggregate our operations into two operating and reportable segments:

North America and International based on geographically distinct market dynamics.

The segment information below reflects the operating results that are regularly provided to and are

GROUPON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As of December 31, 2023, there were no Market-based Performance Share Units.

As of December 31, 2022, no Market-based Performance Share Units remain unvested and outstanding, as the performance or market conditions were not met, and are excluded from the table above.

As of December 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.

Compensation Arrangements , for additional 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.

We completed a transition to a third-party goods marketplace in International in 2021, and therefore we no longer generate product revenue in our Goods category.

For the year ended December 31, 2022, adjustments to accruals previously established in our Goods category related to product are presented within service.

reviewed by our chief operating decision maker ("CODM"), who is our Chief Executive Officer, to assess performance and make resource allocation decisions.

Our segment information is based on the "management" approach.

The "management" approach, as defined within FASB ASC Topic 280, designates the internal reporting used by the CODM for making decisions and assessing performance as the source of our reportable segments.

Our measure of segment profitability is contribution profit, defined as net revenues less cost of sales and marketing expenses, as presented below, and is regularly provided to and reviewed by the CODM to allocate resources and assess performance.

The CODM assesses our segments’ performance based on contribution profit predominantly in the monthly budget-to-actual variances analysis when making decisions about the allocation of our investment in marketing expenses to each segment.

We do not report asset-related information by reportable segment because our CODM does not regularly receive asset information on a reportable segment basis.

The following table summarizes revenue by reportable segment and category for the years ended December 31, 2024, 2023 and 2022 (in thousands):

2 unchanged sentences

North America

Service revenue:

Local $ 350,876 $ 346,962 $ 390,449

1 unchanged sentence

Travel 14,206 14,554 17,035

Total service revenue 379,952 436,269 606,429

Product revenue - Goods — — 626

Total North America revenue (1)

1 unchanged sentence

International

Service revenue:

Local $ 99,333 $ 111,543 $ 128,295

1 unchanged sentence

Travel 6,223 8,454 10,779

Total service revenue 134,958 162,816 188,366

Product revenue - Goods — — 171,687

Total International revenue (1)

$ 116,485 $ 134,958 $ 162,816

Total revenue

$ 492,557 $ 514,910 $ 599,085

(1) North America includes revenue from the United States of $ 371.3 million, $ 374.0 million and $ 428.5 million for the years ended December 31, 2024, 2023 and 2022.

International includes revenue from the United Kingdom of $ 120.8 million for the year ended December 31 2021.

There were no other individual countries that represented more than 10% of consolidated total revenue for the years ended December 31, 2024, 2023 and 2022.

2 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table summarizes cost of revenue by reportable segment and category for the years ended December 31, 2023, 2022 and 2021 (in thousands):

Year Ended December 31,

2023 2022 2021

North America

Service cost of revenue:

Local $ 44,199 $ 52,693 $ 58,192

Goods 3,276 5,249 7,790

Travel 3,484 4,173 4,952

Total service cost of revenue 50,959 62,115 70,934

Product cost of revenue - Goods — — 458

Total North America cost of revenue $ 50,959 $ 62,115 $ 71,392

International

Service cost of revenue:

Local $ 9,903 $ 10,647 $ 8,962

Goods 2,305 2,080 986

Travel 1,079 1,419 1,138

Total service cost of revenue 13,287 14,146 11,086

Product cost of revenue - Goods — — 147,514

Total International cost of revenue $ 13,287 $ 14,146 $ 158,600

GROUPON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table summarizes contribution profit by reportable segment for the years ended December 31, 2023, 2022 and 2021 (in thousands):

The following table summarizes contribution profit by reportable segment and reconciles contribution profit to consolidated income (loss) before provision (benefit) for income taxes for the years ended December 31, 2024, 2023 and 2022 (in thousands):

Year Ended December 31,

3 unchanged sentences

Cost of revenue

Marketing 73,178 103,862 138,025

Contribution profit 255,815 270,292 397,638

Payment processor fees

24,608 25,004 25,495

Other segment items (cost of revenue) (1)

13,300 25,955 36,620

Total cost of revenue

37,908 50,959 62,115

Online marketing

109,996 69,403 82,257

Other segment items (marketing) (2)

3,100 3,775 21,605

Total marketing

113,096 73,178 103,862

Segment contribution profit

$ 225,068 $ 255,815 $ 270,292

International

1 unchanged sentence

Cost of revenue

Marketing 37,327 45,369 50,755

Contribution profit 84,344 103,301 150,698

Revenue 514,910 599,085 967,108

Cost of revenue 64,246 76,261 229,992

Marketing 110,505 149,231 188,780

Contribution profit 340,159 373,593 548,336

Payment processor fees

5,902 7,415 9,215

Other segment items (cost of revenue) (1)

4,441 5,872 4,931

Total cost of revenue 10,343 13,287 14,146

Online marketing

27,432 30,270 38,235

Other segment items (marketing) (2)

3,679 7,057 7,134

Total marketing

31,111 37,327 45,369

Segment contribution profit

$ 75,031 $ 84,344 $ 103,301

Total contribution profit for the reportable segments

$ 300,099 $ 340,159 $ 373,593

Selling, general and administrative 295,399 350,405 481,375

2 unchanged sentences

Restructuring and related charges 1,066 8,006 12,350

Income (loss) from operations $ ( 18,252 ) $ ( 167,815 ) $ ( 4,655 )

The following table summarizes total assets by reportable segment as of December 31, 2023 and 2022 (in thousands):

Total assets:

North America (1)

$ 465,213 $ 669,336

International (1)

105,743 123,781

Consolidated total assets $ 570,956 $ 793,117

(1) North America contains assets from the United States of $ 460.2 million and $ 661.3 million as of December 31, 2023 and 2022.

There were no other individual countries that represented more than 10% of consolidated total assets as of December 31, 2023 and 2022.

The following table summarizes tangible property and equipment, net of accumulated depreciation and amortization, by reportable segment as of December 31, 2023 and 2022 (in thousands):

North America (1)

$ 1,037 $ 5,246

International (1)

Consolidated total

(Gain) on sale of assets

( 5,160 ) — —

(1) All tangible property and equipment within North America is located in the United States.

There were no other individual countries located outside of the United States where tangible property and equipment, net is material as of December 31, 2023 and 2022.

Income (loss) from operations 8,794 ( 18,252 ) ( 167,815 )

Other income (expense), net ( 39,185 ) ( 25,174 ) ( 24,155 )

Income (loss) before provision (benefit) for income taxes $ ( 30,391 ) $ ( 43,426 ) $ ( 191,970 )

(1) Includes editorial costs, compensation expense for technology support personnel who are responsible for maintaining the infrastructure of our websites, amortization of internally-developed software relating to customer-facing applications, and web hosting.

(2) Includes offline marketing costs, such as television, compensation expense for marketing employees, and customer acquisition and activation expense.

GROUPON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table summarizes depreciation and amortization of property, equipment and software and intangible assets by reportable segment for the years ended December 31, 2023, 2022 and 2021 (in thousands):

Year Ended December 31,

2023 2022 2021

North America $ 40,466 $ 52,077 $ 63,725

International 10,752 10,586 9,094

Consolidated total

$ 51,218 $ 62,663 $ 72,819

The following table summarizes expenditures for additions to tangible long-lived assets by reportable segment for the years ended December 31, 2023, 2022 and 2021 (in thousands):

Year Ended December 31,

The following table summarizes tangible property and equipment, net of accumulated depreciation, by geographical region as of December 31, 2024 and 2023 (in thousands):

United States

$ 344 $ 1,037

North America $ 24 $ 1,323 $ 1,777

International 84 2,565 4,562

Consolidated total

Rest of the world

Total tangible long-lived assets

$ 741 $ 2,164

SUBSEQUENT EVENTS

Rights Offering

On January 22, 2024, Groupon announced the closing of its $ 80.0 million fully backstopped Rights Offering for shares of its Common Stock, par value $ 0.0001 per share.

See Note 10 , Stockholders' Equity (Deficit) for additional information.

Termination and Payoff of the Credit Agreement

See Note 7 , Financing Arrangements for additional information.

Major Rocket Incentive Shares

On March 11, 2025, the Company entered into an incentive marketing agreement (the “Major Rocket Agreement”) with Major Rocket LLC (“Major Rocket”).

Pursuant to this Major Rocket Agreement, Major Rocket will provide marketing services in North America including sourcing and facilitation of contracts for enterprise offerings on Groupon’s platform.

Under the Major Rocket Agreement, Major Rocket is eligible to receive incentive compensation if the merchant offerings it is responsible for sourcing achieve certain financial benchmarks measured on an annual basis during the three-year term of the Major Rocket Agreement.

The benchmarks are based on the funds Groupon receives from offerings that Major Rocket sources and range in amount from $ 10 million to $ 25 million.

The incentives payable to Major Rocket upon satisfaction of these benchmarks may be satisfied through the Company’s issuance of up to 954,000 shares of the Company’s common stock or, at the Company’s election, the payment of cash in an amount equal to the then current value of such shares.

Any shares so issued would be subject to the achievement of the above-noted benchmarks and are expected to be issued pursuant to the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended.

If such issuance occurs, the Company will not receive any cash proceeds from any such issuance.

The Major Rocket Agreement also grants Groupon the unilateral option to invoke a one-year transition period agreement after the conclusion of the term of the Agreement, during which Major Rocket would continue to undertake responsibilities relating to the facilitation of commercial agreements between Groupon and third party merchants (including the facilitation of the transfer of merchant contracts directly to Groupon) in exchange for a fixed fee of $ 25,000 per month and additional performance based incentives, both of which are to be paid in cash.

The description herein is qualified in its entirety by reference to the full and complete terms of the Major Rocket Agreement, a copy of which is attached hereto as Exhibit 10.32.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data