Groupon Posts Quarterly Profit
Surprising to some, Groupon just posted its first quarterly profit. The good news follows a bad year for the public company, during which it lost half its value on concern about waning demand for its daily deals and persistent accounting problems. At the end of March, the company revised fourth-quarter results, admitting to "material weakness" in its financial statements and triggering a stock price slide. How did Groupon do it? “By reining in marketing spending and signing up more customers and merchants,” according to Reuters.
"Revenue growth was impressive and they also had material margin expansion," The Benchmark Company analyst Clayton Moran tells Reuters. "There are no signs of competitive pressure in this report. The take rate of 41% is very encouraging.” On a Monday conference call, CEO Andrew Mason told analysts that the company was focused on expanding its mobile business, while using rewards programs and other technology to attract and retain merchants and customers overseas.
Notes Reuters: “He said the company will release new mobile application software in coming months, now that about a third of North American transactions happen on smartphones and other mobile devices.”