Shares of Groupon (NASDAQ:GRPN) have gotten crushed today, down by 14% as of noon EST, after the company reported fourth-quarter earnings results. The daily deals specialist delivered better-than-expected revenue but missed profit projections.
Revenue in the fourth quarter fell 8% to $799.9 million, ahead of the $785.1 million in sales that analysts were expecting. That translated into non-GAAP net income of $60 million, or $0.10 per share, shy of the $0.13 per share in adjusted profit that the market was expecting. Adjusted EBITDA was $104.6 million, and Groupon finished the quarter with $841 million in cash on the balance sheet. The company said global units sold fell 8% due to lower customer traffic.
"In 2018, we took critical steps to transform Groupon into a daily habit for consumers. Despite a challenging operating environment, I'm pleased with the progress we made on our strategic initiatives," CEO Rich Williams said in a statement. "In 2019, we plan to make bolder bets, and have clear priorities in place to help us do so. We believe focusing on convenience, our marketplace, International and continued operational rigor are the right strategies to position Groupon for long-term success."
In Groupon's shareholder letter, Williams said the company's ongoing transformation "will take time" while acknowledging that "the operating environment grew increasingly challenging in the second half of the year." Google tweaked its search algorithms, which resulted in "reduced traffic and engagement" for Groupon. "We don't expect the headwinds to worsen in 2019, nor do we expect them to abate," Williams wrote.
In terms of outlook, Groupon merely said it expects 2019 adjusted EBITDA to be $270 million, flat compared to the $269.8 million in adjusted EBITDA that the company posted for 2018.