Now, I will turn the call over to Andrew.
Andrew D. Mason
Thank you, Kartik. Q2 was a solid quarter for Groupon. Total revenues grew to $568 million, that represents 53% growth excluding a $32 million unfavorable impact from foreign exchange. Operating income was $46 million compared with a loss of $101 million in the second quarter of last year.
Before I get into the details, I'll call out a few more highlights. Gross billings were up 47% year-over-year, excluding FX, to $1.29 billion. North American revenue growth was 66% year-over-year, driven in part by demand in our burgeoning goods business. Weakness in our European markets, which comprised the majority of our international business today, created a significant drag on performance with over $70 million of impact on gross billings quarter-over-quarter. While macroeconomic factors did not help our performance in Europe, we believe there are a number of opportunities within our control that can improve our performance, which I'll discuss momentarily.We reported second quarter GAAP EPS of $0.04 and non-GAAP EPS of $0.08, both of which include some nonrecurring items that Jason will cover. Excluding nonrecurring items, non-GAAP EPS was $0.04.Finally, for the eighth time in a row, we ended this quarter with more cash than when we started, generating $49 million of free cash flow in Q2. This further strengthens our balance sheet, which had $1.2 billion of cash and no long-term debt as of June 30.Now I'd like to go into detail on 4 different topics: factors affecting our performance in Europe; our North American segment results; marketing efficiency; and technology.Let's start with Europe. We are exiting a period of historic growth rates in our international segment. Since we expanded outside of North America in 2010, our business grew by nearly 10x in its first full year from just over $250 million in gross billings to nearly $2.5 billion at the end of 2011.
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