Good day, everyone, and welcome to Groupon's First Quarter 2017 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the company's formal remarks. Today's conference call is being recorded. For opening remarks, I would like to turn the call over to the Vice President of Investor Relations, Deb Schwartz. Please go ahead.

Good morning and welcome to Groupon's first quarter 2017 financial results conference call. On the call today are our CEO, Rich Williams; and CFO, Mike Randolfi. The following discussion and responses to your questions reflect management's view as of today, May 3, 2017 only and will include forward-looking statements. Actual results may differ materially from those expressed or implied in our forward-looking statements. Additional information about our risks and other factors that could potentially impact our financial results is included in today's press release and in our filings with the SEC, including our Form 10-K. We encourage investors to use our Investor Relations website as a way of easily finding information about the company. Groupon promptly makes available on this website the reports that the company files or furnishes with the SEC, corporate governance information, and select press releases and social media postings. On the call today, we will discuss the following non-GAAP financial measures; adjusted EBITDA, non-GAAP earnings per share, non-GAAP net income or loss attributable to common stockholders and free cash flow, as well as FX-neutral results. In our press release and our filings with the SEC, each of which is posted on our Investor Relations website, you'll find additional disclosures regarding our non-GAAP measures, including reconciliations of these measures with U.S. GAAP. Unless otherwise stated, all comparisons on this call will be against our results for the comparable period of 2016 and are excluding year-over-year changes in foreign exchange rates throughout the quarter. And with that, I'm happy to turn the call over to Rich.

Thanks, Deb, and good morning. Earlier this year, I said we were on a multi-year journey to unlock the potential in Groupon and local. I highlighted four core strategic pillars that we believe are critical to our success. These are all foundational initiatives and two are focused on growth. A core foundational pillar is to simplify and streamline our business to make what has historically been a complicated business both more efficient and simpler to operate and deliver value. Given our stage of development as a company, this is exceptionally important. We need to be able to focus our energy, run fast and lean, and invest in our future and growth. Next, it's foundational for us to focus on growing gross profit dollars over time. This may seem basic, but for us, it means placing a premium on gross profit growth and achieving our strategic goals, even if it means lower revenue. Going forward, it also means explicitly favoring gross profit dollar growth over margin, regardless of line of business. Executing on these pillars is central to keeping Groupon on a momentum-building and profitable growth track. Making our business faster and more efficient and getting more dollars flowing through the system makes it vastly easier to invest where we need it most: in our growth pillars. The growth pillar we're most familiar with at Groupon is growing customers. Over the years, we've demonstrated that customer acquisition is a core competency, and the scale advantages it has provided is a huge asset that should not be underestimated or taken for granted. We plan to continue to double down on this strength. That said, the other critical pillar for growth, building a great customer experience and product, is where we're shifting our focus and need to develop. When we get this right,…

Thanks, Rich. We made substantial progress during the quarter on critical initiatives that align with our strategy, which include reducing our go-forward international footprint, shifting our resources more heavily toward local, rationalizing our cost structure and working on new product introductions. The first quarter was a slower start to the year than we expected and we weren't pleased with our gross profit performance for the period. However, we saw a significant improvement in trends in North America local in March and that has continued into the second quarter. With the enhancements we've made to the customer experience, coupled with increased efficiencies we have realized within our cost structure, we believe our strategy will enable us to unlock value over the long term. We remain confident in our full-year adjusted EBITDA outlook and continue to believe we are on a path to deliver multi-year adjusted EBITDA and free cash flow growth. As I discuss our results for the first quarter, note that all comparisons, unless otherwise stated, refer to year-over-year growth and are FX neutral. Additionally, during the quarter, we exited all remaining 11 countries not included in our go-forward country footprint and have presented the results for the businesses in those 11 countries as discontinued operations in our earnings tables for the current and prior periods. As a result of these dispositions, we have consolidated our EMEA and rest of the world segments into one international segment. We plan to file an 8-K over the coming weeks with our most recent three years of financials, reflecting discontinued operations and our revised segment presentation. As a reminder, our business is now comprised of 15 countries, primarily in North America and EMEA where we believe we have a long-term opportunity to win. For the first quarter, gross profit was $309 million and…

Thanks, Mike. When we last spoke in February, after five quarters of strong financial and operational performance, I noted that our work was far from done. I've been clear all along that redesigning a business already operating at scale would take time. But we are making progress; we have a clear plan and believe we're on the right track strategically to unlock the potential in this business. Without question, it's an exciting time at Groupon. We are building what we believe can be one of the great mobile marketplaces. And we're excited to head toward sustained profitable growth beginning this year and in line with our previous expectations. With that, let's open it up for questions.

Thank you. And our first question comes from the line of Sam Kemp from Piper Jaffray. Samuel James Kemp - Piper Jaffray & Co.: Great. Thanks for taking the questions. First one, Mike, can you call out the organic local billings growth for Q1 excluding LivingSocial? And then I feel like I remember you guys talking about expecting around 200,000 net churn at LivingSocial per quarter after you acquired it, and it looks like there was about 100,000 net churn. Can you just talk about what's happening there? And then lastly, given the cadence through Q1 and into Q2, can you just call out, has local billings growth reaccelerated to double digits in March and April? Thanks.

Sure. So, on LivingSocial, in terms of the billings impact in Q1, there was about a 300 basis point benefit of having LivingSocial this year and not having LivingSocial last year. With regards to net customer additions, so I'll call out a few pieces there. The attrition from LivingSocial was pretty consistent with what we expected, roughly around 200,000 net attrited customers from LivingSocial, which was very much in line with what we expected in the quarter. That's about what we expect in the second quarter until they're on our platform. And then, what I would just say, as you think about our net additions just in general is that, this quarter on a same-country basis, net additions were approximately 600,000. But if you were to take into account LivingSocial, it'd actually be closer to 800,000, the LivingSocial attrition. So something just to keep in mind. With regard to just the general trends, so yeah, we ended the quarter with some strong growth in North America local in March. That strong growth continued into April. I wouldn't, at this stage, quantify what that was, other than to say, we ended the quarter on a strong note, North America local, and we've began the new quarter on a strong note in North America local. Samuel James Kemp - Piper Jaffray & Co.: Thanks.

Thank you. And our next question comes from the line of Paul Bieber from Credit Suisse. Paul Bieber - Credit Suisse Securities (USA) LLC: Good morning. Thanks for taking my questions. Can you provide an update on card-linked offers and Beauty Now, and when will those products be launched more broadly? I understand they're only in a couple cities, and will you support Beauty Now expansion with marketing dollars as well?

Thanks for that, Paul. It's Rich. So, I mean, we're – as I said earlier, we're really excited about both card-linked and Beauty Now. The products are great. If you've used them, experienced them, I think you'd agree that they're just a different way to experience Groupon and one that's really rewarding in a bunch of different ways than what we've had before. So our focus entirely on those products at this point is the combination of tuning the products and hardening the infrastructures for scale, while we start to scale them up and launch them in additional markets. We're actively deploying those products in additional markets now, and that includes, of course, selling to merchants in additional markets and onboarding merchants onto those new products and moving them out. And I'd say expect that to continue to happen over the course of the rest of this year and into 2018. And we expect acceleration on our rollouts throughout the course of the year as well. With respect to marketing dollars and marketing support on Beauty Now, I'd actually say it goes to both products. When we're launching a new product, I think historically this hasn't been a strong suit of ours. We've just kind of thrown them out there and let them run on their own. These are so different for consumers. It's part of even why we're investing more in TV. We need to get a different kind of story told to customers and a different kind of message in the market. So we're not going to miss that opportunity as we roll these out. So you'll see broader-based marketing across additional channels in markets as we launch these, including our existing online channels, as well as things like offline, out-of-home, et cetera. So keep your eyes peeled for that in additional markets. Paul Bieber - Credit Suisse Securities (USA) LLC: Okay. Thank you.

Thanks, Paul.

Thank you. And our next question comes from the line of Heath Terry with Goldman Sachs. Heath Terry - Goldman Sachs & Co.: Great. Just on the initiative to move to paperless, can you give us a sense of sort of what kind of technology investment that's going to require and where it fits in sort of your other major technology priorities? And then given the inconsistency of demand that you saw in the first quarter, how do you get confident with maintaining your full-year guidance?

Right. Thanks for that, Heath. I'll jump on the first one, and Mike can cover a little bit on the second as well. As far as we think about the initiative to move to paperless and voucher-less and its slotting in our technical investments, technology investments, here's what I told the team. They're unconstrained to make sure that they have everything they need to make sure those products are launched. But they're unconstrained within our current head count, our current SG&A investment and R&D. So they have the resources they need to continue to move those products forward. Our investment levels in them from a technology perspective have been relatively stable over the last, call it, six to nine months as we've launched them up. But I don't expect any material increase in our SG&A relative to those products or investment. But if we find a need to come down the road as we learn more about those products or see other opportunities to go voucher-less that require moving in a new direction, we may shuffle things around. But that will always be our first look, is to say, how are we deploying our existing investments and our existing resources most effectively to meet those long-term needs? And if we find we can't do that, we've made all the moves we can make then we'll of course consider additional investment in the team. But I don't foresee that really being an issue at this point. So I'll start off a little bit on confidence in general, and then – and, Mike, please jump in, but part of what gives us confidence about the rest of the year is seeing how the business is responding to our inputs and in particular, as Mike mentioned, how the business has responded in March and moving on into April as we continue to stay focus on our strategic initiatives on driving more high-quality inventory, on deploying more high-quality products. So all of those things build to give us more confidence in the trajectory overall of the business. And the responsiveness of the business to the things that we're actively implementing day to day. So Mike, do you have additional color, please chime in.

Yes, no. As Rich mentioned, if I – one, I just simply look at the underlying trends and particularly in the area of our business where we're most differentiated which is on local, the underlying trends are really positive. So that's what I would say is number one. Number two, if I think about the kind of other three things that are going to kind of drive growth over time, it's having customers be aware of you and realizing your marketing message. Our marketing message has been really, really well received. We see a lot of positive indicators in that. We continue to build out and have initiatives to build out great supply. That great supply continues to be additive over time to our platform. And then third from a product standpoint, we continue to innovate from a product standpoint. Obviously there's some big things out there that we're very focused on such as our card-linked offers and Beauty Now. But also on a day to day, the team has just done a really great job of finding small changes that drive conversion improvement, so all of those collectively give us confidence in the outlook for the remainder of the year. Heath Terry - Goldman Sachs & Co.: Great. Thank you very much.

Thanks, Heath.

Thank you. And our next question comes from the line of Mark Kelley with Citi.

Hey. Good Morning. Thanks a lot for taking the question. I just kind of want to follow up on the card-linked offers question from before. Is there a timeline to add more partners beyond Visa? And I guess how important is that in terms of your rollout plans? Do you think you need more partners before you really roll out more broadly? Thank you.

Thanks for that, Mark. Yeah. We believe we can go pretty far with Visa as a partner. They've been a great partner so far, and the team there and our team here has been really tightly coupled and working closely together. But, yeah, as we really think about a full rollout to the total platform, we're working with additional partners and additional data sources to enable that. I'd say over the coming couple of quarters, expect to see some additional partnerships on that side that should help us accelerate it. But today, it's not a gating factor. If you think about Visa, Visa is covering 70%-plus of cardholders, and I think that gives us a lot of runway to offer it to customers, and we control that offering largely, recall. So if we recognize a user doesn't have a Visa card on file, we can of course prompt that user to bring up a Visa card on file. And we – if they don't have a Visa card at all, we can suppress those offers to make sure that we're not putting irrelevant things in front of them. So we have a lot of control behind the scene. Not a massive gate at this point, but for sure, as we think really long term about voucher-less, expanding our partnership, expanding how we go voucher-less is absolutely in our line of sight and something we'll be actively working on here on out.

That's helpful. Thanks a lot.

Thanks, Mark.

Thank you. And our next question comes from the line of Tom Champion from Cowen and Company. Thomas Champion - Cowen & Co. LLC: Good morning, and thank you. I'm just wondering, if you could talk about some of your marketing programs intended to boost purchase frequency, and kind of the early returns on the Save $100 a Week and if that's getting some of your active customers to engage on a daily basis. Thank you.

Sure. Morning, Tom. Thanks for that. I'll give you a high level and then, Mike can add a little bit of color as well. But it's very much starts in this path with just changing the storytelling. Groupon is a well-known brand, but it hasn't been historically a well-understood brand relative to how we've changed the actual business and experience. As we build the marketplace version of Groupon, in many consumers' minds, we're still that daily deal e-mail company. So, really, our investment in offline starting late last year was really our first push to changing that story and changing that story line. And in February, when we launched the Save Up to $100 campaign, you can really see us leaning into that message hard to just reinforce that even before products like Card-Linked and Beauty Now, it is a product you can use every day or at least very frequently to save time and money, especially for our core customer. So, we're going to continue to do that. Now early returns on it have been really, really pretty strong and which is why we've continued to lean into it. We've seen that not just on the financial side because we measure it with a combination of both proprietary and third-party software and data analytical tools. We've been pleased with the economic outcomes and the ROI and where it's ranging relative to our other channels and specifically, some of our larger scaled online channel. We've been really pleased with how it's been performing, with how it's changing customer perception of Groupon. And we measure everything, of course, from brand recall and brand recognition. But more importantly, we're measuring brand understanding relative to the usability of Groupon every day to save money. And that was when we started in the 20-ish% range and we're now in the 50-ish% range. So we've seen on a very short period of time with relatively modest levels of investments and ability to start changing how people are thinking of Groupon. And we're seeing good solid traffic patterns and everything else is a result. And so, we're going to continue along these lines, and Mike can give you a little bit of color on that front.

Yeah. As Rich mentioned and Rich talked about, the Save Up to $100 a Week on What You Do Every Day, all the analytical indicators that we see in the financial return indicators indicate this message is really resonating well with consumers and ties very closely into the Groupon brand. And as a result, we are leaning quite heavily into the offline campaign. And when I talked about Q2, I talked about the idea that we're stepping up our offline campaign. And let me just give you a little bit of quantification around that. If you look at in the second quarter you should probably expect that we're going to spend about $15 million to $16 million more in marketing in Q2 on an absolute basis as compared to Q1. And the primary difference there is our support for that offline campaign. And it's based upon the feedback and the analytics that we're seeing that indicate this message resonates really well with consumers. And it ties very closely into the Groupon brand. And we're seeing it have a positive impact in our North America business, where it's playing.

Thank you. And our next question comes from the line of Brian Fitzgerald from Jefferies.

Thanks, guys. Maybe a couple of questions, a follow-up to Heath's question on moving to voucher-less. Is there a discovery in marketing that you can bring it to bear? Also, how quickly can you bring that to bear? And then to what extent does growth supply or mix of supply in any way impact how fast you can move to a voucher-less scenario? And then, I have one follow-up. Thanks.

Okay. I'll start with that Brian. There are both pieces, you call out a couple of really key pieces on moving to voucher-less. On the discovery side, I think – and marketing both, they tie in that in the most basic way is just education. We have to get these products not just in front of users, we have to start talking about them more actively. In markets like Chicago, where often, where the product has been deployed. You've seen that dialogue already happening, you've seen investments from us in the local markets heavying up on that messaging. And we've seen adoption rates of the products moving in a nice, solid, steady line and moving up into the right as we'd expect. We still – one of the reasons we haven't gone harder, faster on the products, it's not because we didn't see really great interesting things like frequency increases early on, we did. It's more that we've been working to really square away how discovery works inside the Groupon ecosystem, inside our mobile apps, inside the website. Because a lot of our current Card-Linked Offers are free-to-claim. So you have free-to-claim products that live right next to pay upfront vouchered products. So there's a lot of cognitive load for users there. And we've had to tune our relevant systems. We'd have to tune our messaging and tune our merchandising displays. So we've had a lot to work through there. We're feeling much better about where those sit and that's what's giving us confidence to start rolling to more markets. So I think that's on both sides. But those discovery bits internally and the marketing pieces externally, they really need to work together. And you'll see us doing both of those pieces in parallel, as we move to additional markets.…

Got it. Thanks, Rich.

Yeah.

Thank you. And our next question comes from the line of Tom Forte from The Maxim Group.

Great. Thanks for taking my question. On the television advertising front, and then marking in general, to what extent is that having an impact on getting customers to return to Groupon? And what are your other initiatives not just to drive new customer acquisition growth, but to get old customers to come back to Groupon?

Sure. Thanks for that, Tom. It's still early for us to have a real, a great bead on its impact in total customer purchase frequency. That's a number that, as you know, there are multiple factors at play. There's us adding lots of new customers to the mix that have an inherently lower frequency that just haven't had time on our platform to fully engage. So, there are some things there that make it hard to tease out. But I will say that what we have seen so far, as I said before, is really encouraging in how it's changing how people are thinking about Groupon and how it's even impacting traffic overall to the site and direct in our apps and to the website. So, we're generally feeling very bullish about how TV and our other marketing efforts, in general, to drive more of that top of mind and repeat, what we believe, at least, will be repeat behavior long term. The other initiatives on the marketing side, I mean, we – I guess really there's two fronts. One is of course, on the marketing side. We talked about we're going to continue to go deeper here and not just in TV, but in more longer-format storytelling, online marketing. So that's – whether it's video in YouTube, the work that we're doing with other emerging platforms, whether it's Instagram and Snap, et cetera, like that's all a part of the mix here to get Groupon back in front of both existing users that maybe haven't worked with us in a while, as well as new users. So we'll continue to lean heavily in that. But really the biggest things that we're working on related to purchase frequency are the product bets that we're making and the product initiatives we're rolling out. Because that's where we're seeing the clearest signal of significant changes to purchase frequency. As I said before, I mean, people who are using these new products and adopting these new products are using them multiple times more frequently than they are using the original Groupon voucher. So tuning our marketing to those products as we launch them in market is probably the single biggest and most significant change outside of just the things we do normally and outside of TV to change that purchase frequency story over the longer horizon.

Thank you.

Thanks, Tom.

Thank you. And our next question comes from the line of Mark Mahaney from RBC Capital Markets.

Hi. Good morning, guys. This is Jim Shaughnessy stepping in for Mark. Thanks for taking my question. Just another – to follow-up on the Card-Linked Offers, appreciate the color around the purchase behavior differences. I was wondering if you could maybe give a little more detail around adoption usage from a cohort's perspective. Is this some of your older, more frequent Groupon customers adopting these products, is it a mix of both or is it new? And then maybe a second question about how many markets you're in today and expectations for the end of the year in terms of number of markets. Thanks.

Thanks, and morning, Jim. So on cohort mix with new products, it's a mix of everything. But the thing that we, of course, saw and it's just how we roll them out, was that our older cohorts adopted them faster because they really didn't have additional marketing when we first launched them. We just sort of threw them out into the ecosystem to see how they would gain traction. And, of course, our oldest and most active cohorts started to adopt them first. But as we started to layer on marketing the costumer cohort mix is starting to become more broader and they are starting to become an activation channel, especially as we've focused on food and beauty. Now they're two of our biggest activating channels. And we'd expect that to continue. And I think the nuts and bolts of those products are just that they work for people better. And I think I would expect every market we roll into, a similar pattern will play where our older cohorts will adopt first. And then as we layer on marketing and merchandising, new folks will move on. As far as markets that we're in, we're just in the handful of markets today, but we're selling in many more markets than that. So I'm not going to give specifics for a specific number of markets over the course of the year, at least not at this point. But we'll update you as we go. But I'd say, watch us to move into some major markets here over the course of the next couple of months. And those are markets that you're very familiar with at this point. And as they become live, we'll give you a heads up when those products are in market.

Great. Thank you.

Thanks, Jim.

Thank you. And our next question comes from the line of Sameet Sinha from B. Riley. Sameet Sinha - B. Riley & Co. LLC: Yes. Thank you. Actually, my question is more regarding international. Clearly, you've done a good job of reducing the number of markets. But with the complexity of the business and, especially domestically as we've seen over the last few quarters, extremely volatile. Can you talk to me about the merits of still being in international markets versus focusing your efforts on the domestic side, time to (48:30) stabilize the business and getting all the new products out, improving the messaging and improving – basically educating the consumers more. The resources probably would be better utilized here.

Sure. So no, be glad to. So let me just go back to when we originally assessed what markets we were going to remain in and have as part of our country footprint, we essentially looked at what was the opportunity in those markets over an extended period of time. And then, what did we think was our potential over time to unlock that opportunity. And we viewed that in the course of years, not one or two quarters or three quarters, but literally over the course of years, but within a reasonable multi-year horizon, so call it a few years. And so, from our perspective, we looked at the markets and said, these are markets that have the dynamics, the profile, the type of customers we like, the level of density, the amount of discretionary spending. Some head start in these markets where we believed that potential ultimately exists over the longer term. And our view on that hasn't changed, and if anything, it's more solidified than at the time we determined our country footprint. If I think about what the potential of the opportunity is, I just point out, like if you look at this quarter and you look at our North America gross profit, this quarter, we had $221 million of gross profit in North America. In international, we had about $88 million of gross profit. Our international markets, roughly the similar population size as the U.S., a lot of great cities, just like the U.S. It's simply that international, when we were at 47 countries, we didn't have the ability to focus in terms of developing the brand, the supply, and the product. So when we think about over the long term, today, you have $88 million of gross profit, and we think about what the potential is to be able to close that gap, at least partially over a course of years with North America, we think that potential exists over the course of the next several years. So we do think there's a really good opportunity to close that gap. And just to remind you, as you grow gross profit, with us having a strong focus on maintaining efficiency, a lot of that gross profit generation over an extended period of time should also flow down to EBITDA and support our goal and our belief that we'll generate multi-year adjusted EBITDA and free cash flow growth. So that's our thought process around international. Sameet Sinha - B. Riley & Co. LLC: Okay. Thank you.

Thank you. And our next question comes from the line of Brian Nowak from Morgan Stanley. Brian Nowak - Morgan Stanley & Co. LLC: Great. Thanks for taking my question. I guess kind of bigger picture. A few months ago, you really talked about how gross profit is the key metric and I understand turnarounds can be choppy and things. It sounds like it's going to be a bit more challenged. I guess, I'd be curious to hear about more specifics on things that have surprised you year-to-date both domestically and internationally as kind of more detail on the international execution issues in particular. And then what strategies did we really look for to kind of remedy the challenges you've seen year-to-date? Thanks.

Great. I'll start, Brian. Thanks for that. And Mike will add some color as well. It was a pretty big change for us to move – to focus on gross profit. It's important to keep that in mind, and yes as you said, rebuilding a business, turning around a business. These are not overnight exercises when you're talking about $6 billion top-line businesses. But this is a business, putting that aside for a second where if you take a step back and look back even to 2012, you've seen a business that's been increasing revenue since 2012, lock step every year, revenue basically increasing, while gross profit has been on a negative trend over the same period of time. We don't think that's healthy. We don't think that's the right model at all. And I think in general, most people agreed with us as we made this move. But you're also – put that in context. We're overcoming almost five years of momentum, of focusing on revenue at the expense of gross profit. So within a quarter, it's kind of why we can frankly guide the quarters, because we expect some amount of volatility to occur. What surprised us however, as we're changing all this other stuff, that is not a surprise. The stuff where we have our hands on the wheel changing things, those work that we frankly expected them to work. What surprised us with more just a macro softness that we've seen in North America and that we weren't alone in seeing, I think you've probably seen the GDP numbers in Q1 not exciting. You go back to 2009 to see GDP growth in that zone relative to what it is. I think that was a surprise, so that – yet I'd say we still put our…

Yeah. I think the only couple of things I would add there is, first, if you think about from the time Rich became CEO, and just as a company in North America, we just started focusing on much healthier growth as a company. If you look last year, we had North America gross profit up 10.5%, right? So it's clearly a very healthy trend and this year we expect to build upon that. And then so from a North America standpoint, we continue to expect to see healthy North America growth, particularly in the local area of our business. The other thing I would just mention is, we challenged the team this quarter to complete the exits of the additional 11 countries. And that entailed transitioning people and selling businesses, and that's a significant disruption. Now, we think it was the right thing to do. We think it was the right thing to do to get it behind us, because we think it's really important to focus on unlocking the value, the full value over time of the 15 countries we're in. So those were conscious decisions, those were actions we took and we believe it's just the right focus over time. Brian Nowak - Morgan Stanley & Co. LLC: Great. Thanks.

Thanks, Brian.

Thank you. And our next question comes from the line of Deepak Mathivanan from Barclays.

Hi. This is Aki on for Deepak. Thanks for taking my question. I guess two questions if I may. First question being, I was wondering if you could talk about any trends you're seeing in the repeat purchase and spend behavior of the cohort, new users that you guys brought on board in fiscal 2016, maybe in absolute terms, if not maybe relative to your core customer? So that's number one. Then number two, wondering if you could give any more color on sort of your marketing mix between your different channels that you use and where you're seeing sort of the most efficiencies in acquiring new customers today. Thank you.

Sure. So to give you a little bit of context, so as we stepped up our marketing last year, as we've added customers, the cohorts have very performed very much in line with our expectations. So our expectations were that they have a payback of 12 months to 18 months, and we're seeing them perform well within those ROI thresholds. And what I would highlight there is, if you look at just the history of Groupon, we have, in North America, over an extended period of time, we have at some point acquired over 50 million customers, and today we have over 31 million customers. So what you see is beyond the 12-month to 18-month payback horizon is generally our customer base is pretty sticky and tends to really stick around a long time. So, even though we have a 12-month to 18-month payback horizon, the lifetime value of those customers tends to be much greater than that over an extended period of time. So we've been very pleased with our customer acquisition efforts, and we continue to expect that we'll see benefits from that going forward. With regard to our marketing mix, obviously, as we talked about today, we will be spending more money on offline. We're really pleased with our offline campaign. We look at that on a market-by-market basis and have a lot of attribution analysis around it, and it gives us a good degree of confidence that that's a really strong investment; also seeing good progress and strong returns on the SEM side. We scaled back a little bit on the display side, but overall, we're pleased with our marketing efforts overall. What I would tell you in general, as we think about marketing, our goal over time is to invest within our 12-month to 18-month payback threshold, and that's what we're doing.

Okay. Thanks.

Thank you.

Thank you.

And our last question for today comes from the line of Doug Anmuth from JPMorgan.

Hi. This is Lina on for Doug. Can you just provide some more color on how you're reengaging merchants? Beyond providing more flexible terms, are you looking to maybe lower your take rate and instances to grow quality merchants on the platform? Thanks.

Thanks for that, Lina. It's interesting. I mean, we – it's not that we've ever stopped engaging merchants. So, there's definitely merchants out there that have worked with us in the past and that have stopped for whatever reason that we're – that we actively engaged with. And there's lots of merchants that we haven't worked with at all. And I think that's the bigger piece of the pie for us. If you look at even the last time we talked about our offers' count, it's a business that in virtually every country we're in is in the single digits of penetration into the merchant landscape. So we have a ton of headroom to go. So for us, it's less about purposeful reengagement and more about just how do we engage with the broader merchant space to bring them on the Groupon and to find ways that works for them on our platform. How that relates to take rates. We've been flexible to take rates on relative to quality for years. And we'll continue to do that. As we roll out different products, though, you're going to see different take rate mixes and some of those take rates are going to, frankly, look higher just because of the way that the money flows through the P&L. So in some instances of card-linked as an example, it's basically a commission-based product. So while our overall commission rate from a merchant might be lower, our commission dollars are relatively similar. Our take rate is going to look really high because it's really our commission, as largely our gross profit, ex some small processing fees. So you're going to see some changes in that space, but what I will say overall though is that take rate or our commission rate isn't the barrier to us moving into – it's not a self-imposed barrier to us increasing merchant scale. It's something that we want to make sure our platform is flexible for merchants and that brings great merchants on so that we can put great offers in front of customers. And our focus on gross profit dollar generation provides us great freedom to be able to do that. And our history of now adding good, solid gross profit growth for the first time in a long time over the last, call it, the last five quarters gives us confidence that it's the right call.

Thanks.

Thanks, Lina.

Thank you. Ladies and gentlemen, that concludes our conference call for today. We thank you for your participation and you may now disconnect. Everyone, have a great day.