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Groupon Inc (NASDAQ:GRPN) Witnesses Strong Traction In Client Acquisition

Groupon Inc (NASDAQ:GRPN) reported that revenue in 2Q2016 came at $756 million against $738.4 million in the same quarter, a year earlier. North America revenue jumped 7%; EMEA dropped 3% while Rest of World plunged 23%.

The management speaks

Rich Williams, the CEO of Groupon, said that they continued to witness strong traction in client acquisition as they added over 1 million new clients, which is the most in last two years. They are thrilled with the progress of marketing plans so far and their effectiveness in acquiring more people to company’s marketplace. North America augmented client growth with incremental active clients of almost 1.1 million.

Customer acquisition marketing resulted in this incremental increase in North America, over the prior quarter, making it the highest acquisition in last 2 years. The active customer in North America region stood at 27.9 million. Active customers highlight unique clients’ accounts that have bought a product or voucher within the one year.

Local Billings in same region surged 9% YoY as Groupon began to witness the involvement of new customer associates acquired from marketing initiatives and investments. North America gross profit jumped 10% YoY to $217.2 million, which marks the third quarter in row of double digit growth. The gross margin jumped to 22.5% of gross billings, a considerable growth of 60 basis points YoY. In addition, the shopping gross margins surged YoY in all division for a third quarter in row. This highlights margin expansion YoY led by company’s plan to enhance efficiency in logistics businesses and focus less on low margin offerings.

The outlook

Groupon’s stated that its outlook for full year includes prevailing foreign exchange rates, and projected marketing investments. It also covers cost benefits linked with streamlining initiatives and stabilizing market trends in Shopping. The company expects 2016 revenue to come in a range of $3.00 to $3.10 billion.

Published by Fiona Gibson

Fiona is a finance graduate and an expert in analyzing market trends.

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