Groupon Charts New Course with AI-Native Transformation Amid Q1 Disappointment
Groupon's first quarter of 2026 may have fallen short of expectations, but the company has already begun to chart a new course through its transformative project, Foundry.
According to CEO Dušan Šenkypl, the company faced pressures in three areas: continued softness in managed and organic channels, a deceleration in North America Local due to slowed SMB merchant acquisition and the first negative quarter in enterprise since 2021, and a decline in health, beauty, and wellness after four consecutive quarters of growth. Severe winter weather added a near-term headwind.
However, Things to Do continued to grow across both North America and International, partly offsetting these pressures. April performance has improved, driven by North America Local re-acceleration, with managed channels recovering and email returning to positive year-over-year growth.
Importantly, none of the Q1 results yet reflect the operating impact of Project Foundry, a redesign of how Groupon works as an AI-native company. The project aims to embed AI agents into every function, giving business owners direct access to data, tools, and creative leverage needed to act quickly.
Šenkypl described Foundry as "the most consequential operating decision this management team has made since arriving at Groupon three years ago." He highlighted the company's progress in piloting AI voice agents that conduct outbound outreach to small and medium-sized merchants, with a goal of setting the majority of new merchant meetings by AI voice agents by the end of 2026.
Groupon's marketing teams are also operating an AI-driven stack across SEM and SEO, continuously evaluating campaign performance, generating creative variants, and running experiments at a pace not previously possible.
While Q1 fell short of expectations, with global billings declining 1% year-over-year to $383 million and revenue remaining flat at $117 million within guidance range, the company remains confident in its ability to rebound in the second half. The CEO emphasized that these early indicators validate the work done on the customer data platform and AI-driven content.
