Feeds

Coupon-spaffer Groupon starts to sniff actual profits

And those marketing costs are way down

Security for virtualized datacentres

Groupon significantly reduced the amount of money it lost in the first quarter of this year, only ending up with a net loss of $11.7m compared to a loss of $146.5m in the same quarter of 2011.

The daily deals site actually managed to make its first ever operating profit, claiming $39.6m on its coupons, but interest and taxes sent the net earnings into the red.

Revenue shot up to $559m, a leap of 89 per cent from the first quarter of last year.

“We are pleased to report a record quarter that demonstrates our progress in unlocking the opportunity in local commerce for merchants and customers worldwide,” Andrew Mason, CEO of Groupon, said in a canned statement on the results.

The coupon site has been trying to prove that it is worth investing in after a number of accounting discrepancies and a failure to turn any of its business into profit, sent shares plummeting by 62 per cent since its first day close of $26.11 to last Friday's close.

After announcing its quarterly results yesterday, stocks shot up by 18.5 per cent to $11.73 a share, with investors still buying in after-hours trading.

Most tellingly, the number one concern about Groupon as a business seems to have been addressed. Critics of the voucher business model have pointed to the large sums needed for marketing wiping out profits, but Groupon's marketing expenses have now actually fallen as its revenue rose.

The site reported marketing expenses of $116m compared to $230m in the same quarter last year. As a percentage of revenue, marketing costs have tumbled from 78 per cent to 21 per cent.

Groupon said it was expecting revenue for the next quarter to be somewhere between $550m and $590m and it is hoping for an operating profit of between $25m and $45m. ®

Providing a secure and efficient Helpdesk

More from The Register

next story
Facebook pays INFINITELY MORE UK corp tax than in 2012
Thanks for the £3k, Zuck. Doh! you're IN CREDIT. Guess not
Facebook, Apple: LADIES! Why not FREEZE your EGGS? It's on the company!
No biological clockwatching when you work in Silicon Valley
Yes, yes, Steve Jobs. Look what I'VE done for you lately – Tim Cook
New iPhone biz baron points to Apple's (his) greatest successes
Happiness economics is bollocks. Oh, UK.gov just adopted it? Er ...
Opportunity doesn't knock; it costs us instead
Ex-US Navy fighter pilot MIT prof: Drones beat humans - I should know
'Missy' Cummings on UAVs, smartcars and dying from boredom
Sysadmin with EBOLA? Gartner's issued advice to debug your biz
Start hoarding cleaning supplies, analyst firm says, and assume your team will scatter
Edward who? GCHQ boss dodges Snowden topic during last speech
UK spies would rather 'walk' than do 'mass surveillance'
prev story

Whitepapers

Cloud and hybrid-cloud data protection for VMware
Learn how quick and easy it is to configure backups and perform restores for VMware environments.
A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Three 1TB solid state scorchers up for grabs
Big SSDs can be expensive but think big and think free because you could be the lucky winner of one of three 1TB Samsung SSD 840 EVO drives that we’re giving away worth over £300 apiece.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.