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Item 7. Management’s Discussion and Analysis

2026-03-10 compared with 2025-03-11 · 129 added, 131 removed, 326 unchanged (44% of the section changed)

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This discussion contains forward-looking statements about our business and operations.

Our actual results may differ materially from those we currently anticipate as a result of many factors, including those we describe under Item 1A, Risk Factors, and elsewhere in this Annual Report.

Our actual results may differ materially from those we currently anticipate as a result of many factors, including those we describe under Item 1A.

Risk Factors, and elsewhere in this Annual Report.

See Part I, Forward-Looking Statements , for additional information.

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

Our strategy is to be the trusted marketplace where customers go to buy local services and experiences.

We plan to grow our revenue by building long-term relationships with local merchants to strengthen our online selection and by enhancing the customer reach through experience curation and improved convenience in order to drive customer demand and purchase frequency.

We are investing significant resources in making our platform more efficient, stable and agile.

By improving our technology, our customer base can enjoy a modernized experience along with seamless execution of new product innovation, improved customer experience and customer satisfaction.

Our platform migrations are strategic investments in our ability to innovate faster, serve merchants better, and create more engaging experiences for our customers.

How We Measure Our Business

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Gross billings is an indicator of our growth and business performance as it measures the dollar volume of transactions generated through our marketplaces.

Tracking gross billings

also allows us to monitor the percentage of gross billings that we are able to retain after payments to merchants.

However, we are focused on achieving long-term gross profit and EBITDA growth.

Tracking gross billings also allows us to monitor the percentage of gross billings that we are able to retain after payments to merchants.

• Units are the number of purchases during the reporting period, before refunds and cancellations, made either through one of our online marketplaces, a third-party marketplace, or directly with a merchant for which we earn a commission.

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We consider units to be an important indicator of the total volume of business conducted through our marketplaces.

We report units on a gross basis prior to the consideration of customer refunds and therefore units are not always a good proxy for gross billings.

• Active customers are unique user accounts that have made a purchase during the TTM either through one of our online marketplaces or directly with a merchant for which we earned a commission.

• Active customers are unique user accounts, identified by a distinct email address, that have made a purchase during the TTM either through one of our online marketplaces or directly with a merchant for which we earned a commission.

We consider this metric to be an important indicator of our business performance as it helps us to understand how the number of customers actively purchasing our offerings is trending.

Some customers could establish and make purchases from more than one account, so it is possible that our active customer metric may count certain customers more than once in a given period.

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

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

Our gross billings, units and TTM active customers for the years ended December 31, 2025 and 2024 were as follows (in thousands):

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Financial Metrics

• Revenue is earned through transactions which we generate commissions by selling goods or services on behalf of third-party merchants.

• Revenue is earned through transactions for which we generate commissions by selling goods or services on behalf of third-party merchants.

Revenue from those transactions is reported on a net basis as the purchase price collected from the customer for the offering less an agreed upon portion of the purchase price paid to the third-party merchant.

Revenue also includes commissions we earn when customers make purchases with retailers using digital coupons accessed through our digital properties.

• Cost of revenue consists of direct and certain indirect costs incurred to generate revenue.

Costs incurred to generate revenue, which include credit card processing fees, editorial costs, compensation expense for technology support personnel who are responsible for maintaining the infrastructure of our websites, amortization of internal-use software relating to customer-facing applications, web hosting and other processing fees are attributed to the cost of service.

• Gross profit reflects the net margin we earn after deducting our Cost of revenue from our Revenue.

• Contribution Profit is our measure of segment profitability, defined as net revenues less cost of sales and marketing expense.

• Contribution Profit measures the amount of marketing investment needed to generate revenue and is defined as net revenues less cost of sales and marketing expense.

See Item 8, Note 19, Segment and Geographical Information , for additional information.

• Adjusted EBITDA is a non-GAAP financial measure that we define as Net income (loss) excluding income taxes, interest and other non-operating items, depreciation and amortization, stock-based compensation, and other special charges and credits, including items that are unusual in nature or infrequently occurring.

For further information and a reconciliation to Net income (loss), refer to our discussion under Non-GAAP Financial Measures in the Results of Operations section.

• Free cash flow is a non-GAAP financial measure that comprises Net cash provided by (used in) operating activities from operations less purchases of property and equipment and capitalized software.

For further information and a reconciliation to Net cash provided by (used in) operating activities, refer to our discussion in the Liquidity and Capital Resources section.

• Adjusted EBITDA is a non-GAAP financial measure that we define as Net income (loss) from continuing operations excluding income taxes, interest and other non-operating items, depreciation and amortization, stock-based compensation, and other special charges and credits, including items that are unusual in nature or infrequently occurring.

For further information and a reconciliation to Net income (loss) from continuing operations, refer to our discussion under Non-GAAP Financial Measures in the Results of Operations section.

• Free cash flow is a non-GAAP liquidity measure that comprises net cash provided by (used in) operating activities from continuing operations less purchases of property and equipment and capitalized software.

For further information and a reconciliation to Net cash provided by (used in) operating activities from continuing operations, refer to our discussion in the Liquidity and Capital Resources section.

The following table presents the above financial metrics for the years ended December 31, 2025 and 2024 (in thousands):

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Merchants can withdraw their offerings from our marketplace at any time, and their willingness to continue offering services through our marketplace depends on the effectiveness of our marketplace offering.

We are focused on improving our marketplace offering and merchant value proposition by exploring opportunities to better balance the needs of merchant partners, customers and Groupon.

We continue to focus on improving our marketplace offering and merchant value proposition by exploring opportunities to better balance the needs of merchant partners, customers and Groupon.

Acquiring and retaining customers .

To acquire and retain customers to drive higher volumes on our platform from new and existing customers, we are focused on strengthening our product offering, improving the attractiveness of our offerings, and enhancing the performance of our marketing campaigns.

To acquire and retain customers to drive higher volumes on our platform from new and existing customers, we continue to focus on strengthening our product offerings, improving the attractiveness of our offerings, and enhancing the performance of our marketing campaigns.

Impact of macroeconomic conditions .

We have been, and may continue to be, impacted by adverse consequences of the macroeconomic environment, including but not limited to, inflationary pressures, higher labor costs, tariff policy, labor shortages, supply chain challenges and changes in consumer and merchant behavior.

To minimize the impact of macroeconomic conditions on our business, we are focusing on building long-term relationships with local merchants to enhance our inventory selection, improving the customer experience through inventory curation and expanding convenience in order to drive customer demand and purchase frequency.

We have been, and may continue to be, impacted by adverse consequences of the macroeconomic environment, including but not limited to, inflationary pressures, higher labor costs, tariff and other trade policy, labor shortages, supply chain challenges and changes in consumer and merchant behavior.

Judicial and executive developments relating to U.S.

trade and tariff policies in February 2026 may further increase uncertainty regarding the scope, implementation and potential future direction of such measures, and further changes could occur.

In addition, recent and potential future changes to trade and tariff policies may introduce increased pricing volatility and overall uncertainty into our operations.

To minimize the impact of macroeconomic conditions on our business, and to create value for our merchants and customers, we are focusing on building long-term relationships with local merchants to enhance our inventory selection, improving the customer experience through inventory curation and expanding convenience in order to drive customer demand and purchase frequency.

Results of Operations

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Comparison of the Years Ended December 31, 2025 and 2024:

North America gross billings and units decreased by $8.5 million and 1.2 million, while TTM active customers remained flat for the year ended December 31, 2024 compared with the prior year period.

As a result of favorable refund rates and our supply transformation efforts, our Local category experienced growth in gross billings, active customers and units.

The Local category growth is offset by a de-emphasis on our Goods category evidenced by a decrease of our Goods active customers that resulted in fewer unit sales and lower gross billings year over year.

North America gross billings, units and TTM active customers increased by $121.4 million, 0.8 million and 0.8 million, respectively, for the year ended December 31, 2025 compared with the prior year period.

Our Local category experienced growth in gross billings and units driven by our continued execution of our hyperlocal marketplace strategy and increased marketing spend, with strength in our core local business supported by improved supply quality and effective category management.

The Local category growth is partially offset by a de-emphasis on our Goods category evidenced by a decrease of our Goods active customers that resulted in fewer unit sales and lower gross billings year over year in the Goods category.

Financial Metrics

North America segment revenue, cost of revenue and gross profit for the years ended December 31, 2024 and 2023 were as follows (dollars in thousands):

North America segment revenue, cost of revenue and gross profit for the years ended December 31, 2025 and 2024 were as follows (in thousands, except percentages):

Year Ended December 31, % Change

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Comparison of the Years Ended December 31, 2025 and 2024:

North America revenue and cost of revenue decreased by $3.9 million and $13.1 million while gross profit increased by $9.2 million for the year ended December 31, 2024 compared with the prior year period.

As a result of favorable refund rates and our supply transformation efforts, our Local category experienced revenue growth.

The decrease in cost of revenue is primarily due to a decrease in amortization of internally-developed software relating to customer-facing applications.

Gross profit increased due to revenue remaining relatively flat and a decrease in cost of revenue.

North America revenue and gross profit increased by $9.8 million, and $13.6 million, respectively, while cost of revenue decreased by $3.8 million for the year ended December 31, 2025 compared with the prior year period.

Our Local revenue increased by 4.5%, lagging the rate of growth in gross billings as a result of promotional discounts and higher redemption rates.

The decrease in cost of revenue is primarily due to a decrease in amortization of internally-developed software relating to customer-facing applications, which is a direct result of our cost savings initiatives.

Gross profit increased due to an increase in revenue and decrease in cost of revenue.

The decline in our Goods category is primarily attributable to our overall de-emphasis of the Goods category.

Marketing and Contribution Profit

North America marketing and contribution profit for the years ended December 31, 2024 and 2023 were as follows (dollars in thousands):

North America marketing and contribution profit for the years ended December 31, 2025 and 2024 were as follows (in thousands, except percentages):

Year Ended December 31, % Change

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Comparison of the Years Ended December 31, 2025 and 2024:

North America marketing expense and marketing expense as a percentage of revenue increased for the year ended December 31, 2024 compared with the prior year period, primarily driven by an increased investment in our performance marketing campaigns.

North America contribution profit decreased for the year ended December 31, 2024 compared with the prior year period, primarily due to an increase in marketing expense.

North America marketing expense increased for the year ended December 31, 2025 compared with the prior year period, primarily due to increased investment in our online marketing spend to drive customer acquisition and demand growth.

Marketing expense as a percentage of revenue increased as revenue growth did not keep pace with our marketing investment as strong performance in paid channels was offset by headwinds in non-paid channels.

North America contribution profit remained relatively flat for the year ended December 31, 2025, compared with the prior year period, as the increase in marketing expense was largely offset by the increase in gross profit.

International

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Comparison of the Years Ended December 31, 2025 and 2024:

International gross billings, units and TTM active customers decreased by $78.4 million, 3.5 million and 1.1 million for the year ended December 31, 2024 compared with the prior year period.

The Local category decrease was primarily attributable to the exit of our Local business in Italy and a decline in site traffic.

The decline in our Goods and Travel categories were primarily attributable to an overall decline in site traffic.

International gross billings and units decreased by $13.9 million and 0.6 million, respectively, while TTM active customers remained flat for the year ended December 31, 2025 compared with the prior year period.

The decline in the Local category was mainly due to the divestiture of Giftcloud and, to a lesser extent, our withdrawal from the Italian market in mid-2024.

Excluding Giftcloud and Italy, International Local gross billings increased 13%, driven by our continued execution of our hyperlocal marketplace strategy and increased marketing spend, with strength in our core local business supported by improved supply quality and effective category management.

The decline in our Goods category is primarily attributable to our overall de-emphasis of the Goods category.

In addition, there was a $15.3 million favorable impact on gross billings from year-over-year changes in foreign currency exchange rates.

Financial Metrics

International segment revenue, cost of revenue and gross profit for the years ended December 31, 2024 and 2023 were as follows (dollars in thousands):

International segment revenue, cost of revenue and gross profit for the years ended December 31, 2025 and 2024 were as follows (in thousands, except percentages):

Year Ended December 31, % Change

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Comparison of the Years Ended December 31, 2025 and 2024:

International revenue, cost of revenue and gross profit decreased by $18.5 million, $2.9 million and $15.5 million for the year ended December 31, 2024 compared with the prior year period.

The Local category decrease was primarily attributable to the exit of our Local business in Italy and a decline in site traffic.

The decline in our Goods and Travel categories were primarily attributable to an overall decline in site traffic.

Revenue and gross profit had favorable impacts of $1.0 million and $0.9 million from year-over-year changes in foreign currency exchange rates.

International revenue and gross profit decreased by $3.9 million and $5.3 million, respectively, while cost of revenue increased by $1.4 million for the year ended December 31, 2025 compared with the prior year period.

The decline in the Local category was mainly due to the divestiture of Giftcloud and, to a lesser extent, our withdrawal from the Italian market in mid-2024.

Excluding Giftcloud and Italy, International Local revenue increased 6%.

The decline in our Goods category is primarily attributable to our overall de-emphasis of the Goods category.

Revenue and gross profit had favorable impacts of $4.3 million and $3.9 million, respectively, from year-over-year changes in foreign currency exchange rates.

The increase in cost of revenue was primarily due to higher credit card processing fees.

This was driven by growth in international units excluding Giftcloud, which had no credit card processing fees.

Marketing and Contribution Profit

International marketing and contribution profit for the years ended December 31, 2024 and 2023 were as follows (dollars in thousands):

International marketing and contribution profit for the years ended December 31, 2025 and 2024 were as follows (in thousands, except percentages):

Year Ended December 31, % Change

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Comparison of the Years Ended December 31, 2025 and 2024:

International marketing expense and marketing expense as a percentage of revenue decreased for the year ended December 31, 2024 compared to the prior year period, primarily due to traffic declines and a lower investment in our online marketing spend.

International contribution profit decreased for the year ended December 31, 2024 compared with the prior year period, primarily due to a decrease in revenue.

International marketing expense increased for the year ended December 31, 2025 compared to the prior year period, primarily due to increased investment in our online marketing spend to drive customer acquisition and demand growth.

International contribution profit decreased for the year ended December 31, 2025 compared with the prior year period, primarily due to a decrease in gross profit and an increase in marketing.

Consolidated Operating Expenses

Operating expenses for the years ended December 31, 2024 and 2023 were as follows (dollars in thousands):

Operating expenses for the years ended December 31, 2025 and 2024 were as follows (in thousands, except percentages):

Year Ended December 31, % Change

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273,728 295,399 (7.3)

Restructuring and related charges 1,066 8,006 (86.7)

(Gain) on sale of assets

— (5,160) (100.0)

(Gain) on sale of business

(10,650) — 100.0

Restructuring and related charges (credits) (34) 1,066 (103.2)

Total operating expenses

$ 428,899 $ 435,512 (1.5)

% of Gross profit:

% of Revenue:

Marketing 33.3 % 29.3 %

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Comparison of the Years ended December 31, 2025 and 2024:

Marketing expense and marketing expense as a percentage of gross profit increased for the year ended December 31, 2024 compared with the prior year period, due to an increased investment in our North America performance marketing campaigns.

SG&A and SG&A as a percentage of gross profit decreased for the year ended December 31, 2024 compared with the prior year period, primarily due to a decrease in cloud computing costs and a reduction in headcount as a result of our 2022 Restructuring Plan.

Restructuring and related charges decreased for the year ended December 31, 2024 compared with the prior year period, primarily due to a decrease in severance and benefit costs related to our 2022 Restructuring Plan, partially offset by an increase in charges related to the Italy Restructuring Plan.

See Item 8, Note 13, Restructuring and Related Charges, for additional information.

Gain on sale of assets increased for the year ended December 31, 2024 compared with the prior year period, primarily due to a gain from the sale of certain intangible assets.

SG&A and SG&A as a percentage of revenue decreased for the year ended December 31, 2025 compared with the prior year period, due to lower technology expenses, partially offset by higher payroll costs.

Gain on sale of assets decreased for the year ended December 31, 2025 compared with the prior year period, primarily due to a gain from the sale of certain intangible assets in 2024.

See Item 8, Note 5, Goodwill and Other Intangible Assets, for additional information.

Gain on sale of business increased for the year ended December 31, 2025 compared with the prior year period due to a gain from the sale of Giftcloud in 2025.

See Item 8, Note 3, Business Dispositions, for additional information.

Restructuring and related charges (credits) decreased for the year ended December 31, 2025 compared with the prior year period, primarily due to substantially all costs pertaining to the various restructuring plans having been incurred as of the year ended December 31, 2024.

See Item 8, Note 14, Restructuring and Related Charges, for additional information.

Consolidated Other Income (Expense), Net

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

Other income (expense), net for the years ended December 31, 2024 and 2023 was as follows (dollars in thousands):

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

Other income (expense), net for the years ended December 31, 2025 and 2024 was as follows (in thousands, except percentages):

Year Ended December 31,

Other income (expense), net

$ 30,829 $ (37,554)

Comparison of the Years Ended December 31, 2025 and 2024:

The change in Other income (expense), net for the year ended December 31, 2024 compared with the prior year period is primarily related to a $40.3 million change in foreign currency gains and losses.

This was partially offset by a remeasurement of our investment in SumUp of $25.8 million in the year ended December 31, 2023, with no comparable activity in the current year period.

See Item 8, Note 5, Investments, for additional information.

The change in Other income (expense), net for the year ended December 31, 2025 compared with the prior year period is primarily related to a $67.3 million increase in foreign currency gains (losses) which primarily resulted from U.S.

dollar-denominated intercompany balances with our foreign subsidiaries.

The increase is primarily driven by the Euro appreciation against the U.S.

dollar during the year ended December 31, 2025 compared to the year ended December 31, 2024.

Consolidated Provision (Benefit) for Income Taxes

Comparison of the Years Ended December 31, 2025 and 2024:

Provision (benefit) for income taxes for the years ended December 31, 2024 and 2023 was as follows (dollars in thousands):

Provision (benefit) for income taxes for the years ended December 31, 2025 and 2024 was as follows (in thousands, except percentages):

Year Ended December 31, % Change

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Federal income tax rate was 21% for the years ended December 31, 2025 and 2024.

The primary factors impacting the effective tax rate for the years ended December 31, 2024 and 2023 were the pretax losses incurred in jurisdictions that have valuation allowances against their net deferred tax assets.

The primary factors impacting the effective tax rate for the years ended December 31, 2025 and 2024 were the pretax losses incurred in jurisdictions that have valuation allowances against their net deferred tax assets, including U.S.

pre-tax losses due to a loss on extinguishment of debt and the tax settlement expense for the Italy 2012 and 2017 Assessments.

For the years ended December 31, 2025 and 2024, we continue to maintain a full valuation allowance against all U.S.

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Adjusted EBITDA, free cash flow and foreign currency exchange rate neutral operating results.

Those non-GAAP financial measures are intended to aid investors in better understanding our current financial performance and prospects for the future as seen through the eyes of management.

Those non-GAAP financial measures, which are presented on a continuing operations basis, are intended to aid investors in better understanding our current financial performance and prospects for the future as seen through the eyes of management.

We believe that those non-GAAP financial measures facilitate comparisons with our historical results and with the results of peer companies who present similar measures (although other companies may define non-GAAP measures differently than we define them, even when similar terms are used to identify such measures).

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Adjusted EBITDA .

Adjusted EBITDA is a non-GAAP performance measure that we define as Net income (loss) excluding income taxes, interest and other non-operating items, depreciation and amortization, stock-based compensation and other special charges and credits, including items that are unusual in nature or infrequently occurring.

Adjusted EBITDA is a non-GAAP performance measure that we define as Net income (loss) from continuing operations excluding income taxes, interest and other non-operating items, depreciation and amortization, stock-based compensation and other special charges and credits, including items that are unusual in nature or infrequently occurring.

Our definition of Adjusted EBITDA may differ from similar measures used by other companies, even when similar terms are used to identify such measures.

Adjusted EBITDA is a key measure used by our management and Board to evaluate operating performance, generate future operating plans and make strategic decisions.

Adjusted EBITDA is a key measure used by our management and Board to evaluate operating performance, generate future operating plans and make

strategic decisions.

Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and Board.

However, Adjusted EBITDA is not intended to be a substitute for Net income (loss).

However, Adjusted EBITDA is not intended to be a substitute for Net income (loss) from continuing operations.

We exclude stock-based compensation expense and depreciation and amortization because they are primarily non-cash in nature and we believe that non-GAAP financial measures excluding those items provide meaningful supplemental information about our operating performance and liquidity.

For the years ended December 31, 2024 and 2023, special charges and credits included charges related to our Italy, 2022 and 2020 Restructuring Plans, gain on sale of assets and foreign VAT assessments.

For the years ended December 31, 2025 and 2024, special charges and credits included charges related to our Italy Restructuring Plan, 2022 Restructuring Plan and 2020 Restructuring Plan, as well as gain on sale of assets, gain on sale of business, loss on extinguishment of debt and foreign VAT assessments.

We exclude special charges and credits from Adjusted EBITDA because we believe that excluding those items provides meaningful supplemental information about our core operating performance and facilitates comparisons with our historical results.

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We have not engaged in any revenue-generating or payroll-related activity in Portugal since ceasing those operations nor do we intend to engage in these activities in that jurisdiction in the future.

The following is a reconciliation of Adjusted EBITDA to the most comparable GAAP financial measure, Net income (loss) for the years ended December 31, 2024 and 2023 (dollars in thousands):

The following is a reconciliation of Adjusted EBITDA to the most comparable GAAP financial measure, Net income (loss) for the years ended December 31, 2025 and 2024 (in thousands):

Year Ended December 31,

Net income (loss)

Income (loss) from continuing operations

$ (81,081) $ (56,514)

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Depreciation and amortization 18,602 30,900

Restructuring and related charges (2)

Restructuring and related charges (credits) (34) 1,066

(Gain) on sale of assets

(Gain) on sale of business (10,650) —

Foreign VAT assessments (2)

Loss on extinguishment of debt 99,925 1,631

Other (income) expense, net (3)

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Adjusted EBITDA $ 69,332 $ 69,308

(1) Stock-based compensation excludes expense related to the 2024 Executive PSUs that are required to be settled in cash.

(1) Stock-based compensation excludes expense related to the liability-classified 2024 Executive PSUs.

Refer to Item 8, Note 12, Compensation Arrangements, for additional information.

(2) Includes a settlement of $4.25 million related to our sublease to Uptake for the year ended December 31, 2023.

Refer to Item 8, Note 9, Commitments and Contingencies and Item 8, Note 13, Restructuring and Related Charges, for additional information.

(2) The Foreign VAT assessments adjustment excludes related interest expense of $1.8 million for the year ended December 31, 2024 as the interest expense is included within Other (income) expense, net.

Refer to Item 8, Note 10, Commitments and Contingencies for additional information.

(4) Includes $1.6 million related to a loss on extinguishment of exchanged debt in connection with the Exchange and Subscription Agreements for the year ended December 31, 2024.

Refer to Item 8, Note 7, Financing Arrangements .

Includes a $25.8 million remeasurement of our investment in SumUp during the year ended December 31, 2023.

(3) Includes $6.0 million gain on sale related to proceeds received in the sale of the Company's minority investment in TodayTix.

Refer to Item 8, Note 6, Investments , for additional information.

Free cash flow .

Free cash flow is a non-GAAP liquidity measure that comprises net cash provided by operating activities less purchases of property and equipment and capitalized software.

We use free cash flow to conduct and evaluate our business because, although it is similar to cash flow, we believe that it typically represents a more useful measure of cash flows because purchases of fixed assets, software developed for internal use and website development costs are necessary components of our ongoing operations.

Free cash flow is a non-GAAP liquidity measure that comprises Net cash provided by (used in) operating activities from continuing operations less purchases of property and equipment and capitalized software.

We use free cash flow to conduct and evaluate our business because, although it is similar to Net cash provided by (used in) from continuing operations, we believe that it typically represents a more useful measure of cash flows because purchases of fixed assets, software developed for internal use and website development costs are necessary components of our ongoing operations.

Free cash flow is not intended to represent the total increase or decrease in our cash balance for the applicable period.

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Selling, general and administrative 271,341 2,387 273,728 294,628 771 295,399

Restructuring charges 959 107 1,066 8,183 (177) 8,006

Long-lived asset impairment 2 (2) — — — —

(Gain) on sale of assets — — — (5,160) — (5,160)

(5,160) — (5,160) — — —

(Gain) on sale of business (10,176) (474) (10,650) — — —

Restructuring and related charges (credits) (19) (15) (34) 959 107 1,066

Income (loss) from operations $ 23,492 $ 148 $ 23,640 $ 8,828 $ (34) $ 8,794

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The Company's cash requirements are subject to change as business conditions warrant and opportunities arise.

Additionally, with the Rights Offering, termination of our Credit Agreement in February 2024, and the Exchange and Subscription Agreements in November 2024, we believe that the Company has sufficient liquidity to support its overall ongoing operational needs within the next 12 months.

We are subject to claims for tax assessments by foreign jurisdictions, including a proposed Assessment for $122.3 million (€117.5 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 come due 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.

Additionally, with the execution of the Exchange and Subscription Agreements in November 2024 and Exchange Agreement in July 2025, we believe that the Company has sufficient liquidity to support its overall ongoing operational needs within the next 12 months, including the repayment of the remaining outstanding $33.7 million principal of the 2026 Notes upon maturity in March 2026.

We are subject to claims for tax assessments by foreign jurisdictions.

On August 5, 2025, Groupon S.r.l.

and the Italian Tax Authority reached an agreement in principle to resolve the Italy 2012 and 2017 Assessments.

On December 29, 2025, Groupon S.r.l.

and the Italian tax authorities entered into a binding framework agreement that definitively resolved all outstanding tax disputes involving Groupon S.r.l..

Pursuant to the framework agreement, Groupon S.r.l.

agreed to pay a total of approximately $25.3 million (€21.5 million), inclusive of amounts previously paid through installment plans of $10.4 million (€8.9 million) to resolve all disputes.

Groupon S.r.l.

expects a hearing on the possible stay of provisional payments to take place in the first half of 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.

The payments due in 2025 under the terms of the installment plans total $13.7 million (€13.2 million).

Such amounts are recorded as Other non-current assets within the Consolidated Balance Sheets when cash is remitted.

The Company continues to expect that the Assessment will not result in financial exposure that exceeds the amounts disclosed in its Form 8-K, filed on April 15, 2024.

We do not expect any related developments to impact the ability of the Company to meet its obligations outside of Groupon S.r.l.

paid a net amount of approximately $14.8 million (€12.6 million) in the fourth quarter of 2025 and an immaterial additional amount in the first quarter of 2026.

Following these payments, the Company considers the matters covered by the Italian tax assessments to be effectively settled as of December 31, 2025.

See Item 1, Note 15, Income Taxes, for additional information.

Our net cash flows from operating, investing and financing activities for the years ended December 31, 2024 and 2023 were as follows (in thousands):

Our net cash flows from operating, investing and financing activities from continuing operations for the years ended December 31, 2025 and 2024 were as follows (in thousands):

Year Ended December 31,

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Free cash flow is a non-GAAP liquidity measure that comprises net cash provided by operating activities, less purchases of property and equipment and capitalized software.

Our free cash flow for the years ended December 31, 2024 and 2023 and reconciliations to the most comparable GAAP financial measure, Net cash provided by (used in) operating activities, for those periods are as follows (in thousands):

Our free cash flow for the years ended December 31, 2025 and 2024 and reconciliations to the most comparable GAAP financial measure, Net cash provided by (used in) operating activities from continuing operations, for those periods are as follows (in thousands):

Year Ended December 31,

Net cash provided by (used in) operating activities

$ 55,894 $ (77,985)

Purchases of property and equipment and capitalized software

(15,333) (19,285)

Net cash provided by (used in) operating activities from continuing operations $ 64,498 $ 55,894

Purchases of property and equipment and capitalized software from continuing operations (14,624) (15,333)

Free cash flow $ 49,874 $ 40,561

Our revenue-generating transactions are primarily structured such that we collect cash up-front from customers and pay third-party merchants at a later date, either based upon the customer's redemption of the related voucher or fixed payment terms, which are generally biweekly, throughout the term of the merchant's offering.

Our revenue-generating transactions are primarily structured such that we collect cash up-front from customers and pay third-party merchants at a later date, either based upon the customer's redemption of the related voucher or fixed payment terms, which are generally weekly, throughout the term of the merchant's offering.

Our cash balances fluctuate significantly throughout the year based on many variables, including changes in gross billings and the timing of payments to merchants and suppliers.

Net cash provided by (used in) operating activities

For the year ended December 31, 2024, our net cash provided by operating activities was $55.9 million as compared with net cash used in operating activities of $78.0 million in the prior period.

The improved cash flow from operating activities is primarily due to a reduction in headcount as a result of the impacts of our 2022 Restructuring Plan.

For the year ended December 31, 2025, our net cash provided by operating activities from continuing operations was $64.5 million as compared with net cash provided by operating activities from continuing operations of $55.9 million in the prior period.

The improved cash flow from operating activities is primarily due to timing of merchant payments.

Strategic supplier payments in late 2024 decreased merchant payable entering into 2025, resulting in a lower beginning merchant payable balance for the current period and improved cash flow over the comparable period.

We resumed regular payment cycles during the year ended December 31, 2025.

Further we have seen increased revenue and billings growth year-over-year.

Net cash provided by (used in) investing activities

For the year ended December 31, 2024, our net cash used in investing activities was $6.8 million as compared with net cash used in investing activities of $1.4 million in the prior period.

The change is primarily driven by proceeds from the sale of SumUp of $18.9 million in the prior year period, with no comparable activity in the current year period, partially offset by $9.1 million of net proceeds from the sale intangible assets and fewer purchases of property and equipment and capitalized software during the year.

For the year ended December 31, 2025, our net cash provided by investing activities from continuing operations was $6.4 million as compared with net cash used in investing activities from continuing operations of $6.8 million in the prior period.

The improvement in investing cash flow is driven by $15.0 million of proceeds earned on the sale of Giftcloud and $6.0 million of proceeds from the sale of our minority investment in TodayTix in the current year, partially offset by $9.1 million of proceeds from the sale of certain intangible assets in the prior year.

Net cash provided by (used in) financing activities

For the year ended December 31, 2024, our net cash provided by financing activities was $47.8 million as compared with net cash used in financing activities of $35.7 million in the prior period.

The improved cash flow from financing activities is primarily due to $79.6 million of proceeds received from the Rights Offering and $20.0 million of proceeds received in the Exchange and Subscription Agreements, partially offset by an increase of $10.6 million in payments of borrowings under our revolving credit facility.

For the year ended December 31, 2025, our net cash used in financing activities from continuing operations was $7.5 million as compared with net cash provided by financing activities from continuing operations of $47.8 million in the prior period.

The reduced cash flow from financing activities is primarily due to $79.6 million of proceeds received from the Rights Offering and partially offsetting repayments of borrowings under our revolving credit agreement of $42.8 million during the year ended December 31, 2024.

To a lesser extent, the reduced cash flow was impacted by an increase in taxes paid for net share settlements of stock-based compensation awards of $6.2 million during the year ended December 31, 2025 compared with $2.3 million in the prior year period.

Matters related to the Rights Offering and Credit Agreement

In March 2023, we entered into the Fourth Amendment to the Credit Agreement, which reduced borrowing capacity under our senior secured revolving credit facility from $150.0 million to $75.0 million.

In connection with the Fourth Amendment, we repaid $27.3 million of outstanding borrowings.

Prior to entering into the Fourth Amendment, our access to the full capacity of our Credit Agreement was partially restricted and our liquidity impacted

Additionally, we have contracts in place with multiple payment processors, which give our payment processors in certain instances discretion to impose receivable holdbacks or reserve requirements based on changes to our business model or material changes in our financial condition.

Any material increase in receivable holdbacks or reserve requirements could have a material impact on our cash flow and available liquidity.

On November 7, 2023, the Board approved the Rights Offering to our stockholders of record of our Common Stock, as of the close of business on November 20, 2023.

To be able to execute the Rights Offering, the Credit Agreement was amended.

On January 22, 2024, we announced the closing of our $80.0 million fully backstopped Rights Offering for shares of our Common Stock.

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See Item 8, Note 8, Financing Arrangements, for additional information regarding the Credit Agreement and Item 8, Note 11 , Stockholders' Equity (Deficit), for additional information regarding the Rights Offering.

Matters related to the 2026 Notes and 2027 Notes

In 2021, the Company issued the 2026 Notes in the principal amount of $230.0 million, which mature on March 15, 2026.

Matters related to the Notes

In 2021, the Company issued the 2026 Notes in the principal amount of $230.0 million.

The 2026 Notes bear interest at a rate of 1.125% per annum, payable semi-annually in arrears on March 15 and September 15 of each year, and will mature March 15, 2026, subject to earlier repurchase or conversion.

On November 19, 2024, we issued $197.3 million aggregate principal amount of 2027 Notes.

From the issuance, we (i) exchanged $176.3 million aggregate principal amount of the 2026 Notes and (ii) issued and sold to certain Offering Participants $21.0 million additional principal amount of the 2027 Notes for gross cash proceeds of $20.0 million.

From the issuance, we (i) exchanged $176.3 million aggregate principal amount of the 2026 Notes and (ii) issued and sold to certain 2027 Notes Offering Participants $21.0 million additional principal amount of the 2027 Notes for gross cash proceeds of $20.0 million.

We used the $20.0 million of the cash proceeds to offset the cash outflows associated with the debt issuance costs as well as general corporate purposes.

The 2027 Notes bear interest at a rate of 6.25% per annum, payable semi-annually commencing March 15, 2025 and will mature March 15, 2027, subject to earlier repurchase or conversion.

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

See Item 8, Note 7, Financing Arrangements, for additional information regarding the 2026 and 2027 Notes.

The 2027 Notes bear interest at a rate of 6.25% per annum, payable semi-annually March 15 and September 15 of each year, and will mature March 15, 2027, subject to earlier repurchase or conversion.

On July 2, 2025, the Company issued $244.1 million aggregate principal amount of the 2030 Notes, consisting of (i) $20.0 million aggregate principal amount of 2030 Notes issued in exchange for $20.0 million aggregate principal amount of the Company’s outstanding 2026 Notes and (ii) $224.1 million aggregate principal amount of 2030 Notes issued in exchange for $150.0 million aggregate principal amount of the Company’s outstanding 2027 Notes with certain 2030 Notes Offering Participants.

The 2030 Notes are senior, unsecured obligations of the Company and accrue interest at a rate of 4.875% per annum, payable semi-annually in arrears on each June 30 and December 30, commencing December 30, 2025, and will mature on June 30, 2030, unless earlier converted, redeemed or repurchased.

See Item 8, Note 8, Financing Arrangements, for additional information regarding the Notes.

Other Liquidity and Capital Resource matters

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Contractual Obligations and Commitments

For additional information on our commitments for other financing arrangements, future lease payments and purchase obligations, see Item 8, Note 7, Financing Arrangements , Note 8, Leases and Note 9, Commitments and Contingencies, for additional information.

For additional information on our commitments for other financing arrangements and purchase obligations, see Item 8, Note 8, Financing Arrangements, Note 9, Leases, Note 10, Commitments and Contingencies and Note 15, Income Taxes , for additional information.

Off-Balance Sheet Arrangements

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(a) future reversals of existing taxable temporary differences, (b) projected future earnings, (c) taxable income in carryback years, and (d) tax planning strategies.

Our ability to realize deferred tax assets depends on future taxable income, the reversal of taxable temporary differences, and feasible tax planning strategies.

Given the Company’s recent history of U.S.

taxable earnings, a future release of the U.S.

valuation allowance could occur if we achieve sustained profitability in the U.S.

The timing and amount of any release will depend on the weight of positive evidence relative to negative evidence, including recent results and likelihood of future utilization of attributes.

A release would reduce income tax expense in the period of release and could materially affect our effective tax rate.

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

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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 7. Management’s Discussion and Analysis