Groupon Inc (GRPN)’s Highlights

Has Groupon Inc (NASDAQ:GRPN) finally turned the corner? The stock has witnessed some serious volatility in the past as the company reported periods of both declining and growing revenue. The company’s latest quarterly earnings announcement was an enormous success as it was able to record substantial improvements in its domestic revenue, driven by growth in mobile users.

Earnings highlights

The company reported domestic gross billings improvement of 23.1% in the first quarter. Revenue in domestic gross billings increased from $553 million to $681 million from last year.
North America is currently Groupon Inc (NASDAQ:GRPN)’s most successful segment with year-over-year growth in America at 42.3%. The growth in America was offset by revenue declines in the international markets. International markets reported a decline of 18.4% year-over-year.

The decline in gross billings in the international segment was driven by the decline in average spending per active customer from $156 to $129 year-over-year. The decline in average spending was 17.31%, which closely corresponds with the 18.4% decline in gross billings from international markets.

On the other hand, the company was able to increase its gross billings from its Groupon Inc (NASDAQ:GRPN) Goods division from $78 million to $165 million year-over-year in Q1 2013. The growth in gross billings from this relatively new business division is what grew the value of its billings in North America by 42.3% year-over-year.

The company reported earnings that remained unchanged from the previous fiscal year. Basic loss per share was $0.02 per share in the first quarter of 2012; the loss per share was $0.01 per share in the first quarter 2013. The company’s bottom line saw no significant improvement as it remains heavily focused on growing its business.

Analysts anticipate the company to grow earnings 38.5% for fiscal year 2013, with growth rates projected to be 66.70% in fiscal year 2014. The company’s growth in earnings can be accomplished with an incremental improvement in net profitability.

Other alternatives to Groupon

Online retail is a compelling space. Part of what makes Groupon Inc (NASDAQ:GRPN) attractive is that its business has the potential to scale in foreign markets. The company witnessed a decline in revenue and operating income from its international division. This is because Groupon hasn’t fully-developed a market for Groupon discounts. The internet isn’t full saturated in many foreign markets, and this has hindered the success of Groupon in foreign markets over the short-term.

Groupon Inc (NASDAQ:GRPN) is starting to attract competition from Amazon.com, Inc. (NASDAQ:AMZN). Amazon is extremely well-known for ripping off the ideas of other technology companies and going in full-force. Currently, Amazon is heavily focused on cloud and cloud related services.