Press Release Details

GrubHub Reports Third Quarter Results

10/27/2015

GrubHub generates 38% revenue growth in the third quarter

CHICAGO, Oct. 27, 2015 /PRNewswire/ -- GrubHub Inc. (NYSE: GRUB), the leading takeout marketplace, today announced financial results for the quarter ended September 30, 2015. 

"GrubHub delivered strong year-over-year growth in the third quarter, driven by dependable repeat usage and robust new diner adds," said Matt Maloney, CEO.  "During the third quarter, we reached a major milestone: we sent our 300 millionth order to our restaurant partners.  This is a testament to the extraordinary value GrubHub has created for its partners as well as the degree to which we've changed the way people order takeout."

Third Quarter 2015 Highlights

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

Third Quarter Financial Highlights

  • Revenues: $85.7 million, a 38% year-over-year increase from $61.9 million in the third quarter of 2014.
  • Non-GAAP Adjusted EBITDA: $21.5 million, a 5% year-over-year increase from $20.4 million in the third quarter of 2014.
  • Net Income: $6.9 million, or $0.08 per diluted share, a 6% year-over-year increase from $6.5 million, or $0.08 per diluted share, in the third quarter of 2014.
  • Non-GAAP Net Income: $11.5 million, or $0.13 per diluted share, a 13% year-over-year increase from $10.1 million, or $0.12 per diluted share.

Third Quarter Key Business Metrics Highlights

  • Active Diners were 6.43 million, a 41% year-over-year increase from 4.57 million Active Diners in the third quarter of 2014.
  • Daily Average Grubs were 211,500, a 22% year-over-year increase from 172,700 Daily Average Grubs in the third quarter of 2014.
  • Gross Food Sales were $554 million, a 31% year-over-year increase from $424 million in the third quarter of 2014.

"We are seeing encouraging early signs of success with our delivery initiative," continued Maloney.  "While delivery volume remains low relative to overall volume on GrubHub, we've seen tangible improvements in diner frequency, order growth and conversion in some of our secondary markets where restaurants we deliver for generate a significant amount of the overall order volume.  This gives us confidence that our investment in delivery will reap rewards across our entire network over time."

Fourth Quarter Guidance

Based on information available as of October 27, 2015, the company is providing the following financial guidance for the fourth quarter of 2015:


Fourth Quarter 2015


(in millions)

Expected revenue range

$98 - $100

Expected Adjusted EBITDA range

$23 - $25

Third Quarter 2015 Financial Results Conference Call: GrubHub will webcast a conference call today at 9 a.m. CT to discuss the third 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 November 10, 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 September 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 September 30,




Nine Months Ended September 30,



2015



2014




2015



2014


Revenues

$

85,662



$

61,941




$

261,866



$

180,560


Costs and expenses:

















Sales and marketing


21,443




14,883





66,229




47,168


Operations and support


27,637




14,902





74,941




44,743


Technology (exclusive of amortization)


8,412




6,560





23,980




17,973


General and administrative


10,203




8,143





29,049




25,087


Depreciation and amortization


6,299




5,748





21,377




16,878


Total costs and expenses


73,994




50,236





215,576




151,849


Income before provision for income taxes


11,668




11,705





46,290




28,711


Provision for income taxes


4,801




5,252





19,501




15,213


Net income

$

6,867



$

6,453




$

26,789



$

13,498


Net income per share attributable to common stockholders:

















Basic

$

0.08



$

0.08




$

0.32



$

0.19


Diluted

$

0.08



$

0.08




$

0.31



$

0.17


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

















Basic


84,583




79,426





83,827




70,893


Diluted


85,867




82,771





85,599




80,826


 

KEY OPERATING METRICS



Three Months Ended September 30,



Nine Months Ended September 30,



2015



2014



2015



2014


Active Diners (000s)


6,431




4,571




6,431




4,571


Daily Average Grubs


211,500




172,700




222,000




176,100


Gross Food Sales (millions)

$

553.6



$

423.8



$

1,711.1



$

1,279.4


 

GRUBHUB INC.

CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED

(in thousands, except share data)










September 30, 2015



December 31, 2014


ASSETS








CURRENT ASSETS:








Cash and cash equivalents

$

153,028



$

201,796


Short term investments


142,081




111,341


Accounts receivable, less allowances for doubtful accounts


44,337




36,127


Deferred taxes, current


339




825


Prepaid expenses


4,628




2,940


Total current assets


344,413




353,029


PROPERTY AND EQUIPMENT:








Property and equipment, net of depreciation and amortization


16,819




16,003


OTHER ASSETS:








Other assets


3,539




3,543


Goodwill


387,566




352,788


Acquired intangible assets, net of amortization


280,148




254,339


Total other assets


671,253




610,670


TOTAL ASSETS

$

1,032,485



$

979,702


LIABILITIES AND STOCKHOLDERS' EQUITY








CURRENT LIABILITIES:








Restaurant food liability

$

62,053



$

91,575


Accounts payable


3,514




3,371


Accrued payroll


4,691




5,958


Taxes payable


306




1,660


Other accruals


11,704




8,441


Total current liabilities


82,268




111,005


LONG TERM LIABILITIES:








Deferred taxes, non-current


88,965




92,244


Other accruals


5,738




5,931


Total long term liabilities


94,703




98,175


Commitments and contingencies








STOCKHOLDERS' EQUITY:








Common stock, $0.0001 par value


8




8


Accumulated other comprehensive loss


(425)




(262)


Additional paid-in capital


748,318




689,953


Retained earnings


107,613




80,823


Total Stockholders' Equity

$

855,514



$

770,522


TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

1,032,485



$

979,702


 

GRUBHUB INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED

(in thousands)












Nine Months Ended September 30,




2015



2014


CASH FLOWS FROM OPERATING ACTIVITIES









Net income


$

26,789



$

13,498


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









Depreciation



3,846




3,708


Provision for doubtful accounts



565




232


Loss on disposal of fixed assets






11


Deferred taxes



(2,793)




8,211


Intangible asset amortization



17,531




13,170


Tenant allowance amortization



(119)




(119)


Stock-based compensation



9,378




6,981


Deferred rent



(73)




16


Investment premium amortization



672





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









Accounts receivable



(6,912)




(13,618)


Prepaid expenses and other assets



(1,456)




(1,773)


Restaurant food liability



(31,444)




13,474


Accounts payable



(633)




(1,348)


Accrued payroll



(2,150)




2,563


Other accruals



389




2,252


Net cash provided by operating activities



13,590




47,258


CASH FLOWS FROM INVESTING ACTIVITIES









Purchases of investments



(154,268)




(65,736)


Proceeds from maturity of investments



122,856





Capitalized website and development costs



(4,961)




(2,396)


Purchases of property and equipment



(2,866)




(3,189)


Acquisitions of businesses, net of cash acquired



(55,687)





Net cash used in investing activities



(94,926)




(71,321)


CASH FLOWS FROM FINANCING ACTIVITIES









Net proceeds from the issuance of common stock






142,936


Repurchases of common stock






(116)


Proceeds from exercise of stock options



10,689




4,656


Excess tax benefit related to stock-based compensation



21,987




4,569


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






(2,070)


Preferred stock tax distributions






(320)


Net cash provided by financing activities



32,676




149,655


Net change in cash and cash equivalents



(48,660)




125,592


Effect of exchange rates on cash



(108)




(114)


Cash and cash equivalents at beginning of year



201,796




86,542


Cash and cash equivalents at end of the period


$

153,028



$

212,020


SUPPLEMENTAL DISCLOSURE OF NON CASH ITEMS









Fair value of common stock issued for acquisitions


$

15,980



$


Cash paid for income taxes






1,324


 

NON-GAAP FINANCIAL MEASURES RECONCILIATION

(in thousands, except per share data)



Three Months Ended September 30,



Nine Months Ended September 30,



2015



2014



2015



2014


Net income

$

6,867



$

6,453



$

26,789



$

13,498


Income taxes


4,801




5,252




19,501




15,213


Depreciation and amortization


6,299




5,748




21,377




16,878


EBITDA


17,967




17,453




67,667




45,589


Acquisition and restructuring costs


383




670




1,086




1,162


Stock-based compensation


3,113




2,294




9,378




6,981


Adjusted EBITDA

$

21,463



$

20,417



$

78,131



$

53,732


 


Three Months Ended September 30,



Nine Months Ended September 30,



2015



2014



2015



2014


Net income

$

6,867



$

6,453



$

26,789



$

13,498


Stock-based compensation


3,113




2,294




9,378




6,981


Amortization of acquired intangible assets


4,674




3,525




13,462




10,576


Accelerated write-down of Seamless technology platform








1,897





Acquisition and restructuring costs


383




670




1,086




1,162


Income tax adjustments


(3,538)




(2,809)




(11,181)




(8,105)


Non-GAAP net income

$

11,499



$

10,133



$

41,431



$

24,112


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


85,867




82,771




85,599




80,826


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

$

0.13



$

0.12



$

0.48



$

0.30


 

GrubHub, the nation's leading online and mobile food-ordering company.

Logo - http://photos.prnewswire.com/prnh/20151014/276973LOGO

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/grubhub-reports-third-quarter-results-300166825.html

SOURCE GrubHub Inc.

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