Groupon (NASDAQ:GRPN) said second-quarter billings and revenue each declined 1% from a year earlier, with weakness concentrated in its North America Local business, while adjusted EBITDA reached the high end of its guidance range and free cash flow totaled positive $15 million.
Chief Executive Officer Dusan Senkypl said the company entered the third quarter with improving momentum, citing mid-single-digit growth in July. He said the improvement was supported by progress in North America Local and North America Travel, as well as continued strength in the company’s international operations.
AI transformation and platform migration
Senkypl highlighted Project Foundry, Groupon’s initiative to redesign its operations around artificial intelligence, as a central element of the company’s strategy. The company aims for AI to handle repetitive work while employees focus on managing AI agents and interacting with customers and merchants.
According to Senkypl, AI is now creating and optimizing tens of thousands of hyperlocal marketing campaigns, while engineering output per developer has more than doubled over the past six months. He said Groupon expects its organization to be “AI fluent by default” by the end of 2026.
The company also expects to complete the migration of all customer-facing surfaces and geographies to its MobileNext technology platform by the end of the third quarter. Senkypl said the new platform is already powering all countries and surfaces, with remaining work focused largely on the least-used portions of the legacy application experience.
The platform migration is intended to support faster feature development and more personalized experiences. Senkypl said customer signals received in the morning can now be translated into features shipped the same day, a process that previously could take months.
Focus on personalization, quality and repeat purchases
Groupon said its strategic priorities include improving organic search traffic, personalization, deal quality and customer trust. Revenue from organic channels returned to growth during the second quarter and accelerated to double-digit growth in July, according to Senkypl.
The company said it is using AI to create and organize local content for traditional search engines and AI-powered search systems. Its managed marketing channels also continued to improve, with Groupon sending fewer messages but generating strong double-digit revenue growth from those communications.
Senkypl identified purchase frequency as the company’s ultimate measure of success in improving trust and customer experience. Groupon is also monitoring customer segments and metrics such as conversion from a first purchase to a second purchase within seven or 30 days.
The company has removed or remediated hundreds of deals that did not meet its standards, management said. It is also making deal terms clearer by prominently displaying what is included in each offer and surfacing key elements that had previously been embedded in fine print.
- AI now resolves the large majority of customer-support contacts, at roughly three times the speed seen at the start of the year.
- Groupon plans to add deal verification before publication in the second half of 2026.
- The company plans a redesigned redemption experience with wallet support.
- It also plans to pilot a Groupon AI concierge to help customers answer questions and book experiences.
Senkypl said Groupon is not yet broadly marketing its quality-and-trust initiative because management wants the experience to be consistently reliable across the marketplace before making larger public claims or introducing potential customer guarantees.
Merchant acquisition and marketing initiatives
Groupon acknowledged that its North America Local supply engine has been operating below expectations. The company recently appointed Adi Rajkumar as chief operating officer and Mark March as vice president of marketplace strategy and operations, with Senkypl saying the company has high expectations for their impact on the supply side.
The company is expanding its use of AI in merchant acquisition. Senkypl said its AI voice-agent pilot is designed to call merchants, communicate Groupon’s value proposition and schedule meetings with sales representatives. Groupon’s longer-term objective is for AI agents to schedule the majority of new merchant meetings by the end of the year.
Management described a broader AI-driven merchant acquisition system that could coordinate emails, paid campaigns, calls and other outreach based on category- and neighborhood-level demand. Groupon is also using an internal “sales brain” that analyzes merchant information, deal performance and customer feedback to recommend next actions for sales representatives.
On the demand side, the company said it plans to increase investment in brand marketing, influencer marketing and partnerships with recognized brands. Senkypl pointed to Groupon’s McDonald’s loyalty-app partnership as an example of the types of brand relationships it hopes to expand.
Groupon is also testing user-generated-content and influencer initiatives. Senkypl said some influencers have already generated tens of millions of impressions for the company, and Groupon is developing tools that could allow influencers and local communities to create customized deal collections.
Outlook maintained
For the third quarter, Groupon forecast billings growth of 4% to 6%, adjusted EBITDA of $19 million to $21 million and negative free cash flow. Management maintained its full-year outlook for billings growth of 3% to 5%, revenue of $513 million to $523 million, adjusted EBITDA of $75 million to $80 million and free cash flow of at least $60 million.
The company said its full-year outlook implies second-half revenue growth of about 6% at the low end and about 10% at the high end. Senkypl said the expected acceleration is supported by easier comparisons, additional marketing investment and growing contributions from the company’s strategic initiatives.
Chief Financial Officer Rana Kashyap said July’s improvement was broad-based, with particular strength in the company’s Things To Do, beauty and wellness businesses. He said tours and attractions performed especially well during the seasonal period, while North America Local improved compared with the second quarter.
About Groupon (NASDAQ:GRPN)
Groupon, Inc operates an online marketplace that connects subscribers with local merchants offering discounted goods, services and experiences. Through its website and mobile applications, Groupon provides time-limited deals across categories such as restaurants, travel, beauty and wellness, home services, and consumer products. Merchants partner with Groupon to attract new customers and drive foot traffic, leveraging the platform’s targeted marketing tools and large subscriber base to promote special offers and vouchers.
Founded in Chicago in 2008 by Andrew Mason, Eric Lefkofsky and Brad Keywell, Groupon pioneered the daily-deals model, quickly growing its user community and merchant network.
