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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2023
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _______
Commission File Number: 1-35335
Groupon, Inc.
(Exact name of registrant as specified in its charter)
Delaware27-0903295
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
600 W Chicago Avenue60654
Suite 400(Zip Code)
Chicago
Illinois(312)334-1579
(Address of principal executive offices)(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stock, par value $0.0001 per shareGRPNNASDAQ Global Select Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes           No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).        
Yes          No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer                             Accelerated filer         
Non-accelerated filer                             Smaller reporting company
                                     Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes         No   
As of November 6, 2023, there were 31,853,378 shares of the registrant's common stock outstanding.



TABLE OF CONTENTS
PART I. Financial InformationPage
PART II. Other Information

______________________________________________________
2



PART I. FINANCIAL INFORMATION
FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding our future results of operations and financial position, business strategy and plans and our objectives for future operations and future liquidity. The words "may," "will," "should," "could," "expect," "anticipate," "believe," "estimate," "intend," "continue" and other similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely on current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from those expressed or implied in our forward-looking statements. Such risks and uncertainties include, but are not limited to, our ability to execute and achieve the expected benefits of our go-forward strategy; execution of our business and marketing strategies; volatility in our operating results; challenges arising from our international operations, including fluctuations in currency exchange rates, legal and regulatory developments in the jurisdictions in which we operate and geopolitical instability resulting from the conflicts in Ukraine and the Middle East; global economic uncertainty, including as a result of inflationary pressures; ongoing impacts from the COVID-19 pandemic and labor and supply chain challenges; retaining and adding high quality merchants and third-party business partners; retaining existing customers and adding new customers; competing successfully in our industry; providing a strong mobile experience for our customers; managing refund risks; retaining and attracting members of our executive and management teams and other qualified employees and personnel; customer and merchant fraud; payment-related risks; our reliance on email, internet search engines and mobile application marketplaces to drive traffic to our marketplace; cybersecurity breaches; maintaining and improving our information technology infrastructure; reliance on cloud-based computing platforms; completing and realizing the anticipated benefits from acquisitions, dispositions, joint ventures and strategic investments; lack of control over minority investments; managing inventory and order fulfillment risks; claims related to product and service offerings; protecting our intellectual property; maintaining a strong brand; the impact of future and pending litigation; compliance with domestic and foreign laws and regulations, including the CARD Act, GDPR, CPRA, other privacy-related laws and regulations of the Internet and e-commerce; classification of our independent contractors, agency workers, or employees; our ability to remediate our material weakness over internal control over financial reporting; risks relating to information or content published or made available on our websites or service offerings we make available; exposure to greater than anticipated tax liabilities; adoption of tax laws; our ability to use our tax attributes; impacts if we become subject to the Bank Secrecy Act or other anti-money laundering or money transmission laws or regulations; our ability to raise capital if necessary; our ability to continue as a going concern; risks related to our access to capital and outstanding indebtedness, including our convertible senior notes; our common stock, including volatility in our stock price; our ability to realize the anticipated benefits from the capped call transactions relating to our convertible senior notes; difficulties, delays or our inability to successfully complete all or part of the announced restructuring actions or to realize the operating efficiencies and other benefits of such restructuring actions; higher than anticipated restructuring charges or changes in the timing of such restructuring charges; and those risks and other factors discussed in Part I, Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2022 and Part II, Item 1A. Risk Factors of our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2023, June 30 2023 and September 30, 2023, as well as in our Condensed Consolidated Financial Statements, related notes, and the other financial information appearing elsewhere in this report and our other filings with the Securities and Exchange Commission (the "SEC"). Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. We do not intend, and undertake no obligation, to update any of our forward-looking statements after the date of this report to reflect actual results or future events or circumstances. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.
As used herein, "Groupon," "the Company," "we," "our," "us" and similar terms include Groupon, Inc. and its subsidiaries, unless the context indicates otherwise.
3


ITEM 1. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

GROUPON, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
(unaudited)

September 30, 2023December 31, 2022
Assets
Current assets:
Cash and cash equivalents$86,085 $281,279 
Accounts receivable, net34,886 44,971 
Prepaid expenses and other current assets 48,389 41,101 
Total current assets169,360 367,351 
Property, equipment and software, net36,614 56,731 
Right-of-use assets - operating leases, net3,467 12,127 
Goodwill178,685 178,685 
Intangible assets, net12,758 17,641 
Investments93,694 119,541 
Deferred income taxes13,429 13,550 
Other non-current assets15,855 27,491 
Total assets$523,862 $793,117 
Liabilities and equity
Current liabilities:
Short-term borrowings$46,700 $75,000 
Accounts payable10,475 59,568 
Accrued merchant and supplier payables172,390 225,420 
Accrued expenses and other current liabilities97,855 171,452 
Total current liabilities327,420 531,440 
Convertible senior notes, net226,081 224,923 
Operating lease obligations3,061 9,310 
Other non-current liabilities16,569 18,586 
Total liabilities573,131 784,259 
Commitments and contingencies (see Note 6)
Stockholders' equity (deficit)
Common stock, par value $0.0001 per share, 100,500,000 shares authorized; 42,132,235 shares issued and 31,838,118 shares outstanding at September 30, 2023; 40,786,996 shares issued and 30,492,879 shares outstanding at December 31, 2022
4 4 
Additional paid-in capital2,336,830 2,322,672 
Treasury stock, at cost, 10,294,117 shares at September 30, 2023 and December 31, 2022
(922,666)(922,666)
Accumulated deficit(1,477,589)(1,394,477)
Accumulated other comprehensive income (loss)13,980 2,942 
Total Groupon, Inc. stockholders' equity (deficit)(49,441)8,475 
Noncontrolling interests172 383 
Total equity (deficit)(49,269)8,858 
Total liabilities and equity (deficit)$523,862 $793,117 

See Notes to Condensed Consolidated Financial Statements.
4

GROUPON, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(in thousands, except share and per share amounts)
(unaudited)

Three Months Ended September 30, Nine Months Ended September 30,
2023202220232022
Revenue$126,474 $144,390 $377,194 $450,926 
Cost of revenue15,796 18,668 48,840 57,231 
Gross profit110,678 125,722 328,354 393,695 
Operating expenses:
Marketing28,898 37,897 76,013 106,685 
Selling, general and administrative80,016 119,243 277,913 369,601 
Goodwill impairment   35,424 
Long-lived asset impairment   8,811 
Restructuring and related charges2,228 4,912 10,333 8,163 
Total operating expenses111,142 162,052 364,259 528,684 
Income (loss) from operations(464)(36,330)(35,905)(134,989)
Other income (expense), net(39,525)(23,541)(41,260)(49,761)
Income (loss) before provision (benefit) for income taxes(39,989)(59,871)(77,165)(184,750)
Provision (benefit) for income taxes817 (4,328)4,258 (4,605)
Net income (loss)(40,806)(55,543)(81,423)(180,145)
Net (income) loss attributable to noncontrolling interests(552)(680)(1,689)(2,157)
Net income (loss) attributable to Groupon, Inc.$(41,358)$(56,223)$(83,112)$(182,302)
Basic and diluted net income (loss) per share:$(1.31)$(1.86)$(2.68)$(6.06)
Basic and diluted weighted average number of shares outstanding:31,500,489 30,307,734 31,039,668 30,070,598 
Comprehensive income (loss):
Net income (loss)$(40,806)$(55,543)$(81,423)$(180,145)
Other comprehensive income (loss):
Net change in unrealized gain (loss) on foreign currency translation adjustments11,141 22,283 11,038 46,470 
Comprehensive income (loss)(29,665)(33,260)(70,385)(133,675)
Comprehensive (income) loss attributable to noncontrolling interest(552)(680)(1,689)(2,157)
Comprehensive income (loss) attributable to Groupon, Inc. $(30,217)$(33,940)$(72,074)$(135,832)

See Notes to Condensed Consolidated Financial Statements.
5

GROUPON, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
(in thousands, except share amounts)
(unaudited)

Groupon, Inc. Stockholders' Equity (Deficit)
 Common StockAdditional Paid-In CapitalTreasury StockAccumulated DeficitAccumulated Other Comprehensive Income (Loss)Total Groupon, Inc. Stockholders' Equity (Deficit)Non-controlling InterestsTotal Equity (Deficit)
SharesAmountSharesAmount
Balance at December 31, 202240,786,996 $4 $2,322,672 (10,294,117)$(922,666)$(1,394,477)$2,942 $8,475 $383 $8,858 
Comprehensive income (loss)— — — — — (29,147)(5,848)(34,995)534 (34,461)
Vesting of restricted stock units and performance share units420,471 — — — — — — — — — 
Shares issued under employee stock purchase plan33,803 — 246 — — — — 246 — 246 
Tax withholdings related to net share settlements of stock-based compensation awards(140,819)— (1,031)— — — — (1,031)— (1,031)
Stock-based compensation on equity-classified awards— — 2,547 — — — — 2,547 — 2,547 
Distributions to noncontrolling interest holders— — — — — — — — (637)(637)
Balance at March 31, 202341,100,451 $4 $2,324,434 (10,294,117)$(922,666)$(1,423,624)$(2,906)$(24,758)$280 $(24,478)
Comprehensive income (loss)— — — — — (12,607)5,745 (6,862)603 (6,259)
Vesting of restricted stock units and performance share units689,050 — — — — — — — — — 
Tax withholdings related to net share settlements of stock-based compensation awards(268,367)— (1,207)— — — — (1,207)— (1,207)
Stock-based compensation on equity-classified awards— — 7,809 — — — — 7,809 — 7,809 
Distributions to noncontrolling interest holders— — — — — — — — (692)(692)
Balance at June 30, 202341,521,134 $4 $2,331,036 (10,294,117)$(922,666)$(1,436,231)$2,839 $(25,018)$191 $(24,827)
Comprehensive income (loss)— — — — — (41,358)11,141 (30,217)552 (29,665)
Exercise of stock options
437,500 — 2,625 — — — — 2,625 — 2,625 
Vesting of restricted stock units and performance share units250,709 — — — — — — — — — 
Shares issued under employee stock purchase plan12,076 — 61 — — — — 61 — 61 
Tax withholdings related to net share settlements of stock-based compensation awards(89,184)— (980)— — — — (980)— (980)
Stock-based compensation on equity-classified awards— — 4,088 — — — — 4,088 — 4,088 
Distributions to noncontrolling interest holders— — — — — — — — (571)(571)
Balance at September 30, 202342,132,235 $4 $2,336,830 (10,294,117)$(922,666)$(1,477,589)$13,980 $(49,441)$172 $(49,269)
See Notes to Condensed Consolidated Financial Statements.





6

GROUPON, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
(in thousands, except share amounts)
(unaudited)






Groupon, Inc. Stockholders' Equity (Deficit)
Common Stock Additional Paid-In CapitalTreasury StockAccumulated DeficitAccumulated Other Comprehensive Income (Loss)Total Groupon, Inc. Stockholders' Equity (Deficit)Non-controlling InterestsTotal Equity (Deficit)
SharesAmountSharesAmount
Balance at December 31, 202140,007,255 $4 $2,294,215 (10,294,117)$(922,666)$(1,156,868)$(4,813)$209,872 $424 $210,296 
Comprehensive income (loss)— — — — — (34,852)3,369 (31,483)500 (30,983)
Vesting of restricted stock units and performance share units308,152 — — — — — — — — — 
Shares issued under employee stock purchase plan30,022 — 591 — — — — 591 — 591 
Tax withholdings related to net share settlements of stock-based compensation awards(118,589)— (2,597)— — — — (2,597)— (2,597)
Stock-based compensation on equity-classified awards— — 8,349 — — — — 8,349 — 8,349 
Distributions to noncontrolling interest holders— — — — — — — — (814)(814)
Balance at March 31, 202240,226,840 $4 $2,300,558 (10,294,117)$(922,666)$(1,191,720)$(1,444)$184,732 $110 $184,842 
Comprehensive income (loss)— — — — — (91,227)20,818 (70,409)977 (69,432)
Vesting of restricted stock units and performance share units407,426 — — — — — — — — — 
Tax withholdings related to net share settlements of stock-based compensation awards(151,368)— (2,166)— — — — (2,166)— (2,166)
Stock-based compensation on equity-classified awards— — 9,784 — — — — 9,784 — 9,784 
Distributions to noncontrolling interest holders— — — — — — — — (943)(943)
Balance at June 30, 202240,482,898 $4 $2,308,176 (10,294,117)$(922,666)$(1,282,947)$19,374 $121,941 $144 $122,085 
Comprehensive income (loss)— — — — — (56,223)22,283 (33,940)680 (33,260)
Vesting of restricted stock units and performance share units230,186 — — — — — — — — — 
Shares issued under employee stock purchase plan53,529 — 514 — — — — 514 — 514 
Tax withholdings related to net share settlements of stock-based compensation awards(73,013)— (830)— — — — (830)— (830)
Stock-based compensation on equity-classified awards— — 9,143 — — — — 9,143 — 9,143 
Distributions to noncontrolling interest holders— — — — — — — — (538)(538)
Balance at September 30, 202240,693,600 $4 $2,317,003 (10,294,117)$(922,666)$(1,339,170)$41,657 $96,828 $286 $97,114 
See Notes to Condensed Consolidated Financial Statements.
7

GROUPON, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
 Nine Months Ended September 30,
 20232022
Operating activities  
Net income (loss)$(81,423)$(180,145)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization of property, equipment and software34,110 42,172 
Amortization of acquired intangible assets6,206 6,397 
Impairment of Goodwill 35,424 
Impairment of long-lived assets 8,811 
Restructuring-related impairment 2,949 
Stock-based compensation13,771 24,194 
(Gain) loss from changes in fair value of investment
25,751  
(Gain) loss on early lease termination
 (4,471)
Foreign currency (gains) losses, net9,528 39,879 
Change in assets and liabilities:
Accounts receivable10,225 (9,321)
Prepaid expenses and other current assets14,357 (4,086)
Right-of-use assets - operating leases7,985 22,896 
Accounts payable(49,082)13,222 
Accrued merchant and supplier payables(52,497)(80,436)
Accrued expenses and other current liabilities(44,716)(40,331)
Operating lease obligations(22,011)(32,200)
Payment for early lease termination(9,724) 
Other, net5,035 3,196 
Net cash provided by (used in) operating activities(132,485)(151,850)
Investing activities
Purchases of property and equipment and capitalized software(15,917)(30,495)
Proceeds from sale of assets1,475  
Acquisitions of intangible assets and other investing activities(2,523)(2,077)
Net cash provided by (used in) investing activities(16,965)(32,572)
Financing activities
Proceeds from borrowings under revolving credit agreement 50,000 
Payments of borrowings under revolving credit agreement(28,300)(40,000)
Taxes paid related to net share settlements of stock-based compensation awards(3,126)(5,601)
Proceeds from stock option exercises and employee stock purchase plan
2,932 1,105 
Other financing activities(2,459)(2,996)
Net cash provided by (used in) financing activities(30,953)2,508 
Effect of exchange rate changes on cash, cash equivalents and restricted cash34 (9,240)
Net increase (decrease) in cash, cash equivalents and restricted cash(180,369)(191,154)
Cash, cash equivalents and restricted cash, beginning of period (1)
281,696 499,483 
Cash, cash equivalents and restricted cash, end of period (1)
$101,327 $308,329 
        
Nine Months Ended September 30,
20232022
Supplemental disclosure of cash flow information:
Cash paid for interest$5,713 $4,361 
Income tax payments$4,833 $4,483 
Supplemental cash flow information on our leasing obligations
Cash paid for amounts included in the measurement of operating lease liabilities$21,032 $22,640 
Right-of-use assets obtained in exchange for operating lease liabilities$543 $2,669 

8

GROUPON, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
(1)The following table provides a reconciliation of Cash, cash equivalents and restricted cash shown above to amounts reported within the Condensed Consolidated Balance Sheets as of September 30, 2023, December 31, 2022, September 30, 2022 and December 31, 2021 (in thousands):
September 30, 2023December 31, 2022September 30, 2022December 31, 2021
Cash and cash equivalents$86,085 $281,279 $307,998 $498,726 
Restricted cash included in prepaid expenses and other current assets15,242 417 331 757 
Cash, cash equivalents and restricted cash$101,327 $281,696 $308,329 $499,483 
See Notes to Condensed Consolidated Financial Statements.
9

GROUPON, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

NOTE 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
Company Information
Groupon, Inc. and its subsidiaries, which commenced operations in October 2008, is a global scaled two-sided marketplace that connects consumers to merchants by offering goods and services, generally at a discount. Consumers access those marketplaces through our mobile applications and our websites.
Our operations are organized into two segments: North America and International. See Note 13, Segment Information.
Unaudited Interim Financial Information
We have prepared the accompanying Condensed Consolidated Financial Statements pursuant to the rules and regulations of the Securities Exchange Commission ("SEC") for interim financial reporting. These Condensed Consolidated Financial Statements are unaudited and, in our opinion, include all adjustments, consisting of normal recurring adjustments and accruals, necessary for a fair presentation of the Condensed Consolidated Balance Sheets, Statements of Operations and Comprehensive Income (Loss), Cash Flows and Stockholders' Equity (Deficit) for the periods presented. These Condensed Consolidated Financial Statements and notes should be read in conjunction with the audited Consolidated Financial Statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2022.
Principles of Consolidation
The Condensed Consolidated Financial Statements include the accounts of Groupon, Inc. and its wholly-owned subsidiaries, majority-owned subsidiaries over which we exercise control and variable interest entities for which we are the primary beneficiary. All intercompany accounts and transactions have been eliminated in consolidation. Outside stockholders' interests in subsidiaries are shown on the Condensed Consolidated Financial Statements as Noncontrolling interests. Investments in entities in which we do not have a controlling financial interest are accounted for at fair value as available-for-sale securities or at cost adjusted for observable price changes and impairments, as appropriate.
Going Concern
The accompanying Condensed Consolidated Financial Statements are prepared in accordance with U.S. generally accepted accounting principles ("GAAP") applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. ASC 205-40 Presentation of Financial Statements - Going Concern, requires management to assess the reporting entity's ability to continue as a going concern. In accordance with this guidance, we have evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that the Condensed Consolidated Financial Statements are issued.
Our net cash used in operating activities was $136.0 million and $124.0 million for the years ended December 31, 2022 and December 31, 2021. Net cash used in operating activities was $132.5 million and $151.9 million for the nine months ended September 30, 2023 and 2022. Cash and cash equivalents were $86.1 million as of September 30, 2023. We entered into a fourth amendment to the revolving credit agreement in March 2023, which reduced our borrowing capacity and modified certain financial covenants as described in Note 5, Financing Arrangements. The fourth amendment to the revolving credit agreement matures on May 14, 2024. The maturing credit facility together with cash outflows and operating losses indicate that we may not be able to meet our obligations over the next twelve months. These conditions and events, when considered in the aggregate, raised substantial doubt about our ability to continue as a going concern.
We are currently executing plans intended to enhance our liquidity position. These plans include, but are not limited to, completing the fully backstopped rights offering described in Note 14, Subsequent Events and monetizing certain non-core assets. In October 2023, we sold a portion of our non-controlling interest in SumUp
10


GROUPON, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
Holdings S.a.r.l. ("SumUp") for $8.8 million as described in Note 3, Investments. We continue to consider other options to improve our liquidity, such as pursuing additional financing from both the public and private markets and monetization of certain non-core assets, including the remainder of our investment in SumUp. In addition, we expect to pursue additional cost savings initiatives under our 2022 Cost Savings Plan (as defined in Note 9, Restructuring and Related Charges), such as, but not limited to, additional restructuring actions, renegotiating contractual arrangements with certain service providers and continuing to make elective decisions to eliminate vacant positions rather than rehire. Management will also take steps designed to minimize the risk certain payment processors will require reserves or holdback receivables. While management intends to improve our liquidity and our ability to meet our obligations through the plans described above, with the exception of the completed sale of a portion of our SumUp investment, those plans are subject to market or other conditions not within our control. Accordingly, we have concluded that these plans do not alleviate substantial doubt about our ability to continue as a going concern. The Condensed Consolidated Financial Statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the Condensed Consolidated Financial Statements and accompanying notes. Estimates in our financial statements include, but are not limited to, the following: variable consideration from unredeemed vouchers; income taxes; leases; initial valuation and subsequent impairment testing of goodwill, other intangible assets and long-lived assets; investments; receivables; customer refunds and other reserves; contingent liabilities; and the useful lives of property, equipment and software and intangible assets. Actual results could differ materially from those estimates.
Reclassifications
Certain reclassifications have been made to the Condensed Consolidated Financial Statements of prior periods to conform to the current period presentation.
Adoption of New Accounting Standards
There were no new accounting standards adopted during the three and nine months ended September 30, 2023.
NOTE 2. GOODWILL AND LONG-LIVED ASSETS
We performed an assessment in the first, second, and third quarters of 2023 and did not identify a triggering event that would have required us to test for impairment for such periods.
We determined the impact to our business from the new variant of COVID-19 during the first quarter of 2022 and a downward revision of our forecast during the second quarter of 2022 required us to evaluate our goodwill and long-lived assets for impairment. Additionally, during the third quarter of 2022, we determined the carrying amount of one of our right-of-use-assets related to our 2020 Restructuring Plan may not be fully recoverable due to collectability of sublease income. For the first quarter of 2022, our interim quantitative assessment did not identify any goodwill or long-lived asset impairment. For the second quarter of 2022, we recognized $35.4 million of goodwill impairment within our International reporting unit, representing a full impairment of goodwill for that reporting unit. For the second and third quarters of 2022, we recognized long-lived asset impairment related to certain asset groups within our North America and International segments, which included impairment related to our 2020 Restructuring Plan. See details in the tables below and Note 9, Restructuring and Related Charges, for more information.
In order to evaluate goodwill and long-lived assets for impairment in 2022, we compared the fair value of our two reporting units, North America and International, and our asset groups to their carrying values. In determining the fair values of our reporting units and asset groups, we used the discounted cash flow method under the income approach that uses Level 3 inputs.
11

GROUPON, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)

Goodwill
As of September 30, 2023 and December 31, 2022, the balance of our goodwill was $178.7 million. There was no goodwill activity during the nine months ended September 30, 2023. All goodwill is within our North America segment, which had a negative carrying value as of September 30, 2023.

Long-Lived Assets
The following table summarizes impairment charges presented within the following line items on the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2022 (in thousands):
Three Months Ended September 30, 2022Nine Months Ended September 30, 2022
Long-lived asset impairment
North America$ $ 
International 8,811 
Total Long-lived asset impairment 8,811 
Restructuring and related charges
North America1,769 1,769 
International 1,180 
Total Restructuring and related charges1,769 2,949 
Total impairment$1,769 $11,760 

The following table summarizes long-lived asset impairment by asset type for the three and nine months ended September 30, 2022 (in thousands):
Three Months Ended September 30, 2022Nine Months Ended September 30, 2022
Property, equipment and software, net
Leasehold improvements$ $1,632 
Computer hardware 1,323 
Other property, equipment and software, net 416 
Total Property, equipment and software, net 3,371 
Right-of-use assets - operating leases, net
1,769 8,389 
Total long-lived asset impairment$1,769 $11,760 

The following table summarizes intangible assets as of September 30, 2023 and December 31, 2022 (in thousands):
September 30, 2023December 31, 2022
Gross Carrying ValueAccumulated AmortizationNet Carrying ValueGross Carrying ValueAccumulated AmortizationNet Carrying Value
Merchant relationships$18,061 $16,554 $1,507 $17,912 $14,327 $3,585 
Trade names9,359 8,610 749 9,340 8,382 958 
Patents13,750 7,250 6,500 13,341 6,701 6,640 
Other intangible assets9,296 5,294 4,002 17,517 11,059 6,458 
Total$50,466 $37,708 $12,758 $58,110 $40,469 $17,641 
12

GROUPON, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
Amortization of intangible assets is computed using the straight-line method over their estimated useful lives, which range from 1 to 10 years. Amortization expense related to intangible assets was $2.0 million and $2.1 million for the three months ended September 30, 2023 and 2022 and $6.2 million and $6.4 million for the nine months ended September 30, 2023 and 2022. As of September 30, 2023, estimated future amortization expense related to intangible assets is as follows (in thousands):

Remaining amounts in 2023$1,592 
20244,334 
20252,852 
20261,988 
20271,314 
Thereafter678 
Total$12,758 
NOTE 3. INVESTMENTS
As of September 30, 2023 and December 31, 2022, our carrying value in other equity investments, which relates to our non-controlling interest in SumUp, a privately-held mobile payments company, was $93.7 million and $119.5 million and our available-for-sale securities and fair value option investments had a carrying value of zero.
Other equity investments represent equity investments without readily determinable fair values recorded at cost adjusted for observable price changes and impairments. During the third quarter 2023, we recorded a remeasurement of our investment in SumUp, resulting in a decline of $25.8 million based on a preliminary Share Purchase Agreement (the "Purchase Agreement"). This remeasurement represents non-cash investing activity. The loss was driven by a share price reduction on a Euro basis as well as foreign currency depreciation of US dollars versus Euros. The loss on the remeasurement is classified within Other income (expense), net on the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2023. On October 6, 2023, we entered into the Purchase Agreement agreeing to sell approximately 9.4% of our shares in SumUp. Subsequently in October, the overall transaction was finalized and we received cash of $8.8 million in connection with the sale. As a result of the transaction, our non-controlling equity interest in SumUp decreased from 2.29% to 2.08%.
There were no changes in fair value of our available-for-sale securities and fair value option investments for the three and nine months ended September 30, 2023.
The following table summarizes our percentage ownership in our investments as of the dates noted below:
September 30, 2023 and December 31, 2022
Other equity investments 1%to19%
Available-for-sale securities 1%to19%
Fair value option investments10%to19%
13

GROUPON, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
NOTE 4. SUPPLEMENTAL CONDENSED CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF OPERATIONS INFORMATION
The following table summarizes Prepaid expenses and other current assets as of September 30, 2023 and December 31, 2022 (in thousands):
September 30, 2023December 31, 2022
Prepaid expenses$9,042 $16,048 
Income taxes receivable8,517 6,691 
Deferred cloud implementation cost, net10,661 9,362 
Restricted cash (1)
15,242 331 
Other4,927 8,669 
Total prepaid expenses and other current assets$48,389 $41,101 
(1) Consists of cash collateral related to our letters of credit. See Note 5, Financing Arrangements for additional information.
The following table summarizes Other non-current assets as of September 30, 2023 and December 31, 2022 (in thousands):
September 30, 2023December 31, 2022
Deferred contract acquisition costs, net$3,134 $4,815 
Deferred cloud implementation costs, net8,330 17,684 
Other4,391 4,992 
Total other non-current assets$15,855 $27,491 
The following table summarizes Accrued expenses and other current liabilities as of September 30, 2023 and December 31, 2022 (in thousands):
September 30, 2023December 31, 2022
Refund reserve$4,394 $11,072 
Compensation and benefits10,210 15,005 
Accrued marketing5,687 19,596 
Restructuring-related liabilities1,973 4,782 
Customer credits25,246 36,220 
Operating lease obligations
11,195 37,525 
Other (1)
39,150 47,252 
Total accrued expenses and other current liabilities$97,855 $171,452 
(1)Includes certain payroll taxes deferred under the Coronavirus Aid, Relief and Economic Security ("CARES") Act of $2.7 million as of December 31, 2022. This balance was paid in January 2023.
The following table summarizes Other non-current liabilities as of September 30, 2023 and December 31, 2022 (in thousands):
September 30, 2023December 31, 2022
Contingent income tax liabilities$11,387 $11,213 
Deferred income taxes3,101 3,100 
Other2,081 4,273 
Total other non-current liabilities$16,569 $18,586 
14

GROUPON, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
The following table summarizes Other income (expense), net for the three and nine months ended September 30, 2023 and 2022 (in thousands):
Three Months Ended September 30, Nine Months Ended September 30,
2023202220232022
Interest income$1,002 $2,626 $9,749 $5,399 
Interest expense(2,834)(3,760)(13,949)(9,849)
Gain (loss) from changes in fair value of investment
(25,847) (25,847) 
Foreign currency gains (losses), net and other(11,846)(22,407)(11,213)(45,311)
Total other income (expense), net
$(39,525)$(23,541)$(41,260)$(49,761)
NOTE 5. FINANCING ARRANGEMENTS
Convertible Senior Notes due 2026
The convertible senior notes due 2026 (the "2026 Notes") bear interest at a rate of 1.125% per annum, payable semiannually in arrears on March 15 and September 15 of each year, with an annual effective interest rate of 1.83%. The 2026 Notes will mature on March 15, 2026, subject to earlier repurchase, redemption or conversion.
The carrying amount of the 2026 Notes consisted of the following as of September 30, 2023 and December 31, 2022 (in thousands):
September 30, 2023December 31, 2022
Principal amount$230,000 $230,000 
Less: debt discount(3,919)(5,077)
Net carrying amount of liability$226,081 $224,923 
We classified the fair value of the 2026 Notes as a Level 3 measurement due to the lack of observable market data over fair value inputs such as our stock price volatility over the term of the 2026 Notes and our cost of debt. The estimated fair value of the 2026 Notes as of September 30, 2023 and December 31, 2022 was $127.5 million and $133.1 million and was determined using a lattice model.
During the three and nine months ended September 30, 2023 and 2022, we recognized interest costs on the 2026 Notes as follows (in thousands):
Three Months Ended September 30, Nine Months Ended September 30,
2023202220232022
Contractual interest$647 $646 $1,941 $1,940 
Amortization of debt discount388 380 1,158 1,137 
Total $1,035 $1,026 $3,099 $3,077 
Capped Call Transactions
In connection with the 2026 Notes, we entered into privately-negotiated capped call transactions. The capped call transactions cover, subject to customary adjustments, the number of shares of common stock initially underlying the 2026 Notes. The capped call transactions are expected generally to reduce potential dilution to our common stock upon any conversion of the 2026 Notes and/or offset any cash payments we are required to make in excess of the principal amount of converted notes, with such reduction and/or offset subject to a cap initially equal to $104.80 (which represents a premium of 100% over the last reported sale price of our common stock on The Nasdaq Global Select Market on March 22, 2021), subject to certain adjustments under the terms of the capped call transactions.
Revolving Credit Agreement
In May 2019, we entered into a second amended and restated senior secured revolving credit agreement, which matures on May 14, 2024, as amended from time to time (the "Amended Credit Agreement"). Most recently, in March 2023, we entered into a fourth amendment to the revolving credit agreement (the "Fourth Amendment" and together with the Amended Credit Agreement the "Existing Credit Agreement") to modify certain financial covenants and provide for additional flexibility in our operations, among other changes, including certain modifications to (i) our requirements to maintain a monthly minimum liquidity balance (including any undrawn amounts under the revolving credit facility) of at least $50.0 million, (ii) the calculation of EBITDA under the Existing Credit Agreement, (iii) mandatory prepayment requirements and (iv) certain affirmative covenants. In addition, the Fourth Amendment reduced our borrowing capacity under our senior secured revolving credit facility from $150.0 million to $75.0 million, which provides for the issuance of up to $75.0 million in letters of credit, provided that the sum of outstanding borrowings and letters of credit do not exceed the maximum funding commitment of $75.0 million.
We deferred debt issuance costs of $4.6 million in aggregate in connection with the Existing Credit Agreement. Deferred debt issuance costs are included within Other non-current assets on the Condensed Consolidated Balance Sheets and are amortized to interest expense over the term of the respective agreement.
As of September 30, 2023, we were in compliance with the covenants under our Existing Credit Agreement. Non-compliance with the covenants under the Existing Credit Agreement may result in termination of the commitments thereunder and then any outstanding borrowings may be declared due and payable immediately. We have the right to terminate the Existing Credit Agreement or reduce the available commitments at any time.
Amounts committed to outstanding borrowings and letters of credit under our Existing Credit Agreement as of September 30, 2023 and our Amended Credit Agreement as of December 31, 2022 were as follows (in thousands):
September 30, 2023December 31, 2022
Borrowings$46,700 $75,000 
Letters of credit (1)
25,914 24,900 

(1) Under the Existing Credit Agreement, cash collateral is required when letters of credit extend beyond the maturity date of May 14, 2024. This cash is treated as restricted cash on the Condensed Consolidated Balance Sheets. See Note 4, Supplemental Condensed Consolidated Balance Sheets and Statements of Operations Information for additional information.
15

GROUPON, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
NOTE 6. COMMITMENTS AND CONTINGENCIES
Our contractual obligations and commitments and future sublease income under our contractually obligated operating subleases as of September 30, 2023 and through the date of this report, did not materially change from the amounts set forth in our 2022 Annual Report on Form 10-K.
We sublease a portion of 600 West Chicago to Uptake, Inc. ("Uptake"). In the first quarter of 2023, we initiated a lawsuit against Uptake in the Circuit Court of Cook County for breach of the lease agreement and that lawsuit remains pending.
Legal Matters and Other Contingencies
From time to time, we are party to various legal proceedings incident to the operation of our business. For example, we currently are involved in proceedings brought by merchants, employment and related matters, intellectual property infringement suits, customer lawsuits, stockholder claims relating to U.S. securities law, consumer class actions and suits alleging, among other things, violations of state consumer protection or privacy laws.
On June 13, 2023, Groupon was granted final approval of a settlement that resolved four shareholder derivative lawsuits in relation to a previously settled lawsuit that alleged that Groupon and certain of its officers made materially false and/or misleading statements or omissions regarding its business, operations and prospects, specifically as it relates to reiterating its full year guidance on November 4, 2019 and the Groupon Select program. Under the settlement, Groupon agreed to undertake certain corporate reforms. The Court awarded attorneys' fees in the amount of $950,000 to Plaintiffs' counsel. That amount was covered under Groupon's insurance policies and was paid directly by Groupon's insurance carriers in July 2023.
In addition, third parties have from time to time claimed, and others may claim in the future, that we have infringed their intellectual property rights. We are subject to intellectual property disputes, including patent infringement claims, and expect that we will continue to be subject to intellectual property infringement claims as our services expand in scope and complexity. In the past, we have litigated such claims, and we are presently involved in several patent infringement and other intellectual property-related claims, including pending litigation or trademark disputes relating to, for example, our Goods category, some of which could involve potentially substantial claims for damages or injunctive relief. We may also become more vulnerable to third-party claims as laws such as the Digital Millennium Copyright Act are interpreted by the courts, and we become subject to laws in jurisdictions where the underlying laws with respect to the potential liability of online intermediaries are either unclear or less favorable. We believe that additional lawsuits alleging that we have violated patent, copyright or trademark laws may be filed against us. Intellectual property claims, whether meritorious or not, are time consuming and often costly to resolve, could require expensive changes in our methods of doing business or the goods we sell, or could require us to enter into costly royalty or licensing agreements.
We also are subject to consumer claims or lawsuits relating to alleged violations of consumer protection or privacy rights and statutes, some of which could involve potentially substantial claims for damages, including statutory or punitive damages. Consumer and privacy-related claims or lawsuits, whether meritorious or not, could be time consuming, result in costly litigation, damage awards, fines and penalties, injunctive relief or increased costs of doing business through adverse judgment or settlement, or require us to change our business practices, sometimes in expensive ways.
We are also subject to, or in the future may become subject to, a variety of regulatory inquiries, audits, and investigations across the jurisdictions where we conduct our business, including, for example, inquiries related to consumer protection, employment matters and/or hiring practices, marketing practices, tax, unclaimed property and privacy rules and regulations. Any regulatory actions against us, whether meritorious or not, could be time consuming, result in costly litigation, damage awards, fines and penalties, injunctive relief or increased costs of doing business through adverse judgment or settlement, require us to change our business practices in expensive ways, require significant amounts of management time, result in the diversion of significant operational resources, materially damage our brand or reputation, or otherwise harm our business.
16

GROUPON, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
We establish an accrued liability for loss contingencies related to legal and regulatory matters when the loss is both probable and reasonably estimable. Those accruals represent management's best estimate of probable losses and, in such cases, there may be an exposure to loss in excess of the amounts accrued. For certain of the matters described above, there are inherent and significant uncertainties based on, among other factors, the stage of the proceedings, developments in the applicable facts of law, or the lack of a specific damage claim. However, we believe that the amount of reasonably possible losses in excess of the amounts accrued for those matters would not have a material adverse effect on our business, Condensed Consolidated Financial Statements, results of operations or cash flows. Our accrued liabilities for loss contingencies related to legal and regulatory matters may change in the future as a result of new developments, including, but not limited to, the occurrence of new legal matters, changes in the law or regulatory environment, adverse or favorable rulings, newly discovered facts relevant to the matter, or changes in the strategy for the matter. Regardless of the outcome, litigation and other regulatory matters can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.
Indemnifications
In connection with the disposition of our operations in Latin America in 2017, we recorded $5.4 million in indemnification liabilities for certain tax and other matters upon the closing of the transactions as an adjustment to the net loss on the dispositions within discontinued operations at their fair value. We estimated the indemnification liabilities using a probability-weighted expected cash flow approach. Our remaining indemnification liabilities were $2.8 million as of September 30, 2023. We estimate that the total amount of obligations that are reasonably possible to arise under the indemnifications in excess of amounts accrued as of September 30, 2023 is approximately $11.7 million.
In the normal course of business to facilitate transactions related to our operations, we indemnify certain parties, including employees, lessors, service providers, merchants and counterparties to investment agreements and asset and stock purchase agreements with respect to various matters. We have agreed to hold certain parties harmless against losses arising from a breach of representations or covenants, or other claims made against those parties. These agreements may limit the time within which an indemnification claim can be made and the amount of the claim. We are also subject to increased exposure to various claims as a result of our divestitures and acquisitions, particularly in cases where we are entering into new businesses in connection with such acquisitions. We may also become more vulnerable to claims as we expand the range and scope of our services and are subject to laws in jurisdictions where the underlying laws with respect to potential liability are either unclear or less favorable. In addition, we have entered into indemnification agreements with our officers, directors and underwriters, and our bylaws contain similar indemnification obligations that cover officers, directors, employees and other agents. 
Except as noted above, it is not possible to determine the maximum potential amount under these indemnification agreements due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. Historically, any payments that we have made under these agreements have not had a material impact on our operating results, financial position or cash flows.
17

GROUPON, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
NOTE 7. STOCKHOLDERS' EQUITY (DEFICIT) AND COMPENSATION ARRANGEMENTS
Groupon, Inc. Incentive Plan
In August 2011, we established the Groupon, Inc. 2011 Incentive Plan, as amended and restated (the "2011 Plan"), under which options, restricted stock units and performance stock units for up to 13,775,000 shares of common stock are authorized for future issuance to employees, consultants and directors. The 2011 Plan is administered by the Compensation Committee of the Board of Directors. As of September 30, 2023, 2,728,411 shares of common stock were available for future issuance under the 2011 Plan.
Restricted Stock Units
The restricted stock units granted under the 2011 Plan ("Restricted Stock Units") generally have vesting periods between one and four years and are amortized on a straight-line basis over their requisite service period.
The table below summarizes Restricted Stock Unit activity for employees and non-employees under the 2011 Plan for the nine months ended September 30, 2023:
Restricted Stock UnitsWeighted-Average Grant Date Fair Value (per unit)
Unvested at December 31, 20222,876,089 $19.33 
Granted601,314 5.26 
Vested(1,342,961)19.32 
Forfeited(1,210,548)15.79 
Unvested at September 30, 2023923,894 $11.32 
As of September 30, 2023, $6.1 million of unrecognized compensation costs related to unvested Restricted Stock Units are expected to be recognized over a remaining weighted-average period of 0.85 years.
Stock Options
On March 30, 2023, we issued 3,500,000 units of stock options with a per share value of $0.95, a strike price of $6.00 and vesting over two years. The exercise price of stock options granted is equal to the fair market value of the underlying stock on the date of grant. The contractual term for these stock options expires three years from the grant date. The fair value of stock options on the grant date is amortized on a straight-line basis over the requisite service period.
The fair value of stock options granted is estimated on the date of grant using the Black-Scholes-Merton option-pricing model. Expected volatility is based on Groupon's historical volatility over the estimated expected life of the stock options. The expected term represents the period of time the stock options are expected to be outstanding. The risk-free interest rate is based on yields on U.S. Treasury STRIPS with maturity similar to the estimated expected life of the stock options. The weighted-average assumptions for stock options granted are outlined in the following table:
Dividend yield0.0 %
Risk-free interest rate4.1 %
Expected term (in years)2
Expected volatility78.2 %

18

GROUPON, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
The table below summarizes stock option activity for the nine months ended September 30, 2023:
OptionsWeighted-Average Exercise PriceWeighted-Average Remaining Contractual Term (in years)
Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2022 $ — $ 
Granted3,500,000 6.00 3.00— 
Exercised(437,500)6.00 
Outstanding at September 30, 20232,625,000 6.00 2.524,465 
Vested and exercisable at September 30, 2023437,500 $6.00 2.5$4,078 
As of September 30, 2023, there was $2.5 million of total unrecognized compensation costs related to unvested stock options granted under the 2011 Plan. That cost is expected to be recognized over a weighted-average period of 1.5 years. The total fair value of shares vested during the nine months ended September 30, 2023 was $0.8 million.
Performance Shares Units
We have previously granted performance share units under the 2011 Plan that vest in shares of our common stock upon the achievement of financial and operational targets specified in the respective award agreement ("Performance Share Units"). Our existing Performance Share Units are subject to continued service through the period dictated by the award and certification by the Compensation Committee of the Board that the specified performance conditions have been achieved.
The table below summarizes Performance Share Unit activity under the 2011 Plan for the nine months ended September 30, 2023:
Performance Share UnitsWeighted-Average Grant Date Fair Value (per unit)
Unvested at December 31, 202217,269 $24.13 
Granted482,991 13.31 
Vested(17,269)24.13 
Forfeited  
Unvested at September 30, 2023482,991 $13.31 
As of September 30, 2023, $4.2 million of unrecognized compensation costs related to unvested Performance Share Units are expected to be recognized over a remaining weighted-average period of 0.58 years.
19

GROUPON, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
NOTE 8. REVENUE RECOGNITION
Refer to Note 13, Segment Information, for revenue summarized by reportable segment and category for the three and nine months ended September 30, 2023 and 2022.
Customer Credits
We issue credits to customers that can be applied to future purchases through our online marketplaces. Credits are primarily issued as consideration for refunds and, to a lesser extent, for customer relationship purposes. The following table summarizes the activity in the liability for customer credits for the nine months ended September 30, 2023 (in thousands):
Customer Credits
Balance as of December 31, 2022$36,220 
Credits issued62,685 
Credits redeemed (1)
(65,944)
Breakage revenue recognized(7,680)
Foreign currency translation(35)
Balance as of September 30, 2023$25,246 
(1)Customer credits can be redeemed through our online marketplaces for goods or services provided by a third-party merchant and service revenue is recognized on a net basis as the difference between the carrying amount of the customer credit liability derecognized and the amount due to the merchant for the related transaction. Customer credits are typically used within one year of issuance.
Costs of Obtaining Contracts
Incremental costs to obtain contracts with third-party merchants, such as sales commissions, are deferred and recognized over the expected period of the merchant arrangement, generally from 12 to 18 months. Deferred contract acquisition costs are presented in Prepaid expenses and other current assets and Other non-current assets on the Condensed Consolidated Balance Sheets. As of September 30, 2023 and December 31, 2022, deferred contract acquisition costs were $4.0 million and $5.9 million.
The amortization of deferred contract acquisition costs is classified within Selling, general and administrative expense in the Condensed Consolidated Statements of Operations. We amortized $1.8 million and $2.7 million of deferred contract acquisition costs for the three months ended September 30, 2023 and 2022, and $6.2 million and $8.3 million for the nine months ended September 30, 2023 and 2022.
Allowance for Expected Credit Losses on Accounts Receivable
Accounts receivable primarily represents the net cash due from credit card and other payment processors and from merchants and performance marketing networks for commissions earned on consumer purchases. We establish an allowance for expected credit losses on accounts receivable based on identifying the following customer risk characteristics: size, type of customer and payment terms offered in the normal course of business. Receivables with similar risk characteristics are grouped into pools. For each pool, we consider the historical credit loss experience, current economic conditions, bankruptcy filings, published or estimated credit default rates, age of the receivable and any recoveries in assessing the lifetime expected credit losses.
20

GROUPON, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
The following table summarizes the activity in the allowance for expected credit losses on accounts receivable for the nine months ended September 30, 2023 (in thousands):
Allowance for Expected Credit Losses
Balance as of December 31, 2022$4,538 
Change in provision(853)
Write-offs(631)
Foreign currency translation15 
Balance as of September 30, 2023$3,069 
Variable Consideration for Unredeemed Vouchers
For merchant agreements with redemption payment terms, the merchant is not paid its share of the sale price for a voucher sold through one of our online marketplaces until the customer redeems the related voucher. If the customer does not redeem a voucher with such merchant payment terms, we retain all of the gross billings for that voucher, rather than retaining only our net commission. We estimate the variable consideration from vouchers that will not ultimately be redeemed using our historical voucher redemption experience and recognize that amount as revenue at the time of sale. We apply a constraint to ensure it is probable that a significant reversal of revenue will not occur in future periods. We recognized variable consideration from unredeemed vouchers that were sold in a prior period of $5.2 million and $7.4 million for the three months ended September 30, 2023 and 2022, and $6.2 million and $9.4 million for the nine months ended September 30, 2023 and 2022. When actual redemptions differ from our estimates, the effects could be material to the Condensed Consolidated Financial Statements.
NOTE 9. RESTRUCTURING AND RELATED CHARGES
In August 2022 and April 2020, we initiated Board-approved restructuring plans. Costs incurred related to the restructuring plans are classified as Restructuring and related charges on the Condensed Consolidated Statements of Operations. The restructuring activities are summarized by plan in the sections below.
2022 Restructuring Plan
In August 2022, we initiated a multi-phase cost savings plan designed to reduce our expense structure to align with our go-forward business and financial objectives (the "2022 Cost Savings Plan"). The 2022 Cost Savings Plan included a restructuring plan, approved by our Board on August 5, 2022 (the “2022 Restructuring Plan”). The 2022 Restructuring Plan, including the first phase initiated August 2022, second phase initiated January 2023 and the third phase initiated July 2023 is expected to include an overall reduction of approximately 1,150 positions globally, with the majority of these reductions completed as of March 31, 2023 and the remainder expected to occur by the end of 2024. In connection with these actions, we expect to record total pre-tax charges of $23.6 million to $30.6 million. A majority of the pre-tax charges are expected to be paid in cash and relate to employee severance and compensation benefits, with an immaterial amount of charges related to other exit costs. We have incurred total pre-tax charges of $20.5 million since the inception of the 2022 Restructuring Plan.
21

GROUPON, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
The following tables summarize activity by segment related to the 2022 Restructuring Plan for the three and nine months ended September 30, 2023 and 2022 (in thousands):
Three Months Ended September 30, 2023
Employee Severance and Benefit Costs (Credits) (1)
Other Exit CostsTotal Restructuring Charges (Credits)
North America$690 $ $690 
International652  652 
Consolidated$1,342 $ $1,342 
(1)The employee severance and benefits costs for the three months ended September 30, 2023 are related to the termination of approximately 70 employees.
Nine Months Ended September 30, 2023
Employee Severance and Benefit Costs (Credits) (1)
Other Exit CostsTotal Restructuring Charges (Credits)
North America$5,256 $1,037 $6,293 
International4,543  4,543 
Consolidated$9,799 $1,037 $10,836 
(1)The employee severance and benefits costs for the nine months ended September 30, 2023 are related to the termination of approximately 440 employees.
Three and Nine Months Ended September 30, 2022
Employee Severance and Benefit Costs (Credits)
Other Exit CostsTotal Restructuring Charges (Credits)
North America$4,600 $158 $4,758 
International1,436  1,436 
Consolidated$6,036 $158 $6,194 

The following table summarizes restructuring liability activity for the 2022 Restructuring Plan (in thousands):
Employee Severance and Benefit CostsOther Exit CostsTotal
Balance as of December 31, 2022
$175 $ $175 
Charges payable in cash9,799 1,037 10,836 
Cash payments(9,394)(738)(10,132)
Foreign currency translation55  55 
Balance as of September 30, 2023 (1)
$635 $299 $934 
(1)Substantially all of the remaining cash payments for costs related to the 2022 Restructuring Plan are expected to be disbursed by the end of 2024.
2020 Restructuring Plan
In April 2020, the Board approved a multi-phase restructuring plan related to our previously-announced strategic shift and as part of the cost cutting measures implemented in response to the impact of COVID-19 on our business (the "2020 Restructuring Plan"). We have incurred total pretax charges of $108.9 million since the inception of the 2020 Restructuring Plan. Our actions under this plan were substantially completed by December 31, 2021, and our current and future charges or credits will be from changes in estimates. Our 2020 Restructuring Plan included workforce reductions of approximately 1,600 positions globally, the exit or discontinuation of the use
22

GROUPON, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
of certain leases and other assets, impairments of our right-of-use and other long-lived assets and the exit of our operations in New Zealand and Japan.
The following tables summarize activity by segment related to the 2020 Restructuring Plan for the three and nine months ended September 30, 2023 and 2022 (in thousands):
Three Months Ended September 30, 2023
Employee Severance and Benefit Costs (Credits)
Legal and Advisory Costs (Credits)
Lease-related Charges (Credits)Total Restructuring Charges (Credits)
North America$44 $5 $660 $709 
International(214)(49)440 177 
Consolidated$(170)$(44)$1,100 $886 
Three Months Ended September 30, 2022
Employee Severance and Benefit Costs (Credits)
Legal and Advisory Costs (Credits)
Right-of-Use Asset Impairments and Lease-related Charges (Credits)
Total Restructuring Charges (Credits)
North America$ $(1)$(1,578)$(1,579)
International121 28 148 297 
Consolidated$121 $27 $(1,430)