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