Groupon Reports $46.5 Million Profit in Second Quarter

By Devon Glenn 

Groupon raked in $568.3 million in revenue in the second quarter of 2012, bringing the daily deal site’s earnings up 45 percent year-over-year. The company finished out the quarter with a $46.5 million operating income, compared to a $101 million operating loss in the second quarter of 2011. The company cited rising mobile adoption rates and growth within the Groupon Goods program as contributing factors.

“We had a solid quarter despite challenges in Europe and continued investment in technology and infrastructure,” said Groupon CEO Andrew Mason in a statement. Changes in foreign exchange rates, for example, cost the company $0.2 million in operating income.  But the company also cut its marketing spend by 58 percent compared to the same time last year.

Just like the first quarter of 2012, the site featured deals from more than 100,000 merchants.  Groupon has addressed the issue of educating its clients with the launch of GrouponWorks, a database of more than 500 how-to videos on marketing with the daily deal site. The company also reported that adoption of its other merchant support tools had gone up 20 percent, compared with the 10 percent of merchants who were using them last quarter.

Recently, the company has asked users to rate the deals they see to personalize their future results. This quarter, Groupon’s base of active customers has risen 65 percent year-over-year to 38 million. One third of Groupon’s transactions in North America came from mobile devices, an increase of 35 percent compared to the second quarter of 2011.

Groupon Goods, the discount program for material things like sunglasses and iPhone covers (as opposed to vouchers for meals and spa services), also surpassed its annual revenue run-rate of $200 million in its third quarter of existence in North America. (In March, Groupon had to adjust its earnings from the fourth quarter of 2011 due to accounting problems.) Overall revenues in North America grew 66 percent year-over-year.

“We’ve deepened our relationships with a growing base of merchants and customers worldwide,” Mason added, “demonstrating progress as we work to unlock the opportunity in local commerce.”

Image by blackdaliya via Shutterstock.