Groupon, the Web 2.0 company that pioneered a new way for customers to get discounts on products and services, reported a net loss of $42.7 million for Q4 2011 in their first earnings release since going public in early November of last year. While the net loss of $42.7 million is much better than the whopping $378.8 million lost in Q4 2010, analysts had expected that Groupon would turn a profit of 3 cents per share for Q4 2011. On the bad news, Groupon’s stock is down 14% in after-hours trading.
Though the quarterly loss is undesired, Groupon has some things to be happy about regarding their financials. Losses are decreasing each quarter (in Groupon’s S-1 filing with the SEC, the company reported a net loss in Q1 2011 of $146.5 million) and revenue increased 194% to $505.6 million over Q4 2010. This is quite remarkable considering the plethora of competitors (the most notable being Living Social) and minimal barriers to entry.
Groupon might finally be turning a corner toward profitability, but until they do, company executives are probably wishing they took Google’s $6 billion buyout offer.