Groupon's revenue measure shrinks more than 50 percent(Read article summary)
Groupon is trying to go public, and new revenue figures that make Groupon appear smaller won't help its case
About a month ago, I remarked on Grouponâ€™s explosive revenue growth (and its equally impressive cost growth).
The company revised its financial results Friday, and the revenue picture looks less explosive. In the latest update of its S-1 registration statement, Groupon reported $393 million in Q2 revenues. Thatâ€™s a remarkable figure for such a young company but a far cry from the $878 million it previously reported.
And what happened to the almost $400 million in missing revenue? That moneyâ€“payments to the merchants who provide goods and services for Grouponsâ€“is now subtracted before reporting revenue rather than deducted after as an expense. In short, Groupon went from a gross measure of revenue to a net one.
The bad news for Groupon is that the new presentation makes the company appear less than half as big as it did previously. The good news, I suppose, is that its expenses went down by the same amount.
Grouponâ€™s effort to go public has been one of the bumpier ones in recent memory. Its first filing emphasized a profit measure, essentially profits less marketing expenses, that was widely ridiculed. That got dropped in the second draft. And now a gigantic restatement of revenue in the third draft. Not to mention, the companyâ€™s recent difficulties with the SECâ€™s quiet period requirements.