Groupon, Inc.Common Stock Investor update

Dušan? First, thank you everyone for joining us here.

Very happy to have you here. On the mystery deal concept, first, let me provide some bigger picture for those who don't know the mystery deal concept, because it's part of how we are transforming Groupon, how we are bringing new types of products. Mystery vacations right now, but I see the same mystery concept opportunity also for many other products with Groupon, a result of the change how we think about the travel. We are moving from selling just destination to selling experiences. We are pretty much taking away also from our customers a decision which they have to make where I will travel. So this is very explanatory product where they just buy for $199 to $299 per person a trip, and then, without knowing where you are going, they pick their days.

We call them in 3 days, and somebody tells them where way to go. So it's something which was not promoted, which was not on the Groupon in the past, and this is one example how we are building a completely new product proposition, which is relevant for especially younger generation in this case. On the levers, how we plan to attract the younger generation in general. There are 3 dimensions to this. This is reach, this is product and inventory. With reach, we are heavily investing both in our organic channel and paid channels. I'm very happy that we returned to growth with organic channels in Q2, and we see many more opportunities here to continue in the trajectory. At the same time, we are building and improving our paid and brand partnerships and also influencer capabilities so that Groupon appears where younger customers typically discover ideas.

On the product side, the answer which I see is that Groupon can't be the same for everyone visiting the platform. I was talking on the earnings call about the personalization, which helps us shape experience around affinity to category by our customers and the browsing behavior. I think this will be very important part how we will be making Groupon more attractive to people in actually not only younger groups, but in different groups. We will be also bringing in Q3 new onboarding experience, which will help especially younger people who may not know Groupon yet understand what is Groupon about. On inventory, this new format is very important for us. Tours, packages have reached customers who did not respond to other deal formats.

What I see overall is that we have public evidence that active customers grew 2% to over 16 million, and conversion is improving on pretty much every surface which we have. Also, if I would double down on what will work best for young people, my personal bet is that influencer marketing will help us a lot together with better socials, because this is how especially younger people are discovering new products, new services. This is an area which we just recently started. I believe that we have all the right tools which we need, and you can expect a lot of stuff coming from us in this area. Especially together with our mission to get people offline, I see it as a great fit.

Another dimension where I believe that it will be very specifically helping us, especially with younger generation, is AI, because I strongly believe that AI is redefining how the distribution opportunity works. We simply see that younger people are adopting AI trends faster versus rest of the population. We are building towards that. By the way, we will be sharing on our X account an example of what we built recently based on the input from Nick Nemeth and other actually small shareholders with AI Deal Advisor, where customers can be talking to Groupon AI and AI is recommending them deals. So we will be investing heavily in this direction. The first, but definitely not last is personalization, because right now we need to do a better job in recognizing younger people and providing relevant products.

We have data and feedback showing that some of them are confused because we have variety of categories and deals, and we are expecting something else. So this is actually the bread and butter and core of the personalization bit, which we have to take very early signals like the device you have, location, browser, first one or 2 clicks, and recognize the profile of customer and serve the deal which makes sense to them.

Right now our priority is really go deeper where we already operate, not just to expand and add additional countries or areas where the marketplace would not have significant impact. Because pretty much every marketplace, and especially local ones, are about density and about pretty much city-by-city coverage. We have an evidence from other successful marketplaces that they were really growing not on the country level, but they were conquering every single city, category by category by having enough quality supply and then attracting enough customer demand in each location. In international, even we are concentrating supply and marketing investments in major cities in most countries. We see that the cities where we have higher density of our marketplace are growing at strong double-digit rates in Q2. This is a signal that this is the way how we need to be working.

At the same time, we are also resuming operations in Italy, and the reason for that is that, we have a large base of merchants where they were still eager to work with us given our recent presence in the market. In the long term, I believe that Groupon business model is very suitable, and we can definitely see opportunities in many other countries. However, right now, our focus is on the markets where we are in. This is not something which we are actioning right now.

Thank you for the question. First, we do own a small minority stake in SumUp. We have been pleased to be shareholders there. We continue to get updates from that management team, and their business continues to do well. It is growing healthily. It is profitable. How I see this, it has all the features of what should be a successful public company. I understand that the desire of that management team is to one day be public. We have identified and communicated for several years now that this is a non-core investment for us. We will look at opportunistically, opportunities to monetize that stake, whether it is an IPO or a pre-IPO secondary. This is something that we are very open to.