Groupon Races to IPO Based on Strong Q3 Performance

Groupon’s third-quarter performance is clearly what made it possible to move forward on its $540 million initial public offering.

The daily deals giant cut back on marketing expenses and still showed it could make a profit in North America, plus it delivered on a number of other key metrics.

Marketing costs are the primary way Groupon gets subscribers to sign up for its email list that offers a deal every day and therefore is the lifeblood of its growth engine.

But it is also costly and unsustainable.

In today’s filing with the SEC, it showed it could continue to grow despite reducing its marketing expenses by 20.4 percent during the quarter in the U.S. alone.

Here are some key takeaways from the quarter as compared to the prior quarter on a worldwide basis:

  • Revenues before the merchant’s cut: $1.16 billion vs. $929 million
  • Subscribers: 142.9 million vs. 115.7 million
  • Paying Customers: 29.5 million vs. 23 million
  • Participating merchants: 78,649 vs. 78,466
  • Groupons sold: 33 million vs. 32.5 million
  • Average revenue per subscriber: $3.30 vs. $3.90
  • Average revenue per Groupon sold: $13 vs. $12.1
  • Groupons sold per paying customer since 2009: 4.2 vs. 4
  • Total unique paying customers: 16 million vs. 12.1 million

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Just as the atom bomb was the weapon that was supposed to render war obsolete, the Internet seems like capitalism’s ultimate feat of self-destructive genius, an economic doomsday device rendering it impossible for anyone to ever make a profit off anything again. It’s especially hopeless for those whose work is easily digitized and accessed free of charge.

— Author Tim Kreider on not getting paid for one’s work