Digital coupons take byte out of print

Traditional preprint circulars continue to dominate many retailers’ promotional offerings but digital coupon momentum is accelerating judging from strong 2014 results at Coupons.com.

Total revenue in the company’s fourth quarter ended Dec. 31, 2014 increased 14% to $60 million and full year revenue increased 32% to $221.8 million. Total digital coupon transactions in 2014 increased 23% to 1.6 billion.

"2014 marked a very successful year, delivering on several key milestones and laying the foundation for continued growth," said Steven Boal, president and CEO of Coupons.com, referencing what he called solid momentum in all areas of the business. “Our Retailer iQ platform is performing well, demonstrating scale in transaction volumes, consumer adoption, and mobile usage. As we enter 2015, we're excited about the business and our position as a leader in the transformational shift from offline to digital. We believe our focus on data analytics, scaling our network, and mobile engagement will continue to drive our business as we digitally connect retailers, brands and shoppers.”

While revenues grew in the fourth quarter and the full year, Coupons.com continue to report losses on both a reported and adjusted basis. In the fourth quarter, the net loss was $1.7 million, which included $7.8 million in stock-based compensation expense. On an adjusted basis, the company had a $1.5 million profit which included $1.6 million in stock-based compensation. The full year net loss was $23.4 million, which included $35.5 million in stock-based compensation expense.

"We are very pleased with our performance for the year, although, Q4 was slightly impacted by promotions revenue when a few large CPGs did not repeat December holiday campaigns they ran in 2013. However, we continued to see significant operating leverage improvement in the fourth quarter, demonstrating strength in the model," said Mir Aamir, CFO and COO of Coupons.com. "We are excited about the many benefits our Retailer iQ platform brings and, for 2015, anticipate a faster growth rate in the second half of 2015 as scale in Retailer iQ continues to build."

Retailer iQ is a mobile first platform Coupons.com launched last year to enable retailers to engage shoppers in a personalized and targeted way using shopper and behavioral data. As retailers go live on the platform and begin marketing the program to their customers, the platform begins to scale, according to Coupons.com. Shopper adoption rates continued to increase in the fourth quarter, with digital transactions from Retailer iQ increasing 86% from the prior quarter.

Retailers live on the platform are also seeing benefits from their digital engagement efforts such as basket size increases from those shoppers using Retailer iQ as compared with shoppers that are not engaged on the platform, according to the company.