Groupon, Inc 10-Q for FY2026 Q3
Groupon, Inc. (GRPN)
10-Q
2026-11-09
For: 2026-09-30
View Original
Added on
November 09, 2026
About this 10-Q
Groupon, Inc filed this 10-Q on November 9, 2026, covering the quarter ended September 30, 2026 (FY2026 Q3).
Headline figures
Quarter ended September 30, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $125.45M
- up 2.1% from $122.83M a year earlier
- Net loss
- $1.08M
- compared with a net loss of $118.37M a year earlier
- Diluted EPS
- -$0.03
- compared with -$2.92 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2026
OR
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _______
Commission File Number: 1-35335
| (Exact name of registrant as specified in its charter) | ||||||||||||||
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||||||||
| (Zip Code) | ||||||||||||||
| (Address of principal executive offices) | (Registrant's telephone number, including area code) | |||||||||||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐ Accelerated filer ☒
Non-accelerated filer ☐ Smaller reporting company ☐
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No ☒
As of November 5, 2026, there were 40,006,208 shares of the registrant's Common Stock outstanding.
TABLE OF CONTENTS
Page | |||||
| PART I. Financial Information | |||||
| PART II. Other Information | |||||
2
GLOSSARY OF DEFINED TERMS AND ABBREVIATIONS
Groupon, Inc. (the "Company," "we," "our," "us," and similar terms) include Groupon, Inc. and its subsidiaries, unless the context indicates otherwise. The Company also uses several other terms in this Quarterly Report on Form 10-Q ("this Quarterly Report"), which are defined in the list below (the "Glossary"). Newly defined terms within this Quarterly Report are included within the Glossary and may also be defined within applicable sections of this Quarterly Report.
| Abbreviation | Description | ||||
| 2011 Plan | The Company’s 2011 Incentive Stock Plan, as amended | ||||
| 2020 Restructuring Plan | April 2020 Board approved multi-phase restructuring plan | ||||
| 2022 Restructuring Plan | August 2022 Board approved restructuring plan | ||||
2024 Executive PSUs | Awards granted for our executive team under the 2024 PSU Program, which are earned based on the performance of our stock price and a service condition | ||||
2025 PSUs | Awards granted for our executive and upper management team under the 2025 PSU Program, which are earned based on the performance of our stock price and a service condition | ||||
2026 Capped Calls | Privately negotiated capped call options related to the 2026 Notes | ||||
| 2026 Notes | The Company’s 1.125% convertible senior notes due March 2026 | ||||
| 2026 PSUs | Awards granted for our executive and upper management team under the 2026 PSU Program, which are earned based on Groupon's relative total shareholder return (rTSR) percentile ranking versus the Russell 2000 Index and a service condition. | ||||
2026 Restructuring Plan | May 2026 Board approved restructuring plan | ||||
| 2027 Notes | The Company’s 6.250% convertible senior notes due March 2027 | ||||
2027 Notes Excess Shares | Shares of Common Stock that will result in any holder thereof to exceed the 2027 Notes Exchange Cap | ||||
| 2027 Notes Exchange Cap | The limit on ownership percentage defined in the 2027 Notes Indenture | ||||
2027 Notes Indenture | Indenture agreement governing the 2027 Notes | ||||
2027 Notes Offering Participants | Institutional “accredited investors” and/or “qualified institutional buyers” involved in the 2027 Notes | ||||
2030 Notes | The Company’s 4.875% convertible senior notes due June 2030. Referred to as the "New Notes" in the Company's Current Report on Form 8-K filed on June 18, 2025 | ||||
2030 Notes Excess Shares | Shares of Common Stock that will result in any holder thereof to exceed the 2030 Notes Exchange Cap | ||||
2030 Notes Exchange Cap | The limit on ownership percentage defined in the 2030 Notes Indenture | ||||
2030 Notes Indenture | Indenture agreement governing the 2030 Notes | ||||
2030 Notes Offering Participants | Institutional “accredited investors” and/or “qualified institutional buyers” involved in the 2030 Notes | ||||
AI | Artificial Intelligence | ||||
ASC | Accounting Standards Codification | ||||
| ASU | Accounting Standards Update | ||||
Attribution Parties | Parties defined in the 2030 Notes Indenture | ||||
| Bank Secrecy Act | Bank Secrecy Act of 1970 | ||||
| Board | The Company’s Board of Directors | ||||
| CARD Act | Credit Card Accountability Responsibility and Disclosure Act of 2009 | ||||
Cash Collateral Agreement | Agreement dated March 2, 2023 with JPMorgan Chase Bank, N.A. | ||||
| CEO | Chief Executive Officer | ||||
CFO | Chief Financial Officer | ||||
| CODM | Chief Operating Decision Maker | ||||
3
COO | Chief Operating Officer | ||||
Common Stock | Company common stock, par value $0.0001 per share | ||||
| Compensation Committee | Compensation Committee of the Board | ||||
| CPRA | California Privacy Rights Act | ||||
| Credit Agreement | Second amended and restated credit agreement with JPMorgan Chase Bank, N.A., dated May 14, 2019, as amended from time to time and terminated as of February 12, 2024 | ||||
| EBITDA | Earnings Before Interest, Taxes, Depreciation and Amortization | ||||
| ESPP | The Company’s 2012 Employee Stock Purchase Plan | ||||
| Exchange Act | Securities Exchange Act of 1934, as amended | ||||
| FASB | Financial Accounting Standards Board | ||||
GAAP | U.S. Generally Accepted Accounting Principles | ||||
| GDPR | General Data Protection Regulation | ||||
Giftcloud | Giftcloud Ltd. | ||||
Italy 2012 Assessment | Income tax assessment from the Italian tax authority pertaining to Groupon S.r.l., which primarily relates to transfer pricing on transactions occurring in 2011 | ||||
Italy 2017 Assessment | Income tax assessment from the Italian tax authority pertaining to Groupon S.r.l., which primarily relates to transactions occurring in 2017 | ||||
| LLC | The consolidated limited liability company through which deals related to live events were offered. | ||||
Major Rocket | Major Rocket LLC | ||||
Major Rocket Agreement | Incentive marketing agreement with Major Rocket entered into on March 11, 2025 | ||||
Notes | 2026 Notes, 2027 Notes, and 2030 Notes, collectively | ||||
| OBBB Act | One Big Beautiful Bill Act | ||||
| Payoff Amount | Payment of $43.1 million to terminate all commitments to extend further credit under the Credit Agreement | ||||
| Performance Period | The three-year performance measurement period for the 2026 PSUs, commencing on the grant date and ending May 1, 2029 | ||||
PSU | Performance Share Units | ||||
R&D | Research and development | ||||
RSU | Restricted Stock Units | ||||
| rTSR | relative Total Shareholder Return | ||||
| SEC | Securities and Exchange Commission | ||||
| Securities Act | Securities Act of 1933, as amended | ||||
| SG&A | Selling, general and administrative | ||||
| SMS | Short message service | ||||
| SumUp | SumUp Holdings S.a.r.l, a privately-held mobile payments company | ||||
| TTM | Trailing twelve months | ||||
VAT | Value added tax | ||||
| VWAP | Volume-weighted average price | ||||
| YEPR | Year end performance review | ||||
4
PART I. FINANCIAL INFORMATION
FORWARD-LOOKING STATEMENTS
This Quarterly Report contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act, including statements regarding our future results of operations and financial position, business strategy and plans and our objectives for future operations and future liquidity. The words "may," "will," "should," "could," "expect," "anticipate," "believe," "estimate," "intend," "continue" and other similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely on current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from those expressed or implied in our forward-looking statements. Such risks and uncertainties include, but are not limited to, our ability to execute and achieve the expected benefits of our go-forward strategy, including our broader AI-native transformation; the risk that the anticipated benefits of our AI strategy may not be realized in the time frame we expect or at all and may have adverse effects on our operations, merchants and customers; the risk that our public statements regarding our AI strategy and deployment of AI agents are not adequately substantiated or are later viewed as inconsistent with our actual capabilities or results; execution of our business and marketing strategies; volatility in our operating results; challenges arising from our international operations, including fluctuations in currency exchange rates, tax, legal and regulatory developments in the jurisdictions in which we operate and geopolitical instability; global economic uncertainty, including as a result of inflationary pressures; any impact from U.S. and international financial reform legislation and regulations, and any potential trade protection measures, such as new or incremental tariffs and other trade policies; retaining and adding high quality merchants and third-party business partners; retaining existing customers and adding new customers; competing successfully in our industry; providing a strong mobile experience for our customers; managing refund risks; retaining and attracting members of our executive and management teams and other qualified employees and personnel; customer and merchant fraud; payment-related risks; our reliance on email, Internet search engines and mobile application marketplaces to drive traffic to our marketplace; cybersecurity breaches; maintaining and improving our information technology infrastructure; reliance on cloud-based computing platforms; the risks associated with our use and integration of AI and machine learning technologies; completing and realizing the anticipated benefits from acquisitions, dispositions, joint ventures and strategic investments; lack of control over minority investments; managing inventory and order fulfillment risks; claims related to product and service offerings; protecting our intellectual property; maintaining a strong brand; the impact of future and pending litigation; compliance with domestic and foreign laws and regulations, including the CARD Act, GDPR, CPRA, and other privacy-related laws and regulations of the Internet and e-commerce; classification of our independent contractors, agency workers, or employees; risks relating to information or content published or made available on our websites or service offerings we make available; exposure to greater than anticipated tax liabilities; adoption of tax laws; our ability to use our tax attributes; impacts if we become subject to the Bank Secrecy Act or other anti-money laundering or money transmission laws or regulations; our ability to raise capital if necessary; risks related to our access to capital and outstanding indebtedness, including our 2027 Notes and 2030 Notes; our Common Stock, including volatility in our stock price and financial markets; a potential economic slowdown; and those risks and other factors discussed in Part I, Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2025 and Part II, Item 1A. Risk Factors in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, as well as in our Condensed Consolidated Financial Statements, related notes, and the other financial information appearing elsewhere in this report and our other filings with the SEC. Moreover, we operate in a very competitive and rapidly changing environment, including with respect to emerging technologies such as AI, machine learning, and data analytics. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we make. Neither the Company nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. We undertake no obligation to publicly update any forward-looking statements for any reason after the date of this report to conform these statements to actual results or to future events or circumstances. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.
5
ITEM 1. FINANCIAL STATEMENTS
GROUPON, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
(unaudited)
| September 30, 2026 | December 31, 2025 | ||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Accounts receivable, net | |||||||||||
| Prepaid expenses and other current assets | |||||||||||
| Total current assets | |||||||||||
| Property, equipment and software, net | |||||||||||
| Right-of-use assets - operating leases, net | |||||||||||
| Goodwill | |||||||||||
| Intangible assets, net | |||||||||||
| Investments | |||||||||||
| Deferred income taxes | |||||||||||
| Other non-current assets | |||||||||||
| Total assets | $ | $ | |||||||||
Liabilities and equity (deficit) | |||||||||||
| Current liabilities: | |||||||||||
| Current portion of convertible senior notes, net | $ | $ | |||||||||
| Accounts payable | |||||||||||
| Accrued merchant and supplier payables | |||||||||||
| Accrued expenses and other current liabilities | |||||||||||
| Total current liabilities | |||||||||||
Convertible senior notes, net | |||||||||||
| Operating lease obligations | |||||||||||
| Other non-current liabilities | |||||||||||
| Total liabilities | |||||||||||
Commitments and contingencies (see Note 7) | |||||||||||
| Stockholders' equity (deficit) | |||||||||||
Common Stock, par value $ | |||||||||||
| Additional paid-in capital | |||||||||||
Treasury stock, at cost, | ( | ( | |||||||||
| Accumulated deficit | ( | ( | |||||||||
| Accumulated other comprehensive income (loss) | ( | ( | |||||||||
| Total Groupon, Inc. stockholders' equity (deficit) | ( | ( | |||||||||
| Noncontrolling interests | |||||||||||
| Total equity (deficit) | ( | ( | |||||||||
| Total liabilities and equity (deficit) | $ | $ | |||||||||
See Notes to Condensed Consolidated Financial Statements.
6
GROUPON, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(in thousands, except share and per share amounts)
(unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Revenue | $ | $ | $ | $ | |||||||||||||||||||
| Cost of revenue | |||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Marketing | |||||||||||||||||||||||
| Selling, general and administrative | |||||||||||||||||||||||
| Restructuring and related charges (credits) | ( | ||||||||||||||||||||||
| Gain on sale of business | ( | ||||||||||||||||||||||
| Total operating expenses | |||||||||||||||||||||||
| Income (loss) from operations | |||||||||||||||||||||||
| Loss on extinguishment of debt | ( | ( | |||||||||||||||||||||
| Other income (expense), net | ( | ( | |||||||||||||||||||||
| Income (loss) from continuing operations before provision (benefit) for income taxes | ( | ( | ( | ||||||||||||||||||||
| Provision (benefit) for income taxes | |||||||||||||||||||||||
| Income (loss) from continuing operations | ( | ( | ( | ( | |||||||||||||||||||
| Income (loss) from discontinued operations, net of tax | ( | ( | |||||||||||||||||||||
| Net income (loss) | ( | ( | ( | ( | |||||||||||||||||||
| Net (income) loss attributable to noncontrolling interests | ( | ( | ( | ( | |||||||||||||||||||
| Net income (loss) attributable to Groupon, Inc. | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Basic net income (loss) per share: | |||||||||||||||||||||||
| Continuing operations | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Discontinued operations | ( | ||||||||||||||||||||||
| Basic net income (loss) per share | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Diluted net income (loss) per share: | |||||||||||||||||||||||
| Continuing operations | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Discontinued operations | ( | ||||||||||||||||||||||
| Diluted net income (loss) per share | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Weighted average number of shares outstanding: | |||||||||||||||||||||||
| Basic | |||||||||||||||||||||||
| Diluted | |||||||||||||||||||||||
| Comprehensive income (loss): | |||||||||||||||||||||||
| Net income (loss) | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Other comprehensive income (loss) | |||||||||||||||||||||||
| Net change in unrealized gain (loss) on foreign currency translation adjustments | ( | ( | ( | ||||||||||||||||||||
| Other comprehensive income (loss) | ( | ( | ( | ||||||||||||||||||||
| Comprehensive income (loss) | ( | ( | ( | ( | |||||||||||||||||||
| Comprehensive income attributable to noncontrolling interests | ( | ( | ( | ( | |||||||||||||||||||
| Comprehensive income (loss) attributable to Groupon, Inc. | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
7
GROUPON, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
(in thousands, except share amounts)
(unaudited)
| Groupon, Inc. Stockholders' Equity (Deficit) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-In Capital | Treasury Stock | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Total Groupon, Inc. Stockholders' Equity (Deficit) | Non-controlling Interests | Total Equity (Deficit) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2025 | $ | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Comprehensive income (loss) | — | — | — | — | — | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
Vesting of RSUs and PSUs | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
Shares issued under ESPP | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tax withholdings related to net share settlements of stock-based compensation awards | ( | — | ( | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Repurchases of treasury stock | — | — | — | ( | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation on equity-classified awards | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Distributions to noncontrolling interest holders | — | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2026 | $ | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Comprehensive income (loss) | — | — | — | — | — | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
Vesting of RSUs and PSUs | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Exercise of stock options, net of shares withheld for employee taxes and net share settlement of exercise price | — | ( | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Tax withholdings related to net share settlements of stock-based compensation awards, excluding stock options | ( | — | ( | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Repurchases of treasury stock | — | — | — | ( | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation on equity-classified awards | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Distributions to noncontrolling interest holders | — | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2026 | $ | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Comprehensive income (loss) | — | — | — | — | — | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Purchase of noncontrolling interest | — | — | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Vesting of RSUs and PSUs | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
Shares issued under ESPP | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tax withholdings related to net share settlements of stock-based compensation awards | ( | — | ( | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Repurchases of treasury stock | — | — | — | ( | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation on equity-classified awards | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Distributions to noncontrolling interest holders | — | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at September 30, 2026 | $ | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||||||||||||||||||
8
GROUPON, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
(in thousands, except share amounts)
(unaudited)
| Groupon, Inc. Stockholders' Equity (Deficit) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-In Capital | Treasury Stock | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Total Groupon, Inc. Stockholders' Equity (Deficit) | Non-controlling Interests | Total Equity (Deficit) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | ( | $ | ( | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
| Comprehensive income (loss) | — | — | — | — | — | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
Vesting of RSUs | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
Shares issued under ESPP | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tax withholdings related to net share settlements of stock-based compensation awards | ( | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation on equity-classified awards | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Distributions to noncontrolling interest holders | — | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2025 | $ | $ | ( | $ | ( | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
| Comprehensive income (loss) | — | — | — | — | — | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
Vesting of RSUs and PSUs | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Tax withholdings related to net share settlements of stock-based compensation awards | ( | — | ( | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation on equity-classified awards | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Distributions to noncontrolling interest holders | — | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Unwind of capped call transactions | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2025 | $ | $ | ( | $ | ( | $ | ( | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Comprehensive income (loss) | — | — | — | — | — | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Vesting of RSUs and PSUs | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
Shares issued under ESPP | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tax withholdings related to net share settlements of stock-based compensation awards | ( | — | ( | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation on equity-classified awards | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Distributions to noncontrolling interest holders | — | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at September 30, 2025 | $ | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||||||||||||||||||
See Notes to Condensed Consolidated Financial Statements.
9
GROUPON, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
| Nine Months Ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Operating activities | |||||||||||
| Net income (loss) | $ | ( | $ | ( | |||||||
| Less: Income (loss) from discontinued operations, net of tax | ( | ( | |||||||||
| Income (loss) from continuing operations | ( | ( | |||||||||
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||||||||||
| Depreciation and amortization of property, equipment and software | |||||||||||
| Amortization of acquired intangible assets | |||||||||||
| Stock-based compensation | |||||||||||
| Amortization of debt discount (premium) on convertible senior notes | ( | ||||||||||
| Deferred income taxes | |||||||||||
| Foreign currency (gains) losses, net | ( | ||||||||||
| Gain on sale of business | ( | ||||||||||
| Italy unrecognized tax benefit expense | |||||||||||
| Loss on extinguishment of debt | |||||||||||
| Change in assets and liabilities: | |||||||||||
| Accounts receivable | |||||||||||
| Prepaid expenses and other current assets | ( | ( | |||||||||
| Right-of-use assets - operating leases | |||||||||||
| Accounts payable | ( | ( | |||||||||
| Accrued merchant and supplier payables | ( | ( | |||||||||
| Accrued expenses and other current liabilities | |||||||||||
| Operating lease obligations | ( | ( | |||||||||
| Other, net | ( | ||||||||||
| Net cash provided by (used in) operating activities from continuing operations | ( | ||||||||||
| Net cash provided by (used in) operating activities from discontinued operations | |||||||||||
| Net cash provided by (used in) operating activities | ( | ||||||||||
| Investing activities | |||||||||||
| Purchases of property and equipment and capitalized software | ( | ( | |||||||||
| Proceeds from sale of business, net | |||||||||||
| Net cash provided by (used in) investing activities from continuing operations | ( | ||||||||||
| Net cash provided by (used in) investing activities from discontinued operations | |||||||||||
| Net cash provided by (used in) investing activities | ( | ||||||||||
| Financing activities | |||||||||||
| Issuance costs for 2030 Notes | ( | ||||||||||
Repayment of Notes | ( | ||||||||||
Payments for purchases of treasury stock | ( | ||||||||||
| Taxes paid related to net share settlements of stock-based compensation awards | ( | ( | |||||||||
Proceeds from settlement of capped call transactions | |||||||||||
| Other financing activities | ( | ( | |||||||||
| Net cash provided by (used in) financing activities | ( | ( | |||||||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | ( | ( | |||||||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | ( | ||||||||||
| Less: Net increase (decrease) in cash classified within current assets of discontinued operations | |||||||||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | ( | ||||||||||
Cash, cash equivalents and restricted cash, beginning of period (1) | |||||||||||
Cash, cash equivalents and restricted cash, end of period (1) | $ | $ | |||||||||
10
GROUPON, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
(1) The following table provides a reconciliation of Cash, cash equivalents and restricted cash shown above to amounts reported within the Condensed Consolidated Balance Sheets as of September 30, 2026, December 31, 2025, September 30, 2025 and December 31, 2024 (in thousands):
| September 30, 2026 | December 31, 2025 | September 30, 2025 | December 31, 2024 | ||||||||||||||||||||
| Cash and cash equivalents | $ | $ | $ | $ | |||||||||||||||||||
| Restricted cash included in prepaid expenses and other current assets | |||||||||||||||||||||||
| Cash, cash equivalents and restricted cash | $ | $ | $ | $ | |||||||||||||||||||
| Nine Months Ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Supplemental disclosure of cash flow information from continuing operations | |||||||||||
| Cash activity: | |||||||||||
| Cash paid for interest | $ | $ | |||||||||
| Income tax payments | |||||||||||
| Cash paid for amounts included in the measurement of operating lease liabilities | |||||||||||
| Non-cash investing activity from continuing operations: | |||||||||||
| Right-of-use assets obtained in exchange for operating lease liabilities | $ | $ | |||||||||
| Increase (decrease) in liabilities related to purchases of property and equipment and capitalized software | ( | ( | |||||||||
| Non-cash financing activity: | |||||||||||
| Exchanged 2026 Notes | $ | $ | ( | ||||||||
| Exchanged 2027 Notes | ( | ||||||||||
| Issuance of the 2030 Notes in exchange for 2026 Notes and 2027 Notes | |||||||||||
See Notes to Condensed Consolidated Financial Statements.
11
GROUPON, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
NOTE 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
Company Information
Groupon, Inc. and its subsidiaries, which commenced operations in October 2008, is a global scaled two-sided marketplace that connects consumers to merchants by offering goods and services, generally at a discount. Consumers access those marketplaces through our mobile applications and our websites.
Our operations are organized into two segments: North America and International. See Note 14, Segment Information, for more information.
Unaudited Interim Financial Information
We have prepared the accompanying Condensed Consolidated Financial Statements in accordance with GAAP and applicable rules and regulations of the SEC for interim financial reporting. These Condensed Consolidated Financial Statements are unaudited and, in our opinion, include all adjustments, consisting of normal recurring adjustments and accruals, necessary for the fair presentation of the Condensed Consolidated Balance Sheets, Statements of Operations and Comprehensive Income (Loss), Stockholders' Equity (Deficit) and Cash Flows for the periods presented. These Condensed Consolidated Financial Statements and notes should be read in conjunction with the audited Consolidated Financial Statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2025.
In connection with the dispositions of our operations in Latin America in 2017, we recorded indemnification liabilities for certain tax assessments and other matters which were presented in Income (loss) from discontinued operations, net of tax. During the nine months ended September 30, 2025, we recorded an additional accrual related to one of the assessments under the indemnification which is presented in Income (loss) from discontinued operations, net of tax. See Note 7, Commitments and Contingencies, for additional information.
Principles of Consolidation
The Condensed Consolidated Financial Statements include the accounts of Groupon, Inc. and its wholly-owned subsidiaries, majority-owned subsidiaries over which we exercise control and variable interest entities for which we are the primary beneficiary. All intercompany accounts and transactions have been eliminated in consolidation. Outside stockholders' interests in subsidiaries are shown in the Condensed Consolidated Financial Statements as Noncontrolling interests. Investments in entities in which we do not have a controlling financial interest are accounted for at fair value as available-for-sale securities or at cost adjusted for observable price changes and impairments, as appropriate.
Purchase of Noncontrolling Interest
On August 18, 2026, we acquired the remaining 50 % of the outstanding interests in the consolidated limited liability company (the "LLC") that administers our arrangement to offer deals related to live events. The LLC was previously a variable interest entity that we consolidated as its primary beneficiary. As a result of the transaction, we became the sole owner of the LLC. The LLC agreement provides for the dissolution of the LLC upon either party becoming a majority owner. Total consideration consisted of a nominal upfront cash payment and contingent payments over the 12 months following the closing date, which are based on collections by the LLC associated with the strategic partner's share of event inventory on our platform as of the acquisition date. We do not expect the contingent payments, including amounts remaining to be paid after September 30, 2026, to be significant. The aggregate consideration and the related dissolution were not material to our Condensed Consolidated Financial Statements during the three and nine months ended September 30, 2026.
Simultaneously, we entered into a commercial agreement with an affiliate of the strategic partner that allows us to continue to market and distribute primary ticket inventory from that affiliate's clients through our marketplace.
12
GROUPON, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the Condensed Consolidated Financial Statements and accompanying notes. Estimates in our financial statements include, but are not limited to, the following: variable consideration from unredeemed vouchers; income taxes; stock-based compensation; leases; initial valuation and subsequent impairment testing of goodwill, other intangible assets and long-lived assets; investments; receivables; customer credits, customer refunds and other reserves; contingent liabilities; and the useful lives of property, equipment and software and intangible assets. Actual results could differ materially from those estimates.
Reclassifications
Certain reclassifications have been made to the Condensed Consolidated Financial Statements of prior periods to conform to the current period presentation.
Adoption of New Accounting Standards
There were no new accounting standards adopted during the nine months ended September 30, 2026.
Recently Issued Accounting Standards
In November 2024, the FASB issued ASU 2024-03 Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The amendments in this update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027 and early adoption is permitted. The Company is assessing the effect this guidance may have on our disclosures.
In September 2025, the FASB issued ASU 2025-06 Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. This ASU removes all references to project stages in ASC Subtopic 350-40, clarifies the threshold to begin capitalizing costs and specifies that the property, plant and equipment disclosure requirements under ASC Subtopic 360-10 apply to all capitalized software costs accounted for under ASC Subtopic 350-40. The amendments in this update are effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods beginning within those annual reporting periods, and early adoption is permitted. The Company is assessing the effect this guidance may have on our consolidated financial statements.
NOTE 2. BUSINESS DISPOSITIONS
There were no business dispositions during the nine months ended September 30, 2026.
On April 10, 2025, the Company completed the sale of Giftcloud, a non-core, UK-based business, for cash consideration of $17.1 million. The net proceeds of $15.0 million were received in 2025. The related cash activity is presented within Net cash provided by (used in) investing activities from continuing operations for the nine months ended September 30, 2025.
We recognized a pre-tax gain on the sale of $10.7 million that is presented within Gain on sale of business in the Condensed Consolidated Statements of Operations for the nine months ended September 30, 2025.
13
GROUPON, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
NOTE 3. GOODWILL AND LONG-LIVED ASSETS
Goodwill
As of September 30, 2026 and December 31, 2025, the balance of our goodwill was $178.7
Long-Lived Assets
The following table summarizes intangible assets as of September 30, 2026 and December 31, 2025 (in thousands):
| September 30, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||||||
| Gross Carrying Value | Accumulated Amortization | Net Carrying Value | Gross Carrying Value | Accumulated Amortization | Net Carrying Value | ||||||||||||||||||||||||||||||
| Merchant relationships | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Trade names | |||||||||||||||||||||||||||||||||||
Patents | |||||||||||||||||||||||||||||||||||
| Other intangible assets | |||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Amortization of intangible assets is computed using the straight-line method over the estimated useful life of the asset, which ranges from 1 to 10 years. Amortization expense related to intangible assets was $0.2 million and $0.3 million for the three months ended September 30, 2026 and 2025, and $0.9 million and $1.1 million for the nine months ended September 30, 2026 and 2025. As of September 30, 2026, estimated future amortization expense related to intangible assets is as follows (in thousands):
| Remaining amounts in 2026 | $ | ||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| Thereafter | |||||
| Total | $ | ||||
NOTE 4. INVESTMENTS
Other Equity Investments
Other equity investments represent equity investments without readily determinable fair values, which we elected to record at cost adjusted for observable price changes and impairments.
As of September 30, 2026 and December 31, 2025, our carrying value in other equity investments was $74.8 1 % to 19 % ownership percentage in our other equity investments as of September 30, 2026 and December 31, 2025.
As of September 30, 2026 and December 31, 2025, our carrying value in other equity investments was $
Available-for-Sale Securities
Our available-for-sale securities had a fair value of $0
14
GROUPON, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
Fair Value Option Investments
Our fair value option investments had a fair value of $0 10 % to 19 % ownership percentage in our fair value option investments.
NOTE 5. SUPPLEMENTAL CONDENSED CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF OPERATIONS INFORMATION
The following table summarizes Prepaid expenses and other current assets as of September 30, 2026 and December 31, 2025 (in thousands):
| September 30, 2026 | December 31, 2025 | ||||||||||
| Prepaid expenses | $ | $ | |||||||||
| Income taxes receivable | |||||||||||
Restricted cash (1) | |||||||||||
| Other | |||||||||||
| Total prepaid expenses and other current assets | $ | $ | |||||||||
(1) Primarily consists of cash collateral related to our letters of credit and other cash collateral. See Note 6, Financing Arrangements, for additional information.
The following table summarizes Other non-current assets as of September 30, 2026 and December 31, 2025 (in thousands):
| September 30, 2026 | December 31, 2025 | ||||||||||
| Deferred contract acquisition costs, net | $ | $ | |||||||||
| Security deposits | |||||||||||
| Other | |||||||||||
| Total other non-current assets | $ | $ | |||||||||
15
GROUPON, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
The following table summarizes Accrued expenses and other current liabilities as of September 30, 2026 and December 31, 2025 (in thousands):
| September 30, 2026 | December 31, 2025 | ||||||||||
| Customer credits | $ | $ | |||||||||
| Accrued marketing | |||||||||||
| Compensation and benefits | |||||||||||
Foreign VAT assessments (1) | |||||||||||
| Accrued consulting and professional fees | |||||||||||
| Refunds reserve | |||||||||||
| Deferred revenue | |||||||||||
| Income taxes payable | |||||||||||
| Accrued interest | |||||||||||
| Accrued VAT and related liabilities | |||||||||||
| Accrued cloud computing and technology costs | |||||||||||
| Accrued contingent worker costs | |||||||||||
| Other | |||||||||||
| Total accrued expenses and other current liabilities | $ | $ | |||||||||
(1) See Note 7, Commitments and Contingencies, for additional information.
The following table summarizes Other non-current liabilities as of September 30, 2026 and December 31, 2025 (in thousands):
| September 30, 2026 | December 31, 2025 | ||||||||||
| Contingent income tax liabilities | $ | $ | |||||||||
| Deferred income taxes | |||||||||||
| Other | |||||||||||
| Total other non-current liabilities | $ | $ | |||||||||
The following table summarizes Other income (expense), net for the three and nine months ended September 30, 2026 and 2025 (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Interest income | $ | $ | $ | $ | |||||||||||||||||||
| Interest expense | ( | ( | ( | ( | |||||||||||||||||||
Foreign currency gains (losses), net (1) | ( | ||||||||||||||||||||||
| Other income (expense), net | $ | ( | $ | $ | ( | $ | |||||||||||||||||
(1) Foreign currency gains (losses), net for the three and nine months ended September 30, 2026 and 2025 primarily relate to the remeasurement of U.S. dollar-denominated intercompany balances held by certain foreign subsidiaries whose functional currencies are not the U.S. dollar, principally subsidiaries with Euro functional currencies. The amount of foreign currency gains or losses recognized depends on both the magnitude and direction of exchange-rate movements during the period and the level of outstanding intercompany balances.
NOTE 6. FINANCING ARRANGEMENTS
The following table summarizes the outstanding debt obligations as of September 30, 2026 and December 31, 2025 and related maturity dates, contractual interest rates and carrying amounts:
| September 30, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||||||
| Instrument / Description | Contractual Interest Rate | Principal amount | Unamortized debt issuance costs and discounts | Unamortized debt premium | Carrying amount | Principal amount | Unamortized debt issuance costs and discounts | Unamortized debt premium | Carrying amount | ||||||||||||||||||||||||||
| 2026 Notes, due March 15, 2026 | $ | $ | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||
2027 Notes, due March 15, 2027 (1) | ( | ( | |||||||||||||||||||||||||||||||||
| 2030 Notes, due June 30, 2030 | ( | ( | |||||||||||||||||||||||||||||||||
| Total convertible senior notes | $ | $ | ( | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||
| Less: Current portion of convertible senior notes, net | ( | ( | |||||||||||||||||||||||||||||||||
| Convertible senior notes, net | $ | $ | |||||||||||||||||||||||||||||||||
(1) The original principal of the 2027 Notes at issuance was recorded at fair value of $196.2 million, which is equal to the exchanged principal of $176.3 million of the 2026 Notes and cash consideration received of $19.9 million. After the exchange on July 2, 2025, the remaining fair value of the principal recorded at issuance of the 2027 Notes was $46.2 million.
Convertible Senior Notes due 2030
On July 2, 2025, the Company issued its senior, unsecured 2030 Notes, consisting of (i) $20.0 million aggregate principal amount of 2030 Notes issued in exchange for $20.0 million aggregate principal amount of the Company’s outstanding 2026 Notes, and (ii) $224.1 million aggregate principal amount of 2030 Notes issued in exchange for $150.0 million aggregate principal amount of the Company’s outstanding 2027 Notes.
The Company determined that the exchange of the 2026 Notes and the 2027 Notes for 2030 Notes should be accounted for as a debt extinguishment, resulting in a loss on extinguishment of debt of $99.9
The interest on the 2030 Notes is payable semi-annually in arrears on each June 30 and December 30 of each year.
The 2030 Notes are convertible into Common Stock or a combination of cash and Common Stock, at the Company’s election. Subject to certain conditions, holders of the 2030 Notes may convert all or any portion of their 2030 Notes at their option at any time on or after March 31, 2030, until the close of business on the second scheduled trading day immediately preceding the maturity date. In addition, if specified events occur in a calendar quarter prior to March 31, 2030, the holders may elect to convert on an effective date of such event. Based on the closing price of the Common Stock of $19.76 as of September 30, 2026, the if-converted value of the 2030 Notes was less than the principal amount.
The initial conversion rate of the 2030 Notes is 18.503 shares of Company Common Stock per $1,000 principal amount of 2030 Notes, which is equivalent to an initial conversion price of approximately $54.04 per share, subject to customary adjustments. In addition, upon the occurrence of a make-whole fundamental change, as defined in the 2030 Notes Indenture, or if we exercise the optional redemption, we will, in certain circumstances, increase the conversion rate by a number of additional shares for a holder that elects to convert its 2030 Notes in connection with such a make-whole fundamental change or redemption.
In no event will the conversion rate be increased to exceed 27.7546 shares of the Company’s Common Stock per $1,000 principal amount of the 2030 Notes, subject to adjustments.
The Company is entitled to not effect any conversion that will result in any holder thereof, together with
any Attribution Parties, beneficially owning more than 4.9 % of the Company's Common Stock, after giving effect to such conversion. The Company’s obligation to deliver any shares of Common Stock that will result in any holder thereof to exceed the 2030 Notes Exchange Cap is not extinguished and is suspended until such holder advises the Company in writing that it may receive the 2030 Notes Excess Shares without exceeding the 2030 Notes Exchange Cap.
The Company has the conditional right to redeem the notes for cash on or after July 2, 2028. The redemption price will be 100.0 % of the principal amount, plus accrued and unpaid interest. No sinking fund is provided for the 2030 Notes. The Company has the right to repurchase notes in the open market or through other means, without the consent of holders and without prior notice.
The 2030 Notes Indenture contains customary provisions relating to events of default. If an event of default occurs and is continuing, the principal amount of the 2030 Notes and any accrued and unpaid interest may be declared immediately due and payable. In the case of bankruptcy or insolvency, the principal amount of the 2030 Notes and any accrued and unpaid interest would automatically become immediately due and payable. The 2030 Notes will be considered in default if there is a default by the Company or any of its significant subsidiaries with respect to indebtedness for borrowed money of at least $75.0 million.
The carrying value of the 2030 Notes was determined by deducting third party transaction costs incurred in connection with the issuance of the 2030 Notes of $2.3 million from the 2030 Notes fair value of $267.7 million at issuance. The fair value of the principal of the 2030 Notes at issuance was determined using a lattice model. The transaction costs are amortized as interest expense. The fair value of the 2030 Notes at issuance exceeded the principal amount by $23.6 million. This premium is being amortized over the term of the 2030 Notes as a reduction of interest expense. Together with the cash interest, the amortization of debt issuance costs and debt premium result in the annual effective interest rate of 2.99 % over the term of the 2030 Notes.
We classified the fair value of the 2030 Notes as a Level 3 measurement due to the lack of observable market data over fair value inputs such as our stock price volatility over the term of the 2030 Notes and our cost of debt. The estimated fair value of the 2030 Notes as of September 30, 2026 and December 31, 2025 was $230.9 million and $223.4 million, respectively, and was determined using a lattice model.
During the three and nine months ended September 30, 2026 and 2025, we recognized interest costs on the 2030 Notes as follows (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
Contractual interest | $ | $ | $ | $ | |||||||||||||||||||
Amortization of debt premium and debt issuance costs, net | ( | ( | ( | ( | |||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
Convertible Senior Notes due 2027
In November 2024, the Company issued $197.3 million aggregate principal amount of the 2027 Notes to the 2027 Notes Offering Participants in a private offering. The interest on the 2027 Notes is payable semi-annually in arrears on March 15 and September 15 of each year.
The initial conversion rate of the 2027 Notes is 33.333 shares of Common Stock per $1,000 principal amount of 2027 Notes, which is equivalent to an initial conversion price of approximately $30.00 per share, subject to customary adjustments. The 2027 Notes are convertible into Common Stock or a combination of cash and Common Stock, at the Company's election. Upon the occurrence of a make-whole fundamental change, we will, in certain circumstances, increase the conversion rate by a number of additional shares for a holder that elects to convert its 2027 Notes in connection with such make-whole fundamental change.
The Company is entitled to not effect any conversion that will result in any holder thereof, together with any Attribution Parties, beneficially owning more than 9.9 % of the Company's Common Stock, after giving effect to
such conversion. The Company’s obligation to deliver any shares of Common Stock that will result in any holder thereof to exceed the 2027 Notes Exchange Cap is not extinguished and is suspended until such holder advises the Company in writing that it may receive the 2027 Notes Excess Shares without exceeding the 2027 Notes Exchange Cap.
The 2027 Notes will be considered in default if there is a default by the Company or any of its significant subsidiaries with respect to indebtedness for borrowed money of at least $35.0 million.
Concurrent with the issuance of the 2030 Notes in exchange for a large portion of the 2027 Notes, all of the negative covenants and related provisions from the 2027 Notes Indenture were eliminated, and all of the liens on the collateral securing the obligations under the 2027 Notes were released. In addition, the Company was relieved of its obligation to pay additional interest of 2.5 % per annum of the 2027 Notes in the event that it failed to sell or pledge certain of its assets as part of the collateral for the 2027 Notes.
Following the issuance of the 2030 Notes and partial exchange of the 2027 Notes in July 2025, the remaining outstanding principal of the 2027 Notes was $47.3 million and the annual effective interest rate is 7.27 %.
We classified the fair value of the 2027 Notes as a Level 3 measurement due to the lack of observable market data over fair value inputs such as our stock price volatility over the term of the 2027 Notes and our cost of debt. The estimated fair value of the 2027 Notes as of September 30, 2026 and December 31, 2025 was $47.8 million and $48.8 million, respectively, and was determined using a lattice model.
For the three and nine months ended September 30, 2026 and 2025, we recognized interest costs on the 2027 Notes as follows (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
Contractual interest | $ | $ | $ | $ | |||||||||||||||||||
Amortization of debt discount | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
Convertible Senior Notes due 2026
On March 15, 2026, the Company paid off the remaining $33.7 million aggregate principal amount of the 2026 Notes upon their scheduled maturity. The total payment included the outstanding principal balance and all accrued and unpaid interest up to the maturity date. The repayment of principal is reflected in cash flows used in financing activities, and the payment of accrued interest is reflected in cash flows used in operating activities, each within the Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2026.
Prior to the repayment of the 2026 Notes upon maturity, the interest on the 2026 Notes was payable semi-annually in arrears on March 15 and September 15 of each year. The annual effective interest rate of the 2026 Notes was 1.83 %, which included the amortization of debt discounts over the term of the notes.
We classified the fair value of the 2026 Notes as a Level 3 measurement due to the lack of observable market data over fair value inputs such as our stock price volatility over the term of the 2026 Notes and our cost of debt. The estimated fair value of the 2026 Notes as of December 31, 2025 was $33.4 million, determined using a lattice model.
During the three and nine months ended September 30, 2026 and 2025, we recognized interest costs on
the 2026 Notes as follows (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Contractual interest | $ | $ | $ | $ | |||||||||||||||||||
| Amortization of debt discount | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
Capped Call Transactions
In connection with the repayment of the 2026 Notes at maturity, the Company's associated 2026 Capped Calls expired in March 2026. Because the 2026 Capped Calls were classified as stockholders' equity and were not subject to remeasurement, there was no impact to the Company's Condensed Consolidated Statements of Operations upon expiration.
Cash Collateral Agreement
We maintain access to letters of credit under our Cash Collateral Agreement. Under this arrangement, cash collateral is required for all letters of credit, which is classified as restricted cash and presented within Prepaid expenses and other current assets on our Condensed Consolidated Balance Sheets. The amounts committed to letters of credit under the Cash Collateral Agreement as of September 30, 2026 and December 31, 2025 were $27.4 million and $32.8 million, respectively. During the three months ended September 30, 2026, the Portuguese Tax Authority released the Company's $4.0 million bank guarantee related to the 2013 to 2015 Portugal VAT assessment. See Note 7, Commitments and Contingencies, for additional information. There were no changes to the terms of the Cash Collateral Agreement during the periods presented. See Note 5, Supplemental Condensed Consolidated Balance Sheets and Statements of Operations Information, for additional information.
NOTE 7. COMMITMENTS AND CONTINGENCIES
Our contractual obligations and commitments as of September 30, 2026 and through the date of this report, did not materially change from the amounts set forth in our Annual Report on Form 10-K for the year ended December 31, 2025, except as discussed below.
Purchase Obligations
During the nine months ended September 30, 2026 and through the date of this report, we entered into non-cancellable arrangements with third parties, primarily related to cloud computing and other information technology services. Payments under these new contractual obligations are as follows (in thousands):
| 2026 | $ | ||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
| Thereafter | |||||
| Total | $ | ||||
Legal Matters and Other Contingencies
From time to time, we are party to various legal proceedings incident to the operation of our business. For example, we currently are involved in proceedings brought by merchants, employment and related matters, intellectual property infringement suits, customer lawsuits, stockholder claims relating to U.S. securities law, consumer class actions and suits alleging, among other things, violations of state consumer protection or privacy laws.
16
GROUPON, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
We have two separate Portugal VAT assessments covering different periods. The 2011 to 2012 Portugal VAT assessment, totaling up to $4.8 million inclusive of penalties and interest through September 30, 2026, remains under appeal. We lodged our initial appeal in the Portuguese courts in 2015. During 2024, we received a negative ruling at the lowest-level court to assert factual and legal challenges. Based on this ruling and consideration of relevant facts and circumstances, we concluded an adverse outcome was probable and recorded a $4.6 million contingent liability, which is presented in Accrued expenses and other current liabilities in our Condensed Consolidated Balance Sheets as of September 30, 2026. There have been no updates during the current quarter related to the appeal or the status of this contingent liability. We have a bank guarantee of $4.2 million in place relating to this assessment, classified as restricted cash in our Condensed Consolidated Balance Sheets as of September 30, 2026.
The 2013 to 2015 Portugal VAT assessment, totaling approximately $4.5 million inclusive of penalties and interest, is a separate matter. On October 31, 2024, we learned that Portugal’s highest-level court declined to hear our appeal. The assessment was final and became due during the fourth quarter of 2024. In July 2026, we received a formal demand notice for the principal tax and interest, and the Portuguese Tax Authority released the $4.0 million bank guarantee we had in place relating to this assessment which was classified as restricted cash in our Condensed Consolidated Balance Sheets as of December 31, 2025. The guarantee was drawn down in full and applied to the principal tax and interest, settling the assessment, and the related liability was reduced accordingly. The demand notice did not include administrative penalties, which will be separately assessed by the Portuguese Tax Authority. The $0.5 million previously accrued for those penalties, representing our best estimate of the amount we expect to incur, remains in Accrued expenses and other current liabilities in our Condensed Consolidated Balance Sheets as of September 30, 2026.
The Company has been named as a defendant in putative class action complaints alleging violations of the Telephone Consumer Protection Act of 1991 and related state telemarketing laws in connection with the Company's SMS marketing program. These matters are in an early stage in the litigation process and no class has been certified in any of the actions. The Company believes it has meritorious defenses to the allegations in these matters and intends to defend itself vigorously. Because these proceedings are at a preliminary stage, the Company is currently unable to predict their ultimate outcome or estimate the amount or range of possible loss, if any. Accordingly, no amounts have been accrued in the accompanying financial statements. While the Company cannot provide assurance as to the ultimate resolution of these matters, it does not currently believe an unfavorable outcome in any of these cases is probable.
In addition, third parties have from time to time claimed, and others may claim in the future, that we have infringed their intellectual property rights. We are subject to intellectual property disputes, including patent infringement claims, and expect that we will continue to be subject to intellectual property infringement claims as our services expand in scope and complexity. In the past and/or at present, we have litigated patent infringement and other intellectual property-related claims, including pending litigation or trademark disputes relating to, for example, our Goods category, some of which involved or could have involved potentially substantial claims for damages or injunctive relief. We may also become more vulnerable to third-party claims as laws such as the Digital Millennium Copyright Act are interpreted by the courts, and we become subject to laws in jurisdictions where the underlying laws with respect to the potential liability of online intermediaries are either unclear or less favorable. We believe that additional lawsuits alleging that we have violated patent, copyright or trademark laws may be filed against us. Intellectual property claims, whether meritorious or not, are time-consuming and often costly to resolve, could require expensive changes in our methods of doing business or the goods we sell, or could require us to enter into costly royalty or licensing agreements.
We also are subject to consumer claims, lawsuits, and arbitrations relating to alleged violations of consumer protection or privacy rights and statutes, some of which could involve potentially substantial claims for damages, including statutory or punitive damages. Consumer and privacy-related claims, lawsuits, and arbitrations, whether meritorious or not, could be time-consuming, result in costly litigation, damage awards, fines and penalties, injunctive relief or increased costs of doing business through adverse judgment or settlement, or require us to change our business practices, sometimes in expensive ways. In addition, plaintiffs’ firms have increasingly used mass arbitration tactics, in which large numbers of substantially similar individual arbitration demands are filed simultaneously, often seeking to impose significant upfront filing, administrative, or settlement costs regardless of the merits of the underlying claims. The use of such tactics could increase our dispute
17
GROUPON, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
resolution costs, divert management attention, and adversely affect our results of operations, even if the claims asserted are not ultimately successful.
We are also subject to, or in the future may become subject to, a variety of regulatory inquiries, audits, and investigations across the jurisdictions where we conduct our business, including, for example, inquiries related to consumer protection, employment matters and/or hiring practices, marketing practices, tax, unclaimed property and privacy rules and regulations. Any regulatory actions against us, whether meritorious or not, could be time-consuming, result in costly litigation, damage awards, fines and penalties, injunctive relief or increased costs of doing business through adverse judgment or settlement, require us to change our business practices in expensive ways, require significant amounts of management time, result in the diversion of significant operational resources, materially damage our brand or reputation, or otherwise harm our business.
We establish an accrued liability for loss contingencies related to legal, regulatory and indirect tax matters when the loss is both probable and reasonably estimable. Those accruals represent management's best estimate of probable losses, and in such cases, there may be an exposure to loss in excess of the amounts accrued. For certain of the matters described above, there are inherent and significant uncertainties based on, among other factors, the stage of the proceedings, developments in the applicable facts of law, or the lack of a specific damage claim. However, we believe that the amount of reasonably possible losses in excess of the amounts accrued for those matters would not have a material adverse effect on our business, consolidated financial position, results of operations or cash flows. Our accrued liabilities for loss contingencies related to legal, regulatory and indirect tax matters may change in the future as a result of new developments, including, but not limited to, the occurrence of new legal matters, changes in the law or regulatory environment, adverse or favorable rulings, newly discovered facts relevant to the matter, or changes in the strategy for the matter. Regardless of the outcome, litigation and other regulatory matters can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.
Indemnifications
In connection with the disposition of our operations in Latin America in 2017, we recorded $5.4 million in indemnification liabilities for certain tax and other matters upon the closing of the transactions within discontinued operations. We estimated the indemnification liabilities using a probability-weighted expected cash flow approach. In 2019 and 2020, we decreased our indemnification liabilities due to the expiration of certain indemnification obligations. Following these decreases, our remaining indemnification liabilities were $2.8 million.
After negative rulings at the first and second tier courts in March 2024 and April 2025 for the majority of the assessed amounts, the Company filed a special appeal to the second-level court requesting the court to revisit certain aspects of its decision. The second-level court denied the special appeal and Groupon filed an appeal with the third tier court. For one of the matters appealed, in the first quarter of 2025, the Company concluded an adverse outcome is probable based on the second tier court findings specific to that case. The Company therefore determined it is probable a loss has been incurred for this individual matter and recorded additional liability of $0.5 million, including interest and penalties, presented within Income (loss) from discontinued operations in the Condensed Consolidated Statement of Operations during the nine months ended September 30, 2025. Our total remaining indemnification liabilities were $3.5 million as of September 30, 2026, inclusive of the contingent liability and related interest and penalties incurred to date of $0.7 million. There have been no updates during the current quarter related to the appeal or the status of this indemnification liability.
We estimate that the total amount of obligations that are reasonably possible to arise under the indemnifications should not exceed our bank guarantee of $10.2 million for these assessments. Our bank guarantee is classified as restricted cash in our Condensed Consolidated Balance Sheets as of September 30, 2026.
In the normal course of business to facilitate transactions related to our operations, we indemnify certain parties, including employees, lessors, service providers, merchants and counterparties to investment agreements and asset and stock purchase agreements with respect to various matters. We have agreed to hold certain parties harmless against losses arising from a breach of representations or covenants, or other claims made against those parties. These agreements may limit the time within which an indemnification claim can be made and the
18
GROUPON, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
amount of the claim. We are also subject to increased exposure to various claims as a result of our divestitures and acquisitions. We may also become more vulnerable to claims as we expand the range and scope of our services and are subject to laws in jurisdictions where the underlying laws with respect to potential liability are either unclear or less favorable. In addition, we have entered into indemnification agreements with our officers, directors and underwriters, and our bylaws contain similar indemnification obligations that cover officers, directors, employees and other agents.
Except as noted above, it is not possible to determine the maximum potential amount under these indemnification agreements due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. Historically, any payments that we have made under these agreements have not had a material impact on our operating results, financial position or cash flows.
NOTE 8. STOCKHOLDERS' EQUITY (DEFICIT) AND COMPENSATION ARRANGEMENTS
Share Repurchase Program
In May 2018, the Board authorized us to repurchase up to $300.0 million of our Common Stock under our share repurchase program. During the three and nine months ended September 30, 2026, we repurchased 40.0 thousand and 2.8 million shares for an aggregate purchase price of $0.8 million and $32.2 million, respectively, (including fees and commissions) under our repurchase program. As of September 30, 2026, up to $212.8 million of Common Stock remained available for purchase under our program.
In October 2026 and through the date of this report, we repurchased an additional 637,581 shares for an aggregate price of $10.6 million (including fees and commissions) under our repurchase program.
The timing and amount of share repurchases, if any, will be determined based on market conditions, limitations under the Notes, share price, available cash and other factors, and the program may be terminated at any time.
Groupon, Inc. Incentive Plan
We established the 2011 Plan under which options, RSUs and PSUs of up to 20,775,000 shares of Common Stock are authorized for future issuance to employees, consultants and directors. The 2011 Plan is administered by the Compensation Committee. As of September 30, 2026, 3,989,479 shares of Common Stock were available for future issuance under the 2011 Plan.
Restricted Stock Units
The RSUs generally have vesting periods between and three years and are amortized on a straight-line basis over their requisite service period.
The vesting of certain RSUs granted in 2026 is adjusted based on a Performance Multiplier determined by the participant's YEPR for the relevant annual performance determination period. The Performance Multiplier ranges from 0 % to 300 %.
Certain RSUs granted in 2026 were granted to participants who also hold unvested 2025 PSUs. For these participants, the Year 1 and Year 2 tranches were subject to deferral until May 1, 2029 if the first stock price hurdle under the 2025 PSU Program of $19.75 was achieved and certified by the Compensation Committee on or before the otherwise applicable vesting date. Any such deferral does not affect the number of RSUs granted, the applicable Performance Multiplier, or the terms of the participants' 2025 PSUs. In July 2026, the first stock price hurdle of $19.75 under the 2025 PSU Program was achieved and certified. As a result, vesting of the Year 1 and Year 2 tranches of these RSUs is deferred to May 1, 2029.
Compensation cost for the RSUs subject to a Performance Multiplier adjustment is accrued based on the estimated YEPR outcome at each period end and adjusted upon annual YEPR certification by the Compensation Committee. As of September 30, 2026, the Company estimated the Performance Multiplier at 100 %.
19
GROUPON, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
The table below summarizes RSU activity for the nine months ended September 30, 2026:
RSUs | Weighted-Average Grant Date Fair Value (per unit) | ||||||||||
| Unvested at December 31, 2025 | $ | ||||||||||
Granted (1) | |||||||||||
| Vested | ( | ||||||||||
| Forfeited | ( | ||||||||||
| Unvested at September 30, 2026 | $ | ||||||||||
As of September 30, 2026, $14.0 million of unrecognized compensation costs related to unvested RSUs are expected to be recognized over a remaining weighted-average period of 1.76 years.
Stock Options
In March 2023, we granted our CEO options to purchase 3,500,000 shares with an exercise price of $6.00 per share, which vested in full in March 2025. During the second quarter of 2023, the CEO exercised 437,500 vested options. On June 11, 2026, the CEO exercised the remaining 3,062,500 options outstanding on a net-share-settled basis. Of the shares issuable upon exercise, 1,110,943 shares were withheld to satisfy the $18.4 million aggregate exercise price and 236,242 shares were withheld to satisfy $3.9 million of mandatory statutory tax withholding, resulting in a net issuance of 1,715,315 shares of Common Stock. The Company remitted the $5.2 million of related taxes, comprising $3.9 million of statutory withholding on the CEO’s behalf, which is reflected in cash flows used in financing activities, and $1.3 million of employer payroll taxes, which is reflected in cash flows used in operating activities, each within the Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2026.
The table below summarizes stock option activity for the nine months ended September 30, 2026:
| Options | Weighted-Average Exercise Price | Weighted-Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value (in thousands) | ||||||||||||||||||||
| Outstanding at December 31, 2025 | $ | $ | |||||||||||||||||||||
| Exercised | ( | — | |||||||||||||||||||||
| Outstanding at September 30, 2026 | — | ||||||||||||||||||||||
| Exercisable at September 30, 2026 | $ | — | $ | ||||||||||||||||||||
Performance Share Units
We grant PSU awards to our executive and upper management teams under our 2024 Executive PSU, 2025 PSU, and 2026 PSU programs.
2024 Executive PSUs and 2025 PSUs
The 2024 Executive PSU and 2025 PSU programs require certain stock price hurdles, based on a 90 consecutive calendar day volume-weighted average stock price, and certain service conditions to be satisfied before the shares will vest. The following table summarizes the outstanding PSU award stock price hurdles and service conditions of the 2024 Executive PSU and 2025 PSU programs:
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GROUPON, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
2024 Executive PSUs | 2025 PSUs | |||||||||||||
Stock price hurdles | $ | $ | ||||||||||||
Service conditions | Incremental | Incremental | ||||||||||||
In 2025, the first, second, and third stock price hurdles under the 2024 Executive PSU Program were achieved based on the respective 90 consecutive calendar day volume-weighted average stock price. In July 2026, the first stock price hurdle of $19.75 under the 2025 PSU Program was achieved based on the 90 consecutive calendar day volume-weighted average stock price. Accordingly, 165,032 2025 PSUs vested following certification of the Compensation Committee's determinations as to the satisfaction of the other requirements for such PSUs.
2026 PSUs
In May 2026, the Compensation Committee approved the 2026 PSU program under which the 2026 PSUs cliff-vest at the end of the Performance Period based on Groupon's rTSR percentile ranking versus the Russell 2000 Index and subject to continued service through the Performance Period.
rTSR is measured using 90-day VWAP as of the grant date and the end of the Performance Period, with dividends treated as reinvested. Certain 2026 PSUs include an adjustment mechanism designed to insulate the rTSR outcome from the effects of any SumUp liquidity or revaluation event. The number of 2026 PSUs eligible to vest ranges from 0 % to 300 % of target based on Groupon's rTSR percentile rank, subject to the Negative TSR Cap, which is capped at 100 % if Groupon's absolute TSR is negative.
The following table summarizes the outstanding PSU award activity for the nine months ended September 30, 2026:
| 2024 Executive PSUs | 2025 PSUs (1) | 2026 PSUs (2) | |||||||||||||||||||||||||||||||||
| Units | Wtd. Avg. Grant Date Fair Value | Units | Wtd. Avg. Grant Date Fair Value | Units | Wtd. Avg. Grant Date Fair Value | ||||||||||||||||||||||||||||||
Unvested at December 31, 2025 | |||||||||||||||||||||||||||||||||||
Granted | |||||||||||||||||||||||||||||||||||
Vested | ( | ( | |||||||||||||||||||||||||||||||||
Forfeited | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Unvested at September 30, 2026 | |||||||||||||||||||||||||||||||||||
(1) Includes vesting of 23,721 units upon certification by the Compensation Committee that certain service and performance conditions were satisfied during the nine months ended September 30, 2026 under specified terms provided for under the grant agreements for our CEO, Dusan Senkypl, and former COO, Jiri Ponrt.
(2) 2026 PSUs presented at target (100 % payout).
Because the 2024 Executive PSUs, 2025 PSUs, and 2026 PSUs are subject to market conditions, we used a Monte Carlo simulation to calculate the grant date fair value of the awards and the related derived service period. The explicit service period for the awards exceeds the derived service period and therefore we recognize the expense over the explicit service period.
The key inputs used in the Monte Carlo simulation and requisite service period are as follows:
21
GROUPON, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
| 2024 Executive PSUs | 2025 PSUs | 2026 PSUs | |||||||||||||||||||||||||||||||||
Grant Date | June 12, 2024 | October 14, 2024 | May 20, 2025 | January 29, 2026 | May 1, 2026 | August 3, 2026 | |||||||||||||||||||||||||||||
Dividend Yield | % | % | % | % | % | % | |||||||||||||||||||||||||||||
Risk-free interest rate | % | % | % | % | % | % | |||||||||||||||||||||||||||||
Expected volatility | % | % | % | % | % | % | |||||||||||||||||||||||||||||
Requisite service period (in years) | |||||||||||||||||||||||||||||||||||
| Correlation Coefficient | N/A | N/A | N/A | N/A | |||||||||||||||||||||||||||||||
As of September 30, 2026, we had unrecognized compensation costs related to unvested 2024 Executive PSUs, 2025 PSUs, and 2026 PSUs of $2.5 million, $12.0 million and $15.6 million, respectively. The cost is expected to be recognized over a remaining weighted-average period of 0.58 years, 1.23 years, and 2.59 years related to 2024 Executive PSUs, 2025 PSUs and 2026 PSUs, respectively.
Major Rocket Incentive Shares
On March 11, 2025, the Company entered into a marketing agreement with Major Rocket with a three-year contractual term beginning January 1, 2025. Under the Major Rocket Agreement, Major Rocket is eligible to receive incentive compensation if the merchant offerings it is responsible for sourcing achieve certain financial benchmarks ranging in amount from $10.0 million to $25.0 million. The incentives payable to Major Rocket upon satisfaction of these benchmarks may be satisfied through the Company’s issuance of up to 954,000 shares of Common Stock or, at the Company’s election, the payment of cash in an amount equal to the then current value of such shares. The Company's intent is to settle the awards in shares of Common Stock.
As of September 30, 2026, the achievement of these benchmarks remained improbable based on forecasts through the end of 2027. Therefore, no stock-based compensation expense was recognized through September 30, 2026.
22
GROUPON, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
NOTE 9. REVENUE RECOGNITION
Refer to Note 14, Segment Information, for revenue summarized by reportable segment and category for the three and nine months ended September 30, 2026 and 2025.
Customer Credits
We issue credits to customers that can be applied to future purchases through our online marketplaces. Credits are primarily issued as consideration for refunds and, to a lesser extent, for customer relationship purposes. The following table summarizes the activity in the liability for customer credits for the nine months ended September 30, 2026 (in thousands):
| Customer Credits | |||||
| Balance as of December 31, 2025 | $ | ||||
| Credits issued | |||||
Credits redeemed (1) | ( | ||||
| Breakage revenue recognized | ( | ||||
| Foreign currency translation | ( | ||||
| Balance as of September 30, 2026 | $ | ||||
(1)Customer credits can be redeemed through our online marketplaces for goods or services provided by a third-party merchant and revenue is recognized on a net basis as the difference between the carrying amount of the customer credit liability derecognized and the amount due to the merchant for the related transaction. Customer credits are typically used within one year of issuance.
Costs of Obtaining Contracts
Incremental costs to obtain contracts with third-party merchants, such as sales commissions, are deferred and recognized on a straight-line basis over the expected period of the merchant arrangement, generally from 12 to 18 months. Deferred contract acquisition costs are presented in Prepaid expenses and other current assets and Other non-current assets in the Condensed Consolidated Balance Sheets. As of September 30, 2026 and December 31, 2025, deferred contract acquisition costs were $4.3 million and $5.4 million.
The amortization of deferred contract acquisition costs is classified within Selling, general and administrative expense in the Condensed Consolidated Statements of Operations. We amortized $1.8 million and $1.8 million of deferred contract acquisition costs for the three months ended September 30, 2026 and 2025 and $5.6 million and $4.9 million of deferred contract acquisition costs for the nine months ended September 30, 2026 and 2025.
Allowance for Expected Credit Losses on Accounts Receivable
Accounts receivable primarily represents the net cash due from credit card and other payment processors and from merchants and performance marketing networks for commissions earned on consumer purchases. The carrying amount of receivables is reduced by an allowance for expected credit losses that reflects management's best estimate of amounts that will not be collected. We establish an allowance for expected credit losses on accounts receivable based on identifying the following customer risk characteristics: size, type of customer and payment terms offered in the normal course of business. Receivables with similar risk characteristics are grouped into pools. For each pool, we consider the historical credit loss experience, current economic conditions, bankruptcy filings, published or estimated credit default rates, age of the receivable and any recoveries in assessing the lifetime expected credit losses.
23
GROUPON, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
The following table summarizes the activity in the allowance for expected credit losses on accounts receivable for the nine months ended September 30, 2026 (in thousands):
| Allowance for Expected Credit Losses | |||||
| Balance as of December 31, 2025 | $ | ||||
| Change in provision | ( | ||||
| Write-offs | ( | ||||
| Foreign currency translation | ( | ||||
| Balance as of September 30, 2026 | $ | ||||
Variable Consideration for Unredeemed Vouchers
NOTE 10. RESTRUCTURING AND RELATED CHARGES (CREDITS)
In May 2026, the Board approved the 2026 Restructuring Plan relating to the Company's previously announced strategy to rebuild the Company as an AI-native company and better deliver on our mission, serving both customers and merchants. These restructuring actions include an overall reduction of up to 400 positions globally, including employees and contractors, with a majority of these reductions having occurred by the end of the third quarter of 2026. In certain jurisdictions, workforce reductions remain subject to mandatory consultation processes, extending completion of those actions beyond the end of the third quarter of 2026. Costs incurred related to the 2026 Restructuring Plan are classified as Restructuring and related charges (credits) in the Condensed Consolidated Statements of Operations.
The Company estimates it will incur total pre-tax charges of $7.0 to $10.0 million in connection with its restructuring actions. Substantially all of the remaining pre-tax charges are expected to be paid in cash and relate to employee severance compensation and benefits, with an immaterial amount of charges related to other exit costs.
24
GROUPON, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
The following tables summarize costs incurred by segment related to the 2026 Restructuring Plan for the three and nine months ended September 30, 2026 (in thousands):
| Three Months Ended September 30, 2026 | ||||||||||||||||||||
Employee Severance and Benefit Costs (1) | Legal and Advisory Costs | Total Restructuring Charges | ||||||||||||||||||
| North America | ||||||||||||||||||||
| International | ||||||||||||||||||||
| Consolidated | $ | $ | $ | |||||||||||||||||
| Nine Months Ended September 30, 2026 | ||||||||||||||||||||
Employee Severance and Benefit Costs (1) | Legal and Advisory Costs | Total Restructuring Charges | ||||||||||||||||||
| North America | ||||||||||||||||||||
| International | ||||||||||||||||||||
| Consolidated | $ | $ | $ | |||||||||||||||||
The following table summarizes restructuring liability activity for the period (in thousands):
| Employee Severance and Benefit Costs | Legal and Advisory Costs | Total | |||||||||||||||
| Balance as of December 31, 2025 | $ | ||||||||||||||||
| Charges payable in cash | |||||||||||||||||
| Cash payments | ( | ( | ( | ||||||||||||||
| Foreign currency translation | ( | ( | |||||||||||||||
| Balance as of September 30, 2026 | $ | $ | $ | ||||||||||||||
During the three and nine months ended September 30, 2025, we recorded an immaterial amount of Restructuring and related charges (credits) under the 2022 and 2020 Restructuring Plans in the Condensed Consolidated Statements of Operations.
NOTE 11. INCOME TAXES
Our income tax provision for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items.
Provision (benefit) for income taxes and Income (loss) from continuing operations before provision (benefit) for income taxes for the three and nine months ended September 30, 2026 and 2025 were as follows (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
Provision (benefit) for income taxes (1) | $ | $ | $ | $ | |||||||||||||||||||
| Income (loss) from continuing operations before provision (benefit) for income taxes | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||
(1)The three and nine months ended September 30, 2025 include $25.3
Our U.S. Federal income tax rate is 21%. The primary factors impacting the effective tax rate for the three and nine months ended September 30, 2026 and 2025 were pretax losses incurred in jurisdictions that have valuation allowances against their net deferred tax assets. The effective tax rate for the nine months ended September 30, 2026 was further impacted by benefits due to return-to-provision adjustments and tax refunds received, partially offset by additional tax expense resulting from the signing of an advance pricing agreement with international tax authorities during the quarter ended March 31, 2026 and an increase in the Company's liability related to unremitted foreign earnings. For the three and nine months ended September 30, 2025, the effective tax rate was further impacted by U.S. pre-tax losses due to a loss on extinguishment of debt and the foreign income tax expense recognized for the Italy 2012 and Italy 2017 Assessments, partially offset by a benefit resulting from the enactment of the OBBB Act, primarily due to the elimination of the requirement to capitalize and amortize U.S.-based R&D expenditures. For the three and nine months ended September 30, 2026 and 2025, we continue to maintain a full valuation allowance against all U.S. federal and state deferred tax assets.
Given the Company’s recent history of U.S. taxable earnings, we believe that there is a reasonable possibility that within the next twelve months sufficient positive evidence may become available to allow the Company to reach a conclusion that a significant portion of the U.S. federal and state valuation allowance recorded will no longer be needed. The reversal would result in an income tax benefit for the quarterly and annual fiscal period in which the Company releases the valuation allowance. However, the exact timing and amount of the valuation allowance release, if at all, are subject to significant judgment and are dependent on the level of profitability and likelihood of future utilization of attributes that we are able to actually achieve.
We expect that our consolidated effective tax rate in future periods may continue to differ significantly from the U.S. federal income tax rate as a result of our tax obligations in jurisdictions with profits and valuation allowances in jurisdictions with losses.
In general, it is our practice and intention to reinvest the earnings of our non-U.S. subsidiaries in those operations or remit such earnings in a tax-efficient manner. Additionally, an actual repatriation from our non-U.S. subsidiaries could be subject to foreign and U.S. state income taxes. Aside from limited exceptions for which the related deferred tax liabilities are recognized as of September 30, 2026 and December 31, 2025, we do not intend to distribute earnings of foreign subsidiaries for which we have an excess of the financial reporting basis over the tax basis of our investments and therefore have not recorded any deferred taxes related to such amounts. The actual tax cost resulting from a distribution would depend on income tax laws and circumstances at the time of distribution. Determination of the amount of unrecognized deferred tax liability related to the excess of the financial reporting basis over the tax basis of our foreign subsidiaries is not practical due to the complexities associated with the calculation.
We are currently under audit by several jurisdictions, including the U.S. It is likely that the examination phase of some of those audits will conclude in the next 12 months. There are many factors, including factors outside of our control, which influence the progress and completion of those audits.
NOTE 12. FAIR VALUE MEASUREMENTS
Fair value is defined under GAAP as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or a liability.
In determining fair value, we use valuation approaches within the fair value measurement framework. We have fair value option investments and available-for-sale securities that we measure using the income approach. We have classified these investments as Level 3 due to the lack of observable market data over fair value inputs such as cash flow projections and discount rates.
There was no material activity in the fair value of recurring Level 3 fair value measurements for the three and nine months ended September 30, 2026 and 2025.
25
GROUPON, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
Certain assets and liabilities are measured at fair value on a nonrecurring basis, including assets that are written down to fair value as a result of an impairment or modified due to an observable price change in an orderly transaction.
We did not record any significant nonrecurring fair value remeasurements for the three and nine months ended September 30, 2026 and 2025.
Estimated Fair Value of Financial Assets and Liabilities Not Measured at Fair Value
Our financial instruments not carried at fair value consist primarily of accounts receivable, restricted cash, accounts payable, accrued merchant and supplier payables, and accrued expenses. The carrying values of those assets and liabilities approximate their respective fair values as of September 30, 2026 and December 31, 2025 due to their short-term nature.
Our Notes are presented at their respective carrying values in our Condensed Consolidated Balance Sheets, as we have not elected the fair value option under ASC Subtopic 825-10 for any of our convertible notes. See Note 6, Financing Arrangements, for additional information.
NOTE 13. INCOME (LOSS) PER SHARE
Basic net income (loss) per share is computed using the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per share is computed using the weighted-average number of common shares and the effect of potentially dilutive securities outstanding during the period. Potentially dilutive securities include stock options, RSUs, PSUs, ESPP shares, Major Rocket incentive shares, and convertible senior notes. If dilutive, those potentially dilutive securities are reflected in diluted net income (loss) per share using the treasury stock method, except for the convertible senior notes, which are subject to the if-converted method.
26
GROUPON, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
The following table sets forth the computation of basic and diluted net income (loss) per share of Common Stock for the three and nine months ended September 30, 2026 and 2025 (in thousands, except share amounts and per share amounts):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Basic and diluted net income (loss) per share: | |||||||||||||||||||||||
| Numerator | |||||||||||||||||||||||
| Income (loss) - continuing operations | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Less: Net income (loss) attributable to noncontrolling interests | |||||||||||||||||||||||
| Net income (loss) attributable to common stockholders - continuing operations | ( | ( | ( | ( | |||||||||||||||||||
| Net income (loss) attributable to common stockholders - discontinued operations | ( | ( | |||||||||||||||||||||
| Basic and Diluted net income (loss) attributable to common stockholders | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Denominator | |||||||||||||||||||||||
Shares used in computation of basic net income (loss) per share | |||||||||||||||||||||||
Weighted-average effect of diluted securities: | |||||||||||||||||||||||
Stock options | |||||||||||||||||||||||
RSUs | |||||||||||||||||||||||
PSUs | |||||||||||||||||||||||
ESPP Shares | |||||||||||||||||||||||
Convertible senior notes due 2026 | |||||||||||||||||||||||
Convertible senior notes due 2027 | |||||||||||||||||||||||
Shares used in computation of diluted net income (loss) per share | |||||||||||||||||||||||
| Basic net income (loss) per share: | |||||||||||||||||||||||
| Continuing operations | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Discontinued operations | ( | ||||||||||||||||||||||
| Basic net income (loss) per share | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Diluted net income (loss) per share: | |||||||||||||||||||||||
| Continuing operations | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Discontinued operations | ( | ||||||||||||||||||||||
| Diluted net income (loss) per share | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
27
GROUPON, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
The following weighted-average potentially dilutive instruments are not included in the diluted net income (loss) per share calculations above because they would have had an antidilutive effect on the net income (loss) per share from continuing operations:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
Capped call transactions (1) | |||||||||||||||||||||||
Convertible senior notes due 2026 (2) | |||||||||||||||||||||||
Convertible senior notes due 2027 (2) | |||||||||||||||||||||||
Convertible senior notes due 2030 (2) | |||||||||||||||||||||||
| Stock options | |||||||||||||||||||||||
| RSUs | |||||||||||||||||||||||
| PSUs | |||||||||||||||||||||||
| ESPP | |||||||||||||||||||||||
| Total | |||||||||||||||||||||||
(1)The capped call transactions were intended to reduce potential dilution to our Common Stock in the event the 2026 Notes were converted into shares. If the 2026 Notes had converted on or prior to maturity on March 15, 2026, the exercise of the capped call transactions would have substantially offset the economic dilution that would have otherwise resulted from the issuance of shares upon conversion. The capped call transactions expired in connection with the maturity of the 2026 Notes.
(2)We apply the if-converted method in computing the effect of our convertible senior notes on diluted net income (loss) per share, whereby the numerator of our diluted net income (loss) per share computations is adjusted for interest expense, net of tax, and the denominator is adjusted for the number of shares into which the convertible senior notes could be converted. The effect is only included in the calculation of income (loss) per share for those instruments for which it would reduce income (loss) per share. See Note 6, Financing Arrangements, for additional information.
28
GROUPON, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
NOTE 14. SEGMENT INFORMATION
In accordance with ASC Topic 280, Segment Reporting, we disaggregate our operations into two
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| North America | |||||||||||||||||||||||
| Local | $ | $ | $ | $ | |||||||||||||||||||
| Goods | |||||||||||||||||||||||
| Travel | |||||||||||||||||||||||
| Total North America revenue | $ | $ | $ | $ | |||||||||||||||||||
| International | |||||||||||||||||||||||
| Local | $ | $ | $ | $ | |||||||||||||||||||
| Goods | |||||||||||||||||||||||
| Travel | |||||||||||||||||||||||
| Total International revenue | $ | $ | $ | $ | |||||||||||||||||||
| Total revenue | $ | $ | $ | $ | |||||||||||||||||||
29
GROUPON, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
The following table summarizes contribution profit by reportable segment and reconciles total contribution profit for the reportable segments to consolidated income (loss) from continuing operations before provision (benefit) for income taxes for the three and nine months ended September 30, 2026 and 2025 (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| North America | |||||||||||||||||||||||
| Revenue | $ | $ | $ | $ | |||||||||||||||||||
| Cost of revenue | |||||||||||||||||||||||
| Payment processor fees | |||||||||||||||||||||||
Other segment items (cost of revenue) (1) | |||||||||||||||||||||||
| Total cost of revenue | |||||||||||||||||||||||
| Marketing | |||||||||||||||||||||||
| Online marketing | |||||||||||||||||||||||
Other segment items (marketing) (2) | |||||||||||||||||||||||
| Total marketing | |||||||||||||||||||||||
| Segment contribution profit | $ | $ | $ | $ | |||||||||||||||||||
| International | |||||||||||||||||||||||
| Revenue | $ | $ | $ | $ | |||||||||||||||||||
| Cost of revenue | |||||||||||||||||||||||
| Payment processor fees | |||||||||||||||||||||||
Other segment items (cost of revenue) (1) | |||||||||||||||||||||||
| Total cost of revenue | |||||||||||||||||||||||
| Marketing | |||||||||||||||||||||||
| Online marketing | |||||||||||||||||||||||
Other segment items (marketing) (2) | |||||||||||||||||||||||
| Total marketing | |||||||||||||||||||||||
| Segment contribution profit | $ | $ | $ | $ | |||||||||||||||||||
| Total | |||||||||||||||||||||||
| Total contribution profit for the reportable segments | $ | $ | $ | $ | |||||||||||||||||||
| Selling, general and administrative | |||||||||||||||||||||||
| Restructuring and related charges (credits) | ( | ||||||||||||||||||||||
| (Gain) on sale of business | ( | ||||||||||||||||||||||
| Income (loss) from operations | |||||||||||||||||||||||
| Loss on extinguishment of debt | ( | ( | |||||||||||||||||||||
| Other income (expense), net | ( | ( | |||||||||||||||||||||
| Income (loss) from continuing operations before provision (benefit) for income taxes | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||
(1) Includes editorial costs, compensation expense for technology support personnel who are responsible for maintaining the infrastructure of our websites, amortization of internally-developed software relating to customer-facing applications, and web hosting.
(2) Includes offline marketing costs, such as television, compensation expense for marketing employees, and customer acquisition and activation expense.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read together with our Condensed Consolidated Financial Statements and related notes included under Part I, Item 1 of this Quarterly Report on Form 10-Q. This discussion contains forward-looking statements about our business and operations. Our actual results may differ materially from those we currently anticipate as a result of many factors, including those we describe under Part II, Item 1A, Risk Factors, and elsewhere in this Quarterly Report. See Part I, Forward-Looking Statements, for additional information.
Overview
Groupon is a global scaled two-sided marketplace that connects consumers to merchants. Consumers access our marketplace through our mobile applications and our websites. We operate in two segments, North America and International, and operate in three categories, Local, Goods and Travel. See Item 1, Note 14, Segment Information, for additional information.
Our mission is to get people offline through quality local experiences at great value. We believe the best things in life happen offline, and as the world becomes increasingly digitized, we expect demand to grow for in-person experiences and for the digital pathways consumers use to discover and book them. Groupon sits at the intersection of consumer intent and local supply, which we believe positions us to serve as a bridge between the emerging AI economy and millions of local merchants. Our strategy is to be the trusted local experience marketplace where customers go to buy quality local services and experiences at unbeatable value. We plan to grow our revenue by building long-term relationships with local merchants to strengthen our online selection and by enhancing the customer reach through experience curation and improved convenience in order to drive customer demand and purchase frequency.
We generate service revenue from Local, Goods and Travel categories. Revenue primarily represents the net commissions earned from selling goods or services on behalf of third-party merchants. Revenue is reported on a net basis as the purchase price collected from the customer less the portion of the purchase price that is payable to the third-party merchant. We also earn commissions when customers make purchases with retailers using digital coupons accessed through our websites and mobile applications.
We continue to invest in making our platform more efficient, stable and agile. By improving our technology, our customer base can enjoy a modernized experience along with seamless execution of new product innovation, improved customer experience and customer satisfaction. Central to this is our continued investment in our product and engineering organization, building the development velocity, platform depth, and technical capabilities required to deliver faster innovation and more personalized experiences for both customers and merchants. Our product agenda is focused on driving growth through smarter discovery, deeper personalization, and an increasingly seamless experience across every surface we serve.
We believe the next generation of local commerce will be driven by AI-native experiences, for which AI agents will become an important discovery and transaction channel. We are investing in AI-native capabilities on both sides of our marketplace, including personalization, AI ready search and relevance, AI ready checkout for consumers, and AI driven tools intended to improve deal creation, content quality, and merchant productivity. We are making these investments now with the goal of Groupon being well positioned for local experiences demand as this channel scales.
Project Foundry
In the first quarter of 2026, we launched Project Foundry, a company-wide initiative to transform our operating model by embedding AI agents into the core of every function. The goal of Foundry is not the launch of a single feature or capability, but to re-architect how work is performed internally so the Company operates with the speed required to succeed in an AI-native world. The impact of this initiative on our key operating and financial metrics is not yet determinable, and we expect Foundry to influence how we operate over the remainder of 2026 and in future periods. In the third quarter of 2026, we launched FoundryAI, an internal platform that gives our teams access to company data and a shared catalog of AI tools, and moved the majority of our employees onto it.
We expect our organization to be AI-native by default by the end of 2026, meaning that AI is the default way our teams get work done, and our focus is now shifting to deploying AI agents that work alongside our teams.
As part of Project Foundry and the Company’s strategy to become an AI-native company, management is evaluating a range of operational initiatives to better align the Company’s cost structure with this AI-native operating model, improve its operational efficiency and become more nimble, and position the Company for growth. These initiatives, including restructuring actions, were approved by the Board in the second quarter of 2026. As the Company implements Project Foundry, management expects to continue to evaluate additional material cost-reduction and automation actions, including headcount reductions through natural attrition, elective decisions to eliminate vacant positions rather than rehire and other actions. The Company expects any such actions to be completed by the end of 2027.
In May 2026, the Board approved the 2026 Restructuring Plan relating to the Company's previously announced strategy to rebuild the Company as an AI-native company and better deliver on our mission, serving both customers and merchants. These restructuring actions include an overall reduction of up to 400 positions globally, including employees and contractors, with a majority of these reductions having occurred by the end of the third quarter of 2026. In connection with these actions, we expect to record total pre-tax charges of $7.0 million to $10.0 million. Substantially all of the remaining pre-tax charges are expected to be paid in cash and relate to employee severance compensation and benefits, with an immaterial amount of charges related to other exit costs.
The payroll actions under the 2026 Restructuring Plan are estimated to result in $20.0 million to $25.0 million in annualized cost savings. The Company expects to realize up to $10.0 million of gross savings in 2026 with all of these savings reinvested into marketing, AI infrastructure, and talent density. See Item 1, Note 10, Restructuring and Related Charges (Credits), for more information regarding the 2026 Restructuring Plan.
31
How We Measure Our Business
We use several operating and financial metrics to assess the progress of our business and make strategic decisions. Certain of the financial metrics are reported in accordance with GAAP and certain of those metrics are considered non-GAAP financial measures. As our business evolves, we may make changes to the key financial and operating metrics that we use to measure our business. For further information and reconciliations to the most applicable financial measures under GAAP, refer to our discussion under the Non-GAAP Financial Measures section.
Operating Metrics
•Gross billings is the total dollar value of customer purchases of goods and services. Gross billings is presented net of customer refunds, order discounts and sales and related taxes. The substantial majority of our revenue transactions are comprised of sales of vouchers and similar transactions in which we collect the transaction price from the customer and remit a portion of the transaction price to the third-party merchant who will provide the related goods or services. For these transactions, gross billings differs from Revenue reported in our Condensed Consolidated Statements of Operations, which is presented net of the merchant's share of the transaction price. Gross billings is an indicator of our growth and business performance as it measures the dollar volume of transactions generated through our marketplaces. Tracking gross billings also allows us to monitor the percentage of gross billings that we are able to retain after payments to merchants.
•Units are the number of purchases during the reporting period, before refunds and cancellations, made either through one of our online marketplaces, a third-party marketplace, or directly with a merchant for which we earn a commission. We do not include purchases with retailers using digital coupons accessed through our websites or mobile applications in our units metric. We consider units to be an important indicator of the total volume of business conducted through our marketplaces.
•Active customers are unique user accounts, identified by a distinct email address, that have made a purchase during the TTM either through one of our online marketplaces or directly with a merchant for which we earned a commission. We consider this metric to be an important indicator of our business performance as it helps us to understand how the number of customers actively purchasing our offerings is trending. Some customers could establish and make purchases from more than one account, so it is possible that our active customer metric may count certain customers more than once in a given period. We do not include consumers who solely make purchases with retailers using digital coupons accessed through our websites or mobile applications in our active customer metric, nor do we include consumers who solely make purchases of our inventory through third-party marketplaces with which we partner.
Our gross billings and units for the three and nine months ended September 30, 2026 and 2025 were as follows (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Gross billings | $ | 439,104 | $ | 416,112 | $ | 1,235,399 | $ | 1,219,285 | |||||||||||||||
| Units | 8,963 | 9,136 | 25,619 | 26,791 | |||||||||||||||||||
Our active customers for the trailing twelve months ended September 30, 2026 and 2025 were as follows (in thousands):
| Trailing Twelve Months Ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
TTM active customers | 16,200 | 16,126 | |||||||||
32
Financial Metrics
•Revenue is earned through transactions for which we generate commissions by selling goods or services on behalf of third-party merchants. Revenue from those transactions is reported on a net basis as the purchase price collected from the customer for the offering less an agreed upon portion of the purchase price paid to the third-party merchant. Revenue also includes commissions we earn when customers make purchases with retailers using digital coupons accessed through our digital properties.
•Cost of revenue consists of direct and certain indirect costs incurred to generate revenue. Costs incurred to generate revenue include credit card processing fees, editorial costs, compensation expense for technology support personnel who are responsible for maintaining the infrastructure of our websites, amortization of internal-use software relating to customer-facing applications, web hosting and other processing fees attributed to the cost of service.
•Gross profit reflects the net margin we earn after deducting our Cost of revenue from our Revenue.
•Contribution profit measures the amount of marketing investment needed to generate revenue and is defined as net revenue less cost of revenue and marketing expense.
•Adjusted EBITDA is a non-GAAP financial measure that we define as Income (loss) from continuing operations excluding income taxes, interest and other non-operating items, depreciation and amortization, stock-based compensation, and other special charges and credits, including items that are unusual in nature or infrequently occurring. For further information and a reconciliation to Income (loss) from continuing operations, refer to our discussion under the Non-GAAP Financial Measures section.
•Free cash flow is a non-GAAP liquidity measure that comprises net cash provided by (used in) operating activities from continuing operations less purchases of property and equipment and capitalized software. For further information and a reconciliation to Net cash provided by (used in) operating activities from continuing operations, refer to our discussion in the Liquidity and Capital Resources section.
The following table presents the above financial metrics for the three and nine months ended September 30, 2026 and 2025 (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Revenue | $ | 125,450 | $ | 122,825 | $ | 367,325 | $ | 365,714 | |||||||||||||||
| Gross profit | 113,392 | 111,836 | 332,833 | 332,560 | |||||||||||||||||||
| Contribution profit | 61,657 | 70,394 | 201,500 | 215,282 | |||||||||||||||||||
| Adjusted EBITDA | 14,734 | 17,540 | 42,358 | 48,429 | |||||||||||||||||||
| Free cash flow | (45,783) | (24,588) | (44,278) | (3,158) | |||||||||||||||||||
Operating Expenses
•Marketing expense consists primarily of online marketing costs, such as search engine marketing, advertising on social networking sites and affiliate programs, and offline marketing costs, such as television. Additionally, compensation expense for marketing employees is classified within Marketing expense. We record these costs within Marketing in the Condensed Consolidated Statements of Operations when incurred. From time to time, we have offerings from well-known national merchants for customer acquisition and activation purposes, for which the amount we owe the merchant for each voucher sold exceeds the transaction price paid by the customer. Our gross billings from those transactions generate no revenue and our net cost (i.e., the excess of the amount owed to the merchant over the amount paid by the customer) is classified as marketing expense. We evaluate marketing expense as a percentage of revenue because it gives us an indication of how well our marketing spend is driving revenue performance.
•SG&A expenses include selling expenses such as sales commissions and other compensation expenses for sales representatives, as well as costs associated with supporting the sales function such as technology, telecommunications and travel. General and administrative expenses include compensation expense for employees involved in customer service, operations, technology and product development, as well as general corporate functions, such as finance, legal and human resources. Additional costs in
33
general and administrative include depreciation and amortization, rent, professional fees, litigation costs, travel and entertainment, recruiting, maintenance, certain technology costs and other general corporate costs. We evaluate SG&A expense as a percentage of revenue because it gives us an indication of our operating efficiency.
•Restructuring and related charges represent severance and benefit costs for workforce reductions, facilities-related costs and professional advisory fees. See Item 1, Note 10, Restructuring and Related Charges (Credits), for additional information about our restructuring plans.
34
Factors Affecting Our Performance
Attracting and retaining local merchants and suppliers. As we focus on our local experiences marketplace, we depend on our ability to attract and retain merchants who are willing to offer their experiences on our platform. Merchants can withdraw their offerings from our marketplace at any time, and their willingness to continue offering services through our marketplace depends on the effectiveness of our marketplace offering. We are focused on improving our marketplace offering and merchant value proposition by exploring opportunities to better balance the needs of merchant partners, customers and Groupon, including expanding our Things to Do offerings and rebuilding our North America Local supply.
Acquiring and retaining customers. To acquire and retain customers to drive higher volumes on our platform from new and existing customers, we are focused on strengthening our product offerings, improving the quality of the experiences on our marketplace, encouraging repeat purchases through our app, managed channels and personalization, and enhancing the performance of our marketing campaigns.
Impact of macroeconomic conditions. We have been, and may continue to be, impacted by adverse consequences of the macroeconomic environment, including but not limited to, inflationary pressures, higher labor costs, tariff and other trade policies, labor shortages, supply chain challenges and changes in consumer and merchant behavior. Judicial and executive developments relating to U.S. tariff and trade policies may further increase uncertainty regarding the scope, implementation and potential future direction of such measures, and further changes could occur. In addition, recent and potential future changes to trade and tariff policies may introduce increased pricing volatility and overall uncertainty into our operations. To minimize the impact of macroeconomic conditions on our business, and to create value for our merchants and customers, we are focusing on building long-term relationships with local merchants to enhance our inventory selection, improving the customer experience through inventory curation and expanding convenience in order to drive customer demand and purchase frequency.
35
Results of Operations
North America
Operating Metrics
North America segment gross billings and units for the three and nine months ended September 30, 2026 and 2025 were as follows (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
| 2026 | 2025 | % Change | 2026 | 2025 | % Change | ||||||||||||||||||||||||||||||
| Gross billings | |||||||||||||||||||||||||||||||||||
| Local | $ | 306,245 | $ | 293,761 | 4.2 | % | $ | 857,537 | $ | 841,798 | 1.9 | % | |||||||||||||||||||||||
| Goods | 4,124 | 7,645 | (46.1) | 14,262 | 24,646 | (42.1) | |||||||||||||||||||||||||||||
| Travel | 28,365 | 17,701 | 60.2 | 76,497 | 63,940 | 19.6 | |||||||||||||||||||||||||||||
| Total gross billings | $ | 338,734 | $ | 319,107 | 6.2 | $ | 948,296 | $ | 930,384 | 1.9 | |||||||||||||||||||||||||
| Units | |||||||||||||||||||||||||||||||||||
| Local | 5,754 | 5,942 | (3.2) | % | 16,542 | 17,327 | (4.5) | % | |||||||||||||||||||||||||||
| Goods | 106 | 199 | (46.6) | 371 | 696 | (46.7) | |||||||||||||||||||||||||||||
| Travel | 106 | 69 | 53.5 | 287 | 247 | 16.2 | |||||||||||||||||||||||||||||
| Total units | 5,966 | 6,210 | (3.9) | 17,200 | 18,270 | (5.9) | |||||||||||||||||||||||||||||
North America TTM active customers for the trailing twelve months ended September 30, 2026 and 2025 were as follows (in thousands):
| Trailing Twelve Months Ended September 30, | |||||||||||||||||
| 2026 | 2025 | % Change | |||||||||||||||
| TTM active customers | 10,870 | 10,999 | (1.2) | % | |||||||||||||
Comparison of the Three Months Ended September 30, 2026 and 2025:
North America gross billings increased by $19.6 million, while units and TTM active customers decreased by 0.2 million and 0.1 million respectively for the three months ended September 30, 2026 compared with the prior year period. Within our Local category, gross billings increased 4.2% year-over-year as higher transaction value more than offset a decline in unit volume. Transaction value increased as customers purchased higher-value offerings, driven by our Things to Do offerings, including growth in our Enterprise channel, while unit volume declined as customers purchased less frequently. Local gross billings growth was partially offset by higher refunds. From a supply perspective, growth was led by continued strength in our Things to Do offerings and our Enterprise channel, which accelerated to double digits year-over-year, while growth was limited by Health, Beauty & Wellness and our Small Business merchant base, which were relatively flat. From a demand perspective, growth was led by our paid and organic channels, and managed channels turned positive year-over-year, partially offset by a decline in our other non-paid channels. Growth in our Travel category reflects improvements to our hotel and resort offerings. In addition, gross billings in our Goods category decreased, reflecting our continued de-emphasis of the category, which resulted in fewer unit sales year-over-year.
Comparison of the Nine Months Ended September 30, 2026 and 2025:
North America gross billings increased by $17.9 million and units decreased by 1.1 million for the nine months ended September 30, 2026 compared with the prior year period. Within our Local category, gross billings increased 1.9% year-over-year, as higher transaction value more than offset a decline in unit volume. Transaction value increased as customers purchased higher-value offerings, driven by our Things to Do offerings, including growth in our Enterprise channel in the third quarter, while unit volume declined as customers purchased less frequently. From a supply perspective, continued strength in our Things to Do offerings and growth in our Enterprise channel, driven by an acceleration in the third quarter, were limited by softness in Health, Beauty & Wellness. From a demand perspective, growth in our paid, direct, and organic channels was partially offset by a
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decline in our managed channels and other non-paid channels, although managed channels turned positive in the third quarter. Growth in our Travel category reflects improvements to our hotel and resort offerings and growth in our Tours offerings. In addition, gross billings in our Goods category decreased, reflecting our continued de-emphasis of the category, which resulted in fewer unit sales year-over-year.
Financial Metrics
North America segment revenue, cost of revenue and gross profit for the three and nine months ended September 30, 2026 and 2025 were as follows (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
| 2026 | 2025 | % Change | 2026 | 2025 | % Change | ||||||||||||||||||||||||||||||
| Revenue | |||||||||||||||||||||||||||||||||||
| Local | $ | 91,959 | $ | 91,562 | 0.4 | % | $ | 270,384 | $ | 271,990 | (0.6) | % | |||||||||||||||||||||||
| Goods | 682 | 1,224 | (44.3) | 2,439 | 3,904 | (37.5) | |||||||||||||||||||||||||||||
| Travel | 4,443 | 3,221 | 37.9 | 12,388 | 11,222 | 10.4 | |||||||||||||||||||||||||||||
| Total revenue | $ | 97,084 | $ | 96,007 | 1.1 | $ | 285,211 | $ | 287,116 | (0.7) | |||||||||||||||||||||||||
| Cost of revenue | |||||||||||||||||||||||||||||||||||
| Local | $ | 9,690 | $ | 7,796 | 24.3 | % | $ | 25,854 | $ | 23,193 | 11.5 | % | |||||||||||||||||||||||
| Goods | 79 | 150 | (47.3) | 284 | 507 | (44.0) | |||||||||||||||||||||||||||||
| Travel | 598 | 353 | 69.4 | 1,666 | 1,404 | 18.7 | |||||||||||||||||||||||||||||
| Total cost of revenue | $ | 10,367 | $ | 8,299 | 24.9 | $ | 27,804 | $ | 25,104 | 10.8 | |||||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||||||||||||||
| Local | $ | 82,269 | $ | 83,766 | (1.8) | % | $ | 244,530 | $ | 248,797 | (1.7) | % | |||||||||||||||||||||||
| Goods | 603 | 1,074 | (43.9) | 2,155 | 3,397 | (36.6) | |||||||||||||||||||||||||||||
| Travel | 3,845 | 2,868 | 34.1 | 10,722 | 9,818 | 9.2 | |||||||||||||||||||||||||||||
| Total gross profit | $ | 86,717 | $ | 87,708 | (1.1) | $ | 257,407 | $ | 262,012 | (1.8) | |||||||||||||||||||||||||
| % of Consolidated revenue | 77.4 | % | 78.2 | % | 77.6 | % | 78.5 | % | |||||||||||||||||||||||||||
| % of Consolidated cost of revenue | 86.0 | 75.5 | 80.6 | 75.7 | |||||||||||||||||||||||||||||||
| % of Consolidated gross profit | 76.5 | 78.4 | 77.3 | 78.8 | |||||||||||||||||||||||||||||||
Comparison of the Three Months Ended September 30, 2026 and 2025:
North America revenue and cost of revenue increased by $1.1 million and $2.1 million, while gross profit decreased by $1.0 million for the three months ended September 30, 2026 compared with the prior year period. Our Local revenue increased 0.4%, lagging the rate of growth in gross billings, as a result of lower deal margins, due in part to growth in our Things to Do offerings, which have lower deal margins, and other factors. Cost of revenue increased primarily due to an increase in amortization of internally-developed software relating to customer-facing applications that resulted from a transfer of assets between our reportable segments and higher credit card processing fees. The transfer did not have an impact on our consolidated results of operations, other than an immaterial effect on our income tax provision. Gross profit decreased as the increase in cost of revenue outweighed the increase in revenue.
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Comparison of the Nine Months Ended September 30, 2026 and 2025:
North America revenue and gross profit decreased by $1.9 million and $4.6 million, while cost of revenue increased by $2.7 million for the nine months ended September 30, 2026 compared with the prior year period. Our Local revenue decreased 0.6%, lagging the rate of growth in gross billings, as a result of lower deal margins, due in part to growth in our Things to Do offerings, which have lower deal margins. The increased cost of revenue is primarily due to higher credit card processing fees, an increase in amortization of internally-developed software relating to customer-facing applications that resulted from a transfer of assets between our reportable segments, as well as increased connectivity partner fees. The transfer did not have an impact on our consolidated results of operations, other than an immaterial effect on our income tax provision. Gross profit decreased due to increased cost of revenue and decreased revenue.
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Marketing and Contribution Profit
North America marketing and contribution profit for the three and nine months ended September 30, 2026 and 2025 were as follows (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
| 2026 | 2025 | % Change | 2026 | 2025 | % Change | ||||||||||||||||||||||||||||||
| Marketing | $ | 40,545 | $ | 31,746 | 27.7 | % | $ | 101,294 | $ | 91,380 | 10.8 | % | |||||||||||||||||||||||
| % of Revenue | 41.8 | % | 33.1 | % | 35.5 | % | 31.8 | % | |||||||||||||||||||||||||||
| Contribution profit | $ | 46,172 | $ | 55,962 | (17.5) | % | $ | 156,113 | $ | 170,632 | (8.5) | % | |||||||||||||||||||||||
Comparison of the Three Months Ended September 30, 2026 and 2025:
North America marketing expense and marketing expense as a percentage of revenue increased for the three months ended September 30, 2026 compared with the prior year period, primarily driven by higher investment in paid channels to acquire new customers, higher marketing technology costs and higher brand marketing spend. Marketing expense as a percentage of revenue increased as revenue growth did not keep pace with our marketing investment, and the additional spend did not deliver the returns we expected.
North America contribution profit decreased for the three months ended September 30, 2026 compared with the prior year period, primarily due to an increase in marketing expense.
Comparison of the Nine Months Ended September 30, 2026 and 2025:
North America marketing expense and marketing expense as a percentage of revenue increased for the nine months ended September 30, 2026 compared with the prior year period, primarily driven by higher investment in paid channels to acquire new customers, higher marketing technology costs and higher brand marketing spend. Marketing expense as a percentage of revenue increased as marketing investment increased while revenue decreased, and the additional spend did not deliver the returns we expected.
North America contribution profit decreased for the nine months ended September 30, 2026 compared with the prior year period, primarily due to higher marketing investment and lower gross profit.
International
Operating Metrics
International segment gross billings and units for the three and nine months ended September 30, 2026 and 2025 were as follows (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
| 2026 | 2025 | % Change | 2026 | 2025 | % Change | ||||||||||||||||||||||||||||||
| Gross billings | |||||||||||||||||||||||||||||||||||
| Local | $ | 85,573 | $ | 77,270 | 10.7 | % | $ | 238,099 | $ | 230,745 | 3.2 | % | |||||||||||||||||||||||
| Goods | 8,512 | 11,879 | (28.3) | 29,970 | 36,995 | (19.0) | |||||||||||||||||||||||||||||
| Travel | 6,285 | 7,856 | (20.0) | 19,034 | 21,161 | (10.1) | |||||||||||||||||||||||||||||
| Total gross billings | $ | 100,370 | $ | 97,005 | 3.5 | $ | 287,103 | $ | 288,901 | (0.6) | |||||||||||||||||||||||||
| Units | |||||||||||||||||||||||||||||||||||
| Local | 2,794 | 2,605 | 7.2 | % | 7,713 | 7,501 | 2.8 | % | |||||||||||||||||||||||||||
| Goods | 170 | 272 | (37.3) | 607 | 895 | (32.2) | |||||||||||||||||||||||||||||
| Travel | 33 | 49 | (32.8) | 99 | 125 | (20.8) | |||||||||||||||||||||||||||||
| Total units | 2,997 | 2,926 | 2.4 | 8,419 | 8,521 | (1.2) | |||||||||||||||||||||||||||||
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International TTM active customers for the trailing twelve months ended September 30, 2026 and 2025 were as follows (in thousands):
| Trailing Twelve Months Ended September 30, | |||||||||||||||||
| 2026 | 2025 | % Change | |||||||||||||||
| TTM active customers | 5,330 | 5,127 | 4.0 | % | |||||||||||||
Comparison of the Three Months Ended September 30, 2026 and 2025:
International gross billings increased by $3.4 million, while units and TTM active customers increased by 0.1 million and 0.2 million respectively for the three months ended September 30, 2026 compared with the prior year period. International Local gross billings grew 10.7% year-over-year, reflecting growth in both transaction volume and transaction value. International Local gross billings growth was partially offset by higher refunds. From a supply perspective, growth within International Local was driven by an expansion of seasonally relevant supply concentrated in major international cities, led by our Health, Beauty & Wellness and Things to Do offerings. From a demand perspective, growth was led by our paid channels, while our new consumer platform, now deployed across International markets, contributed to double digit year-over-year growth in our organic channel. Gross billings in our Travel category decreased, reflecting lower hotel bookings. Gross billings in our Goods category decreased, reflecting our continued de-emphasis of the category, which resulted in fewer unit sales year-over-year. In addition, there was a $0.7 million unfavorable impact on gross billings from year-over-year changes in foreign currency exchange rates.
Comparison of the Nine Months Ended September 30, 2026 and 2025:
International gross billings and units decreased by $1.8 million and 0.1 million respectively for the nine months ended September 30, 2026 compared with the prior year period. Reported gross billings decreased primarily due to the divestiture of Giftcloud. Excluding Giftcloud, International Local gross billings increased 9.9% year-over-year, reflecting growth in both transaction volume and transaction value. From a supply perspective, growth within International Local was driven by an expansion of seasonally relevant supply concentrated in major international cities, led by our Health, Beauty & Wellness and Things to Do offerings. From a demand perspective, growth was led by our paid channels, while the deployment of our new consumer platform across International markets contributed to two straight quarters of double digit growth in our organic channel. Gross billings in our Travel category decreased, reflecting lower hotel bookings. Gross billings in our Goods category decreased, reflecting our continued de-emphasis of the category, which resulted in fewer unit sales year-over-year. In addition, there was a $10.4 million favorable impact on gross billings from year-over-year changes in foreign currency exchange rates.
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Financial Metrics
International segment revenue, cost of revenue and gross profit for the three and nine months ended September 30, 2026 and 2025 were as follows (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
| 2026 | 2025 | % Change | 2026 | 2025 | % Change | ||||||||||||||||||||||||||||||
| Revenue | |||||||||||||||||||||||||||||||||||
| Local | $ | 25,869 | $ | 23,182 | 11.6 | % | $ | 74,446 | $ | 67,796 | 9.8 | % | |||||||||||||||||||||||
| Goods | 1,292 | 2,175 | (40.6) | 4,313 | 6,700 | (35.6) | |||||||||||||||||||||||||||||
| Travel | 1,205 | 1,461 | (17.5) | 3,355 | 4,102 | (18.2) | |||||||||||||||||||||||||||||
| Total revenue | $ | 28,366 | $ | 26,818 | 5.8 | $ | 82,114 | $ | 78,598 | 4.5 | |||||||||||||||||||||||||
| Cost of revenue | |||||||||||||||||||||||||||||||||||
| Local | $ | 1,459 | $ | 2,145 | (32.0) | % | $ | 5,543 | $ | 6,388 | (13.2) | % | |||||||||||||||||||||||
| Goods | 141 | 344 | (59.0) | 701 | 1,108 | (36.7) | |||||||||||||||||||||||||||||
| Travel | 91 | 201 | (54.7) | 444 | 554 | (19.9) | |||||||||||||||||||||||||||||
| Total cost of revenue | $ | 1,691 | $ | 2,690 | (37.1) | $ | 6,688 | $ | 8,050 | (16.9) | |||||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||||||||||||||
| Local | $ | 24,410 | $ | 21,037 | 16.0 | % | $ | 68,903 | $ | 61,408 | 12.2 | % | |||||||||||||||||||||||
| Goods | 1,151 | 1,831 | (37.1) | 3,612 | 5,592 | (35.4) | |||||||||||||||||||||||||||||
| Travel | 1,114 | 1,260 | (11.6) | 2,911 | 3,548 | (18.0) | |||||||||||||||||||||||||||||
| Total gross profit | $ | 26,675 | $ | 24,128 | 10.6 | $ | 75,426 | $ | 70,548 | 6.9 | |||||||||||||||||||||||||
| % of Consolidated revenue | 22.6 | % | 21.8 | % | 22.4 | % | 21.5 | % | |||||||||||||||||||||||||||
| % of Consolidated cost of revenue | 14.0 | 24.5 | 19.4 | 24.3 | |||||||||||||||||||||||||||||||
| % of Consolidated gross profit | 23.5 | 21.6 | 22.7 | 21.2 | |||||||||||||||||||||||||||||||
Comparison of the Three Months Ended September 30, 2026 and 2025:
International revenue and gross profit increased by $1.5 million and $2.5 million while cost of revenue decreased by $1.0 million for the three months ended September 30, 2026 compared with the prior year period. International Local revenue increased 11.6%, consistent with the drivers of gross billings discussed above. Cost of revenue decreased primarily due to lower amortization of internally-developed software relating to customer-facing applications that resulted from a transfer of assets between our reportable segments. The transfer did not have an impact on our consolidated results of operations, other than an immaterial effect on our income tax provision. Revenue and gross profit also had unfavorable impacts of $0.2 million and $0.2 million from year-over-year changes in foreign currency exchange rates.
Comparison of the Nine Months Ended September 30, 2026 and 2025:
International revenue and gross profit increased by $3.5 million and $4.9 million, while cost of revenue decreased by $1.4 million compared with the prior year period. Excluding Giftcloud, International Local revenue increased 12.9%, consistent with the drivers of gross billings discussed above. Cost of revenue decreased primarily due to lower amortization of internally-developed software relating to customer-facing applications that resulted from a transfer of assets between our reportable segments, partially offset by Giftcloud charges in the current year that were intercompany transactions pre-divestiture in the prior year. The transfer did not have an impact on our consolidated results of operations, other than an immaterial effect on our income tax provision. Revenue and gross profit also had favorable impacts of $2.9 million and $2.5 million from year-over-year changes in foreign currency exchange rates.
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Marketing and Contribution Profit
International marketing and contribution profit for the three and nine months ended September 30, 2026 and 2025 were as follows (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
| 2026 | 2025 | % Change | 2026 | 2025 | % Change | ||||||||||||||||||||||||||||||
| Marketing | $ | 11,190 | $ | 9,696 | 15.4 | % | $ | 30,039 | $ | 25,898 | 16.0 | % | |||||||||||||||||||||||
| % of Revenue | 39.4 | % | 36.2 | % | 36.6 | % | 32.9 | % | |||||||||||||||||||||||||||
| Contribution profit | $ | 15,485 | $ | 14,432 | 7.3 | % | $ | 45,387 | $ | 44,650 | 1.7 | % | |||||||||||||||||||||||
Comparison of the Three Months Ended September 30, 2026 and 2025:
International marketing expense and marketing expense as a percentage of revenue increased for the three months ended September 30, 2026 compared with the prior year period, primarily due to a higher investment in paid channels to capitalize on expanded supply and demand opportunities.
International contribution profit increased for the three months ended September 30, 2026 compared with the prior year period, primarily due to an increase in gross profit, partially offset by higher marketing investment.
Comparison of the Nine Months Ended September 30, 2026 and 2025:
International marketing expense and marketing expense as a percentage of revenue increased for the nine months ended September 30, 2026 compared with the prior year period, primarily due to a higher investment in paid channels to capitalize on expanded supply and demand opportunities.
International contribution profit increased for the nine months ended September 30, 2026 compared with the prior year period, primarily due to an increase in gross profit, partially offset by higher marketing investment.
Consolidated Operating Expenses
Operating expenses for the three and nine months ended September 30, 2026 and 2025 were as follows (in thousands):
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
2026 | 2025 | % Change | 2026 | 2025 | % Change | ||||||||||||||||||||||||||||||
| Marketing | $ | 51,735 | $ | 41,442 | 24.8 | % | $ | 131,333 | $ | 117,278 | 12.0 | % | |||||||||||||||||||||||
Selling, general and administrative (1) | 55,062 | 68,264 | (19.3) | 195,773 | 208,773 | (6.2) | |||||||||||||||||||||||||||||
| Restructuring and related charges (credits) | 2,334 | (64) | NM | 5,502 | 27 | NM | |||||||||||||||||||||||||||||
| Gain on sale of business | — | — | — | — | (10,650) | 100.0 | |||||||||||||||||||||||||||||
| Total operating expenses | $ | 109,131 | $ | 109,642 | (0.5) | $ | 332,608 | $ | 315,428 | 5.4 | |||||||||||||||||||||||||
| % of Revenue: | |||||||||||||||||||||||||||||||||||
| Marketing | 41.2 | % | 33.7 | % | 35.8 | % | 32.1 | % | |||||||||||||||||||||||||||
| Selling, general and administrative | 43.9 | % | 55.6 | % | 53.3 | % | 57.1 | % | |||||||||||||||||||||||||||
(1)The three and nine months ended September 30, 2026 includes $3.7 million and $23.6 million of stock-based compensation expense and $2.1 million and $6.7 million of depreciation and amortization expense. The three and nine months ended September 30, 2025 includes $10.9 million and $27.3 million of stock-based compensation expense and $2.4 million and $8.2 million of depreciation and amortization expense.
Comparison of the Three Months Ended September 30, 2026 and 2025:
SG&A and SG&A as a percentage of revenue decreased for the three months ended September 30, 2026 compared with the prior year period, due to lower payroll related costs resulting from reduced headcount, including reductions from our 2026 Restructuring Plan and lower stock-based compensation and bonus expenses,
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partially offset by higher technology expenses, as the three months ended September 30, 2025 benefited from the usage of non-recurring indirect tax credits.
Comparison of the Nine Months Ended September 30, 2026 and 2025:
SG&A and SG&A as a percentage of revenue decreased for the nine months ended September 30, 2026 compared with the prior year period, due to lower payroll related costs resulting from reduced headcount, including reductions from our 2026 Restructuring Plan and lower stock-based compensation and bonus expenses, partially offset by employer paid payroll tax expense from the exercising of vested options and higher technology expenses, as the nine months ended September 30, 2025 benefited from the usage of non-recurring indirect tax credits.
See Item 1, Note 10, Restructuring and Related Charges (Credits), for additional information regarding the 2026 Restructuring Plan and Item 1, Note 8, Stockholders' Equity (Deficit) and Compensation Arrangements, for additional information relating to the exercised vested options.
Consolidated Other Income (Expense), Net
Other income (expense), net includes interest expense, interest income, and foreign currency gains and losses, primarily resulting from intercompany balances with our subsidiaries that are denominated in foreign currencies.
Other income (expense), net for the three and nine months ended September 30, 2026 and 2025 were as follows (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Other income (expense), net | $ | (1,565) | $ | 1,197 | $ | (9,211) | $ | 27,234 | |||||||||||||||
Comparison of the Three Months Ended September 30, 2026 and 2025:
The change in Other income (expense), net for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025 is primarily related to a $2.8 million decrease in net foreign currency gains (losses) which primarily resulted from U.S. dollar-denominated intercompany balances with our foreign subsidiaries. The gain during the three months ended September 30, 2026 was minimal as the Euro was relatively flat against the U.S. dollar, as compared to the gain in the prior year period driven by the Euro appreciation against the U.S. dollar. In each of these periods, these intercompany balances represented U.S. dollar-denominated payables owed by our foreign subsidiaries, whose functional currency is not the U.S. dollar, to Groupon, Inc.
Comparison of the Nine Months Ended September 30, 2026 and 2025:
The change in Other income (expense), net for the nine months ended September 30, 2026 as compared with the prior year period is primarily related to a $38.3 million decrease in net foreign currency gains (losses) which primarily resulted from U.S. dollar-denominated intercompany balances with our foreign subsidiaries. The loss during the nine months ended September 30, 2026 was primarily driven by the depreciation of the Euro against the U.S. dollar, as compared to the gain in the prior year period driven by the Euro appreciation against the U.S. dollar. In each of these periods, these intercompany balances represented U.S. dollar-denominated payables owed by our foreign subsidiaries, whose functional currency is not the U.S. dollar, to Groupon, Inc.
Consolidated Provision (Benefit) for Income Taxes
Provision (benefit) for income taxes for the three and nine months ended September 30, 2026 and 2025 were as follows (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
| 2026 | 2025 | % Change | 2026 | 2025 | % Change | ||||||||||||||||||||||||||||||
| Provision (benefit) for income taxes | $ | 3,502 | $ | 21,248 | (83.5) | % | $ | 5,865 | $ | 33,603 | (82.5) | % | |||||||||||||||||||||||
| Effective tax rate | 129.9 | % | (22.0) | % | (65.3) | % | (60.5) | % | |||||||||||||||||||||||||||
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Comparison of the Three and Nine Months Ended September 30, 2026 and 2025:
The effective tax rates for the three and nine months ended September 30, 2026 and 2025 were impacted by pretax losses incurred in jurisdictions that have valuation allowances against their net deferred tax assets. The effective tax rate for the nine months ended September 30, 2026 was further impacted by benefits due to return-to-provision adjustments and tax refunds received, partially offset by additional tax expense resulting from the signing of an advance pricing agreement with international tax authorities during the quarter ended March 31, 2026 and an increase in the Company's liability related to unremitted foreign earnings. For the three and nine months ended September 30, 2025, the effective tax rate was further impacted by U.S. pretax losses due to a loss on extinguishment of debt and the foreign income tax expense recognized for the Italy 2012 and Italy 2017 Assessments, partially offset by a benefit resulting from the enactment of the OBBB Act, primarily due to the elimination of the requirement to capitalize and amortize U.S.-based R&D expenditures. For the three and nine months ended September 30, 2026 and 2025, we continue to maintain a full valuation allowance against all U.S. federal and state deferred tax assets. We expect that our consolidated effective tax rate in future periods may continue to differ significantly from the U.S. federal income tax rate as a result of our tax obligations in jurisdictions with profits and valuation allowances in jurisdictions with losses.
See Item 1, Note 11, Income Taxes, for additional information relating to tax audits and assessments and regulatory and legal developments that may impact our business and results of operations in the future.
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Non-GAAP Financial Measures
In addition to financial results reported in accordance with GAAP, we have provided the following non-GAAP financial measures: Adjusted EBITDA, free cash flow and foreign currency exchange rate neutral operating results. These non-GAAP financial measures, which are presented on a continuing operations basis, are intended to aid investors in better understanding our current financial performance and prospects for the future as seen through the eyes of management. We believe that these non-GAAP financial measures facilitate comparisons with our historical results and with the results of peer companies who present similar measures (although other companies may define non-GAAP measures differently than we define them, even when similar terms are used to identify such measures). However, these non-GAAP financial measures are not intended to be a substitute for those reported in accordance with GAAP.
Adjusted EBITDA. Adjusted EBITDA is a non-GAAP performance measure that we define as Income (loss) from continuing operations excluding income taxes, interest and other non-operating items, depreciation and amortization, stock-based compensation and other special charges and credits, including items that are unusual in nature or infrequently occurring. Our definition of Adjusted EBITDA may differ from similar measures used by other companies, even when similar terms are used to identify such measures. Adjusted EBITDA is a key measure used by our management and Board to evaluate operating performance, generate future operating plans and make strategic decisions. Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and Board. However, Adjusted EBITDA is not intended to be a substitute for Income (loss) from continuing operations.
We exclude stock-based compensation expense and depreciation and amortization because they are primarily non-cash in nature and we believe that non-GAAP financial measures excluding those items provide meaningful supplemental information about our operating performance and liquidity. For the three and nine months ended September 30, 2026 and 2025, special charges and credits included charges related to our 2026 Restructuring Plan, 2022 Restructuring Plan, 2020 Restructuring Plan, loss on extinguishment of debt and the (gain) on sale of business. We exclude special charges and credits from Adjusted EBITDA because we believe that excluding those items provides meaningful supplemental information about our core operating performance and facilitates comparisons with our historical results.
The following is a reconciliation of Adjusted EBITDA to the most comparable GAAP financial measure, Income (loss) from continuing operations, for the three and nine months ended September 30, 2026 and 2025 (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
Income (loss) from continuing operations | $ | (806) | $ | (117,782) | $ | (14,851) | $ | (89,162) | |||||||||||||||
| Adjustments: | |||||||||||||||||||||||
| Stock-based compensation | 3,816 | 11,109 | 24,057 | 27,585 | |||||||||||||||||||
| Depreciation and amortization | 4,323 | 4,301 | 12,574 | 14,335 | |||||||||||||||||||
| Restructuring and related charges (credits) | 2,334 | (64) | 5,502 | 27 | |||||||||||||||||||
(Gain) on sale of business (1) | — | — | — | (10,650) | |||||||||||||||||||
| Loss on extinguishment of debt | — | 99,925 | — | 99,925 | |||||||||||||||||||
Other (income) expense, net (2) | 1,565 | (1,197) | 9,211 | (27,234) | |||||||||||||||||||
| Provision (benefit) for income taxes | 3,502 | 21,248 | 5,865 | 33,603 | |||||||||||||||||||
| Total adjustments | 15,540 | 135,322 | 57,209 | 137,591 | |||||||||||||||||||
| Adjusted EBITDA | $ | 14,734 | $ | 17,540 | $ | 42,358 | $ | 48,429 | |||||||||||||||
(1)The nine months ended September 30, 2025 includes $10.7 million of pre-tax gains related to the sale of Giftcloud, a non-core, UK-based business. See Item 1, Note 2, Business Dispositions, for additional information.
(2)Other (income) expense, net, for the three and nine months ended September 30, 2026 and 2025 includes interest income, interest expense, and foreign currency (gains)/losses. See Item 1, Note 5, Supplemental Condensed Consolidated Balance Sheets and Statements of Operations Information, for additional information.
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Free cash flow. Free cash flow is a non-GAAP liquidity measure that comprises Net cash provided by (used in) operating activities from continuing operations less purchases of property and equipment and capitalized software. We use free cash flow to conduct and evaluate our business because, although it is similar to Net cash provided by (used in) operating activities from continuing operations, we believe that it typically represents a more useful measure of cash flows because purchases of fixed assets, software developed for internal use and website development costs are necessary components of our ongoing operations. Free cash flow is not intended to represent the total increase or decrease in our cash balance for the applicable period.
Free cash flow has limitations due to the fact that it does not represent the residual cash flow available for discretionary expenditures. We believe it is important to view free cash flow as a complement to our Condensed Consolidated Statements of Cash Flows. For a reconciliation of free cash flow to the most comparable GAAP financial measure, see Liquidity and Capital Resources below.
Foreign currency exchange rate neutral operating results. Foreign currency exchange rate neutral operating results show current period operating results as if foreign currency exchange rates had remained the same as those in effect in the prior year period. Those measures are intended to facilitate comparisons to our historical performance.
The following table represents the effect on our Condensed Consolidated Statements of Operations from changes in exchange rates versus the U.S. dollar for the three and nine months ended September 30, 2026 (in thousands):
| Three Months Ended September 30, 2026 | |||||||||||||||||
At Avg. Q3 2025 Rates (1) | Exchange Rate Effect (2) | As Reported | |||||||||||||||
| Gross billings | $ | 439,854 | $ | (750) | $ | 439,104 | |||||||||||
| Revenue | 125,665 | (215) | 125,450 | ||||||||||||||
| Cost of revenue | 12,063 | (5) | 12,058 | ||||||||||||||
| Gross profit | 113,602 | (210) | 113,392 | ||||||||||||||
| Marketing | 51,904 | (169) | 51,735 | ||||||||||||||
| Selling, general and administrative | 54,932 | 130 | 55,062 | ||||||||||||||
| Restructuring and related charges (credits) | 2,393 | (59) | 2,334 | ||||||||||||||
| Income (loss) from operations | 4,373 | (112) | 4,261 | ||||||||||||||
| Nine Months Ended September 30, 2026 | |||||||||||||||||
At Avg. Q3 2025 Rates (1) | Exchange Rate Effect (2) | As Reported | |||||||||||||||
| Gross billings | $ | 1,225,014 | $ | 10,385 | $ | 1,235,399 | |||||||||||
| Revenue | 364,467 | 2,858 | 367,325 | ||||||||||||||
| Cost of revenue | 34,134 | 358 | 34,492 | ||||||||||||||
| Gross profit | 330,333 | 2,500 | 332,833 | ||||||||||||||
| Marketing | 130,325 | 1,008 | 131,333 | ||||||||||||||
| Selling, general and administrative | 192,263 | 3,510 | 195,773 | ||||||||||||||
| Restructuring and related charges (credits) | 5,588 | (86) | 5,502 | ||||||||||||||
| Income (loss) from operations | 2,157 | (1,932) | 225 | ||||||||||||||
(1) Represents the financial statement balances that would have resulted had exchange rates in the reporting period been the same as those in effect in the prior year period.
(2) Represents the increase or decrease in the reported amount resulting from changes in exchange rates from those in effect in the prior year period.
Liquidity and Capital Resources
Our principal source of liquidity is our cash balance totaling $177.4 million as of September 30, 2026. The Company’s cash requirements are subject to change as business conditions warrant and opportunities arise. We
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believe that the Company has sufficient liquidity to support its overall ongoing operational needs within the next 12 months, including the repayment of the 2027 Notes upon maturity on March 15, 2027.
Our net cash flows from operating, investing and financing activities from continuing operations for the three and nine months ended September 30, 2026 and 2025 were as follows (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Cash provided by (used in): | |||||||||||||||||||||||
| Operating activities | $ | (43,208) | $ | (20,506) | $ | (35,039) | $ | 7,891 | |||||||||||||||
| Investing activities | (2,575) | (3,024) | (9,239) | 4,000 | |||||||||||||||||||
| Financing activities | (6,684) | (3,275) | (76,180) | (6,413) | |||||||||||||||||||
Free cash flow is a non-GAAP liquidity measure that comprises net cash provided by (used in) operating activities from continuing operations, less purchases of property and equipment and capitalized software. Our free cash flow for the three and nine months ended September 30, 2026 and 2025 and a reconciliation to the most comparable GAAP financial measure, Net cash provided by (used in) operating activities from continuing operations, for those periods were as follows (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
Net cash provided by (used in) operating activities from continuing operations | $ | (43,208) | $ | (20,506) | $ | (35,039) | $ | 7,891 | |||||||||||||||
Purchases of property and equipment and capitalized software from continuing operations | (2,575) | (4,082) | (9,239) | (11,049) | |||||||||||||||||||
| Free cash flow | $ | (45,783) | $ | (24,588) | $ | (44,278) | $ | (3,158) | |||||||||||||||
Our revenue-generating transactions are primarily structured such that we collect cash up-front from customers and pay third-party merchants at a later date, either based upon the customer's redemption of the related voucher or fixed payment terms, which are generally weekly, throughout the term of the merchant's offering.
Our cash balances fluctuate significantly throughout the year based on many variables, including changes in gross billings and the timing of payments to merchants and suppliers.
Net cash provided by (used in) operating activities
For the nine months ended September 30, 2026, our net cash used in operating activities from continuing operations was $35.0 million as compared with net cash provided by operating activities from continuing operations of $7.9 million in the prior period. The decrease in cash provided by operating activities is primarily attributed to a $62.7 million decrease in accrued merchant and supplier payables during the nine months ended September 30, 2026, compared with a $21.8 million decrease in the prior year period. The year-over-year change was driven by strategic supplier payments made in late 2024, which resulted in comparatively lower accrued merchant and supplier payable balances entering the first quarter of 2025, as compared with higher accumulated balances entering the current year. The current year decrease reflects the paydown of those higher balances in the ordinary course of regular payment cycles. The decrease in cash provided by operating activities also reflects higher online marketing investment, with cash payments for marketing $11.9 million higher than the prior year period, as well as $4.5 million of cash payments remitted in connection with actions under the 2026 Restructuring Plan. This decrease was partially offset by a $6.5 million reduction in cash paid for income taxes, primarily attributable to provisional payments related to the Italy tax matters made during the prior year period, with no such payments made in the current year period.
Net cash provided by (used in) investing activities
For the nine months ended September 30, 2026, our net cash used in investing activities from continuing operations was $9.2 million as compared with net cash provided by investing activities from continuing operations of $4.0 million in the prior period. The net cash used in investing activities for the nine months ended September 30, 2026 relates to purchases of property and equipment and capitalized software. The net cash provided by
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investing activities in the prior period primarily relates to the proceeds earned on the sale of Giftcloud, partially offset by purchases of property and equipment and capitalized software.
Net cash provided by (used in) financing activities
For the nine months ended September 30, 2026, our net cash used in financing activities from continuing operations was $76.2 million as compared with net cash used in financing activities from continuing operations of $6.4 million in the prior period. The year-over-year change from financing activities is primarily due to a $33.7 million payment to repay the remaining aggregate principal amount of the 2026 Notes upon their scheduled maturity and $32.2 million related to repurchases of Common Stock under our share repurchase program, and $3.9 million of statutory tax withholding remitted on the CEO's behalf relating to the exercise of his stock options. See Item 1, Note 6, Financing Arrangements, for additional information regarding the payment of our 2026 Notes and Item 1, Note 8, Stockholders' Equity (Deficit) and Compensation Arrangements, for additional information regarding our Common Stock repurchases.
Matters related to the Letters of Credit
In February 2024, we prepaid the Payoff Amount to terminate all commitments to extend further credit under the Credit Agreement. The payment of the Payoff Amount terminated our obligations under the Credit Agreement, except for ordinary and customary survival terms. Following the termination, we retained access to letters of credit originally available under the Credit Agreement, pursuant to our Cash Collateral Agreement.
See Item 1, Note 6, Financing Arrangements, for additional information regarding the Cash Collateral Agreement.
Matters related to the Notes
In 2021, we issued the 2026 Notes in the principal amount of $230.0 million. The Company repaid the remaining $33.7 million aggregate principal and all accrued interest on its 2026 Notes upon maturity on March 15, 2026. The 2026 Notes bore interest at a rate of 1.125% per annum, payable semi-annually in arrears on March 15 and September 15 of each year, with an annual effective interest rate of 1.83%.
In November 2024, we issued $197.3 million aggregate principal amount of 2027 Notes. The 2027 Notes bear interest at a rate of 6.250% per annum, payable semi-annually in arrears on March 15 and September 15 of each year, and will mature March 15, 2027, subject to earlier repurchase or conversion.
In July 2025, the Company issued $244.1 million aggregate principal amount of the 2030 Notes, consisting of (i) $20.0 million aggregate principal amount of 2030 Notes issued in exchange for $20.0 million aggregate principal amount of the Company’s outstanding 2026 Notes and (ii) $224.1 million aggregate principal amount of 2030 Notes issued in exchange for $150.0 million aggregate principal amount of the Company’s outstanding 2027 Notes with 2030 Notes Offering Participants.
The 2030 Notes are senior, unsecured obligations of the Company and accrue interest at a rate of 4.875% per annum, payable semi-annually in arrears on each June 30 and December 30, commencing December 30, 2025, and will mature on June 30, 2030, unless earlier converted, redeemed or repurchased.
See Item 1, Note 6, Financing Arrangements, for additional information regarding the 2026 Notes, 2027 Notes and 2030 Notes.
Other Liquidity and Capital Resource matters
As of September 30, 2026, we had $73.7 million in cash held by our international subsidiaries, which is primarily denominated in British Pounds Sterling, Euros, Indian Rupees and Australian dollars. In general, it is our practice and intention to re-invest the earnings of our non-U.S. subsidiaries in those operations or remit such earnings in a tax-efficient manner. We have not, nor do we currently anticipate the need to, repatriate funds to the U.S. to satisfy domestic liquidity needs arising in the ordinary course of business.
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Contractual Obligations and Commitments
Our contractual obligations and commitments as of September 30, 2026 did not materially change from the amounts set forth in our Annual Report on Form 10-K for the year ended December 31, 2025, except as disclosed in Item 1, Note 7, Commitments and Contingencies.
Off-Balance Sheet Arrangements
We did not have any off-balance sheet arrangements as of September 30, 2026.
Significant Accounting Policies and Critical Accounting Estimates
The preparation of Condensed Consolidated Financial Statements requires management to make estimates and assumptions that affect the reported amounts and classifications of assets and liabilities, revenue and expenses, and related disclosure of contingent liabilities. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
Management's Discussion and Analysis of Financial Condition and Results of Operations is based upon our Condensed Consolidated Financial Statements, which have been prepared in accordance with GAAP. Our significant accounting policies are discussed in Part II, Item 8, Note 2, Summary of Significant Accounting Policies in our Annual Report on Form 10-K for the year ended December 31, 2025. In addition, refer to the critical accounting estimates under Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2025.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We have operations both within the U.S. and internationally, and we are exposed to market risks in the ordinary course of our business, including the effect of foreign currency fluctuations, interest rate changes and inflation. Information relating to quantitative and qualitative disclosures about these market risks is set forth below.
Foreign Currency Exchange Risk
We transact business in various foreign currencies other than the U.S. dollar, principally the Euro, British Pound Sterling, Canadian dollar, Indian Rupee, Polish Zloty, Czech Koruna, Australian dollar, and, to a lesser extent, Swiss Franc and United Arab Emirates Dirham, which exposes us to foreign currency risk. As of September 30, 2026, the U.S. dollar index was up 3.18% over December 31, 2025. For the three and nine months ended September 30, 2026, we derived approximately 22.6% and 22.4% of our revenue from our International segment. Revenue and related expenses generated from our international operations are generally denominated in the local currencies of the corresponding countries. The functional currencies of our subsidiaries that either operate or support these markets are generally the same as the corresponding local currencies. However, the results of operations of, and certain of our intercompany balances associated with, our international operations are exposed to foreign currency exchange rate fluctuations. Upon consolidation, as exchange rates vary, our revenue and other operating results may differ materially from expectations, and we may record significant gains or losses on the re-measurement of intercompany balances.
We assess our foreign currency exchange risk based on hypothetical changes in rates utilizing a sensitivity analysis that measures the potential impact on working capital based on a 10% change (increase and decrease) in currency rates. We use a current market pricing model to assess the changes in the value of the U.S. dollar on foreign currency denominated monetary assets and liabilities. The primary assumption used in this model is a hypothetical 10% weakening or strengthening of the U.S. dollar against those currency exposures as of September 30, 2026 and December 31, 2025.
As of September 30, 2026, our net working capital surplus (defined as current assets less current liabilities) from subsidiaries that are subject to foreign currency translation risk was $0.3 million. The potential decrease in this working capital surplus from a hypothetical 10% adverse change in quoted foreign currency exchange rates would be $30.7 thousand. This compares with a $26.5 million working capital deficit subject to foreign currency exposure as of December 31, 2025, for which a 10% adverse change would have resulted in a potential increase in this working capital deficit of $2.7 million.
Interest Rate Risk
Our cash balance as of September 30, 2026 consists of bank deposits, so exposure to market risk for changes in interest rates is limited. The 2027 Notes and 2030 Notes have an aggregate principal amount of $47.3 million and $244.1 million, respectively, and bear interest at a fixed rate, so we have no financial statement impact from changes in interest rates. However, changes in market interest rates impact the fair value of the 2027 Notes and 2030 Notes along with other variables such as our credit spreads and the market price and volatility of our Common Stock. See Item 1, Note 6, Financing Arrangements, for additional information.
Inflation Risk
Our business is affected by changes to our merchants' and customers' discretionary spend. As our costs are subject to inflationary pressures, periods of increased inflation could negatively impact our business by driving up our operating costs. If those pressures become significant, we may not be able to offset such higher costs through price increases or other cost efficiency measures. Our inability or failure to do so could harm our business, financial condition and results of operations.
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ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our CEO and CFO, evaluated the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of September 30, 2026.
Based on that evaluation, our management concluded that, as of September 30, 2026, our disclosure controls and procedures are effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
Management did not identify changes that occurred in our internal control over financial reporting during the three months ended September 30, 2026, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Limitations on Effectiveness of Controls and Procedures
In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
For a description of our material pending legal proceedings, please see Item 1, Note 7, Commitments and Contingencies, to our Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
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ITEM 1A. RISK FACTORS
There have been no material changes from the risk factors previously disclosed in Part I, Item 1A, Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2025, and Part II, Item 1A, Risk Factors of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026.
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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Recent Sales of Unregistered Securities
During the three months ended September 30, 2026, we did not issue any unregistered equity securities.
Issuer Purchases of Equity Securities
As of September 30, 2026, there have been no changes to our Board authorized share repurchase program. For additional information, please refer to Part II, Item 5, Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities in our Annual Report on Form 10-K for the year ended December 31, 2025.
A summary of our Common Stock repurchases during the three months ended September 30, 2026 under our share repurchase program is set forth in the following table:
| Date | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Program | Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under Program | ||||||||||||||||||||||
| July 1-31, 2026 | — | $ | — | — | $ | 213,566,989 | ||||||||||||||||||||
| August 1-31, 2026 | — | $ | — | — | $ | 213,566,989 | ||||||||||||||||||||
| September 1-30, 2026 | 39,980 | $ | 19.82 | 39,980 | $ | 212,774,565 | ||||||||||||||||||||
| Total | 39,980 | $ | 19.82 | 39,980 | $ | 212,774,565 | ||||||||||||||||||||
The following table provides information about purchases of shares of our Common Stock during the three months ended September 30, 2026 related to shares withheld upon vesting of RSUs and PSUs for minimum tax withholding obligations:
| Date | Total Number of Shares Purchased (1) | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Program | Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under Program | ||||||||||||||||||||||
| July 1-31, 2026 | 60,926 | $ | 27.89 | — | — | |||||||||||||||||||||
| August 1-31, 2026 | 2,589 | $ | 20.08 | — | — | |||||||||||||||||||||
| September 1-30, 2026 | 4,097 | $ | 19.08 | — | — | |||||||||||||||||||||
| Total | 67,612 | $ | 27.06 | — | — | |||||||||||||||||||||
(1)Total number of shares delivered to us by employees to satisfy the mandatory tax withholding requirement upon vesting of RSUs and PSUs.
ITEM 5. OTHER INFORMATION
(a) On November 4, 2026, the Board increased its size from six to seven members and appointed Ajay Mittal as a director of the Company, in each case effective November 9, 2026.
The Board affirmatively determined that Mr. Mittal is an independent director under the applicable rules of NASDAQ. Mr. Mittal has not been named to, and is not currently expected to be named to, any committee of the Board.
Mr. Mittal will receive compensation consistent with the Company’s Non-Employee Directors’ Compensation Plan (the “Director Compensation Plan”). Additionally, in connection with his appointment, on November 4, 2026, the Board approved a pro-rated RSU Retainer for Mr. Mittal under the Director Compensation Plan with a grant date value of $114,329, to be granted on the effective date of his appointment and vesting in full on June 11, 2027.
There are no arrangements or understandings between Mr. Mittal and any other persons pursuant to which Mr. Mittal was selected as a director of the Company. Neither Mr. Mittal nor any of his immediate family members have any direct or indirect material interest in any transaction or proposed transaction required to be reported under Item 404(a) of Regulation S-K.
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Additionally, on November 5, 2026 and November 6, 2026, respectively, the Company entered into Severance Benefit Agreements with Rana Kashyap, the Company’s Chief Financial Officer, and Aditya Rajkumar, the Company’s Chief Operating Officer, each as approved by the Compensation Committee on November 3, 2026 (the “Severance Benefit Agreements”). Mr. Kashyap's Severance Benefit Agreement supersedes his prior severance benefit agreement with the Company.
Under the Severance Benefit Agreements, upon an involuntary termination of employment without Cause or a resignation for Good Reason (each as defined in the Severance Benefit Agreements), Mr. Kashyap and Mr. Rajkumar will each receive, subject to execution of a release of claims and continued compliance with their employment agreements and restrictive covenant obligations, a lump sum amount equal to three months of base salary; the accelerated vesting of the tranches of their outstanding RSUs scheduled to vest during the 12-month period beginning on the termination date, subject to the applicable performance multiplier; and the vesting of a pro-rated portion of their outstanding PSUs, which vest based on actual performance against the applicable stock price or relative total shareholder return measures, as certified by the Compensation Committee.
In the event that Mr. Kashyap’s or Mr. Rajkumar’s employment is terminated in connection with a Change in Control of the Company (as defined in the Severance Benefit Agreements), they will each receive, in addition, a pro rata amount of their target annual cash incentive awards for the year of such termination; the vesting in full of all outstanding unvested RSU tranches, without pro-ration, subject to the applicable performance multiplier and, for certain awards, to approval of the transaction by the directors unaffiliated with Pale Fire Capital SE (“Pale Fire”); and one hundred percent (100%) of their outstanding target PSUs remaining eligible to vest, without pro-ration, based on actual performance against the applicable stock price or relative total shareholder return measures as of the Change in Control date. A Change in Control is deemed not to include, among other things, a transaction in which Pale Fire, together with its affiliated entities and individuals, becomes the direct or indirect beneficial owner of more than fifty percent (50%) of the Company's voting power, unless the transaction is approved by the Board, including by a majority of directors unaffiliated with Pale Fire.
The description of the Severance Benefit Agreements is not complete and is qualified by reference in its entirety to Mr. Kashyap’s and Mr. Rajkumar’s Severance Benefit Agreements, which are filed as Exhibits 10.2 and 10.3, respectively, to this Quarterly Report on Form 10-Q and incorporated herein by reference.
(c) During the three months ended September 30, 2026, the following director adopted a trading arrangement for the sale of our Common Stock:
No other officers or directors adopted , modified, or terminated
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ITEM 6. EXHIBITS
Exhibit Number | Description | ||||||||||
| 10.1 | |||||||||||
| 10.2 | |||||||||||
| 10.3 | |||||||||||
| 31.1 | |||||||||||
| 31.2 | |||||||||||
| 32.1 | |||||||||||
| 101.INS** | XBRL Instance Document | ||||||||||
| 101.SCH | XBRL Taxonomy Extension Schema Document | ||||||||||
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | ||||||||||
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | ||||||||||
| 101.LAB | XBRL Taxonomy Extension Label Linkbase Document | ||||||||||
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | ||||||||||
| 104 ** | Cover Page Interactive Data File | ||||||||||
* Management contract or compensatory plan or arrangement.
** The XBRL Instance Document and Cover Page Interactive Data File do not appear in the Interactive Data File because their XBRL tags are embedded within the Inline XBRL document.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on this 9th day of November 2026.
| GROUPON, INC. | |||||||||||
| By: | /s/ Rana Kashyap | ||||||||||
| Name: | Rana Kashyap | ||||||||||
| Title: | Chief Financial Officer | ||||||||||
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Exhibit 10.1
GROUPON, INC.
2011 Incentive Plan
NOTICE OF PERFORMANCE SHARE UNIT AWARD
The Participant identified below has been granted a Full Value Award of performance share units ("PSUs") in Groupon, Inc. (the "Company"), subject to the terms and conditions of the Performance Share Unit Award Agreement (the "Agreement") and the Groupon, Inc. 2011 Incentive Plan, as amended (the "Plan"), as set forth below. Capitalized terms in this Notice of Performance Share Unit Award (this "Notice"), unless otherwise defined herein, shall have the meanings assigned to them in the Plan.
| Participant Name | [_______________] (the "Participant") | ||||
| Employee ID | [_______________] | ||||
| Grant Date | [_______________] | ||||
| Total Number of PSUs Granted (Target) | [_______________] PSUs | ||||
| Grant Value at Target (at 90-Day VWAP) | USD [_______________] | ||||
| Performance Period | May 1, 2026 – May 1, 2029 (3 years) | ||||
| Vesting Structure | Single cliff vest after the end of the Performance Period, on May 20, 2029 | ||||
| Performance Metric | Relative TSR vs. Russell 2000 Index | ||||
| Performance Measurement | 90-day VWAP ending on Grant Date vs. 90-day VWAP ending on the Performance Period End Date | ||||
| Vesting Range | 0% at or below 50th percentile; linear 0%–300% from 50th to 90th percentile; 300% at or above 90th percentile (Negative TSR Cap: capped at 100% if Groupon absolute TSR is negative) | ||||
1. Vesting
Subject to the Participant's Continuous Service through the Performance Period End Date and the achievement of the rTSR performance conditions set forth in Exhibit A, each PSU shall vest, if at all, on May 20, 2029 (the "Vesting Date"), on a single cliff basis. There are no annual or interim vesting opportunities for PSUs granted under this Notice. The actual number of PSUs that vest (if any) shall be determined pursuant to the vesting schedule and methodology set forth in Exhibit A hereto, and shall be subject to the Committee's certification of the performance outcome.
Vesting on May 20, 2029 is subject to the Committee’s prior certification of the rTSR outcome and the resulting number of vested PSUs. If such certification has not occurred by May 20, 2029, the Vesting Date shall instead be the date on which such certification occurs, which shall be as soon as reasonably practicable following the Performance Period End Date.
2. Settlement
Subject to the vesting requirements set forth in Section 11 and Exhibit A, and subject to any applicable Tax-Related Items withholding, the Participant shall be entitled to receive the number of Shares equal to the number of vested PSUs. Delivery of such Shares shall be made as soon as reasonably practicable following the Vesting Date, and in no event later than March 15 of the calendar year following the calendar year in which the Vesting Date occurs. The Company shall not be obligated to issue fractional Shares; any fractional entitlement resulting from the application of the rTSR performance calculation shall be rounded down to the nearest whole Share.
3. Termination of Continuous Service – Leaver Provisions
Unless otherwise provided in the Participant's individual employment, severance, or other agreement(s) with the Company, the following provisions shall apply upon the Participant's cessation of Continuous Service (the "Termination Date"):
| Termination Type | PSU Treatment | ||||
| Voluntary resignation | All unvested PSUs (including all rights to any future rTSR payout) are immediately forfeited upon the Termination Date. | ||||
| Termination for Cause | All unvested PSUs are immediately forfeited upon the Termination Date. | ||||
| Involuntary Termination Without Cause | A pro-rated portion of unvested PSUs shall remain eligible to vest at the end of the Performance Period, based on actual rTSR performance. The pro-ration is calculated as: (number of completed whole months of Continuous Service from the Grant Date through the Termination Date) ÷ 36 months. Any rTSR-related payout will be deferred and made only upon expiration of the Performance Period and Committee certification of rTSR performance. | ||||
| Death or Disability | All time-based Continuous Service requirements shall immediately lapse in accordance with the Plan. PSUs shall remain outstanding through the end of the Performance Period and vest based on actual rTSR performance. | ||||
| Change in Control (awards not assumed) | PSUs shall vest at the level of rTSR performance as of the date of the Change in Control (or at target/100% if insufficient data exists), in accordance with the Plan. | ||||
If the Participant takes an extended non-medical leave of absence during the Performance Period, the Company may determine that such leave constitutes a cessation of Continuous Service, and the first date of such absence shall be treated as the Termination Date for purposes of this Notice and the Agreement. In case of any dispute as to whether or when a Termination Date has occurred, the Committee's determination shall be final, binding, and conclusive.
4. General Terms
The Participant understands that employment with or service to the Company is for an unspecified duration, can be terminated at any time in accordance with applicable law, and that nothing in this Notice, the Agreement, or the Plan changes the nature of that relationship. The Participant acknowledges that the vesting of the PSUs pursuant to this Notice and Exhibit A is conditioned on: (a) the achievement of the rTSR performance conditions set forth in Exhibit A; and (b) the Participant's Continuous Service through the Performance Period End Date, except as otherwise provided herein. This Notice is subject to: (i) the terms and conditions of the Agreement and the Plan, both of which are incorporated herein by reference; and (ii) the terms of the Company's compensation recovery policy (the "Clawback Policy"). The Participant represents and warrants that the Participant has received and read this Notice, Exhibit A, the Agreement, the Plan, and the Clawback Policy. If there are any inconsistencies between this Notice or Agreement and the Plan, the terms of the Plan will govern.
IN WITNESS WHEREOF, the parties have executed this Notice of Performance Share Unit Award as of the Grant Date set forth above.
| PARTICIPANT | GROUPON, INC. | ||||
| _______________________________ Signature _______________________________ Print Name _______________________________ Date | _______________________________ Authorized Signatory _______________________________ Print Name / Title _______________________________ Date | ||||
EXHIBIT A
TO NOTICE OF PERFORMANCE SHARE UNIT AWARD
VESTING MECHANICS – RELATIVE TSR PERFORMANCE
1. Definitions
For purposes of this Exhibit A and the Notice, the following terms shall have the meanings set forth below:
"Average Stock Price" means the volume-weighted average price ("VWAP") of one Share over a period of ninety (90) consecutive calendar days, as reported on the principal securities exchange on which the Shares are listed.
"Grant Date VWAP" means the Average Stock Price calculated over the ninety (90) calendar day period ending on (and including) the Grant Date (May 1, 2026).
"Vesting Date VWAP" means the Average Stock Price calculated over the ninety (90) calendar day period ending on (and including) the Performance Period End Date (May 1, 2029).
"Groupon Absolute TSR" means the cumulative total shareholder return of the Company's common stock over the Performance Period, calculated as: (Vesting Date VWAP – Grant Date VWAP + Dividends Paid) / Grant Date VWAP, expressed as a percentage.
"Russell 2000 Index" means the Russell 2000 Index (Bloomberg ticker: RTY) as published by FTSE Russell (or any successor index publisher), which serves as the sole comparator group for purposes of measuring Relative TSR under this award.
"Relative TSR Percentile" or "rTSR Percentile" means the percentile ranking of Groupon's Absolute TSR relative to the distribution of constituent-level TSR outcomes within the Russell 2000 Index over the Performance Period, as determined by the Committee.
"Threshold Percentile" means the 50th percentile of the Russell 2000 Index. No PSUs shall vest unless and until the rTSR Percentile exceeds the Threshold Percentile.
"Maximum Percentile" means the 90th percentile of the Russell 2000 Index. The Vesting Percentage is capped at 300% once the rTSR Percentile equals or exceeds the Maximum Percentile.
"Negative TSR Cap" means the limitation providing that, if the Groupon Absolute TSR is negative over the Performance Period (i.e., less than 0%), the Vesting Percentage shall not exceed 100%, regardless of the rTSR Percentile achieved.
“SumUp Book Value” means the Company’s book value of its equity interest in SumUp Holdings, S.a.r.l or any successor or related entity (“SumUp”), as of the Grant Date, being approximately $75,000,000.
“SumUp Liquidity Event” means any sale, transfer, initial public offering, or other realization event with respect to the Company’s equity interest in SumUp occurring during the Performance Period.
“SumUp TSR Adjustment” means the adjustment to the Vesting Date VWAP described in Section 4(e) of this Exhibit A, made for purposes of neutralizing the impact of any SumUp Liquidity Event or change in the carrying value of the Company’s SumUp equity interest on the calculation of Groupon Absolute TSR and the rTSR Percentile.
2. Vesting of PSUs
Each PSU shall vest, if at all, on the Performance Period End Date, subject to: (a) the Participant's Continuous Service through the Performance Period End Date (except as otherwise provided in the Notice or Agreement); and (b) the Committee's certification of the rTSR Percentile achieved, as set forth
in this Exhibit A. All PSUs under this award vest on a single three-year cliff basis after the Performance Period End Date (May 20, 2029); there are no interim vesting dates.
3. rTSR Performance and Vesting Schedule
The number of PSUs that vest shall be determined by multiplying the Total PSUs Granted by the applicable Vesting Percentage, as determined by the rTSR Percentile achieved over the Performance Period:
| Groupon rTSR Percentile vs. Russell 2000 | Vesting Percentage of Target PSUs | Notes | ||||||
| Below 50th Percentile | 0% | No payout below median | ||||||
| At 50th Percentile | 0% | Threshold — payout begins just above median | ||||||
| Between 50th and 90th Percentile | Linear: 0% → 300% | +7.5% per percentile point above 50th | ||||||
| 75th Percentile (illustrative) | 187.5% | Example: (75−50) × 7.5% = 187.5% | ||||||
| At or above 90th Percentile | 300% | Maximum — capped at 300% | ||||||
The Vesting Percentage increases linearly between the Threshold Percentile (50th percentile = 0%) and the Maximum Percentile (90th percentile = 300%). Specifically, for each percentile point by which the rTSR Percentile exceeds the 50th percentile, the Vesting Percentage increases by 7.5 percentage points (i.e., 300% ÷ 40 percentile points = 7.5% per point). The applicable formula is:
Vesting Percentage = (rTSR Percentile – 50) × 7.5%
(subject to a minimum of 0% and a maximum of 300%)
For the avoidance of doubt: (i) if the rTSR Percentile is at or below the 50th percentile, no PSUs shall vest; (ii) if the rTSR Percentile is at the 75th percentile, the Vesting Percentage shall be 187.5% ((75−50) × 7.5%); and (iii) if the rTSR Percentile is at or above the 90th percentile, the Vesting Percentage shall be capped at 300%.
Notwithstanding the foregoing, if the Groupon Absolute TSR over the Performance Period is negative (less than 0%), the Vesting Percentage shall be capped at 100%, regardless of the rTSR Percentile achieved (the "Negative TSR Cap"). This cap reflects the principle that Participants should not receive above-target payouts when the Company's absolute share price has declined over the Performance Period, even if Groupon outperformed the Russell 2000 Index on a relative basis.
4. Measurement Methodology
(a) Measurement Periods. The Grant Date VWAP and the Vesting Date VWAP shall each be calculated over a ninety (90) consecutive calendar day period ending on (and including) the Grant Date and the Performance Period End Date, respectively. This 90-day averaging convention is intended to reduce the impact of short-term share price volatility on the grant and vesting valuations.
(b) Comparator Group. The Russell 2000 Index is the sole comparator group. The Relative TSR Percentile is determined by ranking Groupon's Absolute TSR against the distribution of constituent-level TSRs within the Russell 2000 Index over the same Performance Period. In the event that the Russell 2000 Index is discontinued or materially restructured, the Committee shall, in its sole discretion, select a replacement comparator index that is substantially similar in scope and composition, and notify the Participant of such replacement.
(c) Dividends. For purposes of calculating Groupon's Absolute TSR and the TSR of each Russell 2000 constituent for percentile ranking purposes, dividends (if any) shall be treated as reinvested in the relevant securities on the ex-dividend date, consistent with standard TSR measurement practice.
(d) Corporate Events. In the event of a stock split, stock dividend, reverse stock split, spin-off, or other recapitalization or similar corporate transaction affecting the Shares or the Russell 2000 Index constituents, appropriate adjustments shall be made to the calculations in a manner consistent with the Plan and applicable law, so as to preserve the economic intent of the award.
(e) SumUp TSR Adjustment. Notwithstanding any other provision of this Exhibit A, the Vesting Date VWAP used to calculate Groupon Absolute TSR shall be adjusted as follows:
(i) If a SumUp Liquidity Event occurs during the Performance Period, the Vesting Date VWAP shall be adjusted downward by an amount per Share equal to the excess, if any, of the aggregate proceeds realized by the Company in connection with the SumUp Liquidity Event over the SumUp Book Value, divided by the total number of Shares outstanding as of the date of the SumUp Liquidity Event (by way of illustration only, and not as a representation of actual amounts, aggregate realized proceeds of approximately $150,000,000 would correspond to a downward adjustment of approximately $2 per Share); and
(ii) If no SumUp Liquidity Event occurs during the Performance Period, the Vesting Date VWAP shall be adjusted to reflect the change, if any, in the carrying value of the Company’s SumUp equity interest on the Company’s books (which is subject to periodic re-marking as events dictate) as of the Performance Period End Date, relative to the SumUp Book Value.
The SumUp TSR Adjustment described in this Section 4(e) shall be applied by the Committee as part of its certification of the rTSR Percentile pursuant to Section 5 of this Exhibit A, and the Committee’s determination of the amount and application of the SumUp TSR Adjustment shall be final, binding, and conclusive. For the avoidance of doubt, the SumUp TSR Adjustment is intended to isolate the Award’s vesting outcome to the Company’s underlying operational and market performance, and may result in an upward or downward adjustment to the Vesting Date VWAP depending on the direction of the relevant SumUp realization or revaluation.
5. Committee Certification
Promptly following the Performance Period End Date, the Committee shall review and certify the rTSR Percentile and determine the number of PSUs that have vested. The Committee's determination shall be final, binding, and conclusive. Settlement of vested PSUs shall occur as soon as reasonably practicable following such certification, and in no event later than March 15 of the calendar year following the calendar year in which the Performance Period End Date occurs.
6. Illustrative Examples
The following examples are provided for illustrative purposes only and do not constitute a guarantee of any particular outcome.
Example 1 — Below Threshold (no payout): A Participant holds a Target PSU award of 10,000 PSUs (grant value: $100,000). At the end of the Performance Period, Groupon's rTSR Percentile is at the 45th percentile (below the 50th percentile threshold). Vesting Percentage: 0%. PSUs vesting: 0. No Shares are issued.
Example 2 — Strong Performance: A Participant holds a Target PSU award of 10,000 PSUs. Groupon's rTSR Percentile is at the 75th percentile, and Groupon's Absolute TSR is positive. Vesting Percentage = (75 − 50) × 7.5% = 187.5%. PSUs vesting: 18,750 Shares. The Negative TSR Cap does not apply.
Example 3 — Maximum Performance: Groupon's rTSR Percentile is at or above the 90th percentile, with a positive Absolute TSR. Vesting Percentage: 300% (capped). PSUs vesting: 30,000 Shares.
Example 4 — Negative TSR Cap Applied: Groupon's rTSR Percentile is at the 85th percentile (which would ordinarily yield a Vesting Percentage of (85 − 50) × 7.5% = 262.5%), but Groupon's Absolute TSR over the Performance Period is −15% (negative). The Negative TSR Cap applies: Vesting Percentage is capped at 100%. PSUs vesting: 10,000 Shares (100% of Target).
GROUPON, INC.
2011 Incentive Plan
PERFORMANCE SHARE UNIT AWARD AGREEMENT
Capitalized terms in this agreement (this "Agreement"), unless otherwise defined herein, shall have the meanings assigned to them in the Groupon, Inc. 2011 Incentive Plan, as amended (the "Plan").
The Participant has been granted a Full Value Award of performance share units ("PSUs") in Groupon, Inc. (the "Company") subject to the terms, restrictions, and conditions of the Plan, the Notice of Performance Share Unit Award, including Exhibit A thereto (the "Notice"), and this Agreement.
1. No Stockholder Rights
Unless and until Shares are issued in settlement of vested PSUs, the Participant shall have no ownership of the Shares underlying the PSUs and shall have no right to receive dividends or dividend equivalents with respect to such Shares or to vote such Shares. The Participant shall have no rights as a stockholder until the date of issuance of Shares in settlement of vested PSUs.
2. No Transfer
PSUs are not transferable except to the Participant's designated Beneficiary upon the Participant's death, as permitted under the Plan. Any purported transfer or assignment of PSUs in violation of this Section 2 shall be null and void.
3. Tax Withholding Obligations
(a) The Participant acknowledges that the ultimate liability for all income tax, social insurance, payroll tax, or other tax-related items related to the Participant's participation in the Plan and legally applicable to the Participant ("Tax-Related Items") is and remains the Participant's responsibility and may exceed the amount actually withheld by the Company. The Participant further acknowledges that the Company: (i) makes no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the grant of PSUs, including the grant, vesting, or settlement of PSUs, the subsequent sale of Shares acquired pursuant to such vesting, and the receipt of any dividends or dividend equivalents; and (ii) does not commit to and is under no obligation to structure the terms of the grant or any aspect of the PSUs to reduce or eliminate the Participant's liability for Tax-Related Items or achieve any particular tax result. If the Participant becomes subject to tax in more than one jurisdiction between the Grant Date and the date of any relevant taxable event, the Participant acknowledges that the Company may be required to withhold or account for Tax-Related Items in more than one jurisdiction.
(b) Prior to any relevant taxable or tax withholding event, the Participant shall pay or make adequate arrangements satisfactory to the Company to satisfy all Tax-Related Items. In this regard, the Participant authorizes the Company or its agents, at the Company's discretion, to satisfy obligations with regard to all Tax-Related Items by one or more of the following:
•Withholding from wages or other cash compensation paid to the Participant by the Company;
•Withholding otherwise deliverable Shares to be issued upon vesting/settlement of the PSUs; or
•Withholding from proceeds of the sale of Shares acquired upon vesting/settlement of the PSUs, either through a voluntary sale or through a mandatory sale arranged by the Company on the Participant's behalf.
(c) To avoid negative accounting treatment, the Company may withhold or account for Tax-Related Items by considering applicable minimum statutory withholding amounts or other applicable withholding rates. If Tax-Related Items are satisfied by withholding Shares, for tax purposes, the Participant shall be deemed to have been issued the full number of Shares subject to the vested PSUs, notwithstanding that a number of Shares are held back solely for the purpose of paying Tax-Related Items. The Company may refuse to deliver Shares if the Participant fails to comply with obligations in connection with Tax-Related Items.
(d) To the extent applicable, the settlement of the PSUs is intended to either be exempt from Section 409A of the U.S. Internal Revenue Code (the "Code") under the "short-term deferral" exemption, or
otherwise comply with Section 409A of the Code. This Agreement will be interpreted, operated, and administered in a manner consistent with this intent. The Company may, at any time and without the Participant's consent, modify the terms of the Award as it determines appropriate to comply with the requirements of Section 409A. The Company makes no representation or covenant to ensure that the PSUs or settlement thereof are exempt from or compliant with Section 409A.
4. Compliance with Laws and Regulations
The issuance of Shares underlying the PSUs will be subject to and conditioned upon compliance by the Company and the Participant (including any written representations, warranties, and agreements as the Committee may request) with all applicable state, federal, local, and foreign laws and regulations of any governmental authority, including all applicable requirements of any national or regional securities exchange or quotation system on which the Shares may be listed or quoted at the time of such issuance.
5. No Advice Regarding Award
The Company is not providing any tax, legal, or financial advice, nor is the Company making any recommendations regarding the Participant's participation in the Plan or the acquisition or sale of the underlying Shares. The Participant is advised to consult with the Participant's own personal tax, legal, and financial advisors regarding participation in the Plan before taking any action related to the Plan.
6. Legend on Certificates / Book-Entry
The certificates or book-entry notation representing Shares issued hereunder shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Plan, this Agreement, the rules, regulations, and other requirements of the U.S. Securities and Exchange Commission, any national or regional securities exchange or quotation system, and any applicable federal, state, local, and foreign laws.
7. Clawback Policy
The PSUs and any Shares issued in settlement thereof, together with any proceeds from the sale of such Shares, shall be subject to the terms and conditions of the Company's compensation recovery (clawback) policy as it may be amended from time to time, including any policy adopted pursuant to the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act or any other applicable law. The Participant hereby acknowledges and agrees to be bound by the terms of the Clawback Policy.
8. Successors and Assigns
The Company may assign any of its rights under this Agreement. This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth herein, this Agreement will be binding upon the Participant and the Participant's heirs, executors, administrators, legal representatives, successors, and assigns.
9. Entire Agreement; Severability
The Plan and the Notice (including Exhibit A) are incorporated herein by reference. Except with respect to vesting terms specifically provided in the Participant's individual employment, severance, or other agreement(s) with the Company, the Plan, the Notice, and this Agreement supersede in their entirety all prior undertakings and agreements of the Company and the Participant with respect to the subject matter hereof. If any provision of this Agreement is determined by a court of law to be illegal or unenforceable, then such provision will be enforced to the maximum extent possible and the other provisions will remain fully effective and enforceable.
10. Waiver
Waiver of any term or condition of this Agreement by any party shall not be construed as a waiver of a subsequent breach or failure of the same term or condition, or a waiver of any other term or condition of this Agreement. Any waiver must be in writing.
11. Governing Law and Venue
The validity, interpretation, instruction, performance, enforcement, and remedies of or relating to this Agreement, and the rights and obligations of the parties hereunder, shall be governed by and construed in accordance with the substantive laws of the State of Delaware, without regard to its conflict of law
principles. For the purpose of litigating any dispute that arises under this Agreement, the parties hereby consent to the exclusive jurisdiction of the federal or state courts of the State of Illinois.
12. Notices
Any notice or document required to be filed with the Committee or the Company under the Plan must be in writing and will be properly filed if delivered or mailed to: Groupon, Inc., 35 W. Wacker Drive, Floor 25, Chicago, Illinois 60601, Attention: Legal Department. If intended for the Participant, notices shall be delivered personally, by mail to the Participant's then current residence address as shown on the Company's records, or electronically to the Participant's email address as shown on the Company's records. The Company may, in its sole discretion, deliver documents related to Plan participation through an on-line or electronic system established and maintained by the Company or its designee.
13. Need to Accept Award
The Participant acknowledges that this Notice and Agreement must be accepted within ninety (90) days of the Grant Date in order to be eligible to receive any benefits from this Award, unless otherwise determined by the Company in its discretion. If this Award is not accepted within that time period, the Award may be canceled and all benefits will be forfeited. To accept this Award, the Participant must access the Fidelity NetBenefits website and follow the instructions for acceptance. If this grant was distributed in hard copy format, the Participant must sign and return it to the Company's Compensation Department within 90 days.
By the Participant's signature and the signature of the Company's representative below and on the Notice, the Participant and the Company agree that this Award of PSUs is granted under and governed by the terms and conditions of the Plan, the Notice (including Exhibit A), and this Agreement, and is subject to the Company's Clawback Policy. The Participant has reviewed the Plan, the Notice, this Agreement, and the Clawback Policy in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Agreement, and fully understands all provisions thereof. The Participant hereby agrees to accept as binding, conclusive, and final all decisions or interpretations of the Committee upon any questions relating to the Plan, the Notice, and this Agreement. The Participant further agrees to notify the Company upon any change in residence address or personal email address.
| PARTICIPANT | GROUPON, INC. | ||||
| _______________________________ Signature _______________________________ Print Name _______________________________ Date | _______________________________ Authorized Signatory _______________________________ Print Name / Title _______________________________ Date | ||||
APPENDIX A
ADDITIONAL TERMS AND CONDITIONS FOR NON-U.S. PARTICIPANTS
GROUPON, INC. 2011 INCENTIVE PLAN, AS AMENDED
General
The PSUs are not part of the Participant's employment relationship with the Participant's employer and are completely separate from the Participant's salary or any other compensation or benefits, unless otherwise required by local law. Any value or gain realized from the PSUs will not be included in calculations of benefits, bonuses, severance payments, or similar compensation.
Terms and Conditions
This Appendix includes additional terms and conditions governing the PSUs if the Participant resides in one of the countries listed below. Capitalized terms used but not defined in this Appendix have the meanings set forth in the Plan, the Notice, and/or the Agreement.
Notifications
This Appendix also includes notifications relating to exchange control and other issues. The information is based on laws in effect as of the date of this Agreement and is subject to change. The Company strongly recommends that the Participant seek independent legal and tax advice regarding participation in the Plan.
AUSTRALIA
Securities Law Notification. If the Participant acquires Shares under the Plan and subsequently offers the Shares for sale to a person resident in Australia, such an offer may be subject to Australian disclosure requirements; the Participant should obtain legal advice before making any such offer.
BELGIUM
Tax Reporting Notification. Belgian residents are required to report foreign bank or brokerage accounts on the annual tax return, including any account in which Shares or proceeds are held.
CANADA
Vesting. The grant of PSUs does not provide any right to receive a cash payment; PSUs will be settled in Shares only.
CZECH REPUBLIC
Taxation. Income tax will apply at vesting based on the fair market value of the Shares at vesting. The Participant is responsible for reporting and paying tax. Capital gains tax may apply on a subsequent sale of Shares within three years of vesting.
EUROPEAN ECONOMIC AREA / UNITED KINGDOM
Please consult the GDPR Privacy Notice attached hereto as Exhibit 1 to this Appendix A.
FRANCE
Regulatory Notice. For France-based participants, the PSU component shall be delivered as provided herein and may be subject to French financial securities regulations. If applicable, the Participant will receive a separate communication regarding the applicable French regulatory requirements.
GERMANY
Exchange Control Notification. Cross-border payments in excess of €12,500 must be reported monthly to the German Federal Bank.
INDIA
Exchange Control Notification. The Participant must repatriate any proceeds from the sale of Shares to India and convert the proceeds into local currency within 90 days of receipt.
IRELAND
Director Notification. Directors and officers owning more than a 1% interest in Groupon must notify the Irish subsidiary secretary within five days of any acquisition or disposal of Shares.
ITALY
Exchange Control Notification. Foreign investments held outside Italy, including Shares, must be reported on the RW Form of the annual tax return and may be subject to annual IVAFE wealth tax.
NETHERLANDS
Insider Trading. The Participant should be aware of Dutch insider-trading rules and consult a personal legal advisor before transacting in Shares.
POLAND
Exchange Control. Funds in excess of €15,000 transferred into Poland in connection with the sale of Shares must be transferred via a bank account.
SPAIN
Nature of Grant. PSUs are not part of any employment contract and shall not be considered a mandatory benefit, salary, or any other right. Termination of employment will result in cancellation of unvested PSUs except as otherwise provided herein.
UNITED ARAB EMIRATES
The PSUs and underlying Shares have not been approved or licensed by the UAE Securities and Commodities Authority and have not been authorized or licensed for offering, marketing, or sale in the United Arab Emirates.
UNITED KINGDOM
National Insurance Contributions. As a condition of participation, the Participant agrees to accept liability for secondary Class 1 National Insurance Contributions (Employer's Liability) payable in connection with the PSUs by executing a Joint Election in the form provided by the Company.
EXHIBIT 1 TO APPENDIX A
GDPR PRIVACY NOTICE FOR PARTICIPANTS IN THE EU AND UK
RE: Groupon, Inc. 2011 Incentive Plan, as amended (the "Plan")
The EU General Data Protection Regulation (the "GDPR") requires Groupon, Inc. (the "Company") to provide certain information about how Personal Data relating to EU- and UK-based Participants is used. This notice explains why the Company holds this Personal Data and how Participants can exercise their data rights. Post-Brexit, GDPR continues to apply in the UK via the UK Data Protection Act 2018.
"Personal Data" means information relating to the Participant that the Company processes to administer the Plan. It includes name, home address, email address, telephone number, date of birth, social insurance number, identification number, salary, nationality, job title, and details of any equity rights in the Company.
Data Controller: Groupon, Inc., 35 W. Wacker Drive, Floor 25, Chicago, Illinois 60601, U.S.A.
Purposes: Personal Data is held exclusively to implement, administer, and manage the Participant's participation in the Plan pursuant to the Company's contractual obligations to the Participant.
International Transfers: The Company is based in the United States and Agreements are performed in the United States. Transfer of Personal Data to the United States is necessary to fulfill the Company's contractual obligations. The United States may have different data privacy laws and protections than those in the European Union.
Retention: Personal Data relating to the Plan will be retained for ten (10) years after the Participant's separation from the Company.
Data Subject Rights: Participants have the right of data portability, the right to object to processing, the right to correct inaccurate data, and the right to erasure, among other rights under the GDPR. To exercise rights or for more information, contact: HR@groupon.com. Data Protection Officer: dpo@groupon.com.
Exhibit 10.2
GROUPON, INC.
SEVERANCE BENEFIT AGREEMENT
This SEVERANCE BENEFIT AGREEMENT (the "Agreement") is entered into on the 5th day of November, 2026 (the "Effective Date") between Groupon, Inc. (the "Company"), a Delaware corporation, and Rana Kashyap (the "Executive").
WHEREAS, the Executive will continue to serve as a key employee of the Company and the Executive’s continued services and knowledge are valuable to the Company in connection with the management of one or more of the Company’s principal operating facilities, divisions, departments or subsidiaries; and
WHEREAS, the Board has determined that it is in the best interests of the Company and its stockholders to enter into this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained, the Company and the Executive hereby agree as follows:
1. Definitions. As used in this Agreement, the following terms shall have the respective meanings set forth below:
A. "Average Stock Price" means, except as otherwise provided in an award agreement, the average stock price of a Stock Price Hurdle PSU, determined by calculating the 90 consecutive calendar day volume-weighted average stock price of one share of the Company’s common stock. For purposes of Covered PSU Awards, "Average Stock Price" has the meaning set forth in the applicable award agreement.
B. "Board" means the Board of Directors of the Company.
C. "Cause" means:
i. the Executive’s material failure to perform his or her reasonably assigned duties as an employee (other than a failure resulting from the Executive’s disability) after written notice of such failure from the Company or any of its subsidiaries (hereinafter referred to collectively as "Groupon") describing the failure to perform such duties and a reasonable time to cure of at least thirty (30) days;
ii. the Executive’s engaging in any intentional act of fraud, theft, dishonesty, or falsification with respect to Groupon;
iii. the Executive’s conviction (including a plea of guilty or nolo contendere) of (a) a felony, (b) a crime of moral turpitude, or (c) a criminal act that prevents the Executive from performing his or her duties with Groupon;
iv. the Executive engaging in gross misconduct or willfully violating Groupon’s Global Code of Conduct or other material written policies of Groupon, including without limitation policies relating to anti-harassment and hostile work environment, insider trading, conflicts of interest, or the treatment of confidential information where such conduct or violation is not cured, if able to be cured within Groupon’s discretion, within ten (10) days of written notice thereof by Groupon; or
v. the Executive’s violation of any federal or state law or regulation applicable to the business of Groupon.
Termination by Groupon shall not be treated as for "Cause" unless Groupon terminates the Executive’s employment within ninety (90) days following Groupon becoming aware of the occurrence of the above conditions.
D. "Change in Control" means the occurrence of either of the following events:
i. an Ownership Change Event or a series of related Ownership Change Events (collectively, a "Transaction") in which the stockholders of the Company immediately before the Transaction do not retain in substantially the same proportions immediately after the Transaction direct or indirect beneficial ownership of more than fifty percent (50%) of the total combined voting power of the outstanding securities entitled to vote generally in the election of Board members or, in the case of an Ownership Change Event described in clause (iii) of the definition of Ownership Change Event, the entity to which the assets of the Company were transferred (the "Transferee"), as the case may be; or
ii. approval by the stockholders of a plan of complete liquidation or dissolution of the Company;
provided, however, that a Change in Control shall be deemed not to include: (i) if Pale Fire Capital SE ("Pale Fire") together with its affiliated entities and individuals, becomes the direct or indirect beneficial owner of more than fifty percent (50%) of the total combined voting power of the outstanding securities entitled to vote generally in the election of Board members, unless as a result of a transaction approved by the Board, including by a majority of members of the Board unaffiliated with Pale Fire; and/or (ii) a transaction in which a majority of the members of the board of directors of the continuing, surviving or successor entity, or parent thereof, immediately after such transaction is comprised of Incumbent Directors. Indirect beneficial ownership shall include, without limitation, an interest resulting from ownership of the voting securities of one or more corporations or other business entities which own the Company or the Transferee, as the case may be, either directly or through one or more subsidiary corporations or other business entities. The Board shall have the right to determine whether multiple sales or exchanges of the voting securities of the Company or multiple Ownership Change Events are related, and its determination shall be final, binding and conclusive.
E. "Change in Control Termination" means a Termination without Cause that occurs on the date of the Change in Control, or in the six (6) months prior to, or twelve (12) months following, the date on which a Change in Control occurs.
F. "Code" means the Internal Revenue Code of 1986, as amended.
G. "Committee" means the Compensation Committee of the Board.
H. "Company" means Groupon, Inc., a Delaware corporation.
I. "Covered Equity-Based Award" means a Stock Option, restricted stock unit (including, for the avoidance of doubt, an ERSU), performance share unit (including, for the avoidance of doubt, a Covered PSU Award), or other equity-based award granted under the Incentive Plan; provided, however, that "Covered Equity-Based Award" will not include any awards made under award agreements that expressly state that they are not subject to this Agreement.
J. "Eligible Termination" means the Executive’s "separation from service" (within the meaning of Section 409A) with Groupon that is (i) an involuntary termination of employment by Groupon without Cause ("Termination without Cause"), or (ii) a resignation for Good Reason. An Eligible Termination does not include a termination of employment (a) by Groupon for Cause, (b) by the Executive other than for Good Reason, (c) as a result of the Executive’s death, (d) by Groupon due to the Executive’s absence from the Executive’s duties with the Company on a full-time basis for at least 180 consecutive days as a result of the Executive’s incapacity due to physical or mental illness ("Termination due to Incapacity"); or (e) Executive’s fixed term Employment Contract end (regardless of whether the fixed term contract is extended). An Eligible Termination also does not include a termination of employment occurring upon a sale of all or part of the business in which the Executive is employed, a merger or other combination, spin-off, reorganization or liquidation, dissolution or other winding up or other similar transaction involving Groupon, in any such case where an offer of comparable employment is made to the Executive by the purchaser, acquirer or successor or surviving entity (including a third-party vendor) concurrently with his or her termination.
K. "Good Reason" means, without the Executive’s express written consent, the occurrence of any of the following events:
i. a material adverse change in the nature or scope of the Executive’s authority, powers, functions, duties, responsibilities, or reporting relationship, provided that it shall not be a material adverse change in Executive’s reporting relationship if the Executive directly reports to the board of directors of the Company or its successor (including Groupon’s or its successor’s ultimate parent company, if any);
ii. a material reduction by Groupon in the Executive’s rate of annual base salary;
iii. the failure of Groupon to continue any material compensation plan in which the Executive is participating, unless the Executive is permitted to participate in other plans providing the Executive with substantially comparable compensation-related benefits, or the taking of any action by Groupon which would adversely affect the Executive’s participation in or materially reduce the Executive’s compensation-related benefits under any such plan;
iv. a change in the Executive’s primary employment location to a location that is more than 50 miles from the primary location of the Executive’s employment immediately before such change. (For the avoidance of doubt, it will not be deemed a change if the office location moves and Executive is not required to report to the new location on a full-time basis and is able to work remotely from a home office or agreed upon location within 50 miles of the current office location); or
v. the failure of Groupon to obtain from any successor or transferee of Groupon an express written and unconditional assumption of Groupon’s obligations under this Agreement, as further described in Section 5.C(ii) of this Agreement.
The Executive’s employment may be terminated by the Executive for Good Reason only if (a) an event or circumstance set forth in this Section shall have occurred and the Executive provides the Company with written notice thereof within ninety (90) days after the Executive has knowledge of the occurrence or existence of such event or circumstance, which notice shall specifically identify the event or circumstance that the Executive believes constitutes Good Reason, (b) the Company fails to correct the circumstance or event so identified within thirty (30) days after the receipt of such notice, and (c) the Executive resigns within sixty (60) days following the expiration of the cure period referenced in the preceding clause (b).
L. "Incentive Plan" means the Groupon, Inc. 2011 Incentive Plan, as amended from time to time.
M. "Incumbent Director" means a director who either (i) is a member of the Board as of the Effective Date or (ii) is elected, or nominated for election, to the Board with the affirmative votes of at least a majority of the Incumbent Directors at the time of such election or nomination (but excluding a director who was elected or nominated in connection with an actual or threatened proxy contest relating to the election of directors of the Company).
N. "Ownership Change Event" means the occurrence of any of the following with respect to the Company: (i) the direct or indirect sale or exchange in a single or series of related transactions by the stockholders of the Company of securities of the Company representing more than fifty percent (50%) of the total combined voting power of the Company’s then-outstanding securities entitled to vote generally in the election of Board members; (ii) a merger or consolidation in which the Company is a party; or (iii) the sale, exchange, or transfer of all or substantially all of the assets of the Company (other than a sale, exchange or transfer to one or more subsidiaries).
O. "Section 409A" means Section 409A of the Code and the regulations thereunder.
P. "Stock Option" means a stock option granted under the Incentive Plan.
Q. "Stock Price Hurdle PSUs" means Covered Equity-Based Awards that are performance based awards under which each PSU shall only vest if both certain stock price hurdles and certain 1-year service periods applicable to the PSU are met within a performance period. A stock price hurdle is deemed achieved on the date the Committee certifies that the Company’s Average Stock Price equals or exceeds a hurdle during an award’s performance period. The service condition is deemed achieved as provided in the Executive’s award agreement.
R. "Termination Date" means the date on which an Executive experiences an Eligible Termination.
S. "Time-Based Awards" means Covered Equity-Based Awards (other than Covered ERSU Awards) whose vesting is based solely on continued service over time, including restricted stock units granted under the Company’s 2024 and 2025 equity award programs.
The following additional defined terms relate to the Company's annual equity award programs:
T. "Covered ERSU Award" means an Enhanced Restricted Share Unit award granted under the Incentive Plan pursuant to the Company’s annual enhanced restricted share unit award program for any year, as evidenced by a Notice of Enhanced Restricted Share Unit Award and related Enhanced Restricted Share Unit Award Agreement.
U. "Covered PSU Award" means a Performance Share Unit award granted under the Incentive Plan pursuant to the Company’s annual PSU award program for any year, which vests on the basis, and against the performance measures and comparator group, set forth in the applicable award agreement, as evidenced by a Notice of Performance Share Unit Award and related Performance Share Unit Award Agreement.
V. "Base Tranche" means, with respect to a Covered ERSU Award, the portion of the total number of Enhanced Restricted Share Units granted pursuant to such award that is scheduled to vest on a single ERSU Vesting Date, as set forth in the applicable award agreement (before application of any Performance Multiplier).
W. "ERSU" or "Enhanced Restricted Share Unit" means an enhanced restricted share unit granted pursuant to a Covered ERSU Award, being a form of restricted share unit under the Incentive Plan subject to both a service condition and a YEPR-based Performance Multiplier.
X. "ERSU Vesting Date" means each of the scheduled annual vesting dates for each Base Tranche of a Covered ERSU Award, as set forth in the applicable award agreement.
Y. "Negative TSR Cap" means the limitation set forth in the applicable Covered PSU Award agreement providing that, if the Groupon Absolute TSR over the Performance Period is negative (i.e., less than zero percent (0%)), the Vesting Percentage applicable to such Covered PSU Award shall not exceed one hundred percent (100%) of the number of Target PSUs, regardless of the rTSR Percentile achieved.
Z. "Performance Determination Period" means, with respect to each Base Tranche of a Covered ERSU Award, the calendar year immediately preceding the applicable ERSU Vesting Date for that tranche, as set forth in the applicable Covered ERSU Award agreement.
AA. "Performance Multiplier" means the multiplier determined by reference to the Executive’s YEPR Rating for the relevant Performance Determination Period, applied to each Base Tranche of a Covered ERSU Award to determine the actual number of ERSUs vesting on the applicable ERSU Vesting Date. The Performance Multiplier ranges from 0% to 300% of the Base Tranche as set forth in the applicable Covered ERSU Award agreement and in Exhibit 1 hereto.
BB. "Performance Period" means, with respect to a Covered PSU Award, the period commencing on the Grant Date of such award and ending on the Performance Period End Date.
CC. "Performance Period End Date" means the date specified as the last day of the Performance Period in the applicable award agreement.
DD. "rTSR Percentile" means the percentile ranking of the Company’s total shareholder return over the Performance Period relative to the distribution of constituent-level total shareholder return outcomes within the Russell 2000 Index over the same period, as determined and certified by the Committee in accordance with the applicable Covered PSU Award agreement.
EE. "YEPR Rating" means the annual Year-End Performance Review rating assigned to the Executive pursuant to the Company’s formal performance review process for the relevant Performance Determination Period, as certified by the Committee (or its delegate) in its sole discretion, subject to the force-curve calibration process described in the applicable Covered ERSU Award agreement.
FF. Award Agreement Terms. Capitalized terms used in this Agreement that are not defined herein — including "Continuous Service," "Grant Date," "Grant Date VWAP," "Groupon Absolute TSR," "Share," "Target PSUs," "Vesting Date VWAP" and "Vesting Percentage" — have the meanings given to them in the applicable award agreement or, if not defined therein, in the Incentive Plan.
2. Severance Benefits.
A. Eligibility. The provisions of this Section 2 apply only if (i) the Executive experiences an Eligible Termination (or, in the case of Section 2.C(ii), a Termination due to Incapacity), (ii) the Executive executes and remains in compliance with Executive’s Employment Contract and Executive’s Confidentiality, Intellectual Property, and Restrictive Covenants Agreement (as amended from time
to time) that includes Non-Compete, Non-solicitation and No-Hire clauses, and (iii) the Executive executes a standard mutual separation agreement containing, among other provisions, a release of claims within the time period required under such standard mutual separation agreement following the Termination Date.
B. Basic Cash Severance Payment. Upon an Eligible Termination, the Company shall pay the Executive in a lump sum on the 60th day after the Termination Date (the "Payment Date") an amount equal to three (3) months of the Executive’s annual base salary from the Company and its subsidiaries to the extent not theretofore paid. The Executive agrees that the amount of the Basic Cash Severance Payment includes the statutory severance payment that may be owed to the Executive under the local law the employee is employed and no additional statutory severance would be owed to Executive. In the event of a Change in Control Termination, the Company shall pay the Executive, in addition to the payment provided for in the preceding sentence, in a lump sum on the Payment Date, or, if later, on the 20th day after the date on which a Change in Control occurs, an amount equal to the Executive’s target annual cash incentive award for the year of such Change in Control Termination (to the extent not theretofore paid) multiplied by a fraction, the numerator of which is the number of days of Executive’s employment during the calendar year of such Change in Control Termination, and the denominator of which is the number of days in the calendar year in which the Change in Control Termination occurs.
C. Equity Award Vesting Acceleration.
i. Upon an Eligible Termination that is not a Change in Control Termination, the vesting and exercisability of the Executive’s Covered Equity-Based Awards shall be accelerated to the extent provided in Exhibit 1.
ii. Upon a Termination due to Incapacity: (a) the Committee shall have the discretion to provide that Executive’s outstanding Stock Price Hurdle PSUs shall vest as if 100% of both the service conditions and stock price hurdle conditions have been met; (b) the Committee shall have the discretion to provide that all outstanding Covered PSU Awards shall vest at one hundred percent (100%) of target (applying a Vesting Percentage of 100% irrespective of actual rTSR performance); and (c) the Committee shall have the discretion to provide that all outstanding Covered ERSU Awards shall vest in full, with the Performance Multiplier for each accelerating Base Tranche deemed to be 100% (Meets Expectations).
iii. Upon a Change in Control Termination, the vesting and exercisability of the Executive’s Covered Equity-Based Awards shall be accelerated to the extent provided in Exhibit 2.
3. Additional Change in Control Provisions.
A. Obligations of the Executive. Notwithstanding anything to the contrary, included in any other employment contract entered into between the Executive and Groupon, the Executive agrees that in the event any person or group attempts a Change in Control, the Executive shall not voluntarily leave the employ of Groupon without Good Reason (i) until such attempted Change in Control terminates or (ii) if a Change in Control shall occur, until ninety (90) days following such Change in Control.
B. Section 4999 Excise Tax.
i. Anything in this Agreement to the contrary notwithstanding, in the event it is determined that (a) any payment, award, benefit or distribution (or any acceleration of any payment, award, benefit or distribution) by the Company (or any of its subsidiaries) or any entity that effectuates a
Change in Control (or any of its affiliated entities) to or for the benefit of the Executive (whether pursuant to this Agreement or otherwise) (the "Payments") would be subject to the excise tax imposed by Section 4999 of the Code (the "Excise Tax"), and (b) the reduction of the amounts payable to the Executive under this Agreement to the maximum amount that could be paid to the Executive without giving rise to the Excise Tax (the "Safe Harbor Cap") would provide the Executive with a greater after-tax amount than if such amounts were not reduced, then the amounts payable to the Executive under this Agreement shall be reduced (but not below zero) to the Safe Harbor Cap. The reduction of the amounts payable hereunder, if applicable, shall be made to the extent necessary in the following order: (1) the acceleration of vesting of stock options with an exercise price that exceeds the then fair market value of the stock subject to the award and of other equity awards, provided that the value of such acceleration is not permitted to be determined under Treasury Regulation Section 1.280G-1, Q/A-24(c); (2) the payment under Sections 2.B and 2.C; (3) any equity awards accelerated pursuant to Section 2.C or otherwise valued at full value, provided that the value of such acceleration is not permitted to be determined under Treasury Regulation Section 1.280G-1, Q/A-24(c); (4) the acceleration of vesting of stock options with an exercise price that exceeds the then fair market value of the stock subject to the award and other equity awards, provided that the value of such acceleration is permitted to be determined under Treasury Regulation Section 1.280G-1, Q/A-24(c); and (5) the acceleration of vesting of all other stock options and equity awards on a basis resulting in the highest amount retained by the Executive. For purposes of reducing the Payments to the Safe Harbor Cap, only amounts payable under this Agreement (and no other Payments) shall be reduced. If the reduction of the amounts payable hereunder would not result in a greater after-tax result to the Executive, no amounts payable under this Agreement shall be reduced pursuant to this provision.
ii. All determinations required to be made under this Section 3.B shall be made by the public accounting firm that is retained by the Company as of the date immediately prior to the Change in Control (the "Accounting Firm") which shall provide detailed supporting calculations both to the Company and the Executive within fifteen (15) business days of the receipt of notice from the Company or the Executive that there has been a Payment, or such earlier time as is requested by the Company. Notwithstanding the foregoing, in the event (a) the Board shall determine prior to the Change in Control that the Accounting Firm is precluded from performing such services under applicable auditor independence rules or (b) the Audit Committee of the Board determines that it does not want the Accounting Firm to perform such services because of auditor independence concerns or (c) the Accounting Firm is serving as accountant or auditor for the person(s) effecting the Change in Control, the Board shall appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees, costs and expenses (including, but not limited to, the costs of retaining experts) of the Accounting Firm shall be borne by the Company. If Payments are reduced to the Safe Harbor Cap or the Accounting Firm determines that no Excise Tax is payable by the Executive without a reduction in Payments, the Accounting Firm shall provide a written opinion to the Executive to the effect that the Executive is not required to report any Excise Tax on the Executive’s federal income tax return, and that the failure to report the Excise Tax, if any, on the Executive’s applicable federal income tax return will not result in the imposition of a negligence or similar penalty. The determination by the Accounting Firm shall be binding upon the Company and the Executive.
iii. If it is established pursuant to a final determination of a court or an Internal Revenue Service (the "IRS") proceeding which has been finally and conclusively resolved, that Payments have been made to, or provided for the benefit of, the Executive by the Company which are in excess of the limitations provided in this Section (referred to hereinafter as an "Excess Payment"), the Executive shall repay the Excess Payment to the Company on demand, together with interest on
the Excess Payment at the applicable federal rate (as defined in Section 1274(d) of the Code) from the date of the Executive’s receipt of such Excess Payment until the date of such repayment. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the determination, it is possible that Payments which will not have been made by the Company should have been made (an "Underpayment"), consistent with the calculations required to be made under this Section. In the event that it is determined (a) by the Accounting Firm, the Company (which shall include the position taken by the Company, or together with its consolidated group, on its federal income tax return) or the IRS or (b) pursuant to a determination by a court, that an Underpayment has occurred, the Company shall pay an amount equal to such Underpayment to the Executive within ten (10) days of such determination together with interest on such amount at the applicable federal rate from the date such amount would have been paid to the Executive until the date of payment. The Executive shall cooperate, to the extent the Executive’s expenses are reimbursed by the Company, with any reasonable requests by the Company in connection with any contests or disputes with the IRS in connection with the Excise Tax or the determination of the Excess Payment. Notwithstanding the foregoing, in the event that amounts payable under this Agreement were reduced pursuant to Section 3.B(i) and the present value of any Payment is subsequently re-determined by the Accounting Firm within the context of Treasury Regulation Section 1.280G-1 Q/A 33 that reduces the value of the Payment, the Company shall promptly pay to Executive any amounts payable under this Agreement that were not previously paid solely as a result of Section 3.B(i), subject to the Safe Harbor Cap.
iv. A payment or reimbursement of expenses described in this Section 3 shall be made promptly and in no event later than December 31 of the year following the year in which such expenses were incurred, any reimbursement of expenses incurred due to a tax audit or litigation shall be made no later than the end of the calendar year immediately following the calendar year in which the taxes that are the subject of the audit or litigation are remitted to the taxing authority, or, if no taxes are to be remitted, the end of the calendar year following the calendar year in which the audit or litigation is completed, and the amount of such expenses eligible for payment or reimbursement in any year shall not affect the amount of such expenses eligible for payment or reimbursement in any other year nor shall such right to payment or reimbursement be subject to liquidation or exchange for another benefit.
4. Section 409A.
A. In General. The parties intend that this Agreement and the benefits provided hereunder be interpreted and construed to comply with Section 409A to the extent applicable thereto. Notwithstanding any provision of this Agreement to the contrary, this Agreement shall be interpreted and construed consistent with this intent, provided that the Company shall not be required to assume any increased economic burden in connection therewith. Although the Company intends to administer this Agreement so that it will comply with the requirements of Section 409A, the Company does not represent or warrant that this Agreement will comply with Section 409A or any other provision of federal, state, local or non-United States law.
B. Prohibition on Acceleration of Payments. The time or schedule of any payment or amount scheduled to be paid pursuant to the terms of this Agreement, or pursuant to the terms of any other employment agreement or compensation arrangement entered into between the Executive and the Company or any of its subsidiaries, may not be accelerated hereunder, or under any such other employment agreement or other compensation arrangement, except as permitted under Section 409A.
C. Delay Period. In the event that any payment or distribution or portion of any payment or distribution to be made to the Executive hereunder cannot be characterized as a "short-term deferral" for purposes of Section 409A and is not otherwise exempt from the provisions of Section 409A, and
the Executive is determined to be a "specified employee" under Section 409A, such portion of the payment shall be delayed until the earlier to occur of the Executive’s death or the date that is six (6) months after the Executive’s termination of employment with Groupon (the "Delay Period"). Upon the expiration of the Delay Period, the payments delayed pursuant to this Section 4.C shall be paid to the Executive in a lump sum, and any remaining payments due under this Agreement shall be payable in accordance with their original payment schedule.
5. Miscellaneous.
A. Withholding Taxes. The Company may withhold from all payments due to the Executive hereunder all taxes which, by applicable federal, state, local or other law, the Company is required to withhold therefrom.
B. Scope of Agreement. Nothing in this Agreement shall be deemed to entitle the Executive to continued employment with Groupon.
C. Successors; Binding Agreement.
i. This Agreement shall not be terminated by any merger or consolidation of the Company whereby the Company is or is not the surviving or resulting corporation or as a result of any transfer of all or substantially all of the assets of the Company. In the event of any such merger, consolidation or transfer of assets, the provisions of this Agreement shall be binding upon the surviving or resulting corporation or the person or entity to which such assets are transferred.
ii. The Company agrees that concurrently with any merger, consolidation or transfer of assets referred to in Section 5.C(i), it will cause any successor or transferee unconditionally to assume, by written instrument delivered to the Executive, all of the obligations of the Company hereunder.
iii. This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Executive shall die while any amounts would be payable to the Executive hereunder had the Executive continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to such person or persons appointed in writing by the Executive to receive such amounts or, if no person is so appointed, to the Executive’s estate.
D. Notices.
i. For purposes of this Agreement, all notices and other communications required or permitted hereunder shall be in writing and shall be deemed to have been duly given when delivered or five (5) days after deposit in the United States mail, certified and return receipt requested, postage prepaid, addressed (a) if to the Executive, to the last known residential address on file for the Executive with the Company, and if to the Company, attention General Counsel, with a copy to the Secretary, or (b) to such other address as either party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.
ii. A written notice of the Executive’s Termination Date by the Company or the Executive, as the case may be, to the other, shall (a) indicate the specific termination provision in this Agreement relied upon, (b) to the extent applicable, set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so
indicated and (c) specify the Termination Date (which date shall be not less than fifteen (15) days after the giving of such notice). The failure by the Executive or the Company to set forth in such notice any fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any right of the Executive or the Company hereunder or preclude the Executive or the Company from asserting such fact or circumstance in enforcing the Executive’s or the Company’s rights hereunder.
E. Governing Law; Validity. The interpretation, construction and performance of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of Illinois without regard to the principle of conflicts of laws. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provisions of this Agreement, which other provisions shall remain in full force and effect.
F. Counterparts. This Agreement may be executed in two counterparts, each of which shall be deemed to be an original and both of which together shall constitute one and the same instrument.
G. Entire Agreement. Except to the extent expressly provided herein, this Agreement constitutes the entire understanding between the parties with respect to the Executive’s severance pay and benefits in the event of a termination of the Executive’s employment with Groupon and supersedes any other agreement, whether written or unwritten, with respect thereto.
6. Full Settlement; Resolution of Disputes; Clawback Policy.
A. If there shall be any dispute between the Company and the Executive in the event of any termination of the Executive’s employment, then unless and until there is a final, nonappealable judgment by a court of competent jurisdiction declaring that such termination was for Cause or that the Company is not otherwise obligated to pay any amount or provide any benefit to the Executive under Section 2, the Company shall pay all amounts, and provide all benefits, to the Executive that the Company would be required to pay or provide pursuant to Section 2 as though such termination were by the Company without Cause or by the Executive with Good Reason; provided, however, that the Company shall not be required to pay any disputed amounts pursuant to this Section 6.A except upon receipt of an undertaking by or on behalf of the Executive to repay all such amounts to which the Executive is ultimately adjudged by such court not to be entitled.
B. Except for a contest or dispute regarding the application of the Company’s compensation recovery policy described in Section 6.C below, if any contest or dispute shall arise under this Agreement involving termination of the Executive’s employment with the Company or involving the failure or refusal of the Company to perform fully in accordance with the terms hereof, the Company shall reimburse the Executive, on a current basis, for all legal fees and expenses, if any, incurred by the Executive in connection with such contest or dispute; provided, however, that in the event the resolution of any such contest or dispute includes a finding denying, in total, the Executive’s claims in such contest or dispute, the Executive shall be required to reimburse the Company, over a period of twelve (12) months from the date of such resolution, for all sums advanced to the Executive pursuant to this Section 6.B. Payment or reimbursement of expenses described in this Section 6.B shall be made promptly and in no event later than December 31 of the year following the year in which such expenses were incurred, and the amount of such expenses eligible for payment or reimbursement in any year shall not affect the amount of such expenses eligible for payment or reimbursement in any other year nor shall the right to payment or reimbursement be subject to liquidation or exchange for another benefit.
C. Notwithstanding anything in this Section 6 or elsewhere in this Agreement, Executive consents and acknowledges the application of the Company’s compensation recovery policy as in effect from time to time, and agrees, to the extent applicable, that compensation payable under this Agreement (including with respect to equity awards, any proceeds, gains or other economic benefit Participant actually or constructively receives upon receipt of such awards, the receipt or resale of any shares of common stock thereunder or any other amounts or benefits as required by applicable US law) may be subject to clawback or recovery thereunder. Further, the Company will not be required to reimburse Executive for any legal fees or expenses incurred by Executive that relate to disputing a recovery under such policy.
7. Agreement Modification, Waiver, or Termination.
A. Subject to Section 7.B, no provision of this Agreement may be modified or waived unless such modification or waiver is agreed to in writing and signed by the Executive and by a duly authorized officer of the Company. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. Failure by the Executive or the Company to insist upon strict compliance with any provision of this Agreement or to assert any right the Executive or the Company may have hereunder, including, without limitation, the right of the Executive to terminate employment for Good Reason, shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement.
B. The Company shall have the right prior to a Change in Control, in its sole discretion, pursuant to action by the Board, to approve the termination of this Agreement, which termination shall not become effective until the date fixed by the Board for such termination, which date shall be at least 120 days after notice thereof is given by the Company to the Executive in accordance with Section 5.D; provided, however, that no such action shall be taken by the Board during any period of time when the Board has knowledge that any person has taken steps reasonably calculated to effect a Change in Control until, in the opinion of the Board, such person has abandoned or terminated its efforts to effect a Change in Control; and provided, further, that in no event shall this Agreement be terminated during the 12-month period commencing on the date of a Change in Control.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by a duly authorized officer of the Company and the Executive has executed this Agreement as of the Effective Date.
Groupon, Inc.
/s/ Nick Walker
Signature
Nicholas Walker, Chief People Officer
Print Name / Title
11/04/2026
Date
Chief Financial Officer
/s/ Rana Kashyap
Signature
Rana Kashyap
Print Name / Title
11/05/2026
Date
[Signature Page to Severance Benefit Agreement]
EXHIBIT 1
Vesting Acceleration Upon an Eligible Termination (Non-Change in Control Termination)
The effect on the Executive’s Covered Equity-Based Awards of an Eligible Termination that is not a Change in Control Termination is as follows (subject to the terms of the Agreement, including but not limited to Section 2.A thereof):
PART A: 2024/2025 Award Programs
1. Time-Based Awards (2024/2025 RSUs).
(a) Immediately upon the Executive’s Termination Date, the portion of the Executive’s unvested Time-Based Awards that is scheduled to vest during the twelve (12)-month period beginning on the Termination Date shall immediately vest and, for such Time-Based Awards other than Stock Options, be paid on the Payment Date.
2. Stock Price Hurdle PSUs (2024/2025 PSU Programs).
(a) With respect to any outstanding Stock Price Hurdle PSUs, if an Executive incurs an Eligible Termination (other than a Termination due to Incapacity or a resignation for Good Reason as described in Section 1(K)(i)) after the date both the first 1-year service period and the lowest stock price hurdle condition have been achieved, but prior to the last day of the award’s performance period, then upon the Executive’s Termination Date, the Executive’s Stock Price Hurdle PSUs shall vest based on the number of PSUs for which both the stock price hurdle and service condition are deemed achieved as of such date.
(b) With respect to the service condition, Executive will be deemed to have achieved the 1-year service condition in which the Termination Date falls, with the number of PSUs achieving such condition prorated based on the number of days Executive provided service between the start date of the 1-year service period and the Executive’s Termination Date.
(c) With respect to the stock price hurdle condition, the number of PSUs achieving the condition as of the Termination Date shall include (i) all PSUs having achieved the condition and received Committee certification thereof as of the Termination Date (but which have not vested solely because they have not yet met the service condition) and (ii) to the extent that the Average Stock Price on the Termination Date exceeds one stock price hurdle but is below the next highest stock price hurdle, a proportionate number of PSUs that would have been deemed achieved upon the next highest stock price hurdle shall be deemed achieved as of the Termination Date, based on linear interpolation of the Termination Date’s Average Stock Price between the two stock price hurdles, subject to certification by the Committee. Any portion of the Stock Price Hurdle PSUs that do not vest as of the Termination Date shall be forfeited on such date.
PART B: 2026 and Later Award Programs
3. Enhanced Restricted Share Units (Covered ERSU Awards).
Upon an Eligible Termination that is not a Change in Control Termination, the following provisions shall apply to any outstanding Covered ERSU Awards:
(a) Service Condition. The Base Tranche(s) that are scheduled to vest on the ERSU Vesting Date(s) occurring within the twelve (12)-month period beginning on the Termination Date shall immediately vest on the Termination Date. For this purpose, a Base Tranche whose vesting date has been deferred under a conditional vesting adjustment provision of the applicable Covered ERSU Award agreement shall be treated as scheduled to vest on the ERSU Vesting Date originally scheduled for that tranche, unless the Committee determines otherwise in its sole discretion. Any Base Tranches not otherwise accelerated pursuant to this paragraph shall be forfeited as of the Termination Date.
(b) Performance Multiplier. Except as otherwise provided in the applicable Covered ERSU Award agreement with respect to the Performance Multiplier applicable to a deferred Base Tranche, each accelerating Base Tranche shall be multiplied by the Performance Multiplier corresponding to the most recently certified YEPR Rating for the Performance Determination Period that has been fully completed as of the Termination Date. If no YEPR Rating has yet been certified for any Performance Determination Period as of the Termination Date (including where the Termination Date falls during the first Performance Determination Period before certification), the Committee shall determine the applicable Performance Multiplier in its sole discretion, subject to the right to use a default of 100% (Meets Expectations). Notwithstanding the foregoing, the Committee may, in its sole discretion, apply a Performance Multiplier different from the one determined under this paragraph, provided that the Performance Multiplier so applied shall not exceed 300%.
(c) Settlement. Vested ERSUs (following application of the Performance Multiplier) shall be settled and converted to Shares of Groupon, Inc. common stock on the Payment Date. Fractional shares shall be rounded down to the nearest whole Share.
Reference table: Performance Multiplier by YEPR Rating (as set out in the applicable Covered ERSU Award agreement):
| YEPR Annual Rating | Performance Multiplier | Outcome | ||||||
| 2.7 and below | 0% | Tranche forfeits | ||||||
| 2.8 – 2.9 | 50% | Half the tranche vests | ||||||
| 3.0 – 3.4 (Meets Expectations) | 100% | Full tranche vests | ||||||
| 3.5 – 4.0 | 150% | 1.5× tranche | ||||||
| 4.1 – 4.7 | 200% | 2× tranche | ||||||
| 4.8 – 5.0 | 300% | 3× tranche (maximum) | ||||||
Reproduced for reference; the Performance Multiplier scale set out in the applicable Covered ERSU Award agreement controls.
(d) Section 409A. The settlement of accelerated ERSUs is intended to qualify as a short-term deferral under Treasury Regulation §1.409A-1(b)(4) and shall be made no later than March 15 of the calendar year following the calendar year in which the Termination Date occurs. In any event, the timing of settlement shall not be accelerated except as otherwise permitted under Section 409A.
4. Performance Share Units (Covered PSU Awards).
Upon an Eligible Termination that is not a Change in Control Termination (other than a resignation for Good Reason described in Section 1(K)(i) of this Agreement), the following provisions shall apply to any outstanding Covered PSU Awards, provided that at least one complete calendar month of Continuous Service has elapsed since the Grant Date of such award:
(a) Pro-Ration of Target PSUs. A pro-rated portion of the outstanding Target PSUs (the "Pro-Rated PSU Amount") shall remain eligible to vest following the Termination Date, calculated as follows: Pro-Rated PSU Amount = Total Target PSUs Granted × (Completed Whole Months of Continuous Service from Grant Date to Termination Date ÷ Total Whole Months from Grant Date to the Performance Period End Date) All Target PSUs in excess of the Pro-Rated PSU Amount shall be forfeited as of the Termination Date.
(b) Continuing Performance Measurement. The Pro-Rated PSU Amount shall remain outstanding through the Performance Period End Date and shall vest (if at all) based on actual rTSR performance, as certified by the Committee following the Performance Period End Date. The Negative TSR Cap shall continue to apply. The actual number of PSUs vesting shall be determined by multiplying the Pro-Rated PSU Amount by the applicable Vesting Percentage derived from the rTSR Percentile, as set forth in Exhibit A to the applicable Covered PSU Award agreement.
Reference table: rTSR Vesting Schedule (as set out in the applicable Covered PSU Award agreement):
| Groupon rTSR Percentile vs. Russell 2000 | Vesting % of Target PSUs | Notes | ||||||
| Below 50th percentile | 0% | No payout below median | ||||||
| At 50th percentile | 0% | Threshold; payout begins just above median | ||||||
| Between 50th and 90th percentile | Linear: 0% → 300% | + 7.5% per percentile point above 50th | ||||||
| At or above 90th percentile | 300% | Maximum payout | ||||||
| Negative TSR Cap applies | Capped at 100% | If Groupon absolute TSR is negative | ||||||
Reproduced for reference; the vesting schedule set out in the applicable Covered PSU Award agreement controls.
(c) Settlement. Settlement of any vested PSUs shall occur as soon as reasonably practicable following the Committee’s certification of rTSR performance after the Performance Period End Date, and in no event later than March 15 of the calendar year following the calendar year in which the Performance Period End Date occurs.
(d) Section 409A. The parties acknowledge that the deferred settlement of the Pro-Rated PSU Amount described in this Section may constitute a "deferral of compensation" within the meaning of Section 409A. The timing of such settlement shall not be accelerated except as otherwise permitted under Section 409A. If the Executive is a "specified employee" within the meaning of Section 409A, settlement shall be further subject to the Delay Period provisions of Section 4.C of this Agreement.
5. Stock Options.
Each of the Executive’s vested Stock Options shall remain exercisable following the Termination Date until the expiration of the term of the Stock Option (as set forth in the Stock Option agreement). The termination or forfeiture of the unvested portion of the Stock Options that would otherwise occur on the Termination Date will be delayed to the extent necessary to effectuate the terms of this Agreement in the event that a Change in Control occurs within six (6) months following the Termination Date. If a Change in Control does not occur within six (6) months following the Termination Date, then the unvested portion of the Executive’s Stock Options shall terminate or be forfeited on the six (6)-month anniversary of the Termination Date.
6. Section 409A.
Notwithstanding anything to the contrary in this Exhibit 1, the timing of payment of any Covered Equity-Based Award that provides for the "deferral of compensation" (as such term is defined under Section 409A) may not be accelerated except as otherwise permitted under Section 409A.
EXHIBIT 2
Vesting Acceleration Upon a Change in Control Termination
The effect on the Executive’s Covered Equity-Based Awards of a Change in Control Termination is as follows (subject to the terms of the Agreement, including but not limited to Section 2.A thereof):
PART A: 2024/2025 Award Programs
1. Time-Based Awards (2024/2025 RSUs).
Immediately upon the Executive’s Termination Date, or, if later, the Change in Control date, one-hundred percent (100%) of the Executive’s outstanding unvested Time-Based Awards (or equity awards granted in substitution therefor by an acquirer of, or successor to, the Company) that are not otherwise vested shall become immediately vested and, for such awards other than Stock Options, be paid on the Payment Date or, if later, on the 20th day after the date on which the Change in Control occurs; provided, however, that the Change in Control was pursuant to a Transaction approved by a majority of the members of the Board who are unaffiliated with Pale Fire.
2. Stock Price Hurdle PSUs (2024/2025 PSU Programs).
With respect to any outstanding Stock Price Hurdle PSUs, if an Executive incurs a Change in Control Termination after the date both the first 1-year service period and the lowest stock price hurdle condition have been achieved, but prior to the last day of the award’s performance period, then upon the Executive’s Termination Date, or, if later, the Change in Control date, the Executive’s Stock Price Hurdle PSUs shall vest based on the number of PSUs for which both the stock price hurdle and service condition are deemed achieved as of such date.
(a) With respect to the service condition, Executive will be deemed to have achieved all remaining 1-year service periods falling on or after the Termination Date.
(b) With respect to the stock price hurdle condition, the number of PSUs achieving the condition as of the Termination Date shall include (i) all PSUs having achieved the condition and received Committee certification thereof as of the Termination Date (but which had not vested solely because they had not yet met the service condition) and (ii) to the extent that the Average Stock Price on the Termination Date exceeds one stock price hurdle but is below the next highest stock price hurdle, a proportionate number of PSUs that would have been deemed achieved upon the next highest stock price hurdle shall be deemed achieved as of the Termination Date, based on linear interpolation of the Termination Date’s Average Stock Price between the two stock price hurdles, subject to certification by the Committee. Any portion of the Stock Price Hurdle PSUs that do not vest as of the later of the Termination Date and the Change in Control date shall be forfeited on such date.
PART B: 2026 and Later Award Programs
3. Enhanced Restricted Share Units (Covered ERSU Awards).
Upon a Change in Control Termination, the following provisions shall apply to any outstanding Covered ERSU Awards:
(a) Service Condition. Immediately upon the later of the Executive’s Termination Date or the Change in Control date, one hundred percent (100%) of all outstanding unvested Base Tranches under each Covered ERSU Award shall become immediately vested. There shall be no pro-ration for partial service periods.
(b) Performance Multiplier. Except as otherwise provided in the applicable Covered ERSU Award agreement with respect to the Performance Multiplier applicable to a deferred Base Tranche, each vesting Base Tranche shall be multiplied by the Performance Multiplier corresponding to the most recently certified YEPR Rating for the Performance Determination Period that has been fully completed as of the Termination Date. If no YEPR Rating has yet been certified for any Performance Determination Period as of the Termination Date, the Committee shall determine the applicable Performance Multiplier in its sole discretion, subject to the right to use a default of 100% (Meets Expectations). Notwithstanding the foregoing, the Committee may, in its sole discretion, apply a Performance Multiplier different from the one determined under this paragraph, provided that the Performance Multiplier so applied shall not exceed 300%.
(c) Settlement. Vested ERSUs (following application of the Performance Multiplier) shall be settled on the Payment Date or, if later, on the 20th day after the date on which the Change in Control occurs.
4. Performance Share Units (Covered PSU Awards).
Upon a Change in Control Termination, the following provisions shall apply to any outstanding Covered PSU Awards:
(a) No Pro-Ration. One hundred percent (100%) of the outstanding Target PSUs under each Covered PSU Award shall remain eligible to vest upon a Change in Control Termination. No pro-ration shall apply by reference to the Executive’s period of service within the Performance Period.
(b) Performance Determination. The applicable Vesting Percentage shall be determined based on actual rTSR performance as of the Change in Control date, calculated using: (i) the 90-day volume-weighted average stock price of one Share ending on (and including) the Change in Control date (the "CiC Date VWAP"), subject to the SumUp TSR Adjustment (if any) set out in the applicable Covered PSU Award agreement, applied as if the Change in Control date were the Performance Period End Date, as the ending price; and (ii) the Grant Date VWAP (as defined in the applicable Covered PSU Award agreement) as the starting price. The resulting rTSR Percentile shall be determined by the Committee in accordance with the methodology set out in the applicable Covered PSU Award agreement. The Negative TSR Cap shall continue to apply, measured using Groupon Absolute TSR calculated from the Grant Date to the Change in Control date with the CiC Date VWAP (as adjusted) in place of the Vesting Date VWAP.
(c) Insufficient Data. If the Change in Control occurs within ninety (90) days of the Grant Date of the applicable Covered PSU Award such that a full 90-day measurement period is not available as of the Change in Control date, the Vesting Percentage shall be deemed to be one hundred percent (100%) of the number of Target PSUs, subject to the Committee’s discretion to adjust such percentage.
(d) Settlement. Settlement of any vested PSUs pursuant to this Section shall occur on the Payment Date or, if later, on the 20th day after the date on which the Change in Control occurs.
5. Coordination with Exhibit 1.
In the event the Executive’s employment is terminated in a Change in Control Termination on a date that precedes the Change in Control date, any Covered Equity-Based Awards that were accelerated by application of Exhibit 1 shall count toward satisfying the accelerated vesting described in the preceding sections of this Exhibit 2.
6. Stock Options.
Each of the Executive’s vested Stock Options shall remain exercisable following the Termination Date until the expiration of the term of the Stock Option (as set forth in the Stock Option agreement).
7. Section 409A.
Notwithstanding anything to the contrary in this Exhibit 2, the timing of payment of any Covered Equity-Based Award that provides for the "deferral of compensation" (as such term is defined under Section 409A) may not be accelerated except as otherwise permitted under Section 409A.
Exhibit 10.3
GROUPON, INC.
SEVERANCE BENEFIT AGREEMENT
This SEVERANCE BENEFIT AGREEMENT (the "Agreement") is entered into on the 6th day of November, 2026 (the "Effective Date") between Groupon, Inc. (the "Company"), a Delaware corporation, and Aditya Rajkumar (the "Executive").
WHEREAS, the Executive will continue to serve as a key employee of the Company and the Executive’s continued services and knowledge are valuable to the Company in connection with the management of one or more of the Company’s principal operating facilities, divisions, departments or subsidiaries; and
WHEREAS, the Board has determined that it is in the best interests of the Company and its stockholders to enter into this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained, the Company and the Executive hereby agree as follows:
1. Definitions. As used in this Agreement, the following terms shall have the respective meanings set forth below:
A. "Board" means the Board of Directors of the Company.
B. "Cause" means:
i. the Executive’s material failure to perform his or her reasonably assigned duties as an employee (other than a failure resulting from the Executive’s disability) after written notice of such failure from the Company or any of its subsidiaries (hereinafter referred to collectively as "Groupon") describing the failure to perform such duties and a reasonable time to cure of at least thirty (30) days;
ii. the Executive’s engaging in any intentional act of fraud, theft, dishonesty, or falsification with respect to Groupon;
iii. the Executive’s conviction (including a plea of guilty or nolo contendere) of (a) a felony, (b) a crime of moral turpitude, or (c) a criminal act that prevents the Executive from performing his or her duties with Groupon;
iv. the Executive engaging in gross misconduct or willfully violating Groupon’s Global Code of Conduct or other material written policies of Groupon, including without limitation policies relating to anti-harassment and hostile work environment, insider trading, conflicts of interest, or the treatment of confidential information where such conduct or violation is not cured, if able to be cured within Groupon’s discretion, within ten (10) days of written notice thereof by Groupon; or
v. the Executive’s violation of any federal or state law or regulation applicable to the business of Groupon.
Termination by Groupon shall not be treated as for "Cause" unless Groupon terminates the Executive’s employment within ninety (90) days following Groupon becoming aware of the occurrence of the above conditions.
C. "Change in Control" means the occurrence of either of the following events:
i. an Ownership Change Event or a series of related Ownership Change Events (collectively, a "Transaction") in which the stockholders of the Company immediately before the Transaction do not retain in substantially the same proportions immediately after the Transaction direct or indirect beneficial ownership of more than fifty percent (50%) of the total combined voting power of the outstanding securities entitled to vote generally in the election of Board members or, in the case of an Ownership Change Event described in clause (iii) of the definition of Ownership Change Event, the entity to which the assets of the Company were transferred (the "Transferee"), as the case may be; or
ii. approval by the stockholders of a plan of complete liquidation or dissolution of the Company;
provided, however, that a Change in Control shall be deemed not to include: (i) if Pale Fire Capital SE ("Pale Fire") together with its affiliated entities and individuals, becomes the direct or indirect beneficial owner of more than fifty percent (50%) of the total combined voting power of the outstanding securities entitled to vote generally in the election of Board members, unless as a result of a transaction approved by the Board, including by a majority of members of the Board unaffiliated with Pale Fire; and/or (ii) a transaction in which a majority of the members of the board of directors of the continuing, surviving or successor entity, or parent thereof, immediately after such transaction is comprised of Incumbent Directors. Indirect beneficial ownership shall include, without limitation, an interest resulting from ownership of the voting securities of one or more corporations or other business entities which own the Company or the Transferee, as the case may be, either directly or through one or more subsidiary corporations or other business entities. The Board shall have the right to determine whether multiple sales or exchanges of the voting securities of the Company or multiple Ownership Change Events are related, and its determination shall be final, binding and conclusive.
D. "Change in Control Termination" means a Termination without Cause that occurs on the date of the Change in Control, or in the six (6) months prior to, or twelve (12) months following, the date on which a Change in Control occurs.
E. "Code" means the Internal Revenue Code of 1986, as amended.
F. "Committee" means the Compensation Committee of the Board.
G. "Company" means Groupon, Inc., a Delaware corporation.
H. "Covered Equity-Based Award" means a Stock Option, restricted stock unit (including, for the avoidance of doubt, an ERSU), performance share unit (including, for the avoidance of doubt, a Covered PSU Award), or other equity-based award granted under the Incentive Plan; provided, however, that "Covered Equity-Based Award" will not include any awards made under award agreements that expressly state that they are not subject to this Agreement.
I. "Eligible Termination" means the Executive’s "separation from service" (within the meaning of Section 409A) with Groupon that is (i) an involuntary termination of employment by Groupon without Cause ("Termination without Cause"), or (ii) a resignation for Good Reason. An Eligible Termination does not include a termination of employment (a) by Groupon for Cause, (b) by the Executive other than for Good Reason, (c) as a result of the Executive’s death, (d) by Groupon due to the Executive’s absence from the Executive’s duties with the Company on a full-time basis for at least 180 consecutive days as a result of the Executive’s incapacity due to physical or mental illness
("Termination due to Incapacity"); or (e) Executive’s fixed term Employment Contract end (regardless of whether the fixed term contract is extended). An Eligible Termination also does not include a termination of employment occurring upon a sale of all or part of the business in which the Executive is employed, a merger or other combination, spin-off, reorganization or liquidation, dissolution or other winding up or other similar transaction involving Groupon, in any such case where an offer of comparable employment is made to the Executive by the purchaser, acquirer or successor or surviving entity (including a third-party vendor) concurrently with his or her termination.
J. "Good Reason" means, without the Executive’s express written consent, the occurrence of any of the following events:
i. a material adverse change in the nature or scope of the Executive’s authority, powers, functions, duties, responsibilities, or reporting relationship, provided that it shall not be a material adverse change in Executive’s reporting relationship if the Executive directly reports to the board of directors of the Company or its successor (including Groupon’s or its successor’s ultimate parent company, if any);
ii. a material reduction by Groupon in the Executive’s rate of annual base salary;
iii. the failure of Groupon to continue any material compensation plan in which the Executive is participating, unless the Executive is permitted to participate in other plans providing the Executive with substantially comparable compensation-related benefits, or the taking of any action by Groupon which would adversely affect the Executive’s participation in or materially reduce the Executive’s compensation-related benefits under any such plan;
iv. a change in the Executive’s primary employment location to a location that is more than 50 miles from the primary location of the Executive’s employment immediately before such change. (For the avoidance of doubt, it will not be deemed a change if the office location moves and Executive is not required to report to the new location on a full-time basis and is able to work remotely from a home office or agreed upon location within 50 miles of the current office location); or
v. the failure of Groupon to obtain from any successor or transferee of Groupon an express written and unconditional assumption of Groupon’s obligations under this Agreement, as further described in Section 5.C(ii) of this Agreement.
The Executive’s employment may be terminated by the Executive for Good Reason only if (a) an event or circumstance set forth in this Section shall have occurred and the Executive provides the Company with written notice thereof within ninety (90) days after the Executive has knowledge of the occurrence or existence of such event or circumstance, which notice shall specifically identify the event or circumstance that the Executive believes constitutes Good Reason, (b) the Company fails to correct the circumstance or event so identified within thirty (30) days after the receipt of such notice, and (c) the Executive resigns within sixty (60) days following the expiration of the cure period referenced in the preceding clause (b).
K. "Incentive Plan" means the Groupon, Inc. 2011 Incentive Plan, as amended from time to time.
L. "Incumbent Director" means a director who either (i) is a member of the Board as of the Effective Date or (ii) is elected, or nominated for election, to the Board with the affirmative votes of at least a majority of the Incumbent Directors at the time of such election or nomination (but excluding a
director who was elected or nominated in connection with an actual or threatened proxy contest relating to the election of directors of the Company).
M. "Ownership Change Event" means the occurrence of any of the following with respect to the Company: (i) the direct or indirect sale or exchange in a single or series of related transactions by the stockholders of the Company of securities of the Company representing more than fifty percent (50%) of the total combined voting power of the Company’s then-outstanding securities entitled to vote generally in the election of Board members; (ii) a merger or consolidation in which the Company is a party; or (iii) the sale, exchange, or transfer of all or substantially all of the assets of the Company (other than a sale, exchange or transfer to one or more subsidiaries).
N. "Section 409A" means Section 409A of the Code and the regulations thereunder.
O. "Stock Option" means a stock option granted under the Incentive Plan.
P. "Termination Date" means the date on which an Executive experiences an Eligible Termination.
The following additional defined terms relate to the Company's annual equity award programs:
Q. "Covered ERSU Award" means an Enhanced Restricted Share Unit award granted under the Incentive Plan pursuant to the Company’s annual enhanced restricted share unit award program for any year, as evidenced by a Notice of Enhanced Restricted Share Unit Award and related Enhanced Restricted Share Unit Award Agreement.
R. "Covered PSU Award" means a Performance Share Unit award granted under the Incentive Plan pursuant to the Company’s annual PSU award program for any year, which vests on the basis, and against the performance measures and comparator group, set forth in the applicable award agreement, as evidenced by a Notice of Performance Share Unit Award and related Performance Share Unit Award Agreement.
S. "Base Tranche" means, with respect to a Covered ERSU Award, the portion of the total number of Enhanced Restricted Share Units granted pursuant to such award that is scheduled to vest on a single ERSU Vesting Date, as set forth in the applicable award agreement (before application of any Performance Multiplier).
T. "ERSU" or "Enhanced Restricted Share Unit" means an enhanced restricted share unit granted pursuant to a Covered ERSU Award, being a form of restricted share unit under the Incentive Plan subject to both a service condition and a YEPR-based Performance Multiplier.
U. "ERSU Vesting Date" means each of the scheduled annual vesting dates for each Base Tranche of a Covered ERSU Award, as set forth in the applicable award agreement.
V. "Negative TSR Cap" means the limitation set forth in the applicable Covered PSU Award agreement providing that, if the Groupon Absolute TSR over the Performance Period is negative (i.e., less than zero percent (0%)), the Vesting Percentage applicable to such Covered PSU Award shall not exceed one hundred percent (100%) of the number of Target PSUs, regardless of the rTSR Percentile achieved.
W. "Performance Determination Period" means, with respect to each Base Tranche of a Covered ERSU Award, the calendar year immediately preceding the applicable ERSU Vesting Date for that tranche, as set forth in the applicable Covered ERSU Award agreement.
X. "Performance Multiplier" means the multiplier determined by reference to the Executive’s YEPR Rating for the relevant Performance Determination Period, applied to each Base Tranche of a Covered ERSU Award to determine the actual number of ERSUs vesting on the applicable ERSU Vesting Date. The Performance Multiplier ranges from 0% to 300% of the Base Tranche as set forth in the applicable Covered ERSU Award agreement and in Exhibit 1 hereto.
Y. "Performance Period" means, with respect to a Covered PSU Award, the period commencing on the Grant Date of such award and ending on the Performance Period End Date.
Z. "Performance Period End Date" means the date specified as the last day of the Performance Period in the applicable award agreement.
AA. "rTSR Percentile" means the percentile ranking of the Company’s total shareholder return over the Performance Period relative to the distribution of constituent-level total shareholder return outcomes within the Russell 2000 Index over the same period, as determined and certified by the Committee in accordance with the applicable Covered PSU Award agreement.
BB. "YEPR Rating" means the annual Year-End Performance Review rating assigned to the Executive pursuant to the Company’s formal performance review process for the relevant Performance Determination Period, as certified by the Committee (or its delegate) in its sole discretion, subject to the force-curve calibration process described in the applicable Covered ERSU Award agreement.
CC. Award Agreement Terms. Capitalized terms used in this Agreement that are not defined herein — including "Continuous Service," "Grant Date," "Grant Date VWAP," "Groupon Absolute TSR," "Share," "Target PSUs," "Vesting Date VWAP" and "Vesting Percentage" — have the meanings given to them in the applicable award agreement or, if not defined therein, in the Incentive Plan.
2. Severance Benefits.
A. Eligibility. The provisions of this Section 2 apply only if (i) the Executive experiences an Eligible Termination (or, in the case of Section 2.C(ii), a Termination due to Incapacity), (ii) the Executive executes and remains in compliance with Executive’s Employment Contract and Executive’s Confidentiality, Intellectual Property, and Restrictive Covenants Agreement (as amended from time to time) that includes Non-Compete, Non-solicitation and No-Hire clauses, and (iii) the Executive executes a standard mutual separation agreement containing, among other provisions, a release of claims within the time period required under such standard mutual separation agreement following the Termination Date.
B. Basic Cash Severance Payment. Upon an Eligible Termination, the Company shall pay the Executive in a lump sum on the 60th day after the Termination Date (the "Payment Date") an amount equal to three (3) months of the Executive’s annual base salary from the Company and its subsidiaries to the extent not theretofore paid. The Executive agrees that the amount of the Basic Cash Severance Payment includes the statutory severance payment that may be owed to the Executive under the local law the employee is employed and no additional statutory severance would be owed to Executive. In the event of a Change in Control Termination, the Company shall pay the Executive, in addition to the payment provided for in the preceding sentence, in a lump sum on the Payment Date, or, if later, on the 20th day after the date on which a Change in Control occurs, an amount equal to the Executive’s target annual cash incentive award for the year of such Change in Control Termination (to the extent not theretofore paid) multiplied by a fraction, the numerator of which is the number of
days of Executive’s employment during the calendar year of such Change in Control Termination, and the denominator of which is the number of days in the calendar year in which the Change in Control Termination occurs.
C. Equity Award Vesting Acceleration.
i. Upon an Eligible Termination that is not a Change in Control Termination, the vesting and exercisability of the Executive’s Covered Equity-Based Awards shall be accelerated to the extent provided in Exhibit 1.
ii. Upon a Termination due to Incapacity: (a) the Committee shall have the discretion to provide that all outstanding Covered PSU Awards shall vest at one hundred percent (100%) of target (applying a Vesting Percentage of 100% irrespective of actual rTSR performance); and (b) the Committee shall have the discretion to provide that all outstanding Covered ERSU Awards shall vest in full, with the Performance Multiplier for each accelerating Base Tranche deemed to be 100% (Meets Expectations).
iii. Upon a Change in Control Termination, the vesting and exercisability of the Executive’s Covered Equity-Based Awards shall be accelerated to the extent provided in Exhibit 2.
3. Additional Change in Control Provisions.
A. Obligations of the Executive. Notwithstanding anything to the contrary, included in any other employment contract entered into between the Executive and Groupon, the Executive agrees that in the event any person or group attempts a Change in Control, the Executive shall not voluntarily leave the employ of Groupon without Good Reason (i) until such attempted Change in Control terminates or (ii) if a Change in Control shall occur, until ninety (90) days following such Change in Control.
B. Section 4999 Excise Tax.
i. Anything in this Agreement to the contrary notwithstanding, in the event it is determined that (a) any payment, award, benefit or distribution (or any acceleration of any payment, award, benefit or distribution) by the Company (or any of its subsidiaries) or any entity that effectuates a Change in Control (or any of its affiliated entities) to or for the benefit of the Executive (whether pursuant to this Agreement or otherwise) (the "Payments") would be subject to the excise tax imposed by Section 4999 of the Code (the "Excise Tax"), and (b) the reduction of the amounts payable to the Executive under this Agreement to the maximum amount that could be paid to the Executive without giving rise to the Excise Tax (the "Safe Harbor Cap") would provide the Executive with a greater after-tax amount than if such amounts were not reduced, then the amounts payable to the Executive under this Agreement shall be reduced (but not below zero) to the Safe Harbor Cap. The reduction of the amounts payable hereunder, if applicable, shall be made to the extent necessary in the following order: (1) the acceleration of vesting of stock options with an exercise price that exceeds the then fair market value of the stock subject to the award and of other equity awards, provided that the value of such acceleration is not permitted to be determined under Treasury Regulation Section 1.280G-1, Q/A-24(c); (2) the payment under Sections 2.B and 2.C; (3) any equity awards accelerated pursuant to Section 2.C or otherwise valued at full value, provided that the value of such acceleration is not permitted to be determined under Treasury Regulation Section 1.280G-1, Q/A-24(c); (4) the acceleration of vesting of stock options with an exercise price that exceeds the then fair market value of the stock subject to the award and other equity awards, provided that the value of such acceleration is permitted to be determined under Treasury Regulation Section 1.280G-1, Q/A-24(c); and (5) the acceleration of
vesting of all other stock options and equity awards on a basis resulting in the highest amount retained by the Executive. For purposes of reducing the Payments to the Safe Harbor Cap, only amounts payable under this Agreement (and no other Payments) shall be reduced. If the reduction of the amounts payable hereunder would not result in a greater after-tax result to the Executive, no amounts payable under this Agreement shall be reduced pursuant to this provision.
ii. All determinations required to be made under this Section 3.B shall be made by the public accounting firm that is retained by the Company as of the date immediately prior to the Change in Control (the "Accounting Firm") which shall provide detailed supporting calculations both to the Company and the Executive within fifteen (15) business days of the receipt of notice from the Company or the Executive that there has been a Payment, or such earlier time as is requested by the Company. Notwithstanding the foregoing, in the event (a) the Board shall determine prior to the Change in Control that the Accounting Firm is precluded from performing such services under applicable auditor independence rules or (b) the Audit Committee of the Board determines that it does not want the Accounting Firm to perform such services because of auditor independence concerns or (c) the Accounting Firm is serving as accountant or auditor for the person(s) effecting the Change in Control, the Board shall appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees, costs and expenses (including, but not limited to, the costs of retaining experts) of the Accounting Firm shall be borne by the Company. If Payments are reduced to the Safe Harbor Cap or the Accounting Firm determines that no Excise Tax is payable by the Executive without a reduction in Payments, the Accounting Firm shall provide a written opinion to the Executive to the effect that the Executive is not required to report any Excise Tax on the Executive’s federal income tax return, and that the failure to report the Excise Tax, if any, on the Executive’s applicable federal income tax return will not result in the imposition of a negligence or similar penalty. The determination by the Accounting Firm shall be binding upon the Company and the Executive.
iii. If it is established pursuant to a final determination of a court or an Internal Revenue Service (the "IRS") proceeding which has been finally and conclusively resolved, that Payments have been made to, or provided for the benefit of, the Executive by the Company which are in excess of the limitations provided in this Section (referred to hereinafter as an "Excess Payment"), the Executive shall repay the Excess Payment to the Company on demand, together with interest on the Excess Payment at the applicable federal rate (as defined in Section 1274(d) of the Code) from the date of the Executive’s receipt of such Excess Payment until the date of such repayment. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the determination, it is possible that Payments which will not have been made by the Company should have been made (an "Underpayment"), consistent with the calculations required to be made under this Section. In the event that it is determined (a) by the Accounting Firm, the Company (which shall include the position taken by the Company, or together with its consolidated group, on its federal income tax return) or the IRS or (b) pursuant to a determination by a court, that an Underpayment has occurred, the Company shall pay an amount equal to such Underpayment to the Executive within ten (10) days of such determination together with interest on such amount at the applicable federal rate from the date such amount would have been paid to the Executive until the date of payment. The Executive shall cooperate, to the extent the Executive’s expenses are reimbursed by the Company, with any reasonable requests by the Company in connection with any contests or disputes with the IRS in connection with the Excise Tax or the determination of the Excess Payment. Notwithstanding the foregoing, in the event that amounts payable under this Agreement were reduced pursuant to Section 3.B(i) and the present value of any Payment is subsequently re-determined by the Accounting Firm within the context of Treasury Regulation Section 1.280G-1 Q/A 33 that reduces the value of the Payment, the
Company shall promptly pay to Executive any amounts payable under this Agreement that were not previously paid solely as a result of Section 3.B(i), subject to the Safe Harbor Cap.
iv. A payment or reimbursement of expenses described in this Section 3 shall be made promptly and in no event later than December 31 of the year following the year in which such expenses were incurred, any reimbursement of expenses incurred due to a tax audit or litigation shall be made no later than the end of the calendar year immediately following the calendar year in which the taxes that are the subject of the audit or litigation are remitted to the taxing authority, or, if no taxes are to be remitted, the end of the calendar year following the calendar year in which the audit or litigation is completed, and the amount of such expenses eligible for payment or reimbursement in any year shall not affect the amount of such expenses eligible for payment or reimbursement in any other year nor shall such right to payment or reimbursement be subject to liquidation or exchange for another benefit.
4. Section 409A.
A. In General. The parties intend that this Agreement and the benefits provided hereunder be interpreted and construed to comply with Section 409A to the extent applicable thereto. Notwithstanding any provision of this Agreement to the contrary, this Agreement shall be interpreted and construed consistent with this intent, provided that the Company shall not be required to assume any increased economic burden in connection therewith. Although the Company intends to administer this Agreement so that it will comply with the requirements of Section 409A, the Company does not represent or warrant that this Agreement will comply with Section 409A or any other provision of federal, state, local or non-United States law.
B. Prohibition on Acceleration of Payments. The time or schedule of any payment or amount scheduled to be paid pursuant to the terms of this Agreement, or pursuant to the terms of any other employment agreement or compensation arrangement entered into between the Executive and the Company or any of its subsidiaries, may not be accelerated hereunder, or under any such other employment agreement or other compensation arrangement, except as permitted under Section 409A.
C. Delay Period. In the event that any payment or distribution or portion of any payment or distribution to be made to the Executive hereunder cannot be characterized as a "short-term deferral" for purposes of Section 409A and is not otherwise exempt from the provisions of Section 409A, and the Executive is determined to be a "specified employee" under Section 409A, such portion of the payment shall be delayed until the earlier to occur of the Executive’s death or the date that is six (6) months after the Executive’s termination of employment with Groupon (the "Delay Period"). Upon the expiration of the Delay Period, the payments delayed pursuant to this Section 4.C shall be paid to the Executive in a lump sum, and any remaining payments due under this Agreement shall be payable in accordance with their original payment schedule.
5. Miscellaneous.
A. Withholding Taxes. The Company may withhold from all payments due to the Executive hereunder all taxes which, by applicable federal, state, local or other law, the Company is required to withhold therefrom.
B. Scope of Agreement. Nothing in this Agreement shall be deemed to entitle the Executive to continued employment with Groupon.
C. Successors; Binding Agreement.
i. This Agreement shall not be terminated by any merger or consolidation of the Company whereby the Company is or is not the surviving or resulting corporation or as a result of any transfer of all or substantially all of the assets of the Company. In the event of any such merger, consolidation or transfer of assets, the provisions of this Agreement shall be binding upon the surviving or resulting corporation or the person or entity to which such assets are transferred.
ii. The Company agrees that concurrently with any merger, consolidation or transfer of assets referred to in Section 5.C(i), it will cause any successor or transferee unconditionally to assume, by written instrument delivered to the Executive, all of the obligations of the Company hereunder.
iii. This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Executive shall die while any amounts would be payable to the Executive hereunder had the Executive continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to such person or persons appointed in writing by the Executive to receive such amounts or, if no person is so appointed, to the Executive’s estate.
D. Notices.
i. For purposes of this Agreement, all notices and other communications required or permitted hereunder shall be in writing and shall be deemed to have been duly given when delivered or five (5) days after deposit in the United States mail, certified and return receipt requested, postage prepaid, addressed (a) if to the Executive, to the last known residential address on file for the Executive with the Company, and if to the Company, attention General Counsel, with a copy to the Secretary, or (b) to such other address as either party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.
ii. A written notice of the Executive’s Termination Date by the Company or the Executive, as the case may be, to the other, shall (a) indicate the specific termination provision in this Agreement relied upon, (b) to the extent applicable, set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated and (c) specify the Termination Date (which date shall be not less than fifteen (15) days after the giving of such notice). The failure by the Executive or the Company to set forth in such notice any fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any right of the Executive or the Company hereunder or preclude the Executive or the Company from asserting such fact or circumstance in enforcing the Executive’s or the Company’s rights hereunder.
E. Governing Law; Validity. The interpretation, construction and performance of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of Illinois without regard to the principle of conflicts of laws. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provisions of this Agreement, which other provisions shall remain in full force and effect.
F. Counterparts. This Agreement may be executed in two counterparts, each of which shall be deemed to be an original and both of which together shall constitute one and the same instrument.
G. Entire Agreement. Except to the extent expressly provided herein, this Agreement constitutes the entire understanding between the parties with respect to the Executive’s severance pay and benefits in the event of a termination of the Executive’s employment with Groupon and supersedes any other agreement, whether written or unwritten, with respect thereto.
6. Full Settlement; Resolution of Disputes; Clawback Policy.
A. If there shall be any dispute between the Company and the Executive in the event of any termination of the Executive’s employment, then unless and until there is a final, nonappealable judgment by a court of competent jurisdiction declaring that such termination was for Cause or that the Company is not otherwise obligated to pay any amount or provide any benefit to the Executive under Section 2, the Company shall pay all amounts, and provide all benefits, to the Executive that the Company would be required to pay or provide pursuant to Section 2 as though such termination were by the Company without Cause or by the Executive with Good Reason; provided, however, that the Company shall not be required to pay any disputed amounts pursuant to this Section 6.A except upon receipt of an undertaking by or on behalf of the Executive to repay all such amounts to which the Executive is ultimately adjudged by such court not to be entitled.
B. Except for a contest or dispute regarding the application of the Company’s compensation recovery policy described in Section 6.C below, if any contest or dispute shall arise under this Agreement involving termination of the Executive’s employment with the Company or involving the failure or refusal of the Company to perform fully in accordance with the terms hereof, the Company shall reimburse the Executive, on a current basis, for all legal fees and expenses, if any, incurred by the Executive in connection with such contest or dispute; provided, however, that in the event the resolution of any such contest or dispute includes a finding denying, in total, the Executive’s claims in such contest or dispute, the Executive shall be required to reimburse the Company, over a period of twelve (12) months from the date of such resolution, for all sums advanced to the Executive pursuant to this Section 6.B. Payment or reimbursement of expenses described in this Section 6.B shall be made promptly and in no event later than December 31 of the year following the year in which such expenses were incurred, and the amount of such expenses eligible for payment or reimbursement in any year shall not affect the amount of such expenses eligible for payment or reimbursement in any other year nor shall the right to payment or reimbursement be subject to liquidation or exchange for another benefit.
C. Notwithstanding anything in this Section 6 or elsewhere in this Agreement, Executive consents and acknowledges the application of the Company’s compensation recovery policy as in effect from time to time, and agrees, to the extent applicable, that compensation payable under this Agreement (including with respect to equity awards, any proceeds, gains or other economic benefit Participant actually or constructively receives upon receipt of such awards, the receipt or resale of any shares of common stock thereunder or any other amounts or benefits as required by applicable US law) may be subject to clawback or recovery thereunder. Further, the Company will not be required to reimburse Executive for any legal fees or expenses incurred by Executive that relate to disputing a recovery under such policy.
7. Agreement Modification, Waiver, or Termination.
A. Subject to Section 7.B, no provision of this Agreement may be modified or waived unless such modification or waiver is agreed to in writing and signed by the Executive and by a duly authorized officer of the Company. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at
any prior or subsequent time. Failure by the Executive or the Company to insist upon strict compliance with any provision of this Agreement or to assert any right the Executive or the Company may have hereunder, including, without limitation, the right of the Executive to terminate employment for Good Reason, shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement.
B. The Company shall have the right prior to a Change in Control, in its sole discretion, pursuant to action by the Board, to approve the termination of this Agreement, which termination shall not become effective until the date fixed by the Board for such termination, which date shall be at least 120 days after notice thereof is given by the Company to the Executive in accordance with Section 5.D; provided, however, that no such action shall be taken by the Board during any period of time when the Board has knowledge that any person has taken steps reasonably calculated to effect a Change in Control until, in the opinion of the Board, such person has abandoned or terminated its efforts to effect a Change in Control; and provided, further, that in no event shall this Agreement be terminated during the 12-month period commencing on the date of a Change in Control.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by a duly authorized officer of the Company and the Executive has executed this Agreement as of the Effective Date.
Groupon, Inc.
/s/ Nick Walker
Signature
Nicholas Walker, Chief People Officer
Print Name / Title
11/04/2026
Date
Chief Operating Officer
/s/ Adi Rajkumar
Signature
Aditya Rajkumar
Print Name / Title
11/06/2026
Date
[Signature Page to Severance Benefit Agreement]
EXHIBIT 1
Vesting Acceleration Upon an Eligible Termination (Non-Change in Control Termination)
The effect on the Executive’s Covered Equity-Based Awards of an Eligible Termination that is not a Change in Control Termination is as follows (subject to the terms of the Agreement, including but not limited to Section 2.A thereof):
1. Enhanced Restricted Share Units (Covered ERSU Awards).
Upon an Eligible Termination that is not a Change in Control Termination, the following provisions shall apply to any outstanding Covered ERSU Awards:
(a) Service Condition. The Base Tranche(s) that are scheduled to vest on the ERSU Vesting Date(s) occurring within the twelve (12)-month period beginning on the Termination Date shall immediately vest on the Termination Date. Any Base Tranches not otherwise accelerated pursuant to this paragraph shall be forfeited as of the Termination Date.
(b) Performance Multiplier. Each accelerating Base Tranche shall be multiplied by the Performance Multiplier corresponding to the most recently certified YEPR Rating for the Performance Determination Period that has been fully completed as of the Termination Date. If no YEPR Rating has yet been certified for any Performance Determination Period as of the Termination Date (including where the Termination Date falls during the first Performance Determination Period before certification), the Committee shall determine the applicable Performance Multiplier in its sole discretion, subject to the right to use a default of 100% (Meets Expectations). Notwithstanding the foregoing, the Committee may, in its sole discretion, apply a Performance Multiplier different from the one determined under this paragraph, provided that the Performance Multiplier so applied shall not exceed 300%.
(c) Settlement. Vested ERSUs (following application of the Performance Multiplier) shall be settled and converted to Shares of Groupon, Inc. common stock on the Payment Date. Fractional shares shall be rounded down to the nearest whole Share.
Reference table: Performance Multiplier by YEPR Rating (as set out in the applicable Covered ERSU Award agreement):
| YEPR Annual Rating | Performance Multiplier | Outcome | ||||||
| 2.7 and below | 0% | Tranche forfeits | ||||||
| 2.8 – 2.9 | 50% | Half the tranche vests | ||||||
| 3.0 – 3.4 (Meets Expectations) | 100% | Full tranche vests | ||||||
| 3.5 – 4.0 | 150% | 1.5× tranche | ||||||
| 4.1 – 4.7 | 200% | 2× tranche | ||||||
| 4.8 – 5.0 | 300% | 3× tranche (maximum) | ||||||
Reproduced for reference; the Performance Multiplier scale set out in the applicable Covered ERSU Award agreement controls.
(d) Section 409A. The settlement of accelerated ERSUs is intended to qualify as a short-term deferral under Treasury Regulation §1.409A-1(b)(4) and shall be made no later than March 15 of
the calendar year following the calendar year in which the Termination Date occurs. In any event, the timing of settlement shall not be accelerated except as otherwise permitted under Section 409A.
2. Performance Share Units (Covered PSU Awards).
Upon an Eligible Termination that is not a Change in Control Termination (other than a resignation for Good Reason described in Section 1(J)(i) of this Agreement), the following provisions shall apply to any outstanding Covered PSU Awards, provided that at least one complete calendar month of Continuous Service has elapsed since the Grant Date of such award:
(a) Pro-Ration of Target PSUs. A pro-rated portion of the outstanding Target PSUs (the "Pro-Rated PSU Amount") shall remain eligible to vest following the Termination Date, calculated as follows: Pro-Rated PSU Amount = Total Target PSUs Granted × (Completed Whole Months of Continuous Service from Grant Date to Termination Date ÷ Total Whole Months from Grant Date to the Performance Period End Date) All Target PSUs in excess of the Pro-Rated PSU Amount shall be forfeited as of the Termination Date.
(b) Continuing Performance Measurement. The Pro-Rated PSU Amount shall remain outstanding through the Performance Period End Date and shall vest (if at all) based on actual rTSR performance, as certified by the Committee following the Performance Period End Date. The Negative TSR Cap shall continue to apply. The actual number of PSUs vesting shall be determined by multiplying the Pro-Rated PSU Amount by the applicable Vesting Percentage derived from the rTSR Percentile, as set forth in Exhibit A to the applicable Covered PSU Award agreement.
Reference table: rTSR Vesting Schedule (as set out in the applicable Covered PSU Award agreement):
| Groupon rTSR Percentile vs. Russell 2000 | Vesting % of Target PSUs | Notes | ||||||
| Below 50th percentile | 0% | No payout below median | ||||||
| At 50th percentile | 0% | Threshold; payout begins just above median | ||||||
| Between 50th and 90th percentile | Linear: 0% → 300% | + 7.5% per percentile point above 50th | ||||||
| At or above 90th percentile | 300% | Maximum payout | ||||||
| Negative TSR Cap applies | Capped at 100% | If Groupon absolute TSR is negative | ||||||
Reproduced for reference; the vesting schedule set out in the applicable Covered PSU Award agreement controls.
(c) Settlement. Settlement of any vested PSUs shall occur as soon as reasonably practicable following the Committee’s certification of rTSR performance after the Performance Period End Date, and in no event later than March 15 of the calendar year following the calendar year in which the Performance Period End Date occurs.
(d) Section 409A. The parties acknowledge that the deferred settlement of the Pro-Rated PSU Amount described in this Section may constitute a "deferral of compensation" within the meaning of Section 409A. The timing of such settlement shall not be accelerated except as otherwise permitted under Section 409A. If the Executive is a "specified employee" within the meaning of
Section 409A, settlement shall be further subject to the Delay Period provisions of Section 4.C of this Agreement.
3. Stock Options.
Each of the Executive’s vested Stock Options shall remain exercisable following the Termination Date until the expiration of the term of the Stock Option (as set forth in the Stock Option agreement). The termination or forfeiture of the unvested portion of the Stock Options that would otherwise occur on the Termination Date will be delayed to the extent necessary to effectuate the terms of this Agreement in the event that a Change in Control occurs within six (6) months following the Termination Date. If a Change in Control does not occur within six (6) months following the Termination Date, then the unvested portion of the Executive’s Stock Options shall terminate or be forfeited on the six (6)-month anniversary of the Termination Date.
4. Section 409A.
Notwithstanding anything to the contrary in this Exhibit 1, the timing of payment of any Covered Equity-Based Award that provides for the "deferral of compensation" (as such term is defined under Section 409A) may not be accelerated except as otherwise permitted under Section 409A.
EXHIBIT 2
Vesting Acceleration Upon a Change in Control Termination
The effect on the Executive’s Covered Equity-Based Awards of a Change in Control Termination is as follows (subject to the terms of the Agreement, including but not limited to Section 2.A thereof):
1. Enhanced Restricted Share Units (Covered ERSU Awards).
Upon a Change in Control Termination, the following provisions shall apply to any outstanding Covered ERSU Awards:
(a) Service Condition. Immediately upon the later of the Executive’s Termination Date or the Change in Control date, one hundred percent (100%) of all outstanding unvested Base Tranches under each Covered ERSU Award shall become immediately vested. There shall be no pro-ration for partial service periods.
(b) Performance Multiplier. Each vesting Base Tranche shall be multiplied by the Performance Multiplier corresponding to the most recently certified YEPR Rating for the Performance Determination Period that has been fully completed as of the Termination Date. If no YEPR Rating has yet been certified for any Performance Determination Period as of the Termination Date, the Committee shall determine the applicable Performance Multiplier in its sole discretion, subject to the right to use a default of 100% (Meets Expectations). Notwithstanding the foregoing, the Committee may, in its sole discretion, apply a Performance Multiplier different from the one determined under this paragraph, provided that the Performance Multiplier so applied shall not exceed 300%.
(c) Settlement. Vested ERSUs (following application of the Performance Multiplier) shall be settled on the Payment Date or, if later, on the 20th day after the date on which the Change in Control occurs.
2. Performance Share Units (Covered PSU Awards).
Upon a Change in Control Termination, the following provisions shall apply to any outstanding Covered PSU Awards:
(a) No Pro-Ration. One hundred percent (100%) of the outstanding Target PSUs under each Covered PSU Award shall remain eligible to vest upon a Change in Control Termination. No pro-ration shall apply by reference to the Executive’s period of service within the Performance Period.
(b) Performance Determination. The applicable Vesting Percentage shall be determined based on actual rTSR performance as of the Change in Control date, calculated using: (i) the 90-day volume-weighted average stock price of one Share ending on (and including) the Change in Control date (the "CiC Date VWAP"), subject to the SumUp TSR Adjustment (if any) set out in the applicable Covered PSU Award agreement, applied as if the Change in Control date were the Performance Period End Date, as the ending price; and (ii) the Grant Date VWAP (as defined in the applicable Covered PSU Award agreement) as the starting price. The resulting rTSR Percentile shall be determined by the Committee in accordance with the methodology set out in the applicable Covered PSU Award agreement. The Negative TSR Cap shall continue to apply,
measured using Groupon Absolute TSR calculated from the Grant Date to the Change in Control date with the CiC Date VWAP (as adjusted) in place of the Vesting Date VWAP.
(c) Insufficient Data. If the Change in Control occurs within ninety (90) days of the Grant Date of the applicable Covered PSU Award such that a full 90-day measurement period is not available as of the Change in Control date, the Vesting Percentage shall be deemed to be one hundred percent (100%) of the number of Target PSUs, subject to the Committee’s discretion to adjust such percentage.
(d) Settlement. Settlement of any vested PSUs pursuant to this Section shall occur on the Payment Date or, if later, on the 20th day after the date on which the Change in Control occurs.
3. Coordination with Exhibit 1.
In the event the Executive’s employment is terminated in a Change in Control Termination on a date that precedes the Change in Control date, any Covered Equity-Based Awards that were accelerated by application of Exhibit 1 shall count toward satisfying the accelerated vesting described in the preceding sections of this Exhibit 2.
4. Stock Options.
Each of the Executive’s vested Stock Options shall remain exercisable following the Termination Date until the expiration of the term of the Stock Option (as set forth in the Stock Option agreement).
5. Section 409A.
Notwithstanding anything to the contrary in this Exhibit 2, the timing of payment of any Covered Equity-Based Award that provides for the "deferral of compensation" (as such term is defined under Section 409A) may not be accelerated except as otherwise permitted under Section 409A.
Exhibit 31.1
CERTIFICATION
I, Dusan Senkypl, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Groupon, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: November 9, 2026 /s/ Dusan Senkypl
Dusan Senkypl
Chief Executive Officer
(Principal Executive Officer)
Exhibit 31.2
CERTIFICATION
I, Rana Kashyap, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Groupon, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: November 9, 2026 | /s/ Rana Kashyap | |||||||
Rana Kashyap | ||||||||
| Chief Financial Officer | ||||||||
| (Principal Financial Officer) | ||||||||
Exhibit 32.1
Certifications Pursuant to
18 U.S.C. Section 1350
As Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Quarterly Report of Groupon, Inc. (the "Company") on Form 10-Q for the period ended September 30, 2026, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Dusan Senkypl, Chief Executive Officer of the Company, and Rana Kashyap, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to our knowledge, that:
(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
By: /s/ Dusan Senkypl
Dusan Senkypl
Chief Executive Officer
(Principal Executive Officer)
By: /s/ Rana Kashyap
Rana Kashyap
Chief Financial Officer
(Principal Financial Officer)
Date: November 9, 2026