How Much Money is Groupon Losing? Too Much?

The popular daily deals site, known as Groupon, is losing an incredible amount of money as indicated by its financial statements submitted to the U.S. Securities and Exchange Commission.

The popular daily deals site, known as Groupon, is losing an incredible amount of money as indicated by its financial statements submitted to the U.S. Securities and Exchange Commission.

In the first three months of this year, the company had a net loss of $103 million. Plus, for the whole year of 2010 the loss was $414 million.

According to Bloomberg, Groupon previously had reported a gain of $60.6 million, using an accounting method criticized by regulators. The company distributor’s treatment of operating income had been excluded as non-cash expenses, including internet marketing costs to attract new subscribers. The questionable treatment of finances was being studied by the Securities and Exchange Commission.

So, Groupon lost more money than they had reported.

What is Groupon spending money on? For starters, if you take a look at the records, there is $180 million spent on online advertising in the first three months of the year. The company has 7,000 employees on their pay roll.

However, all is not red for the company. The amount of revenue Groupon produced is just as impressive. The first three months it generated $645 million in revenue, which is an increase of 1,366% from last year when it generated $44 million.

Groupon’s cash flow is positive, reporting $7 million in free cash flow for the first quarter, but down from $12 million from last year.

It will be interesting to see how the daily deal site progresses as it continues its IPO filing for $750 million.