Hello and welcome to Groupon's Third Quarter 2023 Financial Results Conference Call. On the call today are our Interim CEO, Dusan Senkypl; and CFO, Jiří Ponrt; and Senior Vice President Corporate development and Investor Relations, Rana Kashyap. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the company's formal remarks. [Operator Instructions] Today’s conference call is being recorded. Before we begin, Groupon would like to remind listeners that the following discussion and responses to your questions reflect management's views as of today, November 9, 2023 only and will include forward-looking statements. Actual results may differ materially from those expressed or implied in the company’s forward-looking statements. Groupon undertakes no obligation to update these forward-looking statements as a result of new information or future events. Additional information about risks and other factors that could potentially impact the company’s financial results are included in their earnings press release and in their filings with the SEC including their quarterly report on Form 10-Q. We encourage investors to use Groupon’s 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. On the call today, the company will also discuss the following non-GAAP financial measures, adjusted EBITDA, non-GAAP, SG&A, and free cash flow in Groupon’s press release and their filings with the SEC, each of which is posted on their Investor Relations website. You will find additional disclosures regarding these non-GAAP measures, including reconciliations of these measures to the most comparable measures under US GAAP. Unless otherwise noted, all comparisons are provided on an FX-neutral basis. And with that, I'm happy to turn the call over to Dusan.

Hello and thanks for joining us for our third quarter 2023 earnings call. It’s a pleasure to be with all of you. Today’s prepared remarks are posted on our Investor Relations website along with an investor presentation, which I will refer to during my remarks. In addition, I encourage you to review our press release and 10-Q, which contain more detail on our Q3 results. I will start today’s call on Slide 5 and cover the key takeaways from the third quarter. From my perspective, the positive signals I see in the quarter include; one, another quarter of progress as our third quarter financial results came in line with our baseline expectations to deliver sequential improvements in the rate of year-over-year revenue decline, generate positive adjusted EBITDA, and slow our free cash outflow. Two, we announced a plan to raise approximately $100 million between a $80 million fully backstopped equity rights offering and $19 million in non-core asset sales. Transforming a business like Groupon is not easy. With this financing plan along with the actions we have taken year-to-date to create an efficient cost structure, I feel confident that we will be able to provide clarity to all stakeholders, from customers, merchants, employees, suppliers, and capital market participants, that Groupon has the liquidity it needs to support our transformation plan. It is management’s goal to have no doubt about our ability to operate as a going concern. Three, I am pleased to see local billings return to growth earlier than expected, which helped to drive a significant improvement in the rate of decline for global billings. Local billings was aided by a strong summer season for our things to do offerings, where we saw several important merchant partners return to Groupon after a several season hiatus. In addition, we ran…

Thank you. [Operator Instructions] Your first question comes from the line of Trevor Young with Barclays. Your line is open.

Great. Clearly, a lot of detail here, so I have several questions. So, just bear with me. First one, just on North America local billings returning to growth, can you talk about the cadence of growth there throughout the quarter? Did it peak in August around that popular deal and then fade into September? And then any color on how billings are trending so far in 4Q? Jiří, I think you mentioned that you wouldn't be surprised if total local billings turned negative in 4Q. So, just curious if that's actually what you're seeing so far or you're just taking a more cautious stance on the quarter? Jiří Ponrt: Thank you, Trevor. Frankly, we don't comment on monthly trends. Local billings in Q3 was helped by strong things to do our season and a popular deal of multinational retailer. If I take a step back, our current marketplace assortment is a mix of always-on deals and time-limited deals. There are also different seasons where certain types of experiences performed better in certain seasons, for example, things to do in summer months versus Q4 of gifting season. So, our time-limited deals, the merchants may choose to run time limited deal once a year in a month period, not necessarily the same calendar months, not even at the same time in different months. So, next year could be different times. So, therefore, we are not providing details on the monthly data. So, it's very difficult for us to extrapolate how our business is performing by taking one month and compare it versus prior months of prior year and so on. So, we will really focus on how overall quarter perform and longer term trends, which we believe investors should also focus. Hope I answered--

Yes. That's fair. I can appreciate that. Dusan, in your prepared remarks, you mentioned some constraints on dialing up marketing spend in the quarter. Can you actually elaborate on what those constraints were? Will it add unit pricing on certain social platforms or something totally unrelated? And then as we look at the 4Q holiday season, that's typically when impressions get even greater demand from other advertisers. So, should we expect that spend to actually decline Q-on-Q as you focus on those ROI thresholds?

Actually, I don't think that we hit a long-term limit, let's say, for our advertising. We are, in my opinion, hitting the limit, which we can do right now with the platform and technology which we have available. The business intelligence infrastructure project, for example, should unlock us other opportunities to be smarter in performance advertising, same with the new platform, which should provide us more insight on our conversion tracking and this is extremely important, especially in international. And in Q4, I believe that our performance -- not performance revenue management team is looking carefully into seasonality trends when different types of products are starting their own season. So, although I expect that the percentage-wise, we will be on the same level, the overall spend, it depends how successful we will be, and it's very possible that it will be higher in the dollars amount, but the percentage-wise, I don't think that it will be higher.

Okay. That makes sense. Just last one for me. I had this inbound from a few new investors to the name. Just what steps are you taking to drive retention between a merchant and consumer? The illustrative scenario being a customer buys a Groupon for some activity and now has a direct relationship to that merchant. Why would the customer come back through Groupon for that service? And by sort of so why wouldn't the merchant just go direct back to that consumer kind of cutting Groupon out of the process altogether? Just any thoughts on how you address that structural challenge would be appreciated.

We have several potential ways how to approach it going forward, and we will be [Indiscernible] most likely all of that. However, what I would like to mention is not in V1 of our new merchant platform, which we will be -- we are building now, but we will be launching it early next year. I would like to have an option to have different pricing conditions, including our take rate for first-time customers and repeated customers. So, the cost for merchants for the second and follow purchases is different versus what they are paying right now for the first time customers. So, this is one very simple are obvious solution, which we will for sure offer to our merchants.

Got it. We look forward to seeing the new interface next year.

Thank you, Trevor.

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

Thanks so much for taking the question. Maybe two, if I could. We talked last quarter about getting the right mix of merchants and having a density of not just a number of deals, but the right top deals by ZIP Code in geography. How far along in the merchant acquisition and alignment process are you in terms of getting the right array of merchant deals on a market-by-market basis? And how should we think about some of the work that still needs to be done there or looking out into next year? And then maybe -- I don't know if it's one-parter or two-parter or on the rights offering. So, post the rights offering, what is your working assumption of the cash position of the company post the rights offering? How dilutive will that be? And what -- how should we think about that in terms of sort of runway of cash going into 2024? Thank you.

Jiří do you want to take the second question first, and I will then take the first one? Jiří Ponrt: Yes. Thank you for the question. So, as we said here, we are going to raise $100 million. $20 million from these two tranches of summer and $80 million from rights offerings. We also expect Q4 will be positive in our cash flow -- free cash flow. And -- but Q1 due to the natural merchant cycle will be negative because it's quarter after gifting season. And the following quarters, we expect to have positive cash flow. So, I don't want to put any numbers here, but this is about the trends which we see there in -- which we -- and able to add a little bit the information which is known is that it's also our facility we have currently opened. We mentioned the $47 million there on, it's until May 2024.

Okay. And I can take the merchant acquisition question. So, this is the area where I would like to see faster delivery than what we have. As I mentioned during my call, we are seeing year-over-year growth trend in terms of productivity of our salespeople. And I was talking on our last call that we will be adding the city managers, city CEOs who will be able to help us to manage the traffic. But -- we had to change the priorities internally and we were rebuilding other parts of sales organization and processes and tools, so that we have better control in how we are selling, what we are selling and the focus on the deal assortment, the quality of deals is something which we are working now and we'll be focusing on in Q1. So, no changes in the plan. As a side effect of this, we have several automation projects, which should help us to increase the productivity of the sales force significantly. But this is one part, although we have confirmed that it works. And in our top areas, we see year-over-year growth, the implementation of that is slightly delayed.

Okay. Thank you.

You're welcome.

There are no further questions at this time. This will conclude today's conference call. We thank you for joining. You may now disconnect your lines.