Groupon posts maiden profit as sales surge
GROUPON, the online company that offers discounts deals on everything from holidays to paintballing and teeth whitening, posted its first quarterly profit yesterday as marketing costs dropped and customer demand increased.
Excluding one-off costs, it earned $16.3m (£10.1m), or two cents a share, while revenue soared 89 per cent to $559.3m from $295.5m a year earlier.
Including costs, the daily deals website still made a loss of $11.7m in the three months to 31 March, but this was compared to a much wider loss of $146.5m, a year before.
Overall growth was boosted by a particularly strong quarter in its home market North America, where revenues grew by 75 per cent to $238.6m.
Groupon now has 36.9m active customers – up 140 per cent on a year earlier – and surpassed 100,000 merchants served in the first quarter.
The four year-old company founded by chief executive Andrew Mason has been attempting to rebuild investor confidence after losing more than half its market value since its glittering debut on the stock market in November last year.
Groupon suffered a string of missteps, particularly related to its accounting practices. In March, the Chicago-based company was forced to revise its fourth-quarter results, after it underestimated the number of refunds from disgruntled customers.
Groupon’s shares rallied 18.5 per cent to $11.7 on the Nasdaq stock exchange yesterday – its largest single-day gain since its flotation last year. Shares surged a further 17.5 per cent in after hours trading.