Good day, everyone, and welcome to Groupon's Third Quarter 2018 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, Heather Davis. Please go ahead.

Good morning, and welcome to Groupon's third quarter 2018 financial results conference call. On the call today are CEO, Rich Williams; and CFO, Mike Randolfi. The following discussion and responses to your questions reflect management's view as of today, November 7, 2018 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 risks and other factors that could potentially impact our financial results is included in today's press release and our filings with the SEC including our Form 10-K and Forms 10-Q. We encourage investors to use our Investor Relations website at investor.groupon.com. 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. Beginning this quarter, our CEO has issued a letter to shareholders to discuss the results of the quarter and our strategic priorities. You can find the letter on our Investor Relations website. In future quarters, please read the letter before the earnings call and the question-and-answer session. On the call today, we will also discuss the following non-GAAP financial measures: Adjusted EBITDA, FX-neutral results and free cash flow. In our press release and our filings with the SEC, each of which is posted on our Investor Relations website, you will find additional disclosures regarding these non-GAAP measures, including reconciliations of these measures with U.S. GAAP. As we discuss our results during the call, note that all comparisons, unless otherwise stated, refer to year-over-year growth as reported, and all gross profit comparisons are FX-neutral, with the exception of gross profit per customer which are as reported. And with that, I'm happy to turn the call over to Rich.

Thanks, Heather. As you've noticed, we're taking a different approach to our earnings communications beginning this quarter. As Groupon enters its second decade, our business has grown and grown more complex. Our goal is for our conversations with shareholders and analysts to evolve as well. So, we've added a shareholder letter to our earnings materials with the intent to provide you with more context on how we're operating and evolving both in the short- and long-terms. At the same time, we'll pare down our prepared remarks to devote more time to Q&A and really focus on the details and nuances that are driving the business forward. We believe this combination will paint a more complete picture for why we're excited about the progress we're making, the opportunity in local, and the path we're forging to be the daily habit for millions of customers, a strong economic force for small businesses and a difference maker in local communities. Before I turn the call over to Mike, let me take a moment to reflect on a milestone birthday. Ten years ago this month, Groupon was founded on the belief that local commerce was a vast opportunity that had largely been ignored by the Internet revolution and the rise of e-commerce. It was a simple idea, one that's been both challenging and rewarding to tackle. Local remains a vast opportunity. Small businesses are the backbone of nearly every community and few companies have made their success a priority in the way Groupon has. But local is also incredibly fragmented, and there are few blanket solutions to the challenges that merchants face. Over the last decade, no one has devoted the time and energy to local that Groupon has, and we believe what we've learned has us very well positioned for the next 10 years as well. We're attacking the local opportunity through a laser focus on improving the customer experience, growing the power of our platform, capitalizing on the opportunity in our International business, and continuing our track record of operational rigor. We've been focused on these areas for several quarters because we believe they're fundamental building blocks to deliver unbeatable value for customers and merchants, and, importantly, for building a great company. In the third quarter, this focus helped generate $56 million in Adjusted EBITDA, $593 million in revenue, and $306 million in gross profit as we continue to make consistent progress in each of these strategic areas. There's much to be excited about as we build this business for the long-term. I'll let Mike walk you through the financials for the quarter.

Thanks, Rich. Adjusted EBITDA in the third quarter of $56 million is up 21% on a year-over-year basis. And above what we anticipated during the last earnings call. Year-to-date, adjusted EBITDA is up 14%. In Q3, we generated gross profit of $306 million as compared to our expectations of $315 million to $320 million with the unfavorability mainly attributable to lower traffic. In North America, gross profit was $204 million, down $4 million or 2% on a year-over-year basis. Excluding the impact of the impressions utilized to support Groupon+ and the sale of OrderUp assets, gross profit would have been up slightly. Q3 Local gross profit was $159 million, down $4 million or 2%. Q3 Goods gross profit was $31 million flat compared to the prior year. In total, gross profit per customer for Q3 on a trailing 12-month basis in North America was $28.96, up 3% versus the prior-year-period, highlighting the benefit of our customer segmentation efforts. Turning to International. We added over 260,000 net new customers, and generated International gross profit of $102 million for the third quarter, up $2 million or 2%. Q3 Local gross profit was $72 million, up $5 million or 7%, and Q3 Goods gross profit was $22 million, down $3 million or 11%. International Q3 gross profit per customer on a trailing 12-month basis was $24.89, up 7% as reported, highlighting the ability to both grow customer count and generate incremental value from those customers. In the third quarter, on a consolidated basis, marketing expense was $93 million, down $9 million or 9%. In North America, Q3 marketing expense was down $15 million. As we continue to refine our marketing spend to ensure our targeted payback within 12 months to 18 months, we are selectively choosing which customers we acquire and retain. These marketing segmentation enhancements, along with traffic trends, contributed to the 800,000 North America customer decline this quarter. In International, Q3 marketing was up $6 million or 23%, as we continue to invest in customer acquisition. SG&A excluding the impact of the IBM settlement for the third quarter was $201 million, down $14 million or 7% as we continue to benefit from our ongoing efficiency efforts. As previously disclosed, we settled our patent litigation with IBM during the third quarter for approximately $58 million, which includes a cross license agreement. As a result of the settlement, we reversed $40 million of the previously-recorded charge, which benefited SG&A in the quarter. This reversal was excluded from adjusted EBITDA. On liquidity, we ended the quarter with $572 million in cash, in addition to our $250 million undrawn revolver. Regarding the full-year 2018, we are reiterating our adjusted EBITDA guidance of $280 million to $290 million. And with a revised view of working capital for the year, we continue to expect free cash flow, excluding IBM, to be significantly above 2017's free cash flow of $71 million but below our prior view of approximately $200 million. With that, let's open the call to questions.

Certainly. Your first question comes from the line of Ygal Arounian with Wedbush Securities. Your line is open.

Hey, good morning, guys. So, I guess my question would be around the marketing spend, specifically in North America. So, your – part of what you're trying to do is change the brand perception for Groupon, moving it from voucher based to marketplace, but at the same time you're cutting marketing spend, you're being a little bit more targeted domestically. You've also seen positive returns on marketing spend internationally. So, I understand going after profitable customers, but why not push the new brand evolution domestically a little bit more, raise awareness for things like Groupon+ and bookability? Why bias International now if North America is where the product rollout focuses?

Yeah, it's a great question. Ygal, thanks for that. This is Rich. I think a couple things important to keep in mind. I mean, in North America, we're still spending close to $100 million a quarter in marketing when you combine that with order discounts, because we use them in the same way to introduce new products and to get people to trial some of these new products and new experiences. So, we're still spending at a pretty healthy level in North America. And I do think there's a case to be made that we may have pulled back a little bit too aggressively on some of our brand investment there and we see some opportunities to increase that as we move forward into Q4 and beyond, because that is a big focus for us is to change how people think of and use Groupon as a brand and product. But the other thing that I would say is really important to keep in mind is that marketing is only one way that we invest in marketing dollars or working spend is only one way we invest in rolling out some of these changes. And Groupon+ is a great example of that. Probably one of the biggest investments we've made as a single campaign has been in Groupon+ over the last year and really using our internal impressions and our internal assets to acquire new customers and enrollments and to get people to trial that product. So, we're looking at it both externally as well as internally and to make sure we're using our own assets to educate customers in the best way possible. So I think that's really a key for us and something we'll continue to do moving forward to make sure that, for our core customers, the…

Thanks. That's really helpful. And if I could, one hopefully quick follow-up sort of in the same vein. What kind of response are you getting so far from full priced items on Groupon? And what's the consumer awareness like for that, given that I think traditionally, obviously, you guys are more associated with discount products...

Yeah.

...whether it's a voucher or Groupon+?

Yeah, we've been really pleased with the early response that we've seen there. And I think some of that you can see in the letter from this morning. Now really our marketplace partner is just the third-party offers that we're bringing in, the majority of which are full price, makes up about 12% of our total offer pool in North America, so it's not a small percentage. And if you were to look back a few years, that was basically zero. So that's come up really nicely, and that segment of our business is growing really quickly. And it's in the triple-digits in terms of growth, or right in that zone. So, I think we're seeing really good response to it. We believe, though, we still have work to do to make sure that it's really clear to our customers when they're getting something that's unique to Groupon, and it's something that we've constructed and it's the best deal of its kind. And making sure that that stands out and stands above when something is just the best available price in the market. And those are very different things and we're sensitive to that. Our teams are working really aggressively on that, and it's now – as the offer distribution has come up so significantly and as it's starting to grow, it's very much top of mind for them.

Great. Thanks so much.

Welcome.

Your next question comes from the line of Tom Champion with Cowen. Your line is open. Thomas Champion - Cowen & Co. LLC: Hi, guys. Good morning. Thanks for the additional disclosure in the shareholder letter. It's really helpful. The letter talks about your business being bifurcated between legacy email product and a lower margin but higher frequency local marketplace. Can you frame up for us how much of North American gross profit comes from the former versus the latter? And maybe what that was a year ago and how it's changing on a quarter-by-quarter basis? And any commentary around that would be really helpful. Thank you.

Sure. So, let me just clarify a little bit in terms of the bifurcation. I wouldn't describe our bifurcation between a legacy email product and a marketplace product. What I would describe it is more of a legacy higher-margin voucher product and local marketplace. Our business over the last five, six, seven years has transitioned from lots of sources of traffic beyond email. Today, email represents roughly 20% of our traffic, but if you go at our very founding of the company it was nearly 100%. So, from traffic sources today, we generate traffic from a very diverse set of traffic sources but still predominantly the legacy voucher. One of the things that was mentioned in the shareholder letter was particularly on the marketplace that 12% of our offers today are marketplace-type offers through our third-party. That's one of our fastest-growing elements of our business. Also, one of the areas where I'd expect it to continue to be one of the fastest-growing. At this stage, the legacy voucher still by far the larger component of our gross profit. But we've grown the marketplace component fairly significantly, particularly in the last couple of years. If you went back a couple of years ago, there's marketplace offers, the proportion of our offers that were marketplace was relatively insignificant. So, we'd see that being an avenue of growth going forward. But at this stage, we still have the largest share of our gross profit coming from the legacy voucher business. But also, we recognize as we look to the future, the future needs to increasingly be voucherless, bookable, third-party marketplace-type offers.

Your next question comes from the line of Eric Sheridan with UBS. Your line is open.

Thanks for taking the question. Maybe following on that as a theme for the first question. For the 12% of the platform that's now sort of across a broader array of inventory, wondered if you could call out anything on conversion broadly that's happening for users on the platform, so the supply is feeding back into user conversion or shopping velocity. That would be number one. And then with the mobile-first strategy, is there anything to call out in terms of either ROI or spending habits of folks who are coming into the platform mobile-first? Thanks so much, guys?

Sure. Thanks, Eric. I'll start, and then Mike will add color. I think the biggest thing to think about with conversion for us, as I laid out in the letter, is really that macro trend of desktop to mobile transition. And as a platform, mobile overall converts significantly lower than desktop. Most of that delta and conversion comes off of mobile web. Our mobile app actually converts really well which is why you've seen us lean so heavily into mobile app and transition more and more of our traffic to mobile app over time. From a marketplace perspective, that's, frankly, kind of lost in the wash relative to the size of that transition. Because we have marketplace offers that convert higher than our voucher offers and then marketplace offers that convert lower. So, it's relatively – but relative to the desktop-to-mobile transition, which is our biggest conversion story, they fall out in the wash. As far as our strategy overall, I think, look, mobile is where the local customer is and it's really, I think, increasingly where the consumer is. And that for us has been, one, a way for us to manage the transition away from email to build a product and experience that's built for that form factor that's really rewarding in that form factor so that it will drive more direct use of our product and more direct traffic. We think that just strategically is the right move, given that's where the market is headed and where the consumer spends their time. When we really step back from that, though, as well, it's not just that that's where the consumer is, the mobile app consumer, in particular, is a more engaged customer. They spend more on the platform over time and they engage more with the platform over time. So, I think that's – the really key for us is our mobile-first strategy starts with mobile app first and then really moves to migrate more of that lower converting mobile web traffic into that experience because that's really where our highest-value customers reside. So, you're going to continue to see us invest in that transition and moving more – as more desktop has moved into mobile web, moving more mobile web into our app experiences. And as well as something we discussed in the past of bringing more of Groupon to other mobile app experiences and distributing our offers and content in a more broad and open way. So, that's really where we're thinking as a mobile company. And given how far we've transitioned already, I think it's – we're starting to demonstrate the value of having that kind of footprint and really having the efficacy of our work in that side prove itself and just our ability to weather what has been a pretty seismic shift in email over the last handful of years in the company.

Great. Thanks for the color.

Great. Thanks, Eric.

Your next question comes from the line of Doug Anmuth with JPMorgan. Your line is open.

Hi, guys. Thanks for taking the question. This is Neeraj on for Doug. So, my question is regarding the International Goods business. So, we saw a sharp decline here. So just wanted to – could you provide any color over there?

Sure. First, I'll just touch on International real broadly before I get into that and just highlight. We're – continue to be very excited. We've added – continue to have really nice growth in customers, 265,000 this quarter, growing gross profit per customer. And overall, I just think we have a really long runway there. So, we expect in the coming quarters we're going to continue to have a good number of product enhancements, improved supply, improved analytics. We have a great team there. So, we're super-excited about the International business as we look over not only the coming quarters, but the coming years. With regard to Goods, in particular, this quarter on International, so, this quarter we had a large – a little bit of a disproportionate amount of sales in our home and garden area, in particular. That area of sales had both lower margins and higher freight cost or higher shipping cost relative to what we charge a customer. And so, that was a little bit of an anomaly this quarter and it also was on top of a very strong comp in Goods last year. Last year, Goods were – in International, was up 20% in the third quarter of 2017 as compared to the 2016. So, those two things collectively influenced a trend this quarter. But I would describe that that's a trend that's more of an outlier trend and not one that I think would be the long-term trend.

Sure. Thank you.

Thanks, Neeraj.

Your next question comes from the line of Brian Fitzgerald with Jefferies. Your line is open.

Thanks, guys. With the Groupon+ card additions, what type of dynamics are you seeing there with adoption rates and frequency? And then anything notable to call out with respect to differentiation across locations or verticals in terms of those two things?

Thanks for that, Brian. Yeah, I mean, the G+ card additions and card enrollments continue to move on a really good trend. I think just it's been a great story of adoption and trial in the product. And, as we shared in the letter, I think the thing that we're really excited about there is just how much redemptions have grown and that's – redemptions is where we start to make money. And so, that's an exciting track to see that going from – in the low hundreds of thousands to north of 1 million. That's a much stronger perspective in seeing that grow so aggressively. So that's really good. Frequency is stayed – and that's another thing we're very excited about in the product is the frequency gains and benefits that we've seen from folks who redeem on G+ continue to be strong and in the range of double their voucher-only cohorts. So, I think we're generally seeing really exciting things there. As far as in other verticals, et cetera, that's something to come and stay tuned for. As I mentioned in the letter, we are heads down in doing a lot of the foundational work to start to expand, the card linked offering in new ways and across more verticals and get it in front of more customers. And not just through Groupon+. And I think that's important to keep in mind. And as we've discussed in the past, Groupon+ is one product on top of our card-linked platform. We have other products that are live in market off of that card-linked platform we're experimenting with. And you should expect to see that, some of those products as well as the free to claim Groupon+ product, weaving itself into even the voucher experience in new ways. And, ultimately, our goal as we said earlier is to get rid of the voucher and we see card-linked as a way to do that. Groupon+ as a tip of the spear in that effort. So, stay tuned on that front. We see a ton of opportunity across verticals. And all of our important verticals, frankly, to see card-linked and versions of Groupon+, specifically the loyalty version of Groupon+ really play a role.

Great. Thanks, Rich.

You got it.

Your next question comes from the line of Sameet Sinha with B. Riley. Your line is open

Yes, thank you very much. I'm going to ask a multi-part question based on some of the data points that you have provided. So initially used to be kind of a push marketplace, email used to come into the inbox and people would be waiting for it and redeem those deals. Now, it's changing. It's more of a pull marketplace where you're waiting for people to come to the marketplace. Every time they want to do something, go to a restaurant, participate in an activity, they go to Groupon. You want to be top of mind. On the other hand, you're pulling back on advertising spend. So, the mind share of the brand equity in the minds could potentially be going down. Can you help us reconcile these data points? And secondly, in terms of the marketplace, clearly with 12% of third-party deals in your marketplace, you're – that's definitely a good trend. What about an opportunity to kind of push Groupon into other marketplaces? And I mean your recent deal with IBM, I guess, will allow you to push Groupon into the employee base. That's not a real marketplace, but good enough, I guess. How about participating in other sort of marketplaces? And then I have a follow-up question.

Yeah, that's a great question, Sameet. And I think as we mentioned a little bit before, we are transforming the brand. And we're working to change how people experience the brand and then think about the brand. And those things have to go hand in hand. So, I don't think it's worth investing in a brand proposition that your product can't support. And I think we're in a place now where we've made significant investments in the product and some of our experiences are truly delightful. And those are the – that's the place where we spent the disproportionate time and money on at this point to really start to get those to gain traction and to gain awareness. We're not going to stop investing in those. We are delivering strong bottom-line performance which is giving us an ability to continue to invest in some of these future pieces. And that includes ad spend. As I mentioned just a little bit ago, we may have pulled back a little bit too far in some parts of our ad spend. But that's not just pulling back in things like TV, that's pulling back in much more specific and targeted marketing to make sure that we're acquiring high quality consumers. The sharper and more efficient we are in that category of spend, the more we can invest openly and really in the brand and changing the story and making sure we're always top of mind when somebody's hungry or bored or needs something to do with their kids on the weekend which is very, very important to us. So, for sure, you're going to see us continue to invest in our ad spend, in our brand. And you're going to see us invest even more aggressively in Q4 and in a spot that includes internal investments that we make using our own site assets as well as external investments that you see us making through traditional media channels. On the third-party deals, we're 100% with you on that. I think you mentioned the IBM one, that's a nice – I think a nice close to that situation. But it isn't traditional marketplace. We do see an opportunity to port more of our offerings into other marketplaces, specifically things like Groupon+ and the card-linked versions of our product are the kinds of experiences that are portable to other marketplaces. And, again, if you think about the traditional voucher, that's really hard to port because it's a voucher from Groupon and it has a lot of other instructions and it requires a different kind of interaction. Something like Groupon+ that's seamless is very easy to envision in that kind of environment where we are inside other marketplaces and really everything is just running off of our rails. And so, that is absolutely an initiative on our side and you should start to see some of those pieces come to bear over the next couple quarters.

Great. Final question. Can you elaborate more on these traffic trends that you were talking about? Can you pinpoint a case specifically to why that happened? Is that some of the email changes or just because of pullback on marketing?

Yeah, so there's – I mean, there's a few things there. I mean one of the things that was talked – discussed in the shareholder letter is historically, over time, email has been a traffic channel that we've migrated, to some extent, away from it and broadened our overall traffic sources. And so, what you've seen with email is, is you've seen in certain periods of time where there have been declines in that channel. It's a channel that today customers respond differently to than they did seven, eight years ago. During the third quarter, we saw a more accelerated step-down in the email channel, in particular. But then also collectively, particularly from a search perspective, there were particular instances where Groupon would end up ranking was a little bit below where we would historically and that created a little bit of pressure. And then Rich alluded to this as well, in the third quarter, we pared back some of our offline spend. We think that – as we look at that, we think that that could have had some influence as well. And so, one of the things we've done is going into the fourth quarter, in particular, we've leaned in in the fourth quarter and are supporting our offline efforts through a greater extent, particularly as we come upon, for us, what's the busiest time of year, being the holiday season.

Great. Thank you.

Your next question comes from the line of Deepak Mathivanan with Barclays. Your line is open.

Hey, guys. Thanks for taking the question. Two quick ones for me. So first, how big is Groupon+ currently in terms of gross profit run rate? I know something you called out 1.3 million redemptions, but trying to get a sense of GP contribution from total Groupon+. And then second question, as you look ahead into 2019, what are going to be the drivers of EBITDA from here? Seems like there is a clear path for GP declines to kind of reverse out. Should we expect more leverage on marketing and G&A while you achieve this? And if you don't want to be more specific, any directional color there would be helpful. Thank you.

Sure. So, with regards to Groupon+ gross profit, that's not something we've disclosed specifically. What I would tell you is, you can tell from our disclosures what our gross profit per unit is overall. And what I would say is, is for Groupon+, obviously our gross post per unit is going to be lower than our traditional voucher with a big factor of that being the average order value tends to be lower. So, that gives you some ability there to quantify what the gross profit would be from Groupon+. With regards to 2019, what I would say there is, obviously in the next earnings call in February we'll provide a lot more context around 2019. But the key elements of our strategy are going be what we pursue as we enter into 2019. Everything from continuing to enhance and improve the customer experience, continuing to build out our marketplace, as you've seen us do, and I expect we're going to continue to accelerate that over the coming quarters and into next year. Investing in International, we view that as a large untapped opportunity, both in terms of the extent to which it is underpenetrated in terms of the proportion of customers we have relative to the markets we're in. But also, if we look at the impacts of our product and its impact on conversion, we still convert internationally a fair bit lower than we do North America, so you have two real big opportunities there. One is both to grow the customer base relative to the overall share in the market and also improve conversion via improved product and supply. And then obviously cost efficiency and rigor. That is a core element. It's one of the four key elements of our strategy. And what you should expect from us is we're going to continue to be focused on trying to be as efficient and effective with our SG&A as possible. Where there is technology we could deploy to improve the efficiency of our workforce, we're absolutely going to do that. And then we're going to be mindful as to where we need to reinvest at the same time. So that's the way we're going to think about 2019 and we'll have more to share in February.

Great. Thanks a lot.

Thanks, Deepak.

Your next question comes from the line of Justin Patterson with Raymond James. Your line is open. Justin T. Patterson - Raymond James & Associates, Inc.: Great. Thank you very much. I wanted to tease out some more details around the commentary in the letter around North America gross profit drivers. What changes have you seen in frequency among customers? And how should we think about the levers that drive frequency higher? In turn, can the growth in gross profit per customer offset the headwind from slight customer declines near-term? Thanks.

Yeah, I mean, what you've seen is, is the – if you go, like, over the last few quarters, I mean, you've seen pretty consistent trends in terms of – from a units per customer standpoint in North America. And what you've also seen is is gross profit per customer in North America in the trailing 12-month basis is up 3%. So, you've seen that start to inflect. And if you look at the period of time up until a few quarters ago, that was actually trending down as we had grown the customer base. And you end up with some newer customers who may not have fully matured at that stage. But the way I think about that going forward is is it's going be relative to the investment we make. And we're going to be selective and thoughtful as to if we acquire a customer, retain a customer, within that, we want to be – have a fair degree of confidence that we're going to get a really good payback on that customer. And if we don't see the payback, we're not going to acquire or retain the customer. And so, with that as we look forward, we would expect gross profit per customer to continue to inflect up. I'm not going to provide specifics in terms of how that changes relative to the customer trends at this stage. But what I would say is is if you look at everything that we're focused on as a company, whether it be customer experience and improving card-linking and adding bookability and increasing our overall breadth and depth and quality of supply and how we merchandise to our customers and how we segment our customers, every bit of it is targeted towards initiatives that we believe have the potential to increase frequency and ultimately increase gross profit per customer. So that's ultimately our goal and that's the way we're going to think about it going forward?

Yeah, the only thing that I'd add Justin is that, as Mike mentioned, the units per customer has been pretty stable for a while. And it's been pretty stable while we've been pulling out pretty significant volumes of what we think of – and what we think of and as discussed in the past as empty calories. And there were units that just really didn't add future value to the customer or to the platform. And we've shed a lot of those units. And how we've been able to compensate for that, because you haven't really seen that magnitude of reduction in units per customer is by launching some better products and having better experiences. And Groupon+ is a small example of that. Our booking and ticketing experiences, where you get real mobile versions and mobile experiences of something that used to be paper is all demonstrating that it can improve frequency and stickiness on the platform. So, I think here this is another bit of a tale of two cities where we've created some pressure on one side and then we've relieved it on another. And it's really about giving some of these new experiences and these new pieces a chance to grow and overcome what is a pretty big base that they have to break through in order to show their true benefits over time. So, I think there's – as we mentioned in the letter, there's some really nice and really we think exciting growth stories happening inside Groupon that we understand and recognize can be difficult to see given the size of the overall business that we're transitioning away from.

Yeah. Justin T. Patterson - Raymond James & Associates, Inc.: Got it, got it. And then a quick follow-up if I can.

I was going to say just to tag onto that – I was going to say just tag onto that real quickly, the one thing I would just add to Rich's point is, is where we've seen pressures on frequency, it's been on actions that we've taken disproportionately. So, if you think about on the Goods side, we've had a very strong focus on maximizing gross profit. To Rich's point, where we've chosen to invest in supporting Groupon+ which has had some impact on units as well as no longer having units with OrderUp, that's where we've had pressures on the units per customer metric. Those are some of the key drivers. Justin T. Patterson - Raymond James & Associates, Inc.: Got it. And if I can squeeze in a quick follow-up. How do you think about organic investment versus, say, returns to shareholders with the stock price at these levels?

Sure. So, I mean, what I would say is there, if you look historically, we will balance both – three things. And that is investing in our business, thoughtful and strategic M&A. This year, we purchased Vouchercloud. And returning cash to shareholders. If you looked historically, we returned over $850 million of cash to shareholders. And so, we will continue to balance all three of those things. And, obviously, our sole goal there is to do what's best for our shareholders over the long run. Justin T. Patterson - Raymond James & Associates, Inc.: Great. Thank you.

Thanks, Justin.

Your next question comes from the line of Thomas Forte with D.A. Davidson. Your line is open. Thomas Ferris Forte - D.A. Davidson & Co.: Great. Thanks for taking my questions. So, Mike, I know you've talked about this. I had one question related to traffic. One on International. On the traffic side, I wanted to dig a little deeper on this. Is there something going on with Google and search engine optimization? For example, they changed their algo earlier this year to focus more in mobile. Is that something that might affect you until you finish your redesign in 2019? And then also are you seeing something as it relates to GDPR and International marketing? And then also on International, can you give us an update on your thoughts on the potential timing of rolling out Groupon+ Internationally? Thanks.

Yeah. So, with regards to traffic, what I would say there is is if you go through and you take certain categories like, for example, if you were to go and search for things to do in your local city, what you'll see is, is that we are showing up further down the page than we have historically. So that's definitely one source of some of our traffic, some of our traffic headwinds. But the way I would think about that is, is we today generate traffic from a myriad of sources. And while we've had some traffic headwinds in the current period, historically, we've both added to our traffic sources and we think about how to get more value out of that traffic. And so that's something that, over time, we'll continue to be focused on. I mean, if you look at our overall traffic sources today, we have a large portion of customers that come direct to site. Obviously, in terms of SEM and SEO those are meaningful sources as is affiliate relationships in our mobile app and download. So, we receive traffic today from a myriad of sources. But to answer your question specifically, if you were to look at, and I'll throw that out as an example, the things to do category in particular in your local city you'll see that we show up further down than perhaps we used to. With regards to International, on Groupon+, and what I would say is – just in terms of Groupon+, what I would say is I would refer to more of it in terms of card-linking. Our objective, over time, is to have a large portion of our business, both be either seamless where you no longer have the traditional voucher or bookable. And so International is ultimately part of that. So, I'm not going to put a specific timeline but that ultimately is our goal. We want it to be the best experience possible for the customer. And our goal, over time, would be the transition from the traditional voucher.

Yeah, Tom, and the only – I'll add a little bit of color on the SEO and mobile side. I think, as Mike alluded, the changes that we've seen on the SEO front are frankly less about algos and more about the UI. And I think some of where in like the things to do category is an example. You're going to see a changed UI there. So, if you look at things to do in Chicago and you're going to see different modules in that UI that push a lot of the organic links down, just further down the page, and there's just some heated competition there on the page side which is also pushing the organic side down. So, it's really more about that, not as much about how our mobile website works or our mobile app works. And so, the clarification I want to make there is a lot of our mobile redesign and our thinking behind that and the work that's happening now is really around building a mobile design and a mobile user experience on Groupon that is built to handle a big catalog, right? It's built to make it easy to search, browse, and discover what you're looking for when you're coming to Groupon with high intent. And I think that's a big piece that's changed for us over the years, especially the last couple of years, is that we see now more traffic coming to us with intent than just browsing and doing the endless scroll. And I think we're one of the best apps in the world at the scroll and getting people to go up and down at an amazing level of depth just window shopping. But our future is in helping people really get through what is now an increasingly…

Thanks, Tom.

Your next question comes from the line of Matthew Trusz with G.research. Your line is open.

Good morning. Thank you for taking my question.

Yeah. Good morning, Matt.

Good morning.

Do you still see an opportunity for gross customer adds in North America, even if net adds are down for a while? And then my specific questions within that, are there pools of potential customers that would be valuable to have in the platform? Where are they? What does it take to get them? Are recent partnerships part of this mosaic? And with partnerships, what is the efficiency of acquiring a customer via a partnership in your acquisition costs versus LTV equation versus a traditional method?

Sure. So, I'll start on that. So, what I would say is is I think there's still a lot of opportunity over time to add gross adds over time to our North America customer base. And what we're going to continue to think about is is our ability to add those customers in a profitable way, where what we get out of them in terms of long-term value is greater than what we pay to acquire them. And when I think about the actions that we're taking and the emphasis of our strategy, it's really to increase the gross profit per customer over an extended period of time. And naturally, as you increase the gross profit per customer over an extended period of time, it makes that incremental customer you acquire more profitable. So, it opens you up to more customers. And then I would say the recent partnerships are very much part of that, right? So, to the extent that we have a broader set of inventory, we have a broader set of experiences, when customers come to us with the idea of discovery, we have more to offer to them than we had previously. That's going to increase the odds that they become a profitable customer. But what I would say is, is I look at North America and I look at the International markets we serve and we still represent a relatively small – well, while we are a scale local player, we still represent a small portion of the population. And there's still lots and lots of opportunity for people to come who experience local on a daily basis just part of their life to utilize Groupon in that process. So, I think there's still lots of opportunity over the coming years.

Yeah, and the only thing – I'd add a couple of things. I guess one is just to frame how we think about it. One is, everybody gets a haircut, everybody goes out to eat, a lot of people go out and get massages and get their nails done, and we are focused on making this platform and this company and our products so good that you would be nuts to not use them. And I think that's taking us some time to get those out. And there is some short-term noise as we refine our approaches, but we've seen really the only limiter on our ability to grow our customer footprint is going to ultimately be determined by how great our product is. And that's why we're just so – we're so incredibly focused on building a much better experience on Groupon and we believe that, with that, we get higher gross profit per customer, higher frequency, which gives us more ability to go out and acquire those profitable pools of customers. And on the partnership side, the only other color that I would add is that a lot of our partnerships today, virtually all of them that we've announced so far, are ones where we're pulling inventory into our ecosystem and we're not yet tapping into other's ecosystems to be able to acquire their customers into our platform. So, you'll see more of that coming in the coming quarters where it's really about us embedding – where we start embedding Groupon and the value we can create into other people's customer pools, which will bring them onto our platform. To the extent that there's a paid component to that, we'll treat it exactly the same as we treat everything else, where we're going to try to maximize our ability to earn back our profit, our gross profit within 12 to 18 months. So – but I would, again, I'd expect that to start really occurring more in the quarters to come than it is currently today.

Okay. Thanks for the detail. And then just one quick one on Groupon+ in the context of the shareholder letter disclosures. And thanks again for the letter, it's very valuable.

Great.

Are you seeing people stick to Groupon+ once they start using it? And can you just frame your – look, as the year goes on, you've had it for a year.

Yeah.

And can you frame your level of overall satisfaction with – if we think about 1.3 million redemptions versus the context of 5.9 million total users and, again, essentially all of them have joined in the last year, really six months?

Yeah, I think it's a growth story we're excited about. And we've gone from basically nothing within a year to being probably the largest card-linked platform in the U.S. So, if not the largest, then darn close it to it. And on our current path, we'll eclipse everybody else very, very quickly. So, I think it's a very exciting growth story for us, but one that we went into with eyes wide open knowing that there was going to be an education challenge and that it was a multi-step challenge. First, you have to get people to enroll their card. Second, you have to get people to claim a deal. Third, you have to get them to redeem. Fourth, you need to get them to repeat. So, we're seeing that funnel improve as we build and as we grow and as we move people through that education. The thing that we have liked and that we continue to be really encouraged by is that once people start using the product, they stick with the product and they use it more. And even arguably more importantly, in some ways, is that they also just engage with Groupon more. They're buying more stuff from Groupon, period. So, there's been a lot of, I think, really exciting pieces in there. And we're going to keep investing in those pieces. The other thing that I would call out which is part of my comment earlier around, you'll start to see us even finding ways to attach card-linked to the existing voucher. One of the most exciting pieces of data that we've seen off of Groupon+ is that for existing customers of a small business on Groupon+, when those customers start using Groupon+ in those merchants to which they're already a customer, they start to repeat. They come back 50% more frequently. So as a loyalty tool for small businesses, we see that as just incredibly powerful. And that kind of frequency enhancement I think most any business, I don't care how big or how small you are, any business would be doing back-flips to get a 50% increase in frequency virtually overnight and with the simplicity of a product like Groupon+. So, we're incredibly excited by that. And so, it's not just about what happens on our platform, it's why we're excited about card-linking in general is what happens outside of our platform and how it influences consumer behavior now at a very real scale. So, we still think it's very early days for card-linked. And you're going to see us do more with card-linked moving forward. But the reason why you see it is really those pieces that we're seeing continue to not just have momentum but to pick up speed as we move through.

Thank you.

Thanks, Matt.

Thank you.

This concludes the Q&A session as well as Groupon's third quarter 2018 financial results conference call. We thank you for your participation. You may now disconnect.