Groupon actually lost $413 million in 2010.
Diving into the S-1, it turned out that Groupon only considered itself profitable because it used a peculiar accounting metric of its own creation — adjusted consolidated segment operating income, or ACSOI.
Basically, Groupon was taking the money it was spending on advertising to acquire new subscribers to its email and not counting that money as a quarterly, recurring expense — but as a one-time, capital expense, the way Google might account for the cost of building a new server farm.
Groupon was saying that ACSOI helped it figure out the ratio between the amount of money it needed to spend on marketing to acquire a subscriber and how much that subscriber would be worth to the company over the long haul.
But marketing expenses are not typically accounted for this way, and people looked at Groupon as though it were trying to pull a fast one.