Press Release Details

Grubhub Reports Record Second Quarter Results

07/28/2016

Grubhub generates 37% revenue growth in the second quarter

CHICAGO, July 28, 2016 /PRNewswire/ -- Grubhub Inc. (NYSE: GRUB), the leading takeout marketplace, today announced financial results for the quarter ended June 30, 2016. 

"In our strong second quarter, Grubhub continued to build the most comprehensive marketplace connecting restaurants and takeout diners. We posted record net revenues and our best order growth in a year," said Matt Maloney, CEO.  "Grubhub also generated a record number of orders in Q2 despite typical seasonal headwinds, as total order growth accelerated to 23% year-over-year."

Second Quarter 2016 Highlights

The following results reflect the financial performance and key operating metrics of our business for the three months ended June 30, 2016 as compared to the same period in 2015.

Second Quarter Financial Highlights

  • Revenues: $120.2 million, a 37% year-over-year increase from $88.0 million in the second quarter of 2015.
  • Non-GAAP Adjusted EBITDA: $37.6 million, a 32% year-over-year increase from $28.4 million in the second quarter of 2015.
  • Net Income: $12.8 million, or $0.15 per diluted share, a 37% year-over-year increase from $9.4 million, or $0.11 per diluted share, in the second quarter of 2015.
  • Non-GAAP Net Income: $19.6 million, or $0.23 per diluted share, a 31% year-over-year increase from $15.0 million, or $0.17 per diluted share.

Second Quarter Key Business Metrics Highlights

  • Active Diners were 7.35 million, a 24% year-over-year increase from 5.93 million Active Diners in the second quarter of 2015.
  • Daily Average Grubs were 271,100, a 23% year-over-year increase from 220,100 Daily Average Grubs in the second quarter of 2015.
  • Gross Food Sales were $733 million, a 29% year-over-year increase from $568 million in the second quarter of 2015.

"Product improvements, our delivery initiative and an updated brand drove better diner growth and significantly higher engagement in the second quarter," noted Maloney.  "Demonstrating the powerful economics of scale in our business, we achieved an adjusted EBITDA margin of 31%, just under the levels in the first and second quarters of 2015 before we began investing meaningfully in our own delivery capabilities."

Third Quarter and Full Year 2016 Guidance

Based on information available as of July 28th, 2016, the Company is providing the following financial guidance for the third quarter and full year of 2016:


Third Quarter 2016


Full Year 2016


(in millions)

Expected Revenue range

$116 - $119


$480 - $488

Expected Adjusted EBITDA range

$30 - $32


$136 - $142

Second Quarter 2016 Financial Results Conference Call: Grubhub will webcast a conference call today at 9 a.m. CT to discuss the second 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 August 11, 2016.

About Grubhub
Grubhub (NYSE: GRUB) is the nation's leading online and mobile food-ordering company. 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 45,000 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 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 February 26, 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 Quarterly Report on Form 10-Q that will be filed for the quarter ended June 30, 2016, 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.


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



Three Months Ended

June 30,



Six Months Ended
June 30,



2016



2015



2016



2015


Revenues

$

120,173



$

87,955



$

232,413



$

176,204


Costs and expenses:
















Sales and marketing


25,355




20,679




54,188




44,786


Operations and support


40,696




24,603




75,683




47,304


Technology (exclusive of amortization)


10,567




7,902




20,759




15,568


General and administrative


12,158




9,745




25,747




18,846


Depreciation and amortization


8,885




8,829




16,193




15,078


Total costs and expenses


97,661




71,758




192,570




141,582


Income before provision for income taxes


22,512




16,197




39,843




34,622


Provision for income taxes


9,707




6,845




17,105




14,700


Net income attributable to common stockholders

$

12,805



$

9,352



$

22,738



$

19,922


Net income per share attributable to common stockholders:
















Basic

$

0.15



$

0.11



$

0.27



$

0.24


Diluted

$

0.15



$

0.11



$

0.27



$

0.23


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
















Basic


84,741




84,116




84,725




83,449


Diluted


85,749




85,833




85,724




85,465


 

KEY OPERATING METRICS



Three Months Ended
June 30,



Six Months Ended
June 30,



2016



2015



2016



2015


Active Diners (000s)


7,352




5,932




7,352




5,932


Daily Average Grubs


271,100




220,100




269,500




227,300


Gross Food Sales (millions)

$

732.6



$

567.6



$

1,445.4



$

1,157.5


















 

GRUBHUB INC.


CONSOLIDATED BALANCE SHEETS


(in thousands, except share data)



























June 30, 2016



December 31, 2015


ASSETS








CURRENT ASSETS:








Cash and cash equivalents

$

132,924



$

169,293


Short term investments


136,883




141,448


Accounts receivable, less allowances for doubtful accounts


57,087




42,051


Prepaid expenses


6,602




3,482


Total current assets


333,496




356,274


PROPERTY AND EQUIPMENT:








Property and equipment, net of depreciation and amortization


32,320




19,082


OTHER ASSETS:








Other assets


5,218




3,105


Goodwill


437,009




396,220


Acquired intangible assets, net of amortization


323,816




285,567


Total other assets


766,043




684,892


TOTAL ASSETS

$

1,131,859



$

1,060,248


LIABILITIES AND STOCKHOLDERS' EQUITY








CURRENT LIABILITIES:








Restaurant food liability

$

71,276



$

64,326


Accounts payable


11,282




8,189


Accrued payroll


6,118




4,841


Taxes payable


1,020




426


Other accruals


14,267




11,830


Total current liabilities


103,963




89,612


LONG TERM LIABILITIES:








Deferred taxes, non-current


103,376




87,584


Other accruals


5,818




5,456


Total long term liabilities


109,194




93,040


STOCKHOLDERS' EQUITY:








Common stock, $0.0001 par value


8




8


Accumulated other comprehensive loss


(1,396)




(604)


Additional paid-in capital


778,452




759,292


Retained earnings


141,638




118,900


Total Stockholders' Equity

$

918,702



$

877,596


TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

1,131,859



$

1,060,248


 

GRUBHUB INC.


CONSOLIDATED STATEMENTS OF CASH FLOWS


(in thousands)













Six Months Ended June 30,




2016



2015


CASH FLOWS FROM OPERATING ACTIVITIES









Net income


$

22,738



$

19,922


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









Depreciation



3,327




2,721


Provision for doubtful accounts



420




260


Deferred taxes



(4,174)




35


Amortization of intangible assets



12,866




12,357


Stock-based compensation



12,406




6,265


Other



316




417


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









Accounts receivable



(11,722)




(8,460)


Prepaid expenses and other assets



(3,315)




(485)


Restaurant food liability



4,278




3,052


Accounts payable



(858)




(3,957)


Accrued payroll



595




(3,000)


Other accruals



316




1,417


Net cash provided by operating activities



37,193




30,544


CASH FLOWS FROM INVESTING ACTIVITIES









Purchases of investments



(123,723)




(65,645)


Proceeds from maturity of investments



128,490




64,618


Capitalized website and development costs



(5,380)




(3,104)


Purchases of property and equipment



(8,362)




(1,201)


Acquisitions of businesses, net of cash acquired



(67,528)




(55,687)


Acquisition of other intangible assets



(250)





Other cash flows from investing activities



(576)





Net cash used in investing activities



(77,329)




(61,019)


CASH FLOWS FROM FINANCING ACTIVITIES









Repurchases of common stock



(14,774)





Proceeds from exercise of stock options



2,878




9,777


Excess tax benefits related to stock-based compensation



18,767




14,421


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



(938)





Payments for debt issuance costs



(1,477)





Net cash provided by financing activities



4,456




24,198


Net change in cash and cash equivalents



(35,680)




(6,277)


Effect of exchange rates on cash



(689)




76


Cash and cash equivalents at beginning of year



169,293




201,796


Cash and cash equivalents at end of the period


$

132,924



$

195,595


SUPPLEMENTAL DISCLOSURE OF NON CASH ITEMS









Fair value of common stock issued for acquisitions


$



$

15,980


Cash paid for income taxes



3,250





 

NON-GAAP FINANCIAL MEASURES RECONCILIATION

(in thousands, except per share data)



Three Months Ended
June 30,



Six Months Ended
June 30,



2016



2015



2016



2015


Net income

$

12,805



$

9,352



$

22,738



$

19,922


Income taxes


9,707




6,845




17,105




14,700


Depreciation and amortization


8,885




8,829




16,193




15,078


EBITDA


31,397




25,026




56,036




49,700


Acquisition and restructuring costs


697




134




1,528




703


Stock-based compensation


5,505




3,258




12,406




6,265


Adjusted EBITDA

$

37,599



$

28,418



$

69,970



$

56,668









Three Months Ended
June 30,



Six Months Ended
June 30,



2016



2015



2016



2015


Net income

$

12,805



$

9,352



$

22,738



$

19,922


Stock-based compensation


5,505




3,258




12,406




6,265


Amortization of acquired intangible assets


5,640




4,673




10,685




8,788


Accelerated write-down of Seamless technology platform





1,897







1,897


Acquisition and restructuring costs


697




134




1,528




703


Income tax adjustments


(5,068)




(4,314)




(10,537)




(7,644)


Non-GAAP net income

$

19,579



$

15,000



$

36,820



$

29,931


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


85,749




85,833




85,724




85,465


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

$

0.23



$

0.17



$

0.43



$

0.35






Guidance



Three Months Ended

September 30, 2016



Year Ended

December 31, 2016



Low



High



Low



High



(in millions)


Net income

$

8



$

9



$

42



$

46


Income taxes


6




7




32




34


Depreciation and amortization


10




10




37




37


EBITDA


24




26




111




117


Acquisition and restructuring costs












Stock-based compensation


6




6




25




25


Adjusted EBITDA

$

30



$

32



$

136



$

142


 

Grubhub logo.

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-record-second-quarter-results-300305271.html

SOURCE Grubhub Inc.

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