Press Release Details

Grubhub Reports Record Fourth Quarter Results

02/08/2018

Grubhub generates 49% revenue growth in the fourth quarter

CHICAGO, Feb 8, 2018 /PRNewswire/ -- Grubhub Inc. (NYSE: GRUB), the nation's leading takeout marketplace, today announced financial results for the fourth quarter ended Dec. 31, 2017. For the fourth quarter, the Company posted revenues of $205.1 million, which is a 49% year-over-year increase from $137.5 million in the fourth quarter of 2016. Gross Food Sales grew 39% year-over-year to $1.1 billion, up from $818 million in the year ago period.

"Over the past two years we have taken incredible strides in expanding the breadth and depth of our restaurant network, growing the number of local restaurants we work with from 40,000 to over 80,000 today," said Grubhub CEO, Matt Maloney. "The partnership with Yum! which we announced this morning will accelerate the expansion of our delivery network and amplify our diner acquisition efforts, raising consumer awareness of online ordering and driving more volume for all restaurants across our platform."

Fourth Quarter and Full Year 2017 Highlights

The following results reflect the financial performance and key operating metrics of our business for the three and twelve months ended Dec. 31, 2017, as compared to the same periods in 2016.

Fourth Quarter Financial Highlights

  • Revenues: $205.1 million, a 49% year-over-year increase from $137.5 million in the fourth quarter of 2016.
  • Net Income: $53.5 million, or $0.60 per diluted share, a 293% year-over-year increase from $13.6 million, or $0.16 per diluted share, in the fourth quarter of 2016.
  • Non-GAAP Adjusted EBITDA: $57.0 million, a 45% year-over-year increase from $39.2 million in the fourth quarter of 2016.
  • Non-GAAP Net Income: $33.3 million, or $0.37 per diluted share, a 68% year-over-year increase from $19.8 million, or $0.23 per diluted share, in the fourth quarter of 2016.

Fourth Quarter Key Business Metrics Highlights

  • Active Diners were 14.5 million, a 77% year-over-year increase from 8.2 million Active Diners in the fourth quarter of 2016.
  • Daily Average Grubs (DAGs) were 392,500, a 34% year-over-year increase from 292,500 DAGs in the fourth quarter of 2016.
  • Gross Food Sales were $1.1 billion, a 39% year-over-year increase from $818 million in the fourth quarter of 2016.

Full Year Financial Highlights

  • Revenues: $683.1 million, a 38% year-over-year increase from $493.3 million in 2016.
  • Net Income: $99.0 million, or $1.12 per diluted share, a 100% year-over-year increase from $49.6 million, or $0.58 per diluted share, in 2016.
  • Non-GAAP Adjusted EBITDA: $184.0 million, a 27% year-over-year increase from $144.6 million in 2016.
  • Non-GAAP Net Income: $106.1 million, or $1.20 per diluted share, a 39% year-over-year increase from $76.6 million, or $0.89 per diluted share, in 2016.

Full Year Key Business Metrics Highlights

  • Active Diners were 14.5 million, a 77% year-over-year increase from 8.2 million Active Diners in 2016.
  • Daily Average Grubs (DAGs) were 334,000, a 22% year-over-year increase from 274,800 DAGs in 2016.
  • Gross Food Sales were $3.8 billion, a 26% year-over-year increase from $3.0 billion in 2016.

"Grubhub delivery has helped drive phenomenal growth for us, reaching an annualized run rate of over $1 billion dollars in GFS from close to zero in 2015," commented Grubhub President and CFO Adam DeWitt. "Our ability to scale delivery capabilities efficiently, combined with consistent execution on organic diner acquisition and merger integrations, enabled us to generate record EBITDA per order of $1.58 in the fourth quarter."                         

First Quarter and Full Year 2018 Guidance

Based on information available as of Feb. 8, 2018, the Company is providing the following financial guidance for the first quarter and full year of 2018:


First Quarter 2018


Full Year 2018


(in millions)

Expected Revenue range

$224 - $232


$910 - $960

Expected Adjusted EBITDA range

$54 - $60


$225 - $255

Fourth Quarter 2017 Financial Results Conference Call 

Grubhub will webcast a conference call today at 9 a.m. CT to discuss the fourth quarter 2017 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, 2018.

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 over 80,000 restaurant partners in over 1,600 U.S. cities and London. The Grubhub portfolio of brands includes Grubhub, Seamless, 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 acquisition of Eat24 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, 2017 and our most recent Quarterly Report on Form 10-Q for the quarter ended Sep. 30, 2017, 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, 2017, 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, the impact of the U.S. Tax Cuts and Jobs Act ("U.S. Tax Act") 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,


2017



2016



2017



2016

Revenues

$

205,080



$

137,457



$

683,067



$

493,331

Costs and expenses:















Operations and support


81,658




51,727




269,453




171,756

Sales and marketing


45,384




29,636




150,730




110,323

Technology (exclusive of amortization)


14,703




10,689




56,263




42,454

General and administrative


18,396




12,435




65,023




50,482

Depreciation and amortization


18,781




9,911




51,848




35,193

Total costs and expenses


178,922




114,398




593,317




410,208

Income from operations


26,158




23,059




89,750




83,123

Interest (income) expense - net


1,010




(183)




102




(729)

Income before provision for income taxes


25,148




23,242




89,648




83,852

Income tax (benefit) expense


(28,378)




9,605




(9,335)




34,295

Net income attributable to common stockholders

$

53,526



$

13,637



$

98,983



$

49,557

Net income per share attributable to common stockholders:















Basic

$

0.62



$

0.16



$

1.15



$

0.58

Diluted

$

0.60



$

0.16



$

1.12



$

0.58

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















Basic


86,702




85,608




86,297




85,069

Diluted


89,366




86,666




88,182




86,135

 

KEY OPERATING METRICS




Three Months Ended
December 31,



Year Ended
December 31,



2017



2016



2017



2016

Active Diners (000s)



14,462




8,174




14,462




8,174

Daily Average Grubs



392,500




292,500




334,000




274,800

Gross Food Sales (millions)


$

1,138.6



$

817.7



$

3,783.7



$

2,998.1

 

GRUBHUB INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)




December 31, 2017



December 31, 2016

ASSETS







CURRENT ASSETS:







Cash and cash equivalents

$

234,090



$

239,528

Short-term investments


23,605




84,091

Accounts receivable, less allowances for doubtful accounts


95,970




60,550

Prepaid expenses and other current assets


6,818




12,168

Total current assets


360,483




396,337

PROPERTY AND EQUIPMENT:







Property and equipment, net of depreciation and amortization


71,384




46,555

OTHER ASSETS:







Other assets


6,487




4,530

Goodwill


589,862




436,455

Acquired intangible assets, net of amortization


515,553




313,630

Total other assets


1,111,902




754,615

TOTAL ASSETS

$

1,543,769



$

1,197,507

LIABILITIES AND STOCKHOLDERS' EQUITY







CURRENT LIABILITIES:







Restaurant food liability

$

119,922



$

83,349

Accounts payable


7,607




7,590

Accrued payroll


13,186




7,338

Taxes payable


3,109




865

Short-term debt


3,906




Other accruals


26,818




11,348

Total current liabilities


174,548




110,490

LONG-TERM LIABILITIES:







Deferred taxes, non-current


74,292




108,022

Other accruals


7,468




6,876

Long-term debt


169,645




Total long-term liabilities


251,405




114,898

STOCKHOLDERS' EQUITY:







Common stock, $0.0001 par value


9




9

Accumulated other comprehensive loss


(1,228)




(2,078)

Additional paid-in capital


849,043




805,731

Retained earnings


269,992




168,457

Total Stockholders' Equity

$

1,117,816



$

972,119

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

1,543,769



$

1,197,507

 

GRUBHUB INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)




Year Ended December 31,



2017



2016

CASH FLOWS FROM OPERATING ACTIVITIES








Net income


$

98,983



$

49,557

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








Depreciation



11,775




8,921

Provision for doubtful accounts



1,424




1,102

Deferred taxes



(31,179)




1,027

Amortization of intangible assets



40,073




26,272

Stock-based compensation



32,748




23,559

Deferred rent



849




1,286

Amortization of deferred loan costs



487




365

Investment premium amortization



(739)




(612)

Other



436




(159)

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








Accounts receivable



(27,833)




(17,488)

Prepaid expenses and other assets



4,112




(8,765)

Restaurant food liability



8,576




16,451

Accounts payable



(4,244)




(3,204)

Accrued payroll



5,537




1,819

Other accruals



11,735




(2,453)

Net cash provided by operating activities



152,740




97,678

CASH FLOWS FROM INVESTING ACTIVITIES








Purchases of investments



(154,758)




(226,694)

Proceeds from maturity of investments



215,983




284,662

Capitalized website and development costs



(21,325)




(12,809)

Purchases of property and equipment



(18,971)




(24,087)

Acquisitions of businesses, net of cash acquired



(333,301)




(65,849)

Acquisition of other intangible assets



(25,147)




(250)

Other cash flows from investing activities



557




(492)

Net cash used in investing activities



(336,962)




(45,519)

CASH FLOWS FROM FINANCING ACTIVITIES








Proceeds from borrowings under the credit facility



200,000




Repayments of borrowings under the credit facility



(25,781)




Repurchases of common stock






(14,774)

Proceeds from exercise of stock options



16,375




13,468

Excess tax benefits related to stock-based compensation






24,906

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



(10,556)




(2,779)

Payments for debt issuance costs



(1,979)




(1,477)

Net cash provided by financing activities



178,059




19,344

Net change in cash and cash equivalents



(6,163)




71,503

Effect of exchange rates on cash



725




(1,268)

Cash and cash equivalents at beginning of year



239,528




169,293

Cash and cash equivalents at end of the period


$

234,090



$

239,528

SUPPLEMENTAL DISCLOSURE OF NON CASH ITEMS








Cash paid for income taxes


$

19,148



$

8,722

 

GRUBHUB INC.

NON-GAAP FINANCIAL MEASURES RECONCILIATION

(in thousands, except per share data)




Three Months Ended
December 31,



Year Ended
December 31,



2017



2016



2017



2016

Net income


$

53,526



$

13,637



$

98,983



$

49,557

Income taxes



(28,378)




9,605




(9,335)




34,295

Interest (income) expense - net(a)



1,010







102




Depreciation and amortization



18,781




9,911




51,848




35,193

EBITDA



44,939




33,153




141,598




119,045

Acquisition, restructuring and legal costs



3,199




253




9,642




2,042

Stock-based compensation



8,835




5,804




32,748




23,559

Adjusted EBITDA


$

56,973



$

39,210



$

183,988



$

144,646


(a)  

Due to interest incurred on borrowings under the Company's credit facility during the three months ended December 31, 2017, the Company has updated its calculation of Adjusted EBITDA to include net interest expense. The Company did not recast periods prior to 2017 due to the insignificance of net interest (income) expense in those periods. Recast Adjusted EBITDA for the three months ended March 31, 2017, June 30, 2017 and September 30, 2017 includes net interest income of $0.2 million, $0.3 million and $0.4 million, respectively. There were no changes to the Company's GAAP results as a result of this change in presentation.

 



Three Months Ended
December 31,



Year Ended
December 31,



2017



2016



2017



2016

Net income


$

53,526



$

13,637



$

98,983



$

49,557

Stock-based compensation



8,835




5,804




32,748




23,559

Amortization of acquired intangible assets



11,238




4,801




28,066




20,871

Acquisition, restructuring and legal costs



3,199




253




9,642




2,042

Income tax benefit of the U.S. Tax Act



(34,054)







(34,054)




Income tax adjustments



(9,469)




(4,692)




(29,239)




(19,472)

Non-GAAP net income


$

33,275



$

19,803



$

106,146



$

76,557

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



89,366




86,666




88,182




86,135

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


$

0.37



$

0.23



$

1.20



$

0.89

 



Guidance



Three Months Ended
March 31, 2018



Year Ended
December 31, 2018



Low



High



Low



High



(in millions)

Net income


$

16.2



$

20.5



$

65.6



$

87.2

Income taxes



6.3




8.0




25.4




33.8

Interest expense ̶ net



1.0




1.0




4.0




4.0

Depreciation and amortization



20.0




20.0




82.0




82.0

EBITDA



43.5




49.5




177.0




207.0

Acquisition and restructuring costs












Stock-based compensation



10.5




10.5




48.0




48.0

Adjusted EBITDA


$

54.0



$

60.0



$

225.0



$

255.0

 

Grubhub logo. (PRNewsFoto/GrubHub)

 

Cision View original content with multimedia:http://www.prnewswire.com/news-releases/grubhub-reports-record-fourth-quarter-results-300595524.html

SOURCE Grubhub Inc.

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