Groupon fails to turn profit as revenue grows
Thursday, February 09, 2012 - 08:05
SAN FRANCISCO: Daily deals site Groupon on Wednesday issued its first earnings report as a publicly traded company, saying it failed to turn a profit despite revenue nearly tripling from a year earlier.
Groupon's stock price plunged more than 7% to US$22.85 a share in after-hours trading that followed release of the earnings figures, which disappointed investors who had expected the young company to show a profit.
"Groupon had a strong fourth quarter and we finished 2011 having helped 250,000 local merchants across 47 countries grow their businesses while saving Groupon customers billions of dollars," said chief executive Andrew Mason.
"We will continue to invest in new services and tools that help our merchant partners be more successful and drive local commerce around the world," the Chicago-based company's co-founder added.
Groupon revenue climbed to US$506.5 million (RM1.5 billion), a 19% increase from the same quarter a year earlier.
The company had a net loss of US$42.7 million as compared with a US$378.6 million loss in the final three months of 2010. Groupon trimmed about US$100 million from its loss figure in the prior quarter to end the year US$350.85 million in the red.
Groupon shares were listed on the Nasdaq at US$20 on Nov 4 in a blockbuster public offering that raised a whopping US$700 million and triggered fears that investors may be foolishly overvaluing hot Internet startups.
Shares of the company soared as high as US$31.14 on the first day of trading but they have lost ground since then.
Groupon, which rejected a US$6 billion takeover offer from Google a year ago, has enjoyed phenomenal growth since its founding in 2008 but has been dogged by questions about its business model and accounting methods.