GRUB
$101.78
Grubhub
($1.31)
(1.27%)
Earnings Details
1st Quarter March 2018
Tuesday, May 01, 2018 9:00:00 AM
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Summary

Grubhub Beats

Grubhub (GRUB) reported 1st Quarter March 2018 earnings of $0.57 per share on revenue of $232.6 million. The consensus earnings estimate was $0.40 per share on revenue of $229.1 million. The Earnings Whisper number was $0.43 per share. Revenue grew 49.0% on a year-over-year basis.

The company said it expects second quarter revenue of $228.0 million to $236.0 million. The current consensus revenue estimate is $226.9 million for the quarter ending June 30, 2018. The company also said it expects 2018 revenue of $930.0 million to $965.0 million. The company's previous guidance was revenue of $910.0 million to $960.0 million and the current consensus estimate is revenue of $947.9 million for the year ending December 31, 2018.

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

Results
Reported Earnings
$0.57
Earnings Whisper
$0.43
Consensus Estimate
$0.40
Reported Revenue
$232.6 Mil
Revenue Estimate
$229.1 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Grubhub Reports Record First Quarter Results

CHICAGO, May 1, 2018 /PRNewswire/ -- Grubhub Inc. (NYSE: GRUB), the nation's leading online and mobile food-ordering and delivery marketplace, today announced financial results for the first quarter ended March 31, 2018. For the first quarter, the Company posted revenues of $232.6 million, which is a 49% year-over-year increase from $156.1 million in the first quarter of 2017. Gross Food Sales grew 39% year-over-year to $1.2 billion, up from $898 million in the year-ago period.

"Our team executed well in the first quarter, making meaningful progress toward our most significant goals for 2018. We've already launched dozens of new delivery markets, completed our Yelp and Eat24 integrations a quarter earlier than expected, and attracted a record quarterly number of organic new diners," said Grubhub CEO Matt Maloney. "Our restaurant partnerships are broader and deeper than ever before, increasing our value to diners and driving sustained diner and order growth."

First Quarter 2018 Highlights

The following results reflect the financial performance and key operating metrics of our business for the three months ended March 31, 2018, as compared to the same period in 2017.

First Quarter Financial Highlights

  • Revenues: $232.6 million, a 49% year-over-year increase from $156.1 million in the first quarter of 2017.
  • Net Income: $30.8 million, or $0.34 per diluted share, a 74% year-over-year increase from $17.7 million, or $0.20 per diluted share, in the first quarter of 2017.
  • Non-GAAP Adjusted EBITDA: $64.1 million, a 51% year-over-year increase from $42.5 million in the first quarter of 2017.
  • Non-GAAP Net Income: $47.2 million, or $0.52 per diluted share, an 88% year-over-year increase from $25.1 million, or $0.29 per diluted share, in the first quarter of 2017.

First Quarter Key Business Metrics Highlights

  • Active Diners were 15.1 million, a 72% year-over-year increase from 8.8 million Active Diners in the first quarter of 2017.
  • Daily Average Grubs (DAGs) were 436,900, a 35% year-over-year increase from 324,600 DAGs in the first quarter of 2017.
  • Gross Food Sales were $1.2 billion, a 39% year-over-year increase from $898 million in the first quarter of 2017.

"Organic DAG growth accelerated for the second quarter in a row, fueled by the most comprehensive restaurant marketplace and our efficient delivery," said Grubhub President and CFO Adam DeWitt. "Our scale continues to generate improving profitability, leading to strong EBITDA per order of $1.63 during the first quarter, even as we push hard on delivery market expansion and spreading diner awareness."

Second Quarter and Full Year 2018 Guidance

Based on information available as of May 1, 2018, the Company is providing the following financial guidance for the second quarter and full year of 2018:


Second Quarter 2018


Full Year 2018


(in millions)

Expected Revenue range

$228 - $236


$930 - $965

Expected Adjusted EBITDA range

$59 - $65


$242 - $262

First Quarter 2018 Financial Results Conference Call 
Grubhub will webcast a conference call today at 9 a.m. CT to discuss the first 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 until May 15, 2018.

About Grubhub
Grubhub (NYSE: GRUB) is the nation's leading online and mobile takeout food-ordering 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 80,000 restaurant partners in over 1,600 U.S. cities and London. The Grubhub portfolio of brands includes Grubhub, Seamless, 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 acquisition of Eat24 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 March 31, 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 March 31,


2018


2017

Revenues

$

232,570


$

156,134

Costs and expenses:






Operations and support


96,283



59,519

Sales and marketing


48,756



35,438

Technology (exclusive of amortization)


17,331



13,192

General and administrative


17,697



13,181

Depreciation and amortization


20,951



10,040

Total costs and expenses


201,018



131,370

Income from operations


31,552



24,764

Interest (income) expense - net


1,022



(221)

Income before provision for income taxes


30,530



24,985

Income tax (benefit) expense


(236)



7,270

Net income attributable to common stockholders

$

30,766


$

17,715

Net income per share attributable to common stockholders:






Basic

$

0.35


$

0.21

Diluted

$

0.34


$

0.20

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






Basic


87,085



85,874

Diluted


90,091



87,120

 

KEY OPERATING METRICS



Three Months Ended March 31,


2018


2017

Active Diners (000s)


15,078



8,751

Daily Average Grubs


436,900



324,600

Gross Food Sales (millions)

$

1,245.0


$

898.1

 

GRUBHUB INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)








March 31, 2018


December 31, 2017

ASSETS






CURRENT ASSETS:






Cash and cash equivalents

$

272,258


$

234,090

Short-term investments


16,052



23,605

Accounts receivable, less allowances for doubtful accounts


100,129



95,970

Prepaid expenses and other current assets


9,847



6,818

Total current assets


398,286



360,483

PROPERTY AND EQUIPMENT:






Property and equipment, net of depreciation and amortization


79,399



71,384

OTHER ASSETS:






Other assets


6,697



6,487

Goodwill


589,862



589,862

Acquired intangible assets, net of amortization


504,011



515,553

Total other assets


1,100,570



1,111,902

TOTAL ASSETS

$

1,578,255


$

1,543,769

LIABILITIES AND STOCKHOLDERS' EQUITY






CURRENT LIABILITIES:






Restaurant food liability

$

126,853


$

119,922

Accounts payable


12,202



7,607

Accrued payroll


9,897



13,186

Taxes payable


1,514



3,109

Short-term debt


4,688



3,906

Other accruals


34,237



26,818

Total current liabilities


189,391



174,548

LONG-TERM LIABILITIES:






Deferred taxes, non-current


71,316



74,292

Other accruals


17,207



7,468

Long-term debt


143,121



169,645

Total long-term liabilities


231,644



251,405

STOCKHOLDERS' EQUITY:






Common stock, $0.0001 par value


9



9

Accumulated other comprehensive loss


(872)



(1,228)

Additional paid-in capital


856,443



849,043

Retained earnings


301,640



269,992

Total Stockholders' Equity

$

1,157,220


$

1,117,816

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

1,578,255


$

1,543,769

 

GRUBHUB INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)








Three Months Ended March 31,


2018


2017

CASH FLOWS FROM OPERATING ACTIVITIES






Net income

$

30,766


$

17,715

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






Depreciation


5,050



2,412

Provision for doubtful accounts


325



95

Deferred taxes


(2,976)



(4,741)

Amortization of intangible assets


15,901



7,628

Stock-based compensation


10,231



7,243

Deferred rent


1,633



58

Amortization of deferred loan costs


333



124

Other


(243)



(234)

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






Accounts receivable


3,918



(1,721)

Prepaid expenses and other assets


(3,516)



2,957

Restaurant food liability


6,885



11,297

Accounts payable


601



483

Accrued payroll


(3,295)



(1,534)

Other accruals


5,887



9,808

Net cash provided by operating activities


71,500



51,590

CASH FLOWS FROM INVESTING ACTIVITIES






Purchases of investments


(10,537)



(57,783)

Proceeds from maturity of investments


18,166



55,833

Capitalized website and development costs


(6,262)



(4,150)

Purchases of property and equipment


(5,462)



(3,056)

Acquisitions of business, net of cash acquired


737



Acquisition of other intangible assets




(5,000)

Other cash flows from investing activities


16



91

Net cash used in investing activities


(3,342)



(14,065)

CASH FLOWS FROM FINANCING ACTIVITIES






Repayments of borrowings under the credit facility


(25,781)



Proceeds from exercise of stock options


6,948



1,584

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


(11,485)



(3,688)

Net cash used in financing activities


(30,318)



(2,104)

Net change in cash, cash equivalents, and restricted cash


37,840



35,421

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


356



97

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

$

276,435


$

277,732

SUPPLEMENTAL DISCLOSURE OF NON-CASH ITEMS






Cash paid for income taxes

$

227


$

746

 

GRUBHUB INC.

NON-GAAP FINANCIAL MEASURES RECONCILIATION

(in thousands, except per share data)



Three Months Ended March 31,


2018


2017

Net income

$

30,766


$

17,715

Income taxes


(236)



7,270

Interest (income) expense - net


1,022



(221)

Depreciation and amortization


20,951



10,040

EBITDA


52,503



34,804

Acquisition, restructuring and legal costs


1,329



409

Stock-based compensation


10,231



7,243

Adjusted EBITDA

$

64,063


$

42,456



Three Months Ended March 31,


2018


2017

Net income

$

30,766


$

17,715

Stock-based compensation


10,231



7,243

Amortization of acquired intangible assets


11,543



5,273

Acquisition, restructuring and legal costs


1,329



409

Income tax adjustments


(6,677)



(5,519)

Non-GAAP net income

$

47,192


$

25,121

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


90,091



87,120

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

$

0.52


$

0.29

 


Guidance


Three Months Ended
June 30, 2018


Year Ended
December 31, 2018


Low


High


Low


High


(in millions)

Net income

$

19.5


$

23.8


$

79.8


$

94.2

Income taxes


7.5



9.2



30.9



36.5

Interest expense ? net


1.0



1.0



4.0



4.0

Depreciation and amortization


19.0



19.0



80.0



80.0

EBITDA


47.0



53.0



194.7



214.7

Acquisition and restructuring costs






1.3



1.3

Stock-based compensation


12.0



12.0



46.0



46.0

Adjusted EBITDA

$

59.0


$

65.0


$

242.0


$

262.0

 

Grubhub logo. (PRNewsFoto/GrubHub)

 

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SOURCE Grubhub Inc.