GRUB
$87.87
Grubhub
$1.28
1.48%
Earnings Details
3rd Quarter September 2018
Thursday, October 25, 2018 9:00:00 AM
Tweet Share Watch
Summary

Grubhub Misses

Grubhub (GRUB) reported 3rd Quarter September 2018 earnings of $0.43 per share on revenue of $247.2 million. The consensus earnings estimate was $0.41 per share on revenue of $238.2 million. The Earnings Whisper number was $0.46 per share. Revenue grew 51.6% on a year-over-year basis.

The company said it expects fourth quarter revenue of $283.0 million to $293.0 million. The current consensus revenue estimate is $272.4 million for the quarter ending December 31, 2018.

GrubHub Inc provides an online and mobile platform for restaurant pick-up and delivery orders.

Results
Reported Earnings
$0.43
Earnings Whisper
$0.46
Consensus Estimate
$0.41
Reported Revenue
$247.2 Mil
Revenue Estimate
$238.2 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Grubhub Reports Record Third Quarter Results

CHICAGO, Oct. 25, 2018 /PRNewswire/ -- Grubhub Inc. (NYSE: GRUB), the nation's leading online and mobile food-ordering and delivery marketplace, today announced financial results for the third quarter ended Sept. 30, 2018. The Company posted revenues of $247 million, which is a 52% year-over-year increase from $163 million in the third quarter of 2017. Gross Food Sales grew 40% year-over-year to $1.2 billion, up from $867 million in the year ago period.

"We added more organic new diners this quarter than ever before, helping drive the highest organic DAG growth we've seen in a year and a half. Better restaurant selection, a more intelligent diner platform, and more strategic marketing continue to bring more high quality diners to Grubhub," said Matt Maloney, Grubhub's founder and chief executive officer. "With solid traction in new diner acquisition over multiple quarters and increased coverage across the country from our delivery expansion, we are in prime position to invest incrementally in advertising and accelerate online ordering adoption."

Third Quarter 2018 Highlights
The following results reflect the financial performance and key operating metrics of our business for the three months ended Sept. 30, 2018, as compared to the same period in 2017.

Third Quarter Financial Highlights

  • Revenues: $247.2 million, a 52% year-over-year increase from $163.1 million in the third quarter of 2017.
  • Net Income: $22.7 million, or $0.24 per diluted share, a 75% year-over-year increase from $13.0 million, or $0.15 per diluted share, in the third quarter of 2017.
  • Non-GAAP Adjusted EBITDA: $60.1 million, a 41% year-over-year increase from $42.7 million in the third quarter of 2017.
  • Non-GAAP Net Income: $42.2 million, or $0.45 per diluted share, a 72% year-over-year increase from $24.5 million, or $0.28 per diluted share, in the third quarter of 2017.

Third Quarter Key Business Metrics Highlights (excludes LevelUp impact in 2018)

  • Active Diners were 16.4 million, a 67% year-over-year increase from 9.8 million Active Diners in the third quarter of 2017.
  • Daily Average Grubs (DAGs) were 416,000, a 37% year-over-year increase from 304,500 DAGs in the third quarter of 2017.
  • Gross Food Sales were $1.2 billion, a 40% year-over-year increase from $867 million in the third quarter of 2017.

"We are excited to invest behind the diner and order momentum of the last several quarters.  We have significant opportunity to accelerate diner growth by broadening delivery coverage areas and increasing marketing spend," said Adam DeWitt, Grubhub's president and chief financial officer. "As a result, we are opportunistically investing an incremental $20–$30 million in marketing and delivery expansion in the fourth quarter, taking our total 2018 investment in growth to substantially more than $200 million.  The 200 total delivery markets we will launch in 2018 plus accelerated diner growth put us in a great position to capture takeout orders as they move online."

Fourth Quarter 2018 Guidance
Based on information available as of Oct. 25, 2018, the Company is providing the following financial guidance for the fourth quarter of 2018. This guidance excludes any impact from the potential acquisitions of Tapingo and certain assets of OrderUp, which have not yet closed and are subject to standard closing conditions:


Fourth Quarter 2018


(in millions)

Expected Revenue range

$283 - $293

Expected Adjusted EBITDA range

$40 - $50

Third Quarter 2018 Financial Results Conference Call 
Grubhub will webcast a conference call today at 9 a.m. CT to discuss the third quarter 2018 financial results. The webcast can be accessed on the Grubhub Investor Relations website at http://investors.grubhub.com, along with the Company's earnings press release and financial tables. A replay of the webcast will be available at the same website.

About Grubhub
Grubhub (NYSE: GRUB) is the nation's leading online and mobile food-ordering and delivery marketplace with the largest and most comprehensive network of restaurant partners, as well as the largest diner base. Dedicated to connecting diners with the food they love from their favorite local restaurants, Grubhub strives to elevate food ordering through innovative restaurant technology, easy-to-use platforms and an improved delivery experience. Grubhub is proud to work with more than 95,000 restaurant partners in over 1,700 U.S. cities and London. The Grubhub portfolio of brands includes Grubhub, Seamless, LevelUp, Eat24, AllMenus and MenuPages.

Use of Forward Looking Statements
This press release contains forward-looking statements regarding Grubhub, "the Company's" or our management's future expectations, beliefs, intentions, goals, strategies, plans and prospects, including the expected benefits to, and financial performance of, Grubhub following the acquisitions of Eat24 and LevelUp and its commercial agreements with Yelp and Yum! Brands. Such statements constitute "forward-looking statements", which are subject to the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve substantial known and unknown risks, uncertainties and assumptions that could cause actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by the forward-looking statements. Such risks and uncertainties include, but are not limited to, the matters set forth in the filings that we make with the Securities and Exchange Commission from time to time, including those set forth in the section entitled "Risk Factors" in our Annual Report on Form 10-K filed on February 28, 2018, which is on file with the SEC and is available on the Investor Relations section of our website at http://investors.grubhub.com. Additional information will be set forth in our Quarterly Report on Form 10-Q that will be filed for the quarter ended September 30, 2018, which should be read in conjunction with these financial results. Please also note that forward-looking statements represent management's beliefs and assumptions only as of the date of this press release. Except as required by law, we disclaim any intention to, and undertake no obligation to, publicly update these forward-looking statements, or to update the reasons actual results could differ materially from those anticipated in the forward-looking statements, even if new information becomes available in the future.

Use of Non-GAAP Financial Measures
Adjusted EBITDA, non-GAAP net income and non-GAAP net income per diluted share attributable to common stockholders are financial measures that are not calculated in accordance with accounting principles generally accepted in the United States, or GAAP.

We define Adjusted EBITDA as net income adjusted to exclude acquisition, restructuring and certain legal costs, income taxes, interest income and expense, depreciation and amortization and stock-based compensation expense. Non-GAAP net income and non-GAAP net income per diluted share attributable to common stockholders exclude acquisition, restructuring and certain legal costs, amortization of acquired intangible assets, stock-based compensation expense and other nonrecurring items as well as the income tax effects of these non-GAAP adjustments. We use these non-GAAP financial measures as key performance measures because we believe they facilitate operating performance comparisons from period to period by excluding potential differences primarily caused by variations in capital structures, tax positions, the impact of acquisitions, restructuring and certain legal costs, the impact of depreciation and amortization expense on our fixed assets and the impact of stock-based compensation expense. Adjusted EBITDA, non-GAAP net income and non-GAAP net income per diluted share attributable to common stockholders are not measurements of our financial performance under GAAP and should not be considered as an alternative to performance measures derived in accordance with GAAP.

See "Schedule of Non-GAAP Financial Measures Reconciliation" below for a reconciliation of net income to Adjusted EBITDA, non-GAAP net income and non-GAAP net income per diluted share attributable to common stockholders.

 

GRUBHUB INC.

STATEMENTS OF OPERATIONS

(in thousands, except per share data)






Three Months Ended

September 30,


Nine Months Ended
September 30,


2018


2017


2018


2017

Revenues

$

247,225


$

163,059


$

719,536


$

477,987

Costs and expenses:












Operations and support


111,511



65,352



310,239



187,795

Sales and marketing


49,426



35,138



144,413



105,346

Technology (exclusive of amortization)


21,258



14,292



57,306



41,560

General and administrative


22,195



18,617



58,072



46,627

Depreciation and amortization


20,987



12,613



61,787



33,067

Total costs and expenses


225,377



146,012



631,817



414,395

Income from operations


21,848



17,047



87,719



63,592

Interest (income) expense - net


337



(373)



1,367



(908)

Income before provision for income taxes


21,511



17,420



86,352



64,500

Income tax (benefit) expense


(1,234)



4,432



2,721



19,043

Net income attributable to common stockholders

$

22,745


$

12,988


$

83,631


$

45,457

Net income per share attributable to common stockholders:












Basic

$

0.25


$

0.15


$

0.94


$

0.53

Diluted

$

0.24


$

0.15


$

0.91


$

0.52

Weighted-average shares used to compute net income per share attributable to common stockholders:












Basic


90,494



86,449



89,027



86,162

Diluted


93,678



88,543



92,091



87,788

 

KEY OPERATING METRICS








Three Months Ended
September 30,


Nine Months Ended
September 30,



2018(a)


2017


2018(a)


2017

Active Diners (000s)



16,379



9,806



16,379



9,806

Daily Average Grubs



416,000



304,500



425,300



314,200

Gross Food Sales (millions)


$

1,214.5


$

867.3


$

3,679.9


$

2,645.1

(a)    

Excludes the impact of the LevelUp acquisition, which closed on September 13, 2018.

 

GRUBHUB INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)




















September 30, 2018


December 31, 2017

ASSETS






CURRENT ASSETS:






Cash and cash equivalents

$

294,550


$

234,090

Short-term investments


16,687



23,605

Accounts receivable, less allowances for doubtful accounts


120,306



87,377

Income tax receivable


14,125



8,593

Prepaid expenses and other current assets


17,024



6,818

Total current assets


462,692



360,483

PROPERTY AND EQUIPMENT:






Property and equipment, net of depreciation and amortization


105,434



71,384

OTHER ASSETS:






Other assets


11,666



6,487

Goodwill


885,350



589,862

Acquired intangible assets, net of amortization


520,867



515,553

Total other assets


1,417,883



1,111,902

TOTAL ASSETS

$

1,986,009


$

1,543,769

LIABILITIES AND STOCKHOLDERS' EQUITY






CURRENT LIABILITIES:






Restaurant food liability

$

122,900


$

119,922

Accounts payable


17,184



7,607

Accrued payroll


19,036



13,186

Taxes payable


1,566



3,109

Short-term debt


6,250



3,906

Other accruals


33,186



26,818

Total current liabilities


200,122



174,548

LONG-TERM LIABILITIES:






Deferred taxes, non-current


44,073



74,292

Other accruals


19,683



7,468

Long-term debt


290,073



169,645

Total long-term liabilities


353,829



251,405

STOCKHOLDERS' EQUITY:






Common stock, $0.0001 par value


9



9

Accumulated other comprehensive loss


(1,620)



(1,228)

Additional paid-in capital


1,079,165



849,043

Retained earnings


354,504



269,992

Total Stockholders' Equity

$

1,432,058


$

1,117,816

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

1,986,009


$

1,543,769

 

GRUBHUB INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)










Nine Months Ended
September 30,



2018


2017

CASH FLOWS FROM OPERATING ACTIVITIES







Net income


$

83,631


$

45,457

Adjustments to reconcile net income to net cash from operating activities:







Depreciation



16,189



7,949

Provision for doubtful accounts



741



338

Deferred taxes



2,048



(2,162)

Amortization of intangible assets



45,598



25,118

Stock-based compensation



36,445



23,913

Deferred rent



3,975



130

Amortization of deferred loan costs



588



349

Other



(732)



(823)

Change in assets and liabilities, net of the effects of business acquisitions:







Accounts receivable



(17,969)



(15,903)

Income taxes receivable



(5,533)



3,795

Prepaid expenses and other assets



(15,455)



4,193

Restaurant food liability



1,608



4,591

Accounts payable



5,265



2,965

Accrued payroll



5,311



1,575

Other accruals



3,752



6,351

Net cash provided by operating activities



165,462



107,836

CASH FLOWS FROM INVESTING ACTIVITIES







Acquisitions of businesses, net of cash acquired



(366,856)



(51,859)

Purchases of investments



(47,642)



(145,667)

Proceeds from maturity of investments



54,916



164,733

Capitalized website and development costs



(21,471)



(15,281)

Purchases of property and equipment



(31,984)



(12,549)

Acquisition of other intangible assets





(25,147)

Other cash flows from investing activities



38



589

Net cash used in investing activities



(412,999)



(85,181)

CASH FLOWS FROM FINANCING ACTIVITIES







Proceeds from the issuance of common stock



200,000



Proceeds from borrowings under the Credit Agreement



175,000



Repayments of borrowings under the Credit Agreement



(52,344)



Proceeds from exercise of stock options



13,010



12,505

Taxes paid related to net settlement of stock-based compensation awards



(28,238)



(7,696)

Payment for debt issuance costs





(285)

Net cash provided by financing activities



307,428



4,524

Net change in cash, cash equivalents, and restricted cash



59,891



27,179

Effect of exchange rates on cash, cash equivalents and restricted cash



(406)



709

Cash, cash equivalents, and restricted cash at beginning of year



238,239



242,214

Cash, cash equivalents, and restricted cash at end of the period


$

297,724


$

270,102

SUPPLEMENTAL DISCLOSURE OF NON-CASH ITEMS







Cash paid for income taxes


$

7,508


$

16,340

 

GRUBHUB INC.

NON-GAAP FINANCIAL MEASURES RECONCILIATION

(in thousands, except per share data)






Three Months Ended
September 30,


Nine Months Ended
September 30,


2018


2017


2018


2017


Net income

$

22,745


$

12,988


$

83,631


$

45,457


Income taxes


(1,234)



4,432



2,721



19,043


Interest (income) expense - net


337



(373)



1,367



(908)


Depreciation and amortization


20,987



12,613



61,787



33,067


EBITDA


42,835



29,660



149,506



96,659


Acquisition, restructuring and legal costs


3,024



4,539



5,665



6,443


Stock-based compensation


14,275



8,475



36,445



23,913


Adjusted EBITDA

$

60,134


$

42,674


$

191,616


$

127,015







Three Months Ended
September 30,


Nine Months Ended
September 30,


2018


2017


2018


2017


Net income

$

22,745


$

12,988


$

83,631


$

45,457


Stock-based compensation


14,275



8,475



36,445



23,913


Amortization of acquired intangible assets


10,037



6,455



31,107



16,828


Acquisition, restructuring and legal costs


3,024



4,539



5,665



6,443


Income tax adjustments


(7,854)



(7,936)



(21,160)



(19,770)


Non-GAAP net income

$

42,227


$

24,521


$

135,688


$

72,871


Weighted-average diluted shares used to compute net income per share attributable to common stockholders


93,678



88,543



92,091



87,788


Non-GAAP net income per diluted share attributable to common stockholders

$

0.45


$

0.28


$

1.47


$

0.83


 


Guidance



Three Months Ended

December 31, 2018



Low



High



(in millions)


Net income

$

4.3



$

11.4


Income taxes


1.7




4.6


Interest expense ? net


(2.0)




(2.0)


Depreciation and amortization


22.0




22.0


EBITDA


26.0




36.0


Acquisition and restructuring costs






Stock-based compensation


14.0




14.0


Adjusted EBITDA

$

40.0



$

50.0


 

Grubhub logo. (PRNewsFoto/GrubHub)

 

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/grubhub-reports-record-third-quarter-results-300737495.html

SOURCE Grubhub