Get pushed into that room.
Yeah, yeah. So we'll give it a few more seconds. All right. So we'll just kick it off. So welcome, everyone. This is Bobby Burke, Senior Research Analyst at Northland Capital Markets. Today we have Groupon CEO Dušan Šenkypl and the VP of Investor Relations and Corporate Development, Rana Kashyap. As you may know, I launched coverage this past July and currently have an outperform rating and a $17 price target versus where shares are trading right now, which are $11.30, call it. Just my thesis on Groupon shares really revolves around these three key points. First, sustainable improvements made to the cost structure, translating to the company becoming free cash flow, EBITDA positive after several years of being negative and burning cash.
Second, new management behind these changes, who are highly aligned with shareholders, have also been driven, have also been able to drive some flashes of reigniting growth after years of decline, and then third, the company has introduced a new platform, which should ultimately lead to improved conversion on traffic and an improved merchant and customer experience, leading to further growth. The format of the call today, we'll start with the Groupon team giving a 15-minute-ish overview on the company, along with slides, which we emailed earlier this morning. That will then be followed by a Q&A session between myself and management, and then finally, if we have a few minutes at the end, we'll open it up to investor participant questions, and if you want to ask a question at the end, just please raise your hand and we'll unmute you to allow you to ask that question.
If you'd rather have a question be asked by me, you can always email me, send a chat, or just email your Northland sales representative to get that question to me to then ask. But without any further ado, I'll turn it over to Dušan and Rana. Take it away, guys.
So welcome, everyone, and Bobby, thanks for having us here. First, let me walk you through what Groupon is for me, for us, and latest updates. So, Rana, if you can switch to the next. Yeah. So first, how we see our mission. The mission is to empower people to discover and enjoy amazing experiences through unbeatable value, delivered with trust and ease. But what it means, what are the important elements? I want to point out that in the title of the slide, you see curated experience marketplace. Because my view is that we don't have to maximize the number of merchants. We want to create a safe environment where customers trust us, which means that we need to select and decide who will be on the platform and what the deals are, and have the deals which have great value.
And by the way, by value, it doesn't always mean lowest price of the deals. For merchants, we want to be a strategic marketing partner to achieve revenue and traffic objectives and pay for performance-based model, because there are not on the market any other players who can deliver so much traffic and value for merchants in the performance model. And we have many, many examples showing that this proposition works. But let's jump inside Groupon. You know the business lines which we are reporting, which is Goods, Local, Travel , but in reality, how I see it, or in my opinion, how we need to look at it through the lens of our customers, you can imagine the boxes which are here on the right side.
There are two big ones, Beauty, Wellness, Things To Do , and then a few smaller ones that they are kind of like thirds of the business. So Beauty and Wellness is one third of the business, Things To Do , second third of the business, and the rest is third of the business. Under this Beauty and Wellness , when you think about it from a customer perspective, or how I see it, is that we have a strong anti-aging segment, which means people who are buying Botox, for example, very strong weight loss segment, which is, for example, semaglutides, this hair, face, skin, and body treatments, plus another strong segment which we have in these categories are spas and massages, which should give you a better idea of what are really the services which Groupon is selling.
When you look into Things To Do vertical and these local activities, you can imagine them like local trampoline parks, arcades, and similar local stuff, which is very and highly interesting for citizens of the city, not just for tourists. Vice versa, tours and attractions are actually the stuff which quite often attracts visitors and tourists. We have live events, which are, for example, the concerts and similar events. From other areas, which are these smaller boxes on the right side, I would, for example, mention the auto parts or oil change specifically, where Groupon is one of the top players, if not the top player in the United States. The online shopping channel here, for example, you can imagine as a customer acquisition engine, mainly for enterprises.
We have many enterprise partners working with us on a regular basis, where we sell, for example, their membership products. Next slide, please. Now, just step back to remind and talk about the path. When I was joining Groupon, when we were looking at 2022 numbers, you can see that the free cash flow was - $172 million. The revenue was going down by 38%. You see that every year we are improving. Most importantly, you can see that recently, this year, we are guiding to positive a djusted EBITDA. We are guiding to positive free cash flow, and the revenue growth is changing in the right direction. We are not growing yet, but the decline is much lower than what we had last year. Next slide, please. Yeah, maybe actually one more comment on the previous slide. It's not just about the numbers, but also about the phases.
In the beginning, my journey here and the management journey in 2023 was really like cost cutting, just to make sure that we build a sustainable cost base, which will be very stable going forward, and we don't expect that our fixed cost will be growing as we will be growing the business, which is important for our calculation of where the company can get with financials. The next step, which we are going through right now, and it's not an easy one, actually, is rebuilding the platform because we got quite complex technical infrastructure in Groupon, and we want really to have a platform which will be agile. We will be able to innovate, and you can see first green shoots when you compare, for example, the website platform which we were operating for Black Friday, Cyber Monday on the website this year versus last year.
You can see that the website which we have right now is much more modern, looks much better, has better performance overall, and this should be the most important part for the stage three where we are going into now with some overlap on this rebuilding phase, where we want to show to everyone, mainly to our customers, which are both consumers and merchant partners, that we will be delivering new features and improving the value proposition on both sides of the marketplace. Next slide, please. Now, what is our focus and growth drivers? When I am looking on some of our early successes like Madrid, where we are above our 2019 numbers, it goes to geo and category focus. We need to understand the location. We need to understand deals which work in that location and understand the specific customer and merchant proposition in that location.
And by the way, that value proposition differs across many categories, which I was mentioning on the second slide. This is how we are organizing supply, and this is also how we are aligning other parts of the company, like product engineering and marketing, so that all these teams have understanding of this geo and category specifics. But at the same time, on this slide, I have also the audience because we need to talk to the right language, and we want to communicate directly, starting next year, with specific communities and target specific audiences. Like Groupon is a great destination for deal hunters, for moms, because we have a majority of our customers are women. And then what are the main conversion drivers, which we can see? This is what we call here Triple 10. The first one is conversion.
We strongly believe that we can grow at least 10% per annum the conversion of our website. And how will we do it? First of all, we have a better website, better looking website, more modern, working on more devices. We will be improving the deal structure. You already saw it on hundreds of deals which we have on the website, where it's a video content, which is helping us to gain customer trust, but it will allow us also to go and advertise on platforms like TikTok and others, which are video-driven primarily. We will be improving the redemption so that it's easier to redeem. We will be improving bookability. All this will be helping us with conversions because when customers will see on the website, on the deal description, that it's really easy to redeem, they can book this time slot immediately.
It will be much easier for them to make the decision that I will buy the deal. The second pillar, which I have here, which also can grow 10% plus annually, is traffic and how we will do it. We will build better content for the website. We have the new platform launch, which allows us to add and generate more AI-driven content. So we will be building merchant pages for our merchant partners. We will be adding more and more category-specific pages. We will be doing guides for cities covering specific business and category verticals. We will be running custom marketing channels and campaigns targeting specific events even on the geo level. All that will help us to attract more traffic through direct channels, through SEO, and through paid channels. And the third pillar, which I have here, is purchase frequency.
You can see it also as a retention part of it. First, what we need to do is to make sure that our customers really redeem the voucher because we see a very direct correlation between customers who are really using the service, really go and use the voucher which they buy with the purchase frequency. If they don't use and don't redeem the first voucher, the likelihood that they will do the next purchase is much lower. So that's why it will be one of the drivers and one of the focus areas which we will be working on. How to improve the frequency purchase? What are the other methods? How to do it?
We need to talk to the customer with right channels, meaning push notifications, running retargeting campaigns on Facebook and other social platforms, showing right deals, better understand what buyers in certain location and category are buying if they buy, for example, a massage as their first deal. We will be also adding more what we call Wow Deals , like for example, great food and drinks deals like Starbucks and similar to drive frequency, and by the way, when we are thinking about the numbers here, every turn in purchase frequency is worth more than 100 million of contribution margin, so it's a big deal for us. Now, if we pull all this together, we can easily say that we are aiming for at least 20% billings growth by 2027.
And on top of that, if you consider that we have, I would say, very high gross margins, we have quite attractive contribution margins, and the cost base, which I was talking about, is very stable. So it will not grow in the future significantly. It can be translated into very, very attractive bottom line. The next slide, please. The update on recent business performance. First of all, I would like to reiterate our guidance for Q4 2024. And then in more specific information and numbers, the November comparison was impacted because last year, Black Friday and Cyber Monday weekend was later, meaning it fell into December for a big part. We see that International, Local excluding Travel continues in the trend to stabilize. We are very happy with results of our international divisions.
In North America, we still continue to experience some traffic headwinds as a result of recent platform migrations. December is improving versus previous trends. I would like to mention also that performance of marketing channels is on the levels which we were planning from ROI perspectives, which was not the case in the beginning of the quarter. Last remark on business performance or in general, what I see on the platform, the Groupon as a platform performs better during the season, meaning when there is something to buy. When we were commenting Q2, Q3, we were talking about very successful TTD season. Now we have another example. For example, the Halloween, we were running special campaigns with Halloween inventory. Just for these campaigns, although it's not like a major, major business, we saw 50% growth year- over- year.
And we expect that similar behavior will be around and probably not with the same level of growth will be across multiple holiday seasons during the year. So thank you for attention on this part, and let's continue with Q&A.
Terrific. Thank you too, Dušan, for that awesome introduction. And I guess just first wanted to start off with maybe stepping back on what attracted yourself and your investment firm, Pale Fire Capital, to Groupon in the first place? And maybe if you could just discuss, what were your initial goals in investing, and has that shifted from what the goal is today? And just to remind those on the call, your former Pale Fire Capital owned about 25% of the outstanding shares in Groupon, and you were the former founder and owner of that investment firm. Yep.
Our original investment thesis was quite different to what we see right now. We were looking on Groupon development when Groupon was moving from third-party goods, sorry, from first-party goods to third-party, which means that it was not recognizing revenue of the GMV, let's say, but only the commission. We saw a similar trend in the very similar company in Central Europe, which was called Slevomat. We were very close to the whole business model. We believe that Groupon is actually following a very similar path in terms of transformation from originally a not-profitable company into the company which goes towards attraction events experiences. Later, I joined the board. We were talking to the management, and we realized that, yes, the company has potential, in my opinion, even more potential than what we thought from outside originally.
But at the same time, we need to completely change how the company operates to unlock this potential. And the reason why I personally joined the company as a CEO was simply that the value which I can see here, which we can unlock, is so huge that it's simply priority number one for me. And so far, I would say the expectations and the numbers which we saw in that original role model in that European company, Slevomat, pretty much everything applies here. The market is obviously different. There are some additional opportunities, for example, in enterprise and national segment, which Slevomat didn't have. There is higher competition, for example, in travel. But I believe that the opportunities which we have in, and I was describing the ways how we will get there, are really, really huge.
Thanks. Yeah, that's definitely I can see that. Just a large opportunity going in front of you and makes sense as to why you'd want to step in and take over the reins, given how large that opportunity set is in front. So then maybe step and go on a bit forward, but still kind of looking back here. Just on the second quarter earnings, you disclosed how you had hoped to share that you'd reach an inflection point in the business given the results you saw in the month of June. But there was some technical, like a technical snafu that emerged in July that caused you guys to not be able to say that. Could you just remind those on the call what the actual technical issue was and kind of where that now and where that stands now with respect to it?
Yeah. When I was commenting on the transformation summary slide, the rebuilding platform phase for us means that we need to do multiple changes on the platform. One example which I give you is that originally, let's say, payment slash fraud platform, which we had, luckily had, was very manual. Almost 10% of transactions on Groupon ended up flagged as potential fraud. People had to review those transactions, which took typically one day. When you bought something on Groupon, quite often up to 24 hours, you were not able to use that service, which is not a customer experience which we can accept, and it would hurt us going forward. Second, we inherited the cloud commitments, which were not corresponding with the business needs and actually also with how we were actually spending on individual clouds. We had to do very heavy cloud migration.
And the third, we inherited the systems which were not flexible. During my first 18 months, I was pretty much not able to push any product changes which would help us to grow Groupon's value proposition, improve it for merchants or customers. So we were building new front end, which adds us this flexibility. During those projects, we simply hit a few roadblocks on that fraud system. There were some during the cloud migration, there were some roadblocks which impacted our performance during summer. At this point, I believe that the majority of technical issues which are impacting performance are done. We still have one area based on that anti-fraud system update where we were doing password resets for a certain group of users, which we need to reactivate and get back on the platform. So this is something which will take longer time.
But in terms of stability of the platform, how we are able to run marketing, which was a big issue for us in Q3 and in the beginning of Q4, I believe that I can state that we resolved the vast majority of those issues.
Got it. That's really good color and good to hear about the marketing issues that you saw in kind of the beginning of Q4 or kind of in the rearview mirror. So kind of piggybacking on that, improving the platform has obviously been a major focus for the team. And you just kind of listed a bunch of issues that you inherited that have now since been fixed. But improving the platform means a lot of different things because you're a two-sided marketplace, right? You have your merchants and your customers.
And so maybe if we break it up into improvements to the platform for customers, improvements to the platform for the merchants, and then just back-end infrastructure improvements, could you just talk about what the team has done? And I guess you kind of already spoke on that. But maybe looking forward, what are kind of the most important IT upgrades going forward that you have on the docket?
So I would not call them IT upgrades. It's luckily switching into hopefully business as usual, where we will be simply adding features. So on the consumer front end, we see huge opportunities in improving the customer experience, making the search much more accessible and much more smart, I would say. We are adding video features. We will be adding a lot of content which will be very helpful for customers to navigate on the website.
We will be updating and improving the way how we are communicating the redemption and improving the redemption through more integrations with different POS systems, for example. So we saw a few examples on the customer part. On the merchant part, we are providing much more numbers now. Merchants can see the performance of their campaigns, the impact of sponsored listings, for example, impact of promotions on them. So this is something which, again, will iterate. We will be focusing much more on merchant redemption to make sure that the start of deals and campaigns is successful because for us, it's critical to improve not only lifetime of our customers, but keep as many merchants as possible on the platforms. And we will be improving the way how platform works for them. Just a few examples.
Got it. And then maybe going to the sticking with the merchant side of things, what is kind of obviously you mentioned earlier in your prepared remark or your opening remarks about the unique kind of business proposition that you give to merchants being a kind of targeted, pay-for-performance marketing firm, right? Could you maybe just talk a little bit more about your go-to-market? As you bring in those higher quality deals, which you smartly noted, it doesn't mean just low-dollar price. It actually means deals that people want to do. Could you just talk about the company's strategy in getting more higher quality merchants back onto the platform, either back onto the platform or onto the platform for the first time?
Yeah. So it goes hand in hand with that geo and category strategy which I was commenting where I was several times explaining that we need to do this consultative selling, meaning that we are not just a partner who goes to merchant and asks for the biggest discount. It just doesn't work. Where we are digging deeper is really to understand the value proposition, meaning that we are going in each category, and sometimes it's on geo level, sometimes it's on national level through top deals. We are analyzing how they work, how the economy for the merchant partners works.
Based on that, we are building the sales process, which is using the know-how from this analysis so that we can repeat it, so that we don't have just five or 10 great deals, but we can go in every location to merchant and explain them, "Hey, if you do the massages this way, you can have fairly high AOV. It may be profitable or break even. You can use this campaign either as a customer acquisition or yield management and just really be a partner to merchant to help them grow."
That's really, yeah, that's very well said and makes a lot of sense. I think that's interesting. Essentially, as you talk about this analysis of top deals, whether it's on a geographic level or a category level, is this an analysis that you guys have been doing since you joined? It seems like this is kind of a little bit more of a recent thing that's ongoing, just trying to get a sense of how long this process has been going and maybe the expectations of it going forward.
Bobby, when you join a company and you have -$172 million in free cash flow, then I have to admit that I didn't spend a lot of time on analysis like that. That's why that first phase was restructuring, cutting costs, making the company financially stable. By moving into different stages, it allows us to do different stuff. You know that we were talking about splitting sales into geo into several regions in the United States. We were talking about managing through market managers what the sales is going after. Definitely, we started last year already on this.
We have the basic infrastructure in sales done. So sales in the United States is regionalized, which is very important. There are market managers who are looking on what we need in certain categories. But right now, we are going one level deeper and really perfectly analyze the value proposition so that we can fine-tune it. And this would not be stable. This would not be possible if we would not have a company which is financially stable. And this is the point where we are.
Very well said. Makes perfect sense. I'm sorry, were you going to say one more thing?
No, no, no. Fine.
Okay. Cool. And then so then on the third quarter call, it was discussed that the platform upgrade caused some legacy users to drop off. And I just wanted to kind of get an update. Have you seen a rebound in those legacy customers? I know in to give some color, it's essentially these people had passwords saved forever. The updated platform knocked them out. They had to relog in. Don't know the password. Maybe they don't have that email anymore.
And I know that a lot of those legacy customers were doing specific deals within beauty, right? So I guess, have you seen? It's obviously probably tough to track if they're now signing up with a new email. But have you seen a bounce back in that at all? Or is that still kind of these lost legacy customers? Is that still kind of a headwind you feel you'll be comping over the next couple of quarters?
So this is something like the results we will be commenting on during our next earnings because these are the customers who were heavily buying during the holiday season and still a big part of the holiday season is ahead of us. What we did is that we identified those customers. We built specific communication channels through email, through push notifications, also some retargeting campaigns on the social media like Facebook and Google. So we are in the process of convincing them to get back and continue buying on Groupon. However, for results, we need to have the whole quarter numbers and compile it from it.
Fair enough. And then sticking kind of with the platform update, right? So obviously, you mentioned this new platform. It's significantly going to be more agile. You're actually going to be able to push through updates through the system in an effective way and not have those technical snafus. I think previously, I think you guys had I think the number was like 90-plus tech stacks.
Now it's down to one singular one, right, if I'm understanding that correctly. But one of the issues that you guys have mentioned on this new platform was there's kind of been a drop-off a little bit in the SEO kind of engine and the ability to kind of gain traction through that. So I was just curious, any updates on how that's progressed intra-quarter? Obviously, the good thing about having the new platform is you can now update it in a quicker pace to match what the SEO wants. But just kind of any commentary on how that's progressed?
Yeah. So SEO is not something which you fix in one week because you need to wait on when Google picks up the changes. But I would say that right now, the website and the platform which we have is slightly better than the platform which we had before in terms of SEO. And yes, some stuff will be picked up by Google, I believe, in the coming weeks. So it progressed as expected. And actually, SEO is one area where I'm really excited about because with what we can build now, new content, new structure, new elements, it's one of the growth drivers for Groupon in the next year.
Got it. That's really good color. And then so I've got a question here from an investor on the line, but kind of stepping back to Slevomat, right, the Czech Republic Groupon essentially that you guys had previously turned around. What was the most impactful change at Slevomat to drive improved revenue growth trends? And if it was not a single change, maybe what were the top three most impactful changes? And do you feel like those changes that you did at Slevomat are something that you can a playbook that you can repeat at Groupon?
Yeah. So the most important change, in my opinion, was the switch from the lowest possible price to highest value. And the Slevomat was actually able to grow AOV significantly. It's not really apples-to-apples comparison because they had bigger opportunity versus Groupon, I believe, in travel versus what we see right now on the market. But in general, in the beginning, they were selling deals which were really about that, like, "Give us the 50% discount everywhere." And right now, or during the transformation, what we saw that they were really selling nicely looking packages, great services, and people were really coming and buying them.
So AOV was one driver. And I actually believe that this AOV opportunity is with us, and this consultative type of selling is what we will get us there. The second, which is highly related to this quality, Slevomat was able to grow the gifting functionality because when you have products which are great quality, they are looking good, then you don't have an issue to buy it as a gift. And based on the numbers which we have, they have or had 50% of our Q4 revenue was coming from gifting.
The functionality which we started to build last year on Groupon and which we are improving every month, both on the functionality side but also on the deal side, shows us that the gifting thesis which we have for the U.S., but also for international market, is valid. The gifting is significantly growing. We still believe and see that we have an inventory gap which we need to fill, and it will take us some time. The purchase habits of customers, what they are buying, what are the gifts in NA versus international markets, it's actually very, very similar. In some categories, we see that the gifting already generates like 30% of our orders. When you look on those categories, it's not such a big surprise when you see a deal about driving Ferrari for one hour. It's a great gift, actually.
So categories like this are great for customers. So what we need to do is really continue with education, show it to people that really Groupon is a great place where you can buy gifts, first of all, last minute, which is very important also for me personally because quite often I forget to buy something. And even this year, I bought something on Slevomat as a gift because Groupon is not here in the Czech Republic. I actually got several gifts on Groupon deals from my colleagues, which was a great experience.
Yeah. Nice. Nice. Yeah. No, I'm definitely in that same boat. I need to start. I probably have done less Christmas shopping than most people on this, so give me a little anxiety here, but that's all right. I know I've got a website now to go to, huh? So just maybe talking more near-term, shares have been up, call it 30% in the last two weeks. And I know it's tough, or sometimes it's tough to kind of pinpoint one thing that is driving that. But I just figured I'd wanted to ask you guys both on what your perspective is that's been driving the recent share price appreciation. Is anything in your eyes that's really driving that?
So I will let Rana to comment on this because I'm here for long-term. I just know that we may have some bumps on the road. But for me, what's important is that we have a platform. We have a business model. We believe that we are adding value to customers. We are adding value to merchants. So my focus is on long-term growth. I am here not because of 30% growth of the stock last few days. I'm here for something completely different. So, Rana, if you want to take this and comment last few days.
No, I don't have anything further to comment.
Fair enough. Fair enough. Yeah. And I think everybody on this call can appreciate the responses, the long-term horizon that you have on the company. And I think I would note too is that some of your PSUs are at levels quite higher than where the stock is trading at. And I think on the fourth quarter call last year, you explicitly told investors, "Hey, this share package, you do not need to expect me to ask for any more shares until the stock is above that high tranche, which is, I believe, $70." And that's just something that you seldom see CEOs saying.
And so I think, again, that was one of the things that popped off or kind of jumped off the page for me reading that quote from you and kind of reiterating that point right there. That's great to hear. I guess turning to kind of the 2025, just kind of curious, what assumptions are baked into that flat to up low single-digit revenue guidance? And maybe could you discuss what factors could drive outperformance to those expectations as well as maybe underperformance?
So Rana, do you want to comment on the guidance?
Yeah. Really, the outlook we gave for 2025, what we were seeing and what we wanted to let investors know was the headwinds that we saw in Q3, which continued into Q4. If those continue on some of these legacy cohorts, we could see continued headwinds in the first half of next year. What's not considered into the outlook we shared at that time was really any upside from the product changes that Dušan's been spending time commenting today.
So it's really the basic, call it the basic approach for if you just run the numbers of we have some headwinds that started in Q3, and those will be with us until we anniversary them into Q3 next year. Or maybe with us. And I think you already asked Dušan this. He said, "We'll update investors on where we are with the reactivation of those legacy cohorts when we report Q4."
Got it. Okay. Makes sense. So then maybe another question for me is, we talked about how to gain more merchants onto the platform, bring those higher deals in. But I kind of wanted to just double-click it again. What additional enhancements to the merchant experience are planned to improve deal quality and attract higher- quality merchants? I guess you talked about. I know that you've given. They're able to kind of see their marketing campaigns and how those go at a much more quantitative level. But I guess just any other upgrades that you're expecting to kind of implement to that merchant experience?
Maybe I can share you one project which we are working on in terms of which is more on the merchant acquisition part, but I believe it's part of the story, that is, right now, we have very good understanding of where we need merchants and in which categories. We are able to get leads online using AI, meaning find the merchants in those locations in similar categories. We are using AI to initiate communications with merchants. Pretty much the goal right now is to have the merchant to decide, "I want you to call me tomorrow 5:00 P.M.," and our sales rep will call, which is still a very traditional way to do.
With AI, we want to add their functionality on the level that we will design the deal for the merchant based on the category, location, and best-performing deals from that category, for example, in similar cities in the United States. So we can get to a situation when we will show the merchant, "Hey, if you do this deal with us, just change the images, fine-tune the prices, but the economics are there for you. The volume can be delivered by you click here to launch the campaign." So we can significantly decrease the complexity for merchants to create campaigns on Groupon. Then we will be adding more and more features for campaign management, meaning that we will show them performance. We will be not we will. We are already doing that. We are adding functionality into our Merchant Center , which is analyzing performance of merchant campaigns.
And it's adding recommendations. Based on what we see, we recommend you to add additional gifting options because similar deals in similar locations with more expensive options, they are selling this option quite well. Or we can show, "If you do promotions with us, you can get 50% volume." So plenty of functionality. It will not be big bang. It will be about delivering these features in decent pace going forward.
Got it. And then I think now kind of wanted to open up. I know there's one investor with his hand raised in the queue. So wanted to allow them to ask that question. Heidi, can you yep. So I think, Will, your line's unmuted here.
Great. Thanks. Can you hear me?
Yeah. We can. Great.
Thanks, Dušan . So I wanted to spend some time on the new platform. It looks great. So my understanding was on day one, and speaking with you in the past, that normally when you first cut over to a new platform, there can be some conversion degradation. But actually here, it was accretive to conversion. So we'd just love to understand kind of what the new platform allows you to do. If you go on it, clearly, you've made some changes to kind of how things appear and holidays more front and center. But we'd love to get a sense of kind of whether conversion on the new platform is ahead of the old one and whether you think you can build on the conversion gains if there are any as we think about 2025. And then I have a follow-up on SEO, but we'll start with conversion.
Okay. So in terms of conversion, we are ahead with conversion on mobile interface, which is majority of our revenue. And we are on par plus 1-2% typically, but oscillating around that number on the desktop. This is important for us because mobile is majority of our traffic, majority of our revenue, and we need to really behave like a mobile-first company, which was not always the case. The conversion of incoming traffic is quite a big achievement. I was actually never in the past able to achieve same-level conversion on newly launched platforms. So I'm happy with that result.
At the same time, I have to admit that simply very, very few, not features, but simply very, very few areas which had impact, which was not about immediate conversion, but for example, that SEO part where we simply saw slightly lower rankings of new platform, which we had to fix. So overall, I am happy with the result. I would say that it's probably the most successful launch of any platform during my career, not in terms that it took too much time from my perspective, but in terms of conversion, I believe it's quite a good achievement.
So, in the end, now done. So this one's most successful from kind of day one as you turn the page with your previous kind of replatform.
Six months to a year,
Do you get further gains from where you are on day one, obviously?
And obviously, yes. And going forward, if the platform would have same performance, that investment would be waste of time and resources in the end of the day. Yeah. So the reason why we are building it is to improve it. So I don't know. The features which we are discussing for Q1, like universal search, right now, you have to change location.
And when you think how we have different verticals, you have travel, which if you search for travel, hotel, for example, you don't search for hotel in the location where you are right now. It's not easy, even on the new platform yet. When you search vice versa for some local activities, then you search for local stuff. So we will be adding there more intelligent search box, which will be recognizing categories, which will be hinting you how to search for different verticals, which we have on the website.
We have multiple improvements for deal page to support conversion because this is V1, really, but in my opinion, the deal page, and not just opinion, based on the wireframes and the schemes which I have, we will be improving it.
So the follow-up question that is, it sounds like initially SEO takes a little longer to optimize, and you don't really know what you need to optimize until you cut over, and on day one, it was a little bit of degradation and kind of our rankings there. It's the first time I've kind of heard you be optimistic about that, so you talked about there's an upcoming thing or event with SEO, so we'd love to understand whether you think SEO rankings are something you're comfortable or confident you can build back, and then maybe an associated timeline with building back those SEO rankings.
So if we would just get back to previous ranking, I would be quite unhappy about the result because Groupon is actually a domain with a great history. The reputation with Google systems is very high. So I don't think there are many other companies who have such a good starting point based on the domain which we operate. So it's a great thing for us. So my goal is to be significantly growing in SEO during next year.
Okay. So I guess what I'm struggling with, and I appreciate the need to be conservative, but from our perspective, you've been very clear that you are doing some things that are going to cause some disruption. And from our perspective, we have a long-term time horizon, so I really don't care. But what I'm struggling with is the comments on 2025.
You seem very confident that we're going to get conversion up, and we're going to get our SEO rankings up. And revenue is really a product of conversion and SEO. So, as I think about both of those moving up and meaningfully, there seems to be an opportunity for significant revenue growth next year. So help me square just your confidence on the conversion. It sounds like we've already achieved the progress there and your confidence on SEO with kind of the initial 2025 look.
So we have both headwinds and tailwinds. The tailwinds, we were just discussing. There are multiple opportunities. On the headwinds, we still have, for example, the impact on that cohort which we were discussing during last earnings.
Of the people that were locked out.
Yes. Yes.
It sounds like you're doing some things to get them back, but I've talked enough, so I'll let you keep going. Congrats on the new[ site]. It looks great. Thank you.
Thank you. I don't know. Do you want to add anything towards the guidance here?
No. I don't know, Bobby. Time-wise, I see some of these questions in the Q&A. I turn it to you to adjudicate.
Yeah. Just we'll take one more question. I thought this was another good one inbound from a client. They mentioned the Spanish toggle, making the website more accessible to Spanish speakers. It seems like that could be a large opportunity and maybe untapped. Any thought? Is that something that you guys are looking to do going forward where you can kind of quickly switch from an English website to a Spanish website to kind of target those Spanish speakers in America? Any kind of thoughts and color on that?
Yeah. Yeah. So right now, we have the manual capability to switch language. We are considering switching the language automatically. We recognize that the consumer is using Spanish computer. We can switch the language, and during Q1, we plan to test some SEM marketing campaigns targeting Spanish people. During the last six months, we built a small squad of Spanish-speaking salespeople also to acquire some Spanish-speaking merchants to support the marketplace from the other side. So we don't have any estimation expectations here. The Spanish community actually is a pretty good target for us. I see that plenty of them are deal hunters.
So I see it as an opportunity which we want to explore, but I don't have any numbers or expectations here right now.
Understood. I don't know if you can see the Q&A, but there was another one I last did, Dušan, from an investor that said Groupon might have some stigma attached to it with certain merchants. And given all the changes you guys are making, would you guys consider changing the name so it gets called something else?
Yeah. You guys can answer that. Yeah.
Yeah. You guys can answer that. Yeah. So my past experience shows that it's not worth it, actually. And even Slevomat, Slevomat name means discount engine. It's crazy. Yeah. We did similar acquisition of Central European eBay in Czech Republic, which had similar issues. And the brand equity which we have there is huge. And yes, there is negative connotation and there is positive connotation.
But when we tried to speak to merchants and I was visiting some of them, when I mentioned Groupon, it was not that they closed the door and didn't want to talk. They were always ready to talk. It actually helped us. Yes, maybe for merchants, some expectations were negative, but it was not a blocker. So I see the brand, yes, it's a challenge. We need to work with it. But in the long run, I see value in Groupon brand.
I think that's a perfect way to wrap up the call because obviously, from my perspective, I see value in Groupon the brand, but also the shares. Thank you very much, Dušan and Rana, for joining us today on the call and giving us the time. I'm excited to also have you guys doing some one-on-ones here on Thursday at our growth conference, which I know many of the investors on the call were signed up for. Terrific turnout as well for today's call. I just really appreciate everybody taking the time today to join. And again, thank you, Dušan and Rana, for the time.
Thank you very much, everyone.
Thank you.
Thank you, guys.