Good day everyone and welcome to Groupon's Second Quarter 2021 Financial Results Conference Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the company's formal remarks. Today's conference call is being recorded. For opening remarks, I would like to turn the call over to the Chief Communications Officer, Jennifer Beugelmans. Please go ahead.

Good morning and welcome to Groupon's second quarter 2021 financial results conference call. On the call today are Interim CEO, Aaron Cooper; and CFO, Melissa Thomas. The following discussion and responses to your questions reflect management's views as of today, August 6, 2021 only and will include forward-looking statements. Actual results may differ materially from those expressed or implied in our forward-looking statements. Additional information about risks and other factors that could potentially impact our financial results is included in our earnings press release and in our filings with the SEC, including our Annual Report on Form 10-K. We encourage investors to use our Investor Relations website at investors.groupon.com as a way of easily finding information about the company. Groupon promptly makes available on this website, the reports of the company files or furnishes with the SEC, corporate governance information and select press releases and social media postings. On the call today, we will also discuss the following non-GAAP financial measures, adjusted EBITDA, free cash flow and FX-neutral result. In our press release and our filings with the SEC, each of which is posted on our Investor Relations website, you will find additional disclosures regarding the non-GAAP measures, including reconciliations of these measures to the most comparable measures under US GAAP. And with that, I'm happy to turn the call over to Aaron.

Thanks, Jennifer and good morning everyone. It has been an exciting first half of 2021 at Groupon, and I'm pleased to report another solid quarter of financial results. In the second quarter, we generated nearly $430 million in global Local billings, the highest quarterly level since the pandemic began and $41 million of adjusted EBITDA. The macro recovery, as expected, is proving to be an organic tailwind as economies around the world reopen and consumers get back to enjoying Local experiences. While the recovery in North America continues to ebb and flow, second quarter North America Local billings grew 20% versus the first quarter and 67% of 2019 levels, the highest quarterly recovery rates since the onset of the pandemic. We ended the second quarter with 15.2 million active North American customers, which was stable compared to the first quarter and is an important milestone that you'll hear more about from Melissa later in the call. For our international business, in the second quarter, countries began relaxing COVID restrictions as vaccinations accelerated, and in June, International Local billings reached the highest recovery rate since the onset of Wave 2 in October 2020. International Local billings also stepped up nicely quarter over quarter, growing nearly 30% in the second quarter versus the first quarter, but similar to what we've seen in North America, we expect performance to ebb and flow across international markets. As we leverage these macro recovery trends to our advantage, we are also continuing to execute on our growth strategy. We told you that our goal was to grow high-quality local inventory. So far, our efforts have centered around growing offers inventory within Beauty and Wellness and removing restrictions on deals across the marketplace. We've also begun to modernize our marketplace with a new customer experience and new feature sets for our merchants, including expanded self-service. Overall, despite the overhang of the pandemic, we are seeing green shoots that give us confidence in our ability to reshape Groupon into a destination for local experiences, which we believe will provide a foundation for growth in the years to come. Our growth thesis is rooted in our ability to deliver the value proposition our customers and merchants want. Everything we're doing is focused on improving these value propositions. We want to improve the ease with which merchants can interact with the Groupon marketplace, extend their reach to new and existing customers, and give them the monetization levels they need to achieve healthy unit economics. Likewise for customers, we intend to expand our wallet share by giving them the value, selection, and convenience they want. Expanding our inventory is a key element of our growth strategy, and our teams have been making meaningful progress on two fronts: bringing back pre-COVID supply to our marketplace and focusing on offers and repeatable inventory. First, let me touch on the team's progress on bringing merchants, particularly top merchants from 2019, back to the marketplace. Many of you have been asking us about the health of our merchant base, so I wanted to provide you with some additional color to highlight our progress today. My comments will focus on North America, which is leading the way. When we think about recovery on the merchant base, we believe the fastest way for us to re-energize our local category is to reactivate our top supply. So we have placed a lot of focus on this call and our efforts are beginning to pay off. At this point, we have brought many of our top merchants back to the marketplace. While we are encouraged by our progress in bringing these merchants back, retaining them is something we know we have to move this number even higher. As I said, we're confident we can continue to do that and here's why. First, our team is in active dialogue with our top merchants who are not yet back on the platform and many of them are telling us they want to come back to Groupon, but the timing is not yet right. This is particularly true among our team’s top merchants, which on a billings basis were our largest vertical in 2019. We are hearing from many of these merchants that there are capacity constraints, largely driven by labor shortages, lingering COVID restrictions, and high consumer demand. This has led to a supply-demand mismatch. However, other verticals like Beauty and Wellness and Home and Auto are more recovered, and we have more of these merchants back in the Groupon marketplace. We believe this demonstrates that they view Groupon as a valued partner. As we continue to engage with our top merchants, we are seeing top supply metrics improve weekly across all verticals. We believe merchant capacity constraints are transient and that we will successfully bring back top supply, although the timeline to achieve this will likely extend into next year. The great news on this front is that as our top merchants return, they will be returning to a fundamentally improved Groupon experience, one that does a better job of driving customers through their doors. You're hearing that we still have some work to do on this front, but our progress in bringing top supply back on the platform is certainly trending in the right direction. To help you triangulate as to why this is important, top supply recovery has been correlated with our bookings recovery in North America Local. We believe that as high-quality merchants return to our marketplace, it stimulates customer demand. Beyond just our top merchants, we have broad supply with a market-leading selection of local experiences that support the vibrancy of our marketplace. We are leveraging our sales team, self-service, and our inventory partnerships to continue to grow our inventory base and further strengthen our competitive position. While we are focused first and foremost on recovering our top supply, we are also doing all we can to help small businesses find their footing as they reopen their doors. We love seeing these local businesses come back and partnering with us, which helps to strengthen our position as the destination for local. So, we talked a bit about recovery; let me now switch gears and update you on our growth efforts. The team is making steady progress on our inventory initiatives, which we believe will allow us to transform our marketplace by growing high-quality local supply. As we've discussed in previous calls, in North America in 2021, we're focused on removing repeat restrictions on deals across all verticals and increasing the average number of listings per Beauty and Wellness merchant. I'm excited to announce that as of today's call, more than 70% of our deal inventory is now repeatable. This is an important milestone as we strive towards our long-term goal of increasing purchase frequency and overall marketplace velocity. Unrestricted deals will give consumers the opportunity to engage more frequently with more inventory to make repeat purchases. While it is still very early days, which means we haven't fully leaned into marketing these deals, we are encouraged that merchants who have lifted repeat restrictions saw an initial 2% lift in units per customer. We have also hit our goal to increase the average number of listings per Beauty and Wellness merchant. In the first half of 2021, we grew inventory within our North American Beauty and Wellness vertical, with a majority of this growth driven by offers. In fact, listings per Beauty and Wellness merchant have grown over 20% since we launched offers, which means on average these merchants now have about four options for purchase in the Groupon marketplace. Digging in one level deeper, Beauty and Wellness merchants who leverage offers have nearly four times more listings than merchants who only list deals. This further demonstrates that our merchant value proposition is resonating and our new offers product is unlocking Groupon's opportunity with Beauty and Wellness merchants. We will continue to focus on driving listings per merchant higher when and where it makes sense. Let me provide some additional context for how this progress is showing up in merchant and consumer behavior, as well as in our business. As we look at the four cities where we tested offers — Detroit, Denver, Dallas, and Seattle — during the second half of 2020, we can see the impact of offers. Offers has now been part of our sales pitch in these markets for about a year. We're still early, but we're seeing a positive response from both sides of our marketplace. Here's where we are today: on the supply side, merchants are embracing offers. The initiatives we have in place are driving Beauty and Wellness supply growth in our marketplace, and we are testing these initiatives and others to power supply growth in other verticals. On the demand side, customers are also responding, particularly high-intent customers. That said, again we're still a bit early. While we're seeing encouraging signals, we have work to do to unlock our full potential. It's also really important to keep in mind that our markets have yet to fully benefit from our new customer experience and marketing investment. The pandemic has created a lot of noise, and there's a lot of seasonality that makes measuring incrementality difficult. Remember, however, that we've tackled the two root causes that prevented customers from doing more with us. With unrestricted supply, which now allows customers to buy more than 70% of our inventory again and again, and we systematically gone after full menu with merchants so they can do more with us and help give customers the broader selection of experiences they want. These are fundamental challenges that we had to overcome. Bottom line, we have high conviction that unrestricted inventory and providing new inventory products will help us drive demand over time. As we continue to scale elements of our growth strategy, we're positioned to leverage these elements throughout our business to create even more opportunities to drive growth, such as launching new products focused on driving frequency, rolling out new branding, and exploring new ways to attract loyal customers. Now that we are beginning to make substantial progress, both recovering our pre-COVID supply and unlocking merchants' potential to do more with Groupon, we're ready to leverage proven marketplace tactics, like inventory multipacks and other merchandising initiatives that were not possible before. Let me take you through how we are leveraging these marketplace tactics within our strategic priority to modernize the marketplace experience for merchants and customers alike. Let's start with the merchant experience. We're leveraging technology across our merchant platform to deliver the ease, reach, and monetization that local businesses want from Groupon. We have launched new features to significantly improve our self-service capabilities, and it is now much easier for our merchants to create, update, and optimize listings. In short, Groupon is becoming a better partner to our local merchants around the globe. A best-in-class self-service option solves two key challenges for us. Number one, it addresses a key merchant pain point, and number two, it creates leverage for our sales team as we expand our local inventory. New and existing merchants alike are transitioning seamlessly to our self-service platform. Let me provide a little color on how self-service is beginning to show up in our merchant data. In the past 12 months, we've made strong progress getting merchants to adapt self-service. In the second quarter alone, nearly 50% of the deals launched in North America were via self-service. We expect this number to continue to grow over time. Moving forward, we believe self-service will be an important and standard way for merchants to interact with Groupon. Now that we have made significant progress optimizing our merchant platform to handle standard business operations, we are moving to enhance our feature set with capabilities that are needed for Groupon and our opportunities. For example, in the fourth quarter of 2020, we launched a new recommendations feature, which is beginning to deliver results. Among our top merchants, those that have leveraged our recommendations realized nearly 20% more bookings versus merchants who did not. In late June, we launched a significant new recommendations feature set, the Merchant Advisor, a tool that further strengthens our ability to give our merchants more strategic campaign recommendations to drive growth. This new feature dynamically analyzes merchant campaign performance and provides bespoke recommendations that help merchants manage their entire portfolio of listings, such as recommending new deals to launch based on a merchant's menu of services. We plan to scale this to all merchants in the third quarter and believe it will provide merchants with even more actionable insights to drive growth. A win-win for both merchants and Groupon. In addition to self-service, we are also leveraging partnerships and integrations when we see an opportunity to accelerate improvements to the Groupon merchant experience. A great example of this is our new partnership with Booksy, a popular Beauty and Wellness appointment app. Now existing Booksy merchants can easily connect their inventory to the Groupon marketplace, and Groupon will be able to offer our merchants free access to Booksy's suite of scheduling and business management tools. Bookable inventory is an important characteristic of high-quality supply, particularly in the Beauty and Wellness vertical, and these types of partnerships can help accelerate the growth of our bookable inventory while also enhancing the customer experience. Offering a portfolio of free and paid merchant services is part of our overarching long-term strategy to provide merchants with a full-service platform that they can leverage to build and grow their businesses. This is a great segue into our progress modernizing customer experience. By now, many of you in North America have interacted with our new customer experience. As a reminder, our overarching goal with their experiences is to drive sell-through of our expanding inventory base, grow purchase frequency over time, and begin to bend the customer perception of Groupon from an inspiration-only marketplace to a destination for local experiences. We want to deliver a modern, engaging, personalized discovery experience that will give consumers highly relevant search results and recommendations to consider and interact with that will help drive conversion over the long run. With consumers coming to Groupon every day interacting with our homepage, we have a unique opportunity to educate consumers on how they can leverage our platform to explore the world around them and participate in the 80+ Grouponable moments happening every year. We've made a lot of progress on this mission-critical initiative, and as of last week our new customer experience had been launched to 100% of North American users across the app, mobile web, and desktop. A huge shoutout to our product and engineering teams for all their hard work to get this new CX launched. We had not planned to change our customer experience in over 5 years, and this launch is an important point in our journey to becoming the destination for local. In addition, it was also completed in a much shorter timeframe than any previous changes, going from concept to delivery in just six months. Let me share a few early learnings, 90 days post-launch. We are prepared to see a typical drop in conversion rate that usually happens when we launch a new CX. While conversion rates are still below pre-launch levels, we've been encouraged to see that the impact on conversion was less than anticipated and to see conversion improve steadily since March. Engagement is also a bright spot for us. We're seeing customers spend more time engaging with our marketplace. Our homepage bounce rate has gone down and category page views have gone up as customers spend more time browsing and exploring local experiences. Finally, the early read on our likelihood to purchase survey indicates that our new CX is helping to shift our brand perception. While based on a small sample size, through this data, we have seen that our new experience is outperforming our old experiences as customers tell us that Groupon is showing them the businesses and listings they're interested in and helping them discover new experiences. In terms of what's next for our new CX, this recent launch is only the beginning. Now that we've unlocked new inventory growth avenues and have launched a foundational new user experience that is local-first and showcases Groupon as a destination marketplace, we're focused on improving the way we surface full-menu inventory options and building and launching more features to drive more engagement and repeat purchases. One example of how our inventory, merchant, and customer initiatives are coming together to pave the path forward for the New Groupon is with our recent planning of inventory market apps, which allows customers to buy multiple experiences in a single purchase from a merchant at a discounted price. We're exploring how we can leverage multipacks and eventually bundles to drive unit growth. While this product is still in early development, the initial read from customers has been positive, leading us to believe that we can capture additional wallet share. Less than a year ago, a product like this would have not been possible. We've been able to create an entirely new product that speaks directly to our merchant and customer value proposition. As I mentioned, we believe this is only the beginning. With our progress on the inventory front and the rollout of our new CX in North America, and as local communities continue to reopen around the world, we've begun to lean into marketing to maximize the impact of our progress. As we look to re-educate customers and expand the perception of our brand from an episodic inspirational marketplace to a destination marketplace, we are being strategic with our marketing investments, focusing on deploying resources in a balanced way to make all parts of the funnel work harder. Being strategic also means that we'll continue to assess the impact from the Delta variant and pandemic-related constraints. In the second quarter, we continued moving our marketing spend up the funnel, with the ultimate aim of reshaping our brand perception as a destination for local. We saw some great results with our mid-funnel efforts and tested new channels to reach a new younger audience. We've also begun to showcase and leverage our brand repositioning through creative marketing. This week we launched a new brand campaign, 'Grab Life by the Groupon,' asking people to choose between accepting life as it is or grabbing life like it depends on it. This campaign brings our inventory and marketplace modernization work to life, and we're excited about this campaign's potential among customers who are ready to get out and explore our local communities. Before I turn the call over to Melissa, I want to take a step back and remind everyone of everything we're doing to transform the Groupon marketplace. If you look back over the past 10 years, Groupon was really only able to offer one local inventory product: deals. Merchants had only one way to interact with Groupon, and there was no opportunity for them to do more with us. With only one product and limited purchasable inventory, we trained customers to think about us only episodically. We have fundamentally altered the customer and merchant value propositions over the course of just the last year. We're providing our merchants with the ease, reach, and monetization they need to help their businesses succeed with Groupon and giving our customers the value, selection, and convenience that they want. As we've shared today, we've already made significant progress rolling out our new value propositions. It will take time to influence the hearts and minds of our customers, given our long-standing reputation as an inspiration marketplace, but we're well on our way and we're excited about what lies ahead. With that, I'll turn the call over to Melissa to provide insights on our financial performance.

Thanks Aaron, and thanks to everyone who is joining us today. I am proud of the progress we've made during the first half of 2021 and look forward to bringing this energy into the rest of the year. Today, I'll provide further insight into our second quarter operating financial results, our restructuring plan, and lastly our updated 2021 financial guidance. In addition to my prepared remarks, I encourage you to review our slides, which contain additional information on our outlook for the remainder of the year. Starting with our consolidated second-quarter results, we delivered $608 million of gross billings, $266 million of revenue, $194 million of gross profit, and $41 million of adjusted EBITDA. We ended the quarter with $565 million in cash. We are encouraged by the recovery trends we have seen; as expected, trends haven't been linear, and recovery continues to ebb and flow in certain verticals and countries. As Aaron mentioned, in North America Local, Q2 was the highest quarterly billings recovery rate since the onset of the pandemic. In International, within the second quarter, Local billings reached the highest recovery rate since the second wave of COVID impacts began in October 2020. While we are pleased with our results to date, we believe that billings recovery has been limited, given the challenges that merchants are now facing due to the ongoing COVID impacts, including the Delta Variant, capacity restrictions, and labor shortages. That said, we believe these challenges are transient, and we continue to be focused on what we can control. North America active customers were stable in the second quarter and ended the quarter at 2.2 million, the same balance as at the end of the first quarter. For us, it's not just about stabilizing things; it's also about increasing customer purchase frequency, which we believe starts with improving the quality of the customer base. Let me give you a little more color on the progress we're making on this front in North America. We are improving the value of our customer base by adding a higher mix of local customers. Despite having fewer customers than we did prior to COVID, we are improving the gross profit we're generating per customer. Local customers have a higher value than our goods customers. Local-only customers increased approximately 10% versus the first quarter, and about 85% of new customers in the second quarter were local-only customers, up 500 basis points versus both the first quarter of 2021 and pre-COVID 2019 level. International active customers have not yet stabilized. This is marginally dependent on the timing and extent of local recovery, which has been more prolonged in our international markets. Next, I'll provide more insights into our second-quarter results. Starting with North America Local, as I mentioned, we do have a sequential increase in Local billings in the second quarter compared with the first quarter. Looking at the trajectory intra-quarter, local bookings as a percent of 2019 levels peaked in the month of April and then pulled back beginning in May. The performance in May and June was primarily driven by our 'things to do' category where supply is less recovered versus 2019 levels, and we didn't see the typical level of seasonal step-up in bookings for this vertical. In International, the macro environment started to improve during the second quarter as the vaccination rollout picked up and restrictions were eased across Europe. Given this progress, International Local bookings started to inflect in May with a further step up in June. International Local billings for the second quarter were 41% of 2019 on an FX-neutral basis. Additionally, it's important to note that our second-quarter global local gross profit benefited from $10 million of variable consideration from unredeemed vouchers that were sold in the prior period. The majority of this benefit was related to our International segment. We are observing redemption rates that are lower than our historical estimates, proving out to sold during the onset of the COVID-19 pandemic that are now reaching their expiration. That said, we're encouraged that redemption rates for bookings in the recent period are more in line with 2019 levels. Our customer redemption rates have been more volatile since the onset of the pandemic. We know that redemption is a key sign of a successful customer experience. Our efforts are focused on increasing the redemption rate, which we believe will ultimately lead to increased customer purchase frequency, a win-win-win for customers, merchants, and Groupon. Moving to our Goods category, COVID Goods performance continues to be challenged. This is driven by the intense competitive environment for Goods, which includes heightened competition in paid marketing channels, ad targeting headwinds from recent iOS updates, and consumers returning to physical stores. We are redeploying marketing spend to alternative marketing channels, but we have seen ongoing impacts to Goods in July. Lastly, on Goods, I'm pleased to report that the International transition to the third-party marketplace model, which we began in the second quarter, is over 16% complete and is expected to be completed at the end of the year. As we saw in North America, this greatly simplifies the operation of our Goods category and allows us to run Goods business in a more efficient cost structure. This simplification will help us to remain focused on winning in local, a category where we are most differentiated. Turning to operating expenses, marketing expenses were $44 million in the second quarter and reflect an increase in spend as consumer demand for local returns, and we made investments in our brand repositioning. SG&A was $138 million. Our restructuring actions are now largely complete, and we expect to achieve $225 million of run-rate savings by the fourth quarter of this year. Keep in mind as you think about the SG&A run rate on a go-forward basis, we do expect normal inflationary increases, such as merit and incremental expenses associated with our ongoing cloud migration. Now for a quick update on the liquidity front. Earlier this year, we issued $230 million of convertible notes due April 2026. In the second quarter, we used the net proceeds from the convertible note issuance, which were included in our restricted cash balance as of March 31, as well as cash on hand to fund the early repurchase of $250 million convertible notes due April 2022. Looking ahead to the third quarter and beyond, we remain laser-focused on tackling our most important priorities. We believe that we're taking the right steps now to position Groupon for the long term. In light of our second-quarter performance, we are updating our full-year 2021 financial guidance. We now expect to deliver $115 million to $125 million of adjusted EBITDA for the full year. We remain on track to deliver between $950 million and $990 million of revenue for the full year. Let me provide some additional context around our updated full-year outlook. We expect Local performance to continue to ebb and flow in the second half of the year, largely driven by factors outside of our control, such as the Delta variant and the supply-demand mismatch that merchants are facing, particularly in the 'Things to Do' vertical. Regarding Goods, in light of the headwinds I mentioned earlier, Goods performance levels stepped down in July to approximately 30% of 2019 billings globally. Our Outlook for July performance levels for Goods is expected to continue through the remainder of the year, and we will complete our transition to the 3P model at the end of 2021. Lastly, our intent is for marketing as a percentage of gross profit to step up further in the second half relative to Q2 spending levels as we invest in our brand repositioning. However, the timing and extent of the step-up in our marketing spend will depend on the macro dynamics we are observing. Given these factors and the second-quarter benefit from variable consideration from unredeemed vouchers, you should expect our third-quarter adjusted EBITDA to be lower than the second quarter. As a reminder, our outlook does not assume a material contribution from our growth strategy. One final thought before I turn it back over to Aaron: We are excited about our path forward and believe we are executing a strategy that will position us for growth over the long term. While the potential resurgence of the pandemic and related restrictions is a very real headwind that could impact our recovery timeline, we see this as a transient challenge and remain optimistic about our future. I'll now turn it back over to Aaron for some closing thoughts.

Thanks, Melissa. Before we move on to the Q&A portion of our call, I'd be remiss if I didn't take a moment to acknowledge all of the incredible work our team has been doing. We've come a long way through the start of the pandemic; it would not have been possible without their dedication, resilience, and hard work. They continue to rise to the occasion, and I couldn't be prouder of their efforts. Our people are our most valuable asset, and our team has set out to make Groupon the place where high-performing, engaged, and diverse employees come to work to be inspired and feel connected to one another. We've recently launched a variety of new diversity, equity, and inclusion, culture, and volunteer initiatives to support these goals. A happy and healthy organization is integral to our success as we drive towards our long-term vision of being a destination for local experiences, and we look forward to updating you on our progress in the second half of the year. And with that, I’ll open the call for questions.

For the first question, we have Trevor Young from Barclays. Your line is open.

Two from me. First one for Aaron. We're seeing some good green shoots, as you pointed out, some good innovation on product, the improving CX, inventory growing, etc. But it still sounds like maybe some hesitation from merchants and even some of those larger merchants you work with in the past dozen choppy trends. What does it take to get merchants to really jump in so that you can harvest some of this innovation improvements that you've put in place? And then second one, I didn't hear any mention of the $250 million EBITDA above the - if you were to reach 80% of 2019 GP levels. Is that one of the milestones you're aiming towards, or is there maybe a change in strategy a bit here that you're going to lean in on spending more, whether it's R&D to drive innovation, maybe on the marketing side to drive merchant and customer adoption to get that flywheel going now that you have some of the tools for inventory and the interface addressed? Thank you.

Thank you. Good to hear you. Let me take the first question and then Melissa will take the second. So when you asked about all the changes we're making on the merchant side in your question related to what's going to take it to get them to jump in. If you look at the numbers, our merchants are taking advantage of this at a steady clip. It's just going to take a matter of time, especially when you have merchants who have been working with Groupon in one way for so long; it's a matter of introducing them to our new offering and letting them get familiar with it. The key components of what we started to do with merchants, I think the foundational element is self-service. For over 10 years, again, merchants have been using Groupon in a more manual way, and now they have a chance to do that with self-service. Something that starts with something simple, like putting up a deal or deal edit, but as the self-service tool continues to engage with our merchants, there is so much more we can do, like adding sponsored listings, which are now integrated into our self-service tool and will begin ramping into the back half of this year and into 2022. It’s one of a number of things that our merchants can now take advantage of in a far easier way, and easier for them also means it's lower cost. There is staffing they can put on managing Groupon and what they can do. So for us, honestly, it's just a matter of time; the things that we're doing in the uptick that you see us getting is a testament to the fact that we're heading in the right direction. But also, these are things that merchants have come to expect in any ad platform, and they're taking advantage of them. Melissa?

Yes. Thanks, Aaron. Thanks, Trevor, for the question. Regarding the $250 million and 80% recovery, that is intended to illustrate the power of our financial model on a significantly reduced fixed cost structure. We have not provided guidance for 2022 at this stage, but it's something that we'll look to do on our fourth-quarter earnings conference call. I think what I would highlight is that we're really excited about the progress that we're making on our growth strategy and the foundation we're laying there, but more to come in terms of 2022. We'll look to provide clarity as we get closer to our Q4 call.

For the next question, we have Ygal Arounian from Wedbush Securities. Your line is open.

Thanks for the question. The first one. And sorry to put you in a little bit of an uncomfortable position, apologies in advance. But it's been a year and a half since you took over as Interim CEO, and I would say at the very beginning of the pandemic, the message and strategy have been as consistent as we've seen it from Groupon. This position that you're laying out, the long-term strategy, I think it's been a really strong roadmap. I'm just wondering from your point of view what investors should think - what the Board is kind of looking for to play out before you can kind of take over in a permanent role. I think from some investors that we speak to, there's always question marks around the really long-term vision and strategy that could potentially change under different leadership. So that's the first one, and then on the marketing efforts early on, clearly a really important component of trying to change the brand image with a lot of things that you're trying to bring on board. What are the things that you're looking for to feel like you're being successful in the marketing efforts? And you've talked a lot about the brand strategy; is there a performance campaign around this to drive more traffic to the app and drive more consumers to the product? Thanks.

Thank you, Ygal. I appreciate your question. So first off, as it relates to strategy, the consistency in relation to the CEO search, there is no update, no new update on the CEO search. But what's most important here is that the Board and our team are all aligned behind the strategy. This is something that we are working on together, and this strategy is not changing. I wouldn't have any concern with that. Now you can see that from the increasing level of execution that we're getting across the board. So this is very much our focus. Now, I will say when you ask the question, you seemed a little nervous to me. I appreciate that, so I recommend for you a reflexology Groupon. I just had it a couple of weeks ago; it's simply about a certain foot massage followed by some shoulder work, and it really helped me out. Our Health, Beauty, and Wellness business saw volumes up. Now, what we are picking up on that is actually awesome. Now for your question on marketing, think about the arc of what we're doing. We’ve said and told everybody that we are going to change our merchant value proposition to get more, better supply. Then we said we had to start to change our customer discovery experience, and we've now rolled out our CX. That customer discovery experience is really the first part of our marketing effort because now it’s more intuitively communicates what we want to be known for. I mean, if you pull up the old site, the flash deal site, where you have a big episodic, school-oriented experience. We now have a destination-oriented experience. When we put that in front of customers and we measure it by the brand metrics and make sure that they understand the brands that we want to be known for, and the reputation we want to have as a destination for the categories they are interested in, that’s how we're seeing the performance that we want. Because the mission we are on, it's not about near-term performance marketing, which we're very good at; great and extremely good, and we've always been with execution, but it's about changing this experience, so that we start to benefit from destination-oriented traction. Now, that is backed up by us launching our new marketing campaign moving more to mid-funnel; we'll continue to do that, and now upper funnel with our 'Grab Life by the Groupon' campaign. This long arc of our strategy, very much works together, and we got some of the marketing portion of it, but changing that perception for Groupon is obviously core to the strategy and something that we're working on across all components of our execution. Great questions; thank you.

Thanks. And yes, I just didn't want to - I didn't want to make you uncomfortable, that's why I was a little nervous, but just a quick follow-up for Melissa on the next question. I fully understand that 250 at 80 wasn't guidance or intended to be guidance, but are we coming off of that? You should no longer be thinking of - if you get there, that's the EBITDA level?

I think the point you got to take away is that we've created a lot of leverage in our model and significantly higher flow-through to EBITDA as a result of the significant reductions that we've made to our cost structure over the last year. Unchanged. So that's really I think the key takeaway there: we create a lot of leverage in the model.

The next question comes from Douglas Anmuth at JPMorgan. Your line is open.

This is Neeraj on for Doug. Just a couple of questions: number one is, just on the cadence of the gross profit and EBITDA? I guess, so on the first quarter you kind of provided the cadence would be improving numbers quarter-on-quarter throughout the year. So just as you highlighted on the things to do issues, supply-demand issues, anything else that we need to read there? And number two would be on the goods business; you pointed out it's going to be close to 30% of 2019 levels. So how should we think about the goods business in the long term, and how much are you putting forward in terms of marketing in the goods business? Thank you.

Why don't I start, and I'll take your goods question first, and then Melissa will come back and get your first question. So as it relates to goods, the way to think about goods is pretty consistent with how we talked about it. We have significantly reduced the cost structure of our goods business. Now winning for us is on the other side of winning in local, and so now with a reduced cost structure in our goods business, we'll get better EBITDA flow-through out of that business. Our focus, though, is on local, and so do expect over time for goods to continue to kind of take a back seat. That really is just based on our focus on local and getting local growing.

Yes, thanks, Aaron. So as you think about the drivers of our outlook, there are a couple of things that I’d highlight as you look at kind of quarterly ebbs and flows. First, we did have a larger than expected impact from variable consideration in the second quarter. We did have a $10 million benefit coming through related to prior period bookings. So that was something that we really hadn't anticipated. The second point that I would call out, as you mentioned, we did see a step down in our global goods performance from the second quarter through July, down to around 30% of 2019 levels. We are assuming in our outlook that the competitive headwinds we’ve seen will continue. As you think about the EBITDA side, it is important to take into account our progression on marketing spend. If you look at how that investment has progressed through the year, we've stepped up investments in Q2 relative to Q1. As we think about the second half, we expect to further step up our investments in marketing, and we would expect marketing as a percentage of gross profit to be higher than it was in the second quarter. As you think about that, you're seeing local demand things needs to return. In addition to that, we are stepping up our investments in our brand repositioning.

So that’s what you're really looking to see from us in the second half: a higher level of marketing investments. On the local side, we are encouraged by the recovery that we saw in the second quarter, but we do remain cautious in the near term, just in light of the spread of the Delta variant, as well as the dynamics within our 'Things to Do' category that we mentioned here, where our supply is less recovered in that vertical relative to 2019. So those factors are taken into account in our guidance.

There are no further questions at this time. Thank you, presenters. Ladies and gentlemen, this concludes today's conference. Thank you for your participation and have a wonderful day. You may all disconnect.