Press Release Details

Grubhub Reports Record Fourth Quarter And Full Year 2016 Results

02/08/2017

Grubhub generates 38% revenue growth in the fourth quarter

CHICAGO, Feb. 8, 2017 /PRNewswire/ -- Grubhub Inc. (NYSE: GRUB), the nation's leading takeout marketplace, today announced financial results for the quarter and year ended Dec. 31, 2016. Orders grew 21% year-over-year, and the Company posted quarterly revenues of $137.5 million, which is a 38% year-over-year increase from $100.0 million in the fourth quarter of 2015.

"Grubhub had a transformative year in 2016. We dramatically improved our product and reaccelerated order growth. Fueled by data-driven product enhancements, substantial strides in delivery, and a refreshed marketing approach, we exited the year growing DAGs faster than we did a year ago," said Matt Maloney, Grubhub CEO. "With Grubhub delivery now in roughly 70 markets across the country and a significantly improved restaurant network, we enter 2017 well positioned to press our market leading advantage and give Grubhub growth momentum for years to come."

Fourth Quarter and Full Year 2016 Highlights

The following results reflect the financial performance and key operating metrics of our business for the three months and year ended Dec. 31, 2016, as compared to the same periods in 2015.

Fourth Quarter Financial Highlights

  • Revenues: $137.5 million, a 38% year-over-year increase from $100.0 million in the fourth quarter of 2015.
  • Net Income: $13.6 million, or $0.16 per diluted share, a 21% year-over-year increase from $11.3 million, or $0.13 per diluted share, in the fourth quarter of 2015.
  • Non-GAAP Adjusted EBITDA: $39.2 million, a 46% year-over-year increase from $26.8 million in the fourth quarter of 2015.
  • Non-GAAP Net Income: $19.8 million, or $0.23 per diluted share, a 19% year-over-year increase from $16.7 million, or $0.19 per diluted share, in the fourth quarter of 2015.

Fourth Quarter Key Business Metrics Highlights

  • Active Diners were 8.17 million, a 21% year-over-year increase from 6.75 million Active Diners in the fourth quarter of 2015.
  • Daily Average Grubs were 292,500, a 21% year-over-year increase from 241,800 Daily Average Grubs in the fourth quarter of 2015.
  • Gross Food Sales were $818 million, a 27% year-over-year increase from $643 million in the fourth quarter of 2015.

Full Year Financial Highlights

  • Revenues: $493.3 million, a 36% year-over-year increase from $361.8 million in 2015.
  • Net Income: $49.6 million, or $0.58 per diluted share, a 30% year-over-year increase from $38.1 million, or $0.44 per diluted share, in 2015.
  • Non-GAAP Adjusted EBITDA: $144.6 million, a 38% year-over-year increase from $105.0 million in 2015.
  • Non-GAAP Net Income: $76.6 million, or $0.89 per diluted share, a 32% year-over-year increase from $58.1 million, or $0.68 per diluted share.

Full Year Key Business Metrics Highlights

  • Active Diners were 8.17 million, a 21% year-over-year increase from 6.75 million Active Diners in 2015.
  • Daily Average Grubs were 274,800, a 21% year-over-year increase  from 227,100 Daily Average Grubs in 2015.
  • Gross Food Sales were $3.0 billion, a 27% year-over-year increase from $2.4 billion in 2015.

"Our rapid scaling in delivery combined with our substantial incremental margins helped Grubhub post record profits in 2016. Adjusted EBITDA grew 38% for the year, with Adjusted EBITDA per order growing 14% to $1.44 per order in 2016 from $1.27 the prior year," said Adam DeWitt, Grubhub CFO. "Throughout 2016 and into this year, we've been adding the highest quality restaurants in all of our markets to our vastly improved diner platform. We believe this formula will support us in driving growth across our network, while our scale will help us generate more cash flow per order over time."

First Quarter and Full Year 2017 Guidance

Based on information available as of Feb. 8, 2017, the Company is providing the following financial guidance for the first quarter and full year of 2017:


First Quarter 2017


Full Year 2017


(in millions)

Expected Revenue range

$148 - $156


$620 - $660

Expected Adjusted EBITDA range

$37 - $42


$165 - $190

 

Fourth Quarter 2017 Financial Results Conference Call 
Grubhub will webcast a conference call today at 9 a.m. CT to discuss the fourth quarter 2016 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 Feb. 22, 2017.

About Grubhub
Grubhub (NYSE: GRUB) is the nation's leading online and mobile takeout food-ordering marketplace with the most comprehensive network of restaurant partners and largest active diner base. Dedicated to moving eating forward and connecting diners with the food they love from their favorite local restaurants, the Company's platforms and services strive 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 50,000 restaurant partners in over 1,100 U.S. cities and London. The Grubhub portfolio of brands includes Grubhub, Seamless, AllMenus, MenuPages, LAbite, Restaurants on the Run, DiningIn and Delivered Dish.

Use of Forward Looking Statements
This press release contains forward-looking statements regarding management's future expectations, beliefs, intentions, goals, strategies, plans and prospects, including the expected financial performance of Grubhub following its recent acquisitions and investment in delivery. 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 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 Feb. 26, 2016 and our most recent Quarterly Report on Form 10-Q for the quarter ended Sept. 30, 2016, which are on file with the SEC and are available on the Investor Relations section of our website at http://investors.grubhub.com/. Additional information will be set forth in our Annual Report on Form 10-K that will be filed for the year ended Dec. 31, 2016, 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 assume 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 and restructuring costs, income taxes, 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 and restructuring 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 and restructuring, 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

December 31,



Year Ended

December 31,



2016



2015



2016



2015


Revenues

$

137,457



$

99,959



$

493,331



$

361,825


Costs and expenses:
















Sales and marketing


29,636




24,921




110,323




91,150


Operations and support


51,727




32,483




171,756




107,424


Technology (exclusive of amortization)


10,689




8,802




42,454




32,782


General and administrative


12,252




11,457




49,753




40,506


Depreciation and amortization


9,911




6,657




35,193




28,034


Total costs and expenses


114,215




84,320




409,479




299,896


Income before provision for income taxes


23,242




15,639




83,852




61,929


Provision for income taxes


9,605




4,351




34,295




23,852


Net income attributable to common stockholders

$

13,637



$

11,288



$

49,557



$

38,077


Net income per share attributable to common stockholders:
















Basic

$

0.16



$

0.13



$

0.58



$

0.45


Diluted

$

0.16



$

0.13



$

0.58



$

0.44


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
















Basic


85,608




84,823




85,069




84,076


Diluted


86,666




86,028




86,135




85,706


 

KEY OPERATING METRICS






Three Months Ended

 December 31,



Year Ended

December 31,




2016



2015



2016



2015


Active Diners (000s)



8,174




6,746




8,174




6,746


Daily Average Grubs



292,500




241,800




274,800




227,100


Gross Food Sales (millions)


$

817.7



$

642.5



$

2,998.1



$

2,353.6




















 


 

GRUBHUB INC.


CONSOLIDATED BALANCE SHEETS


(in thousands, except share data)



























December 31,

2016



December 31, 

2015


ASSETS








CURRENT ASSETS:








Cash and cash equivalents

$

239,528



$

169,293


Short term investments


84,091




141,448


Accounts receivable, less allowances for doubtful accounts


60,550




42,051


Prepaid expenses


12,168




3,482


Total current assets


396,337




356,274


PROPERTY AND EQUIPMENT:








Property and equipment, net of depreciation and amortization


46,555




19,082


OTHER ASSETS:








Other assets


4,530




3,105


Goodwill


436,455




396,220


Acquired intangible assets, net of amortization


313,630




285,567


Total other assets


754,615




684,892


TOTAL ASSETS

$

1,197,507



$

1,060,248


LIABILITIES AND STOCKHOLDERS' EQUITY








CURRENT LIABILITIES:








Restaurant food liability

$

83,349



$

64,326


Accounts payable


7,590




8,189


Accrued payroll


7,338




4,841


Taxes payable


865




426


Other accruals


11,348




11,830


Total current liabilities


110,490




89,612


LONG TERM LIABILITIES:








Deferred taxes, non-current


108,022




87,584


Other accruals


6,876




5,456


Total long term liabilities


114,898




93,040


STOCKHOLDERS' EQUITY:








Common stock, $0.0001 par value


9




8


Accumulated other comprehensive loss


(2,078)




(604)


Additional paid-in capital


805,731




759,292


Retained earnings


168,457




118,900


Total Stockholders' Equity

$

972,119



$

877,596


TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

1,197,507



$

1,060,248


 

GRUBHUB INC.


CONSOLIDATED STATEMENTS OF CASH FLOWS


(in thousands)













Year Ended December 31,




2016



2015


CASH FLOWS FROM OPERATING ACTIVITIES









Net income


$

49,557



$

38,077


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









Depreciation



8,921




5,085


Provision for doubtful accounts



1,102




850


Deferred taxes



1,027




(3,835)


Amortization of intangible assets



26,272




22,949


Stock-based compensation



23,559




13,450


Deferred rent



1,286




32


Other



(406)




529


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









Accounts receivable



(17,488)




(4,343)


Prepaid expenses and other assets



(8,765)




242


Restaurant food liability



16,451




(29,409)


Accounts payable



(3,204)




3,312


Accrued payroll



1,819




(2,104)


Other accruals



(2,453)




(80)


Net cash provided by operating activities



97,678




44,755


CASH FLOWS FROM INVESTING ACTIVITIES









Purchases of investments



(226,694)




(220,667)


Proceeds from maturity of investments



284,662




189,872


Capitalized website and development costs



(12,809)




(7,137)


Purchases of property and equipment



(24,087)




(4,150)


Acquisitions of businesses, net of cash acquired



(65,849)




(73,907)


Acquisition of other intangible assets



(250)





Other cash flows from investing activities



(492)




(408)


Net cash used in investing activities



(45,519)




(116,397)


CASH FLOWS FROM FINANCING ACTIVITIES









Repurchases of common stock



(14,774)





Proceeds from exercise of stock options



13,468




11,919


Excess tax benefits related to stock-based compensation



24,906




27,830


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



(2,779)




(345)


Payments for debt issuance costs



(1,477)





Net cash provided by financing activities



19,344




39,404


Net change in cash and cash equivalents



71,503




(32,238)


Effect of exchange rates on cash



(1,268)




(265)


Cash and cash equivalents at beginning of year



169,293




201,796


Cash and cash equivalents at end of the period


$

239,528



$

169,293


SUPPLEMENTAL DISCLOSURE OF NON CASH ITEMS









Fair value of common stock issued for acquisitions


$



$

15,980


Cash paid for income taxes



8,722





 

GRUBHUB INC.


NON-GAAP FINANCIAL MEASURES RECONCILIATION


(in thousands, except per share data)





Three Months Ended
December 31,



Year Ended
December 31,



2016



2015



2016



2015


Net income

$

13,637



$

11,288



$

49,557



$

38,077


Income taxes


9,605




4,351




34,295




23,852


Depreciation and amortization


9,911




6,657




35,193




28,034


EBITDA


33,153




22,296




119,045




89,963


Acquisition and restructuring costs


253




468




2,042




1,554


Stock-based compensation


5,804




4,072




23,559




13,450


Adjusted EBITDA

$

39,210



$

26,836



$

144,646



$

104,967









Three Months Ended
December 31,



Year Ended
December 31,



2016



2015



2016



2015


Net income

$

13,637



$

11,288



$

49,557



$

38,077


Stock-based compensation


5,804




4,072




23,559




13,450


Amortization of acquired intangible assets


4,801




4,774




20,871




18,236


Accelerated write-down of Seamless technology platform











1,897


Acquisition and restructuring costs


253




468




2,042




1,554


Income tax adjustments


(4,692)




(3,928)




(19,472)




(15,109)


Non-GAAP net income

$

19,803



$

16,674



$

76,557



$

58,105


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


86,666




86,028




86,135




85,706


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

$

0.23



$

0.19



$

0.89



$

0.68


 



Guidance




Three Months Ended

 March 31, 2017



Year Ended

December 31, 2017




Low



High



Low



High




(in millions)


Net income


$

12.5



$

15.5



$

58.6



$

73.5


Income taxes



8.5




10.5




39.9




50.0


Depreciation and amortization



9.5




9.5




39.0




39.0


EBITDA



30.5




35.5




137.5




162.5


Acquisition and restructuring costs













Stock-based compensation



6.5




6.5




27.5




27.5


Adjusted EBITDA


$

37.0



$

42.0



$

165.0



$

190.0


 

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/grubhub-reports-record-fourth-quarter-and-full-year-2016-results-300403842.html

SOURCE Grubhub Inc.

Dave Zaragoza, Corporate Finance & Investor Relations, ir@grubhub.com; Katie Norris, Press, press@grubhub.com