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
|
|
|
December31,2016
|
|
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
|
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.
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