Groupon Inc. is a business in transition, which is evident in its 2015 financial results released yesterday.

Groupon, No. 30 in the Internet Retailer 2015 Top 500 Guide, says revenue from its sales of physical goods rose 10.5% in the fourth quarter, outpacing its overall 3.8% revenue growth.

“2015 was a year of significant change for Groupon,” said CEO Rich Williams, who assumed the role in November. “As Groupon turned seven years old, we saw continued progress toward our vision of building a daily habit in local commerce. We continue to be one of the best new business drivers at scale for local merchants. We continue to grow and evolve our marketplace. We continue to increase traction among customers. We continue to have much left to do. 2015 was also a tough year for Groupon. With seven years of pioneering in local, we’ve learned some hard but valuable lessons.”

Among those lessons: Reducing the scope of Groupon’s international operations, which helped cut costs and boost profits. When 2015 started Groupon operated in 47 countries, but by the end of the year it was only in 28 countries, which Groupon says are its “key geographies.” “[We] are quickly moving closer to the footprint we want to operate and grow long term,” Williams said.

The company also decided to focus less on top-line growth of its Goods business, which sells physical products, and more on the bottom line. “We realized that empty calories in our shopping business might be good for revenue, but that they often weren’t in line with the long-term health of the business and model,” Williams said. “We realized just how critical it is to focus our energies on levers that make sizeable impacts on the business long term.”

For the fourth quarter ended Dec. 31, Groupon reported:

• Revenue of $917.2 million, up 3.8% from $883.2 million a year earlier.
• North American revenue of $622.6 million up 13.0% from $551.0 million
• International sales of $294.6 million, a 11.3% decline from $332.2 million
• Revenue for Groupon Goods of $602.3 million, a 10.5% increase from $545.2 million.
• Operating loss of $5.4 million compared to a $33.6 million gain.
• A net loss of $46.5 million compared with a year-ago gain of $8.8 million
• Gross billings, which reflect the total amount consumers paid for Groupon vouchers, excluding applicable taxes and refunds, stood at $1.707 billion, a 1.0% decrease from $1.725 billion.

For the full year, Groupon reported:

• Revenue of $3.120 billion, up 2.6% compared with $3.042 billion in 2014.
• North American revenue of $2.048 billion, a 12.3% jump from $1.824 billion
• International sales of $1.072 billion, a 12.0% decrease from $1.218 million
• Groupon Goods revenue of $1.366 million, up 24.5% from $1.097 million
• Operating loss of $79.8 million compared to a $30.7 million gain
• Net income of $20.7 million compared with a year-ago loss of $73.1 million
• Gross billings stood at $6.256 billion, virtually unchanged from $6.238 billion

 

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