Press Release Details

GrubHub Reports Second Quarter Results

07/28/2015

GrubHub generates 47% revenue growth and 68% adjusted EBITDA growth in the second quarter

CHICAGO, July 28, 2015 /PRNewswire/ -- GrubHub Inc. (NYSE: GRUB), the leading takeout marketplace, today announced financial results for the quarter ended June 30, 2015. 

"We delivered significant year-over-year growth in the seasonally slower second quarter, driven by strong performance in all of our markets across the country," said Matt Maloney, CEO.  "GrubHub's almost 6 million diners ordered more than 20 million times during the quarter, driving revenue growth of 47 percent year-over-year."

Second Quarter 2015 Highlights

The following results reflect the financial performance and key operating metrics of our business for the three months ended June 30, 2015 as compared to the same period in 2014. 

Second Quarter Financial Highlights

  • Revenues: $88.0 million, a 47% year-over-year increase from $60.0 million in the second quarter of 2014.
  • Non-GAAP Adjusted EBITDA: $28.4 million, a 68% year-over-year increase from $16.9 million in the second quarter of 2014.
  • Net Income: $9.4 million, or $0.11 per diluted share, a 247% year-over-year increase from $2.7 million, or $0.03 per diluted share, in the second quarter of 2014.
  • Non-GAAP Net Income: $15.0 million, or $0.17 per diluted share, a 146% year-over-year increase from $6.1 million, or $0.07 per diluted share.

Second Quarter Key Business Metrics Highlights

  • Active Diners were 5.93 million, a 42% year-over-year increase from 4.19 million Active Diners in the second quarter of 2014.
  • Daily Average Grubs were 220,100, a 26% year-over-year increase from 174,500 Daily Average Grubs in the second quarter of 2014.
  • Gross Food Sales were $568 million, a 34% year-over-year increase from $423 million in the second quarter of 2014.

Seamless Upgrade

"In addition to strong financial performance, we released a significant upgrade to the Seamless consumer interface, which brings the best performing elements of all of our platforms into one consolidated experience," continued Maloney.  "The new interface has an updated design and is cleaner, more intuitive and importantly, mobile-centric. We are also now on a single technology stack, which will allow us to scale more easily and will dramatically improve our time to market for new features and functionality."

Delivery Expansion

"We are making great strides expanding our delivery capabilities.  By next week, we will have doubled the number of markets where we offer delivery in the months following our February acquisitions of two of the nation's leading restaurant delivery companies," noted Maloney.  "We are proud that more than half of our 6 million diners live in markets that have GrubHub delivery right now."

Second Quarter and Full Year 2015 Guidance

Based on information available as of July 28, 2015, the company is providing the following financial guidance for the second quarter and full year of 2015:


Third Quarter 2015


Full Year 2015


(in millions)

Expected revenue range

$85 - $87


$358 - $364

Expected Adjusted EBITDA range

$23 - $25


$104 - $112

Second Quarter 2015 Financial Results Conference Call: GrubHub will webcast a conference call today at 9 a.m. CT to discuss the second quarter 2015 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 August 11, 2015.

About GrubHub
GrubHub (NYSE: GRUB) is one of the nation's largest portfolios of online and mobile takeout food ordering and delivery services. Connecting diners to more than 35,000 restaurants in more than 900 U.S. cities and London, the company's platforms and services strive to make takeout better through innovative restaurant technology, easy-to-use platforms and an improved delivery experience. The GrubHub Inc. portfolio of brands includes GrubHub, Seamless, AllMenus, MenuPages, Restaurants on the Run and DiningIn.

Use of Forward Looking Statements:
This press release contains forward-looking statements regarding our 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 March 5, 2015, 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 Quarterly Report on Form 10-Q that will be filed for the quarter ended June 30, 2015, which should be read in conjunction with these financial results. Please also note that forward-looking statements represent our 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.

CONDENSED STATEMENTS OF OPERATIONS – UNAUDITED
(in thousands, except per share data)






Three Months Ended

June 30,


Six Months Ended
June 30,


2015


2014


2015


2014

Revenues

$

87,955


$

60,006


$

176,204


$

118,619

Costs and expenses:












Sales and marketing


20,679



16,168



44,786



32,285

Operations and support


24,603



14,734



47,304



29,841

Technology (exclusive of amortization)


7,902



6,066



15,568



11,413

General and administrative


9,745



8,620



18,846



16,944

Depreciation and amortization


8,829



5,615



15,078



11,130

Total costs and expenses


71,758



51,203



141,582



101,613

Income before provision for income taxes


16,197



8,803



34,622



17,006

Provision for income taxes


6,845



6,111



14,700



9,961

Net income

$

9,352


$

2,692


$

19,922


$

7,045

Net income per share attributable to common stockholders:












Basic

$

0.11


$

0.03


$

0.24


$

0.10

Diluted

$

0.11


$

0.03


$

0.23


$

0.09

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












Basic


84,116



78,042



83,449



66,626

Diluted


85,833



82,074



85,465



79,854



KEY OPERATING METRICS






Three Months Ended
June 30,


Six Months Ended
June 30,


2015


2014


2015


2014

Active Diners (000s)


5,932



4,192



5,932



4,192

Daily Average Grubs


220,100



174,500



227,300



177,800

Gross Food Sales (millions)

$

567.6


$

422.6


$

1,157.5


$

855.6













 

GRUBHUB INC.

CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED

(in thousands, except share data)








June 30, 2015


December 31, 2014

ASSETS






CURRENT ASSETS:






Cash and cash equivalents

$

195,595


$

201,796

Short term investments


111,836



111,341

Accounts receivable, less allowances for doubtful accounts


46,228



36,127

Deferred taxes, current


499



825

Prepaid expenses


3,655



2,940

Total current assets


357,813



353,029

PROPERTY AND EQUIPMENT:






Property and equipment, net of depreciation and amortization


14,975



16,003

OTHER ASSETS:






Other assets


3,598



3,543

Goodwill


387,566



352,788

Acquired intangible assets, net of amortization


284,821



254,339

Total other assets


675,985



610,670

TOTAL ASSETS

$

1,048,773


$

979,702

LIABILITIES AND STOCKHOLDERS' EQUITY






CURRENT LIABILITIES:






Restaurant food liability

$

94,654


$

91,575

Accounts payable


2,235



3,371

Accrued payroll


3,844



5,958

Taxes payable


549



1,660

Other accruals


12,567



8,441

Total current liabilities


113,849



111,005

LONG TERM LIABILITIES:






Deferred taxes, non-current


91,953



92,244

Other accruals


5,763



5,931

Total long term liabilities


97,716



98,175

Commitments and Contingencies






STOCKHOLDERS' EQUITY:






Common stock, $0.0001 par value


8



8

Accumulated other comprehensive loss


(159)



(262)

Additional paid-in capital


736,614



689,953

Retained earnings


100,745



80,823

Total Stockholders' Equity

$

837,208


$

770,522

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

1,048,773


$

979,702

 

GRUBHUB INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED

(in thousands)










Six Months Ended June 30,



2015


2014

CASH FLOWS FROM OPERATING ACTIVITIES







Net income


$

19,922


$

7,045

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







Depreciation



2,721



2,390

Provision for doubtful accounts



260



166

Deferred taxes



35



8,138

Intangible asset amortization



12,357



8,740

Tenant allowance amortization



(79)



(79)

Stock-based compensation



6,265



4,687

Deferred rent



(36)



76

Investment premium amortization



532



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







Accounts receivable



(8,460)



(8,725)

Prepaid expenses and other assets



(485)



(1,592)

Restaurant food liability



3,052



6,241

Accounts payable



(3,957)



(962)

Accrued payroll



(3,000)



1,721

Other accruals



1,417



2,439

Net cash provided by operating activities



30,544



30,285

CASH FLOWS FROM INVESTING ACTIVITIES







Purchases of investments



(65,645)



Proceeds from maturity of investments



64,618



Capitalized website and development costs



(3,104)



(1,112)

Purchases of property and equipment



(1,201)



(2,378)

Acquisitions of businesses, net of cash acquired



(55,687)



Net cash used in investing activities



(61,019)



(3,490)

CASH FLOWS FROM FINANCING ACTIVITIES







Net proceeds from the issuance of common stock





94,927

Repurchases of common stock





(116)

Proceeds from exercise of stock options



9,777



1,145

Excess tax benefit related to stock-based compensation



14,421



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





(2,061)

Preferred stock tax distributions





(320)

Net cash provided by financing activities



24,198



93,575

Net change in cash and cash equivalents



(6,277)



120,370

Effect of exchange rates on cash



76



184

Cash and cash equivalents at beginning of year



201,796



86,542

Cash and cash equivalents at end of the period


$

195,595


$

207,096

SUPPLEMENTAL DISCLOSURE OF NON CASH ITEMS







Fair value of common stock issued for acquisitions


$

15,980


$

Cash paid for income taxes





1,321

 



NON-GAAP FINANCIAL MEASURES RECONCILIATION
(in thousands, except per share data)






Three Months Ended
June 30,


Six Months Ended
June 30,


2015


2014


2015


2014

Net income

$

9,352


$

2,692


$

19,922


$

7,045

Income taxes


6,845



6,111



14,700



9,961

Depreciation and amortization


8,829



5,615



15,078



11,130

EBITDA


25,026



14,418



49,700



28,136

Acquisition and restructuring costs


134



207



703



492

Stock-based compensation


3,258



2,284



6,265



4,687

Adjusted EBITDA

$

28,418


$

16,909


$

56,668


$

33,315










Three Months Ended
June 30,


Six Months Ended
June 30,


2015


2014


2015


2014

Net income

$

9,352


$

2,692


$

19,922


$

7,045

Stock-based compensation


3,258



2,284



6,265



4,687

Amortization of acquired intangible assets


4,673



3,526



8,788



7,051

Accelerated write-down of Seamless technology platform


1,897





1,897



Acquisition and restructuring costs


134



207



703



492

Income tax adjustments


(4,314)



(2,606)



(7,644)



(5,296)

Non-GAAP net income

$

15,000


$

6,103


$

29,931


$

13,979

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


85,833



82,074



85,465



79,854

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

$

0.17


$

0.07


$

0.35


$

0.18




Three Months Ended


June 30,

2015


March 31,

2015


December 31,

2014


September 30,

2014


June 30,

2014


March 31,

2014

Net income

$

9,352


$

10,570


$

10,765


$

6,453


$

2,692


$

4,353

Stock-based compensation


3,258



3,007



2,412



2,294



2,284



2,403

Amortization of acquired intangible assets


4,673



4,115



3,526



3,525



3,526



3,525

Accelerated write-down of Seamless technology platform


1,897











Acquisition and restructuring costs


134



569



477



670



207



285

Income tax adjustments


(4,314)



(3,330)



(2,778)



(2,809)



(2,606)



(2,690)

Non-GAAP net income

$

15,000


$

14,931


$

14,402


$

10,133


$

6,103


$

7,876

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


85,833



85,098



84,311



82,771



82,074



77,635

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

$

0.17


$

0.18


$

0.17


$

0.12


$

0.07


$

0.10

 

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/grubhub-reports-second-quarter-results-300119694.html

SOURCE GrubHub Inc.

Anan Kashyap, Corporate Finance & Investor Relations, ir@grubhub.com, or Abby Hunt, Press, press@grubhub.com