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COMPENSATION ARRANGEMENTS | 12 Months Ended
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Dec. 31, 2024
Share-Based Payment Arrangement [Abstract] |
COMPENSATION ARRANGEMENTS | COMPENSATION ARRANGEMENTS Groupon, Inc. Stock Plan In August 2011, we established the 2011 Plan under which options, RSUs, PSUs and 2024 Executive PSUs for up to 13,775,000 shares of Common Stock are authorized for future issuance to employees, consultants and directors. The 2011 Plan is administered by the Compensation Committee. In June 2024, at the Company's annual meeting of stockholders, the Company's stockholders approved an amendment to the 2011 Plan to increase the number of authorized shares by 7,000,000. Accordingly, a total of 20,775,000 shares of Common Stock have been authorized for issuance under the 2011 Plan. As of December 31, 2024, 5,843,911 shares of Common Stock were available for future issuance under the 2011 Plan. The stock-based compensation expense, net of capitalization related to stock awards issued under the 2011 Plan are presented within the following line items of the Consolidated Statements of Operations for the years ended December 31, 2024, 2023 and 2022 (in thousands):
| Year Ended December 31,
| 2024 |  | 2023 |  | 2022
Cost of revenue | $ | 121 |  |  | $ | 119 |  |  | $ | 395 |
Marketing | 52 |  |  | 53 |  |  | 1,054 |
Selling, general and administrative | 26,561 |  |  | 14,309 |  |  | 28,557 |
Total stock-based compensation expense (1) | $ | 26,734 |  |  | $ | 14,481 |  |  | $ | 30,006 |
(1) Excludes expense related to the 2024 Executive PSUs that are required to be settled in cash. Employee Stock Purchase Plan The ESPP authorizes us to grant up to 1,000,000 shares of Common Stock under that plan. For the years ended December 31, 2024, 2023 and 2022, 11,612, 45,879 and 83,551 shares of Common Stock were issued under the ESPP. Restricted Stock Units The RSUs generally have vesting periods between one and four years and are amortized on a straight-line basis over their requisite service period. The table below summarizes RSUs activity under the 2011 Plan for the year ended December 31, 2024:
| RSUs |  | Weighted- Average Grant Date Fair Value (per share)
Unvested at December 31, 2023 | 745,840 |  |  | $ | 10.61 |
Granted | 760,858 |  |  | 10.56 |
Vested | (607,188) |  |  | 8.95 |
Forfeited | (188,164) |  |  | 12.51 |
Unvested at December 31, 2024 | 711,346 |  |  | $ | 11.18 |
The weighted-average grant date fair value of RSUs granted in 2023 and 2022 was $5.26 and $16.95. The fair value of RSUs that vested during each of the three years ended December 31, 2024, 2023 and 2022 was $8.1 million, $8.9 million and $15.6 million. As of December 31, 2024, $5.4 million of unrecognized compensation costs related to unvested employee RSUs are expected to be recognized over a remaining weighted-average period of 1.28 years. Stock Options On March 30, 2023, we issued 3,500,000 units of stock options with a per share value of $0.95, a strike price of $6.00 and vesting over two years. The exercise price of stock options granted is equal to the fair market value of the underlying stock on the date of grant. The contractual term for these stock options expires three years from the grant date. The fair value of stock options on the grant date is amortized on a straight-line basis over the requisite service period. The fair value of stock options granted is estimated on the date of grant using the Black-Scholes-Merton option-pricing model. Expected volatility is based on Groupon's historical volatility over the estimated expected life of the stock options. The expected term represents the period of time the stock options are expected to be outstanding. The risk-free interest rate is based on yields on U.S. Treasury STRIPS with maturity similar to the estimated expected life of the stock options. The weighted-average assumptions for stock options granted are outlined in the following table:
Dividend yield | 0.0 | %
Risk-free interest rate | 4.1 | %
Expected term (in years) | 2.00
Expected volatility | 78.2 | %
There were no stock options granted or exercised for the year ended December 31, 2024 and 2022. The total intrinsic value of options that were exercised during the year ended December 31, 2023 was $2.0 million.
| Options |  | Weighted-Average Exercise Price |  | Weighted-Average Remaining Contractual Term (in years) |  | Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2023(1) | 3,062,500 |  |  | $ | 6.00 |  |  | 2.25 |  | $ | 20,948 |
Outstanding at December 31, 2024 | 3,062,500 |  |  | 6.00 |  |  | 1.25 |  | 18,834 |
Exercisable at December 31, 2024 | 2,625,000 |  |  | $ | 6.00 |  |  | 1.25 |  | $ | 16,144 |
(1) Consists of 2,187,500 outstanding (unvested) stock options and 875,000 exercisable stock options as of December 31, 2023, as presented within our 2023 Annual Report on Form 10-K As of December 31, 2024, there was $0.4 million of total unrecognized compensation costs related to unvested stock options granted under the 2011 Plan. That cost is expected to be recognized over a weighted- average period of 0.25 years. The total fair value of shares vested during the years ended December 31, 2024, 2023 and 2022 was $2.2 million, $0.8 million and $0.0 million. These stock options were granted to our CEO, who is based in the Czech Republic. Taxes on stock options in the Czech Republic are payable upon the sale of the underlying shares. The Company's tax liability is determined by multiplying the applicable tax rate by the difference between the value of the shares underlying the options on the date of exercise and the aggregate exercise price of the options. These taxes will be recognized in the Consolidated Statement of Operations upon any subsequent sale of the shares acquired upon exercise of the options. Performance Share Units Both our PSUs and the 2024 Executive PSUs are subject to continued service through the period dictated by the award and certification by the Compensation Committee that the specified performance and market conditions have been achieved. PSUs We have granted PSUs that vest in shares of our Common Stock upon the achievement of financial and operational targets specified in the respective award agreement. Based on our financial and operational results for the year ended December 31, 2023, 422,368 shares became issuable upon vesting of PSUs following the Compensation Committee's certification in April 2024. The table below summarizes PSU activity for the year ended December 31, 2024:
| PSUs |  | Weighted-Average Grant Date Fair Value (per unit)
Unvested at December 31, 2023 | 506,324 |  |  | $ | 6.34 |
Granted | 16,417 |  |  | 16.68 |
Vested | (422,368) |  |  | 6.35 |
Forfeited | (83,956) |  |  | 6.31 |
Unvested at December 31, 2024 | 16,417 |  |  | $ | 16.68 |
Maximum shares issuable upon vesting at December 31, 2024 | 24,626 |  |  |
As of December 31, 2024, there was no remaining unrecognized compensation cost related to unvested PSUs as the specified performance conditions were not met by the end of the performance period. As of December 31, 2024, the remaining weighted-average service period of the awards is 0.25 years. 2024 Executive PSUs Equity-classified 2024 Executive PSUs On June 12, 2024 and October 14, 2024, we granted 2024 Executive PSUs. The 2024 Executive PSUs may only be earned if certain stock price hurdles are met and the recipient satisfies certain service conditions. The achievement of the stock price hurdles is measured during a period beginning on February 2, 2025. The 2024 Executive PSUs have four stock price hurdles: $14.86, $20.14, $31.01, and $68.82. The shares awarded under the 2024 Executive PSU award are divided equally between four tranches corresponding to achievement of each stock price hurdle. Once the stock price hurdle is achieved, a service condition must also be met before the shares will vest. Specifically, the service condition for: (i) 33% of the award will be met after May 1, 2025; (ii) an additional 33% of the award will be met after May 1, 2026; and (ii) the final 34% of the award will be met after May 1, 2027. The 2024 Executive PSUs are subject to downward adjustments by the Compensation Committee. We determined these awards are subject to a market condition, and therefore used a Monte Carlo simulation to calculate the grant date fair value of the awards and the related derived service period. The requisite service condition period for each award exceeds the derived service period and therefore we recognize the expense over the requisite service period. The key inputs used in the Monte Carlo simulation and requisite service period for the equity-classified 2024 Executive PSUs by grant date are outlined in the following table:
| Equity-classified 2024 Executive PSUs
| June 12, 2024 |  | October 14, 2024
Dividend yield | 0.00 | % |  | 0.00 | %
Risk-free interest rate | 4.46 | % |  | 3.86 | %
Expected volatility | 95.73 | % |  | 98.70 | %
Requisite service period (in years) | 2.88 |  | 2.54
The table below summarizes equity-classified 2024 Executive PSU activity for the year ended December 31, 2024:
| Equity-classified 2024 Executive PSUs |  | Weighted-Average Grant Date Fair Value (per unit)
Unvested at December 31, 2023 | — |  |  | $ | — |
Granted | 3,698,064 |  |  | 13.29 |
Vested | — |  |  | — |
Forfeited | — |  |  | — |
Unvested at December 31, 2024 | 3,698,064 |  |  | $ | 13.29 |
As of December 31, 2024, we had unrecognized compensation costs related to unvested equity-classified 2024 Executive PSUs of $29.3 million. The cost is expected to be recognized over a remaining weighted-average period of 1.58 years. Liability-classified 2024 Executive PSUs In October 2024, the Compensation Committee approved a cash incentive award, which is required to be settled in cash upon vesting. The award is subject to the same market, performance and service conditions as the 2024 Executive PSUs. Upon vesting, the cash settlement, if any, will be calculated by multiplying the closing stock price on each vesting date by the number of shares that would have otherwise vested if the award provided for equity settlement. The Company's compensation plan limits cash awards to $5.0 million per annum with any amount in excess of $5.0 million to be paid the following year. The related award obligation is presented within Accrued expenses and other current liabilities The 2.54 year service condition period exceeds the derived service period and therefore we will recognize the expense over the 2.54 year requisite period. The total compensation expense to be recognized for the award will be based on remeasurement of the award at each interim reporting period through the final vesting date of May 1, 2027. The key inputs used in the initial Monte Carlo simulation on the grant date were the risk-free rate of 3.86%, dividend yield of 0.00%, and our stock price volatility of 98.70%. As of December 31, 2024, the 2.33 year service condition period exceeds the derived service period and therefore we will recognize the expense over the 2.33 year requisite period. The key inputs used in the Monte Carlo simulation as of December 31, 2024 were the risk-free rate of 4.21%, dividend yield of 0.00% and our stock price volatility of 100.27%. The table below summarizes liability-classified 2024 Executive PSU activity for the year ended December 31, 2024:
| Liability-classified 2024 Executive PSUs |  | Weighted-Average Grant Date Fair Value (per unit)
Unvested at December 31, 2023 | — |  |  | $ | — |
Granted | 261,365 |  |  | 6.70 |
Vested | — |  |  | — |
Forfeited | — |  |  | — |
Unvested at December 31, 2024 | 261,365 |  |  | $ | 6.70 |
As of December 31, 2024, we had unrecognized compensation costs related to unvested liability-classified 2024 Executive PSUs of $1.4 million. The cost is expected to be recognized over a remaining weighted-average period of 2.33 years. Defined Contribution Plans We have a 401(k) defined contribution retirement savings plan covering substantially all domestic employees. Each participant may elect to defer a portion of his or her compensation subject to certain limitations. We contribute up to 50% of the first 6% of eligible compensation contributed to the plan, subject to a 3 year graded vesting schedule. We also have several foreign defined contribution plans, which require us to contribute a percentage of participating employee's salary according to local regulations. During the years ended December 31, 2024, 2023 and 2022, our contributions for all plans were $2.9 million, $1.9 million and $5.8 million.

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