4q14 earnings - s22.q4cdn.com · consumers rely on groupon when they shop locally >160m...

4Q14 Earnings February 2015

Forward-Looking Statements

The statements contained in this presentation that refer to plans and expectations for the next quarter, the full year or the future are forward-looking

statements that involve a number of risks and uncertainties, and actual results could differ materially from those discussed. The risks and uncertainties

that could cause our results to differ materially from those included in the forward-looking statements include, but are not limited to, volatility in our revenue

and operating results; risks related to our business strategy including our marketing strategy and spend; effectively dealing with challenges arising from

our international operations; retaining existing customers and adding new customers; retaining and adding new and high quality merchants; cyber security

breaches; incurring expenses as we expand our business; competing successfully in our industry; maintaining favorable payment terms with our business

partners; providing a strong mobile experience for our customers; delivery and routing of our emails; maintaining a strong brand; managing inventory and

order fulfillment risks; integrating our technology platforms; managing refund risks; retaining our executive team; litigation; compliance with domestic and

foreign laws and regulations, including the CARD Act and regulation of the Internet and e-commerce; tax liabilities; tax legislation; maintaining our

information technology infrastructure; protecting our intellectual property; handling acquisitions, joint ventures and strategic investments effectively;

seasonality; payment-related risks; customer and merchant fraud; global economic uncertainty; and our ability to raise capital if necessary. We urge you to

refer to the factors included under the headings "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of

Operations" in the company's Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q, copies of which may be obtained by visiting

the company's Investor Relations web site at http://investor.groupon.com or the SEC's web site at www.sec.gov. Groupon's actual results could differ

materially from those predicted or implied and reported results should not be considered an indication of future performance.

You should not rely upon forward-looking statements as predictions of future events. Although Groupon believes that the expectations reflected in the

forward-looking statements are reasonable, it cannot guarantee that the future results, levels of activity, performance or events and circumstances

reflected in the forward-looking statements will be achieved or occur. Moreover, neither the company nor any other person assumes responsibility for the

accuracy and completeness of the forward-looking statements. The forward-looking statements reflect Groupon’s expectations as of February 12, 2015.

Groupon undertakes no obligation to update publicly any forward-looking statements for any reason after the date of this release to conform these

statements to actual results or to changes in its expectations.

Additional information relating to certain of our financial measures contained herein is available in our most recent earnings release and at our website

at investor.groupon.com.

2

Mission: To connect local commerce,

increasing consumer buying power while

driving more business to local merchants through price and discovery.

3

Local Commerce Opportunity Merchant Opportunity

Local Merchants Worldwide ~1% of

~2% of Merchants in Core Categories

>950K Groupon Featured Merchants LTD 1

Source: Localeze/Neustar & Factual.com Business Listings, Euromonitor and Company Data

Local Commerce Marketplace Worldwide <0.1% of

~$7.6B Gross Billings 2

4

The Local Market is Large and Unique

(1) Groupon merchants featured LTD as of December 31, 2014.

(2) FY 2014 Gross Billings.

5

Consumers Rely on Groupon When They Shop Locally

>160M

cumulative subscribers

global monthly unique visitors

mobile downloads

units sold in Q4 alone

Subscribers, MUVs, and units as of December 31, 2014; mobile downloads as of January 31, 2015.

(1) Monthly Unique Visitors is the count of users accessing Groupon on both web and mobile devices.

(2) Units reflect vouchers and products sold before cancellations and refunds.

>260M

~110M

>100M

1

2

6

>950K

active deals worldwide

featured merchants life-to-date

Merchant Pages released to be indexed on Google

All data as of December 31, 2014 with the exception of Merchant Pages released to Google, which is as of February 12, 2015.

(1) Active deals reflect the number of daily featured and Deal Bank deals offered on average at the end of the period.

(2) LTD Unique merchants reflects the total number of unique merchants who have featured with Groupon.

~370K

>800K

1

2

And We’ve Been Adding Supply to Build Our Marketplace

~10k merchants

connected through

our merchant tablet,

rolling out beacons

7

~110M Mobile

Downloads,

>50% Mobile

Transaction Mix

~370k Active Deals

(including

Local, Goods &

Travel)

>800K Merchant

Pages released to be

indexed,

Nearly 25M tips and ratings

>50k Coupons in NA

In 2015, We’re Focused on Connecting the Two

All data as of December 31, 2014 with the exception of mobile downloads, which is as of January 31, 2015 and Merchant Pages released to Google, which is as of February 12, 2015.

$137

$155

$-

$20

$40

$60

$80

$100

$120

$140

$160

$180

4Q13 4Q14

+$18

y/y

Key Metrics to Track Progress

(1) Active customers reflect the total number of unique user accounts who have purchased a voucher or product during the trailing twelve months.

(2) Spend per average active customer reflects the total gross billings generated in the trailing twelve months per average active customer over that period.

(3) Units reflect vouchers and products sold before cancellations and refunds. 8

Active Customers Spend per Average

Active Customer

Units 1 2 3

43.7M

53.9M

0.0

10.0

20.0

30.0

40.0

50.0

60.0

4Q13 4Q14

+23%

y/y

56M

0.0

20.0

40.0

60.0

80.0

100.0

4Q13 4Q14

101M

+81%

y/y

$72

$40

$59

$67

$87

$768 $758 $752 $757 $925

$1,593

$1,817 $1,819 $1,861

$2,084

$-

$500

$1,000

$1,500

$2,000

4Q13 1Q14 2Q14 3Q14 4Q14

Chart Title

Financial Summary – Consolidated Quarterly

Gross Billings & Revenue USD, Millions

Adjusted EBITDA USD, Millions

4Q13 2Q14 1Q14 3Q14 4Q14

Gross Billings Revenue

+31% Y/Y

+20% Y/Y

(1) Adjusted EBITDA is a non-GAAP financial measure. See appendix for a reconciliation to the most comparable U.S. GAAP financial measure, “Net (loss) income.”

1

9

$(168)

$(112)

$260

$287

$253

AEBITDA

$313

$1,610

$2,334 $2,574 $3,192

$745

$3,986

$5,380 $5,757

$7,581

$-

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

2010 2011 2012 2013 2014

Chart Title

Financial Summary – Consolidated Annual

Gross Billings & Revenue USD, Millions

Adjusted EBITDA USD, Millions

2010 2012 2011 2013 2014


+32% Y/Y

+24% Y/Y

(1) Adjusted EBITDA is a non-GAAP financial measure. See appendix for a reconciliation to the most comparable U.S. GAAP financial measure, “Net loss.”

1

10

$57 $79 $64 $60 $66

$12

$27 $24 $24

$42

4Q13 1Q14 2Q14 3Q14 4Q14

$306

$325 $333

$326 $310

4Q13 1Q14 2Q14 3Q14 4Q14

$390 $372 $362 $377 $532

4Q13 1Q14 2Q14 3Q14 4Q14

Expense Summary – Consolidated

Cost of Revenue USD, Millions

Marketing and Order Discounts USD, Millions

Selling, General & Administrative USD, Millions

Stock Compensation and Acquisition-Related USD, Millions

24% 20% 20% 20% 26% 4% 6% 5% 5% 5%

19% 18% 18% 18% 15% 2% 1% 2% 2% 1%

$XX $25 $32

$27 $30

% of Gross Billings

$35 $26

$32 $34 $31

4Q13 1Q14 2Q14 3Q14 4Q1411

1

(1) Order Discounts are considered to be a marketing-related activity, even though these are not presented as “Marketing” on our consolidated statements of operations. Instead, Order Discounts are a reduction to Gross Billings and Revenue.

Percent of Gross Billings presentation includes both Marketing and Order Discounts.

Marketing Order Discounts

Financial Summary – Segment North America

USD, Millions

EMEA USD, Millions

Rest of World USD, Millions

(1) Represents segment revenue less cost of revenue and operating expenses, excluding stock-based compensation and acquisition-related expense (benefit), net, in absolute dollars and as a percentage of gross billings. Segment

operating margin is defined as segment operating income (loss) as a percent of gross billings in order to eliminate the differences in gross versus net presentation of revenue.

$37

$19

$28

$22

$35

7% 4% 6% 5% 6%

0%

10%

20%

30%

40%

50%

60%

$-

$10

$20

$30

$40

$50

$60

4Q13 1Q14 2Q14 3Q14 4Q14

Segment Operating Income & Margin 1 Segment Operating Loss & Margin

$(15) $(25) $(18)

$(6)

$(16)

-6% -5%

-3%

-1%

-3% -10%

0%

10%

20%

30%

40%

50%

$(30)

$(25)

$(20)

$(15)

$(10)

$(5)

$-

$5

4Q13 2Q14 1Q14 3Q14 4Q14

1

$26

$11 $15 $13

$31

3% 1% 2% 2% 3%

0%

10%

20%

30%

40%

50%

60%

$-

$10

$20

$30

$40

$50

$60

4Q13 1Q14 2Q14 3Q14 4Q14

Segment Operating Income & Margin 1

$444 $431 $424 $418 $551

$789 $782 $799 $774

$949

4Q13 1Q14 2Q14 3Q14 4Q14

Chart Title Gross Billings & Revenue


+20% Y/Y

+24% Y/Y

$251 $231 $228 $230 $272

$566 $514

$483 $489 $561

$-

$100

$200

$300

$400

$500

$600

$700

4Q13 1Q14 2Q14 3Q14 4Q14

Gross Billings & Revenue


-1%

Y/Y

+8%

Y/Y

$73 $96 $100 $108 $102

$239

$522 $537 $597 $575

4Q13 1Q14 2Q14 3Q14 4Q14

Gross Billings & Revenue


+141% Y/Y

+6% ex F/X,

TMON,

legacy

Groupon

Korea

+39%Y/Y

Segment Op. Income SOI % of Billings Segment Op. Income SOI % of Billings Segment Op. Loss Seg Op Loss % of Billings

12

$1,593

$1,817 $1,819 $1,861

$2,084

4Q13 1Q14 2Q14 3Q14 4Q14

Chart Title

24% 21% 21% 20%

19%

$-

$0

$0

$0

$0

$1

$1

$1

$1

$1

$- $1,030 $2,060 $3,090 $4,120 $5,150 $6,180 $7,210 $8,240 $9,270 $10,300 $11,330 $12,360 $13,390 $14,420 $15,450 $16,480 $17,510 $18,540 $19,570 $20,600 $21,630 $22,660 $23,690 $24,720 $25,750 $26,780 $27,810 $28,840 $29,870 $30,900 $31,930 $32,960 $33,990 $35,020 $36,050 $37,080 $38,110 $39,140 $40,170 $41,200 $42,230 $43,260 $44,290 $45,320 $46,350 $47,380 $48,410 $49,440 $50,470 $51,500 $52,530 $53,560 $54,590 $55,620 $56,650 $57,680 $58,710 $59,740 $60,770 $61,800 $62,830 $63,860 $64,890 $65,920 $66,950 $67,980 $69,010 $70,040 $71,070 $72,100 $73,130 $74,160 $75,190 $76,220 $77,250 $78,280 $79,310 $80,340 $81,370 $82,400 $83,430 $84,460 $85,490 $86,520 $87,550 $88,580 $89,610 $90,640 $91,670 $92,700 $93,730 $94,760 $95,790 $96,820 $97,850 $98,880 $99,910 $100,940 $101,970 $103,000 $104,030 $105,060 $106,090 $107,120 $108,150 $109,180 $110,210 $111,240 $112,270 $113,300 $114,330 $115,360 $116,390 $117,420 $118,450 $119,480 $120,510 $121,540 $122,570 $123,600 $124,630 $125,660 $126,690 $127,720 $128,750 $129,780 $130,810 $131,840 $132,870 $133,900 $134,930 $135,960 $136,990 $138,020 $139,050 $140,080 $141,110 $142,140 $143,170 $144,200 $145,230 $146,260 $147,290 $148,320 $149,350 $150,380 $151,410 $152,440 $153,470 $154,500 $155,530 $156,560 $157,590 $158,620 $159,650 $160,680 $161,710 $162,740 $163,770 $164,800 $165,830 $166,860 $167,890 $168,920 $169,950 $170,980 $172,010 $173,040 $174,070 $175,100 $176,130 $177,160 $178,190 $179,220 $180,250 $181,280 $182,310 $183,340 $184,370 $185,400 $186,430 $187,460 $188,490 $189,520 $190,550 $191,580 $192,610 $193,640 $194,670 $195,700 $196,730 $197,760 $198,790 $199,820 $200,850 $201,880 $202,910 $203,940 $204,970 $206,000 $207,030 $208,060 $209,090 $210,120 $211,150 $212,180 $213,210 $214,240 $215,270 $216,300 $217,330 $218,360 $219,390 $220,420 $221,450 $222,480 $223,510 $224,540 $225,570 $226,600 $227,630 $228,660 $229,690 $230,720 $231,750 $232,780 $233,810 $234,840 $235,870 $236,900 $237,930 $238,960 $239,990 $241,020 $242,050 $243,080 $244,110 $245,140 $246,170 $247,200 $248,230 $249,260 $250,290 $251,320 $252,350 $253,380 $254,410 $255,440 $256,470 $257,500 $258,530 $259,560 $260,590 $261,620 $262,650 $263,680 $264,710 $265,740 $266,770 $267,800 $268,830 $269,860 $270,890 $271,920 $272,950 $273,980 $275,010 $276,040 $277,070 $278,100 $279,130 $280,160 $281,190 $282,220 $283,250 $284,280 $285,310 $286,340 $287,370 $288,400 $289,430 $290,460 $291,490 $292,520 $293,550 $294,580 $295,610 $296,640 $297,670 $298,700 $299,730 $300,760 $301,790 $302,820 $303,850 $304,880 $305,910 $306,940 $307,970 $309,000 $310,030 $311,060 $312,090 $313,120 $314,150 $315,180 $316,210 $317,240 $318,270 $319,300 $320,330 $321,360 $322,390 $323,420 $324,450 $325,480 $326,510 $327,540 $328,570 $329,600 $330,630 $331,660 $332,690 $333,720 $334,750 $335,780 $336,810 $337,840 $338,870 $339,900 $340,930 $341,960 $342,990 $344,020 $345,050 $346,080 $347,110 $348,140 $349,170 $350,200 $351,230 $352,260 $353,290 $354,320 $355,350 $356,380 $357,410 $358,440 $359,470 $360,500 $361,530 $362,560 $363,590 $364,620 $365,650 $366,680 $367,710 $368,740 $369,770 $370,800 $371,830 $372,860 $373,890 $374,920 $375,950 $376,980 $378,010 $379,040 $380,070 $381,100 $382,130 $383,160 $384,190 $385,220 $386,250 $387,280 $388,310 $389,340 $390,370 $391,400 $392,430 $393,460 $394,490 $395,520 $396,550 $397,580 $398,610 $399,640 $400,670 $401,700 $402,730 $403,760 $404,790 $405,820 $406,850 $407,880 $408,910 $409,940 $410,970 $412,000 $413,030 $414,060 $415,090 $416,120 $417,150 $418,180 $419,210 $420,240 $421,270 $422,300 $423,330 $424,360 $425,390 $426,420 $427,450 $428,480 $429,510 $430,540 $431,570 $432,600 $433,630 $434,660 $435,690 $436,720 $437,750 $438,780 $439,810 $440,840 $441,870 $442,900 $443,930 $444,960 $445,990 $447,020 $448,050 $449,080 $450,110 $451,140 $452,170 $453,200 $454,230 $455,260 $456,290 $457,320 $458,350 $459,380 $460,410 $461,440 $462,470 $463,500 $464,530 $465,560 $466,590 $467,620 $468,650 $469,680 $470,710 $471,740 $472,770 $473,800 $474,830 $475,860 $476,890 $477,920 $478,950 $479,980 $481,010 $482,040 $483,070 $484,100 $485,130 $486,160 $487,190 $488,220 $489,250 $490,280 $491,310 $492,340 $493,370 $494,400 $495,430 $496,460 $497,490 $498,520 $499,550 $500,580 $501,610 $502,640 $503,670 $504,700 $505,730 $506,760 $507,790 $508,820 $509,850 $510,880 $511,910 $512,940 $513,970 $515,000

4Q13 1Q14 2Q14 3Q14 4Q14

Financial Summary – Category Gross Billings USD, Millions

Gross Profit and Gross Margin USD, Millions

2

Travel Goods Local Gross Margin % of Billings

15%

43% 47%

40% 39%

46%

13% 12% 11%

49%

37%

52%

39% 46%

11% 10%

$393 $390

21%

69%

17%

9%

$378 $386

9%

16%

75%

23%

10% 9%

$380

69%

21%

68% 74%

2

(1) Local represents deals from local and national merchants and deals on local events. Other revenue transactions, which include advertising, payment processing, point of sale and commission revenue, were previously aggregated with the Travel

category. During the three months ended March 31, 2014, the Company updated its presentation of category information to include gross billings and gross profit from those other revenue sources

within the Local category, and prior period category information has been retrospectively adjusted to conform to the current presentation.

(2) Gross margin is defined as gross profit as a percent of gross billings in order to eliminate the differences in gross versus net presentation of revenue.

1

13

$439 $457 $461

$447

$499

32% 33%

31% 31% 30%

$-

$0

$0

$0

$0

$1

$1

$-

$100

$200

$300

$400

$500

4Q13 1Q14 2Q14 3Q14 4Q14

$277 $262

$227 $219

$242

38% 38% 40% 38% 37%

0%

10%

20%

30%

40%

50%

60%

70%

80%

$-

$50

$100

$150

$200

$250

$300

$350

$400

4Q13 1Q14 2Q14 3Q14 4Q14

$117

$168 $170 $190

$161

29%

21% 21% 20% 18%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

$-

$50

$100

$150

$200

$250

$300

$350

$400

$450

4Q13 1Q14 2Q14 3Q14 4Q14

North America USD, Millions

Financial Summary – Local

(1) Local represents deals from local and national merchants and deals on local events. Other revenue transactions, which include advertising, payment processing, point of sale and commission revenue, were previously aggregated with the Travel

category. During the three months ended March 31, 2014, the Company updated its presentation of category information to include gross billings and gross profit from those other revenue sources

within the Local category, and prior period category information has been retrospectively adjusted to conform to the current presentation.


1

EMEA USD, Millions


Gross Profit Billings Gross Margin % of Billings 2

$141 $153 $143 $138

$148 $105 $100 $90

$84 $90

$34 $35 $36 $39 $30

14

$12 $22 $25 $23 $19

$89

$283 $281 $289

$336

13% 8% 9% 8% 6%

0%

10%

20%

30%

40%

50%

60%

$-

$50

$100

$150

$200

$250

$300

$350

$400

4Q13 1Q14 2Q14 3Q14 4Q14


$34 $27 $35 $32 $38

$220

$183 $191 $191

$246

15% 15%

19% 17%

16%

0%

10%

20%

30%

40%

50%

60%

$-

$50

$100

$150

$200

$250

$300

$350

$400

4Q13 1Q14 2Q14 3Q14 4Q14

EMEA USD, Millions


Financial Summary – Goods



$21 $13 $23 $24 $34

$286

$243 $248 $243

$369

7% 5%

9% 10% 9%

0%

10%

20%

30%

40%

50%

60%

$-

$50

$100

$150

$200

$250

$300

$350

$400

4Q13 1Q14 2Q14 3Q14 4Q14

15

$5 $8 $9 $11 $5

$32

$71

$85

$118

$77

16%

11%

10% 9% 7%

0%

10%

20%

30%

40%

50%

60%

$-

$10

$20

$30

$40

$50

$60

$70

$80

$90

$100

$110

$120

$130

4Q13 1Q14 2Q14 3Q14 4Q14

$14 $14 $15 $15 $15

$68 $68 $65

$80

$73

21% 20%

23%

19% 21%

0%

10%

20%

30%

40%

50%

60%

$-

$20

$40

$60

$80

$100

$120

4Q13 1Q14 2Q14 3Q14 4Q14

$12 $14 $14 $14 $14

$64

$82

$90

$85 $80

19% 18%

16% 17% 18%

0%

10%

20%

30%

40%

50%

60%

$-

$20

$40

$60

$80

$100

$120

4Q13 1Q14 2Q14 3Q14 4Q14


Financial Summary – Travel

(1) Other revenue transactions, which include advertising, payment processing, point of sale and commission revenue, were previously aggregated with the Travel category. During the three months ended March 31, 2014, the Company updated its

presentation of category information to include gross billings and gross profit from those other revenue sources within the Local category, and prior period category information has been retrospectively adjusted to conform to the current

presentation.


EMEA USD, Millions



1

16

Financial Summary – Cash Flow

Operating Cash Flow (TTM) USD, Millions

Free Cash Flow (TTM) USD, Millions

1

(1) Free cash flow is a non-GAAP financial measure. See appendix for a reconciliation to the most comparable U.S. GAAP financial measure, “Net cash provided by (used in) operating activities.”

$218

$189

$123

$180

$289

4Q13 1Q14 2Q14 3Q14 4Q14

$155

$124

$41

$93

$201

4Q13 1Q14 2Q14 3Q14 4Q14

17

Other Financial Highlights

($ millions) 12/31/11

GAAP Earnings (Loss) per Share $0.01 $(0.11)

Non-GAAP EPS $0.06 $0.08

Operating Cash Flow $287M $289M

Operating Cash Flow TTM $289M $289M

Free Cash Flow $266M $201M

Free Cash Flow TTM $201M $201M

Cash and Cash Equivalents

$1.1B

` 4Q 2014 FY 2014

1

2

2

Repurchased 1.2M shares in the fourth quarter, for an aggregate purchase price of $8.1M;

$102M remains available under existing share repurchase authorization

(1) Non-GAAP EPS is a non-GAAP financial measure. See appendix for a reconciliation to the most comparable U.S. GAAP financial measure, “Diluted net income (loss) per share.”

(2) Free cash flow is a non-GAAP financial measure. See appendix for a reconciliation to the most comparable U.S. GAAP financial measure, “Net cash provided by (used in) operating activities.” 18

Appendix

19

Non-GAAP Reconciliations Adjusted EBITDA (in thousands)

4Q13 1Q14 2Q14 3Q14 4Q14

Net (loss) income $(78,861) $(35,363) $(20,922) $(19,018) $11,384

Adjustments

Stock-based compensation 32,239 23,729 31,655 34,574 32,061

Acquisition-related expense (benefit), net 2,265 1,785 597 (304) (809)

Depreciation and amortization 24,132 34,740 34,658 38,146 37,377

Other expense, net 84,833 840 1,023 20,023 11,467

Provision (benefit) for income taxes 7,380 14,570 12,045 (6,434) (4,457)

Total Adjustments 150,849 75,664 79,978 86,005 75,639

Adjusted EBITDA $71,988 $40,301 $59,056 $66,987 $87,023

The following is a reconciliation of Adjusted EBITDA to the most comparable U.S. GAAP financial measure, “Net (loss) income”:

20

2010 2011 2012 2013 2014

Net loss $(413,386) $(297,762) $(51,031) $(88,946) $(63,919)

Adjustments

Stock-based compensation 36,168 93,590 104,117 121,462 122,019

Acquisition-related expense (benefit), net 203,183 (4,537) 897 (11) 1,269

Depreciation and amortization 12,952 32,055 55,801 89,449 144,921

Other (income) expense, net (284) 20,679 3,759 94,663 33,353

(Benefit) provision for income taxes (6,674) 43,697 145,973 70,037 15,724

Total Adjustments 245,345 185,484 310,547 375,600 317,286

Adjusted EBITDA $(168,041) $(112,278) $259,516 $286,654 $253,367

The following is a reconciliation of Adjusted EBITDA to the most comparable U.S. GAAP financial measure, “Net loss”:

Non-GAAP Reconciliations cont’d Non-GAAP Earnings Per Share (in thousands, except share and per share amounts)

21

Three Months Ended

December 31, 2014

Year Ended

December 31, 2014

Net income (loss) attributable to common stockholders $8,788 $(73,090)

Stock-based compensation 32,061 122,019

Amortization of acquired intangible assets 11,054 47,122

Acquisition-related (benefit) expense, net (809) 1,269

Income tax effect of adjustments (13,503) (44,593)

Net earnings attributable to common stockholders excluding stock-based

compensation, amortization of acquired intangible assets and acquisition-related

(benefit) expense, net

$37,591 $52,727

Diluted shares 681,543,847 674,832,393

Incremental diluted shares -- 10,152,694

Adjusted diluted shares 681,543,847 684,985,087

Diluted net income (loss) per share $0.01 $(0.11)

Impact of stock-based compensation, amortization of acquired intangible assets and

acquisition-related (benefit) expense, net $0.05 $0.19

Non-GAAP earnings per share $0.06 $0.08

The following is a reconciliation of non-GAAP earnings per share to the most comparable U.S. GAAP financial measure, “Diluted net income (loss) per share”:

Non-GAAP Reconciliations cont’d Free Cash Flow (in thousands)

4Q13 1Q14 2Q14 3Q14 4Q14

Net cash provided by (used in) operating activities $178,275 $(20,717) $(22,747) $45,466 $286,822

Purchases of property and equipment and

capitalized software (19,931) (16,355) (31,053) (20,053) (20,831)

Free Cash Flow $158,344 $(37,072) $(53,800) $25,413 $265,991

Net cash used in investing activities $(23,330) $(138,608) $(34,498) $(20,461) $(35,889)

Net cash used in financing activities $(55,444) $(41,492) $(114,753) $(16,823) $(21,088)

The following is a reconciliation of free cash flow to the most comparable U.S. GAAP financial measure, “Net cash provided by (used in) operating activities”:

22

4Q13 1Q14 2Q14 3Q14 4Q14

Net cash provided by operating activities (TTM) $218,432 $188,955 $122,906 $180,277 $288,824

Purchases of property and equipment and

capitalized software (TTM) (63,505) (65,392) (82,403) (87,392) (88,292)

Free Cash Flow (TTM) $154,927 $123,563 $40,503 $92,885 $200,532

Net cash used in investing activities (TTM) ($96,315) $(204,244) $(222,880) $(216,897) $(229,456)

Net cash used in financing activities (TTM) $(81,697) $(113,847) $(220,659) $(228,512) $(194,156)

The following is a reconciliation of free cash flow (TTM) to the most comparable U.S. GAAP financial measure, “Net cash provided by operating activities (TTM)”:

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