Press Release Details

Grubhub Reports First Quarter 2020 Results

05/06/2020
Grubhub generates 12% revenue growth in the first quarter

CHICAGO, May 6, 2020 /PRNewswire/ -- Grubhub Inc. (NYSE: GRUB), a leading online and mobile food-ordering and delivery marketplace, today announced financial results for the first quarter ended March 31, 2020 and also posted a letter to shareholders on its investor relations website. The Company reported revenues of $363 million, which is a 12% year-over-year increase from $324 million in the same period last year. Gross Food Sales grew 8% year-over-year to $1.6 billion, up from $1.5 billion in the same period last year.

"The restaurant industry is facing enormous challenges in light of the difficult, but necessary, steps taken to keep us safe as we fight COVID-19," said Matt Maloney, Grubhub founder and CEO. "Grubhub is using nearly all of our profits in the second quarter to generate as many additional orders for our restaurant partners as possible. We hope that the darkest days are behind our restaurant partners and they can start focusing on the recovery."

First Quarter 2020 Highlights
The following results reflect the financial performance and key operating metrics of our business for the three months ended March 31, 2020, as compared to the same period in 2019.

First Quarter Financial Highlights

  • Revenues: $363.0 million, a 12% year-over-year increase from $323.8 million in the first quarter of 2019.
  • Net Income (Loss): $(33.4) million, or $(0.36) per diluted share, a decrease from $6.9 million, or $0.07 per diluted share, in the first quarter of 2019.
  • Non-GAAP Adjusted EBITDA: $21.0 million, a 59% year-over-year decrease from $50.9 million in the first quarter of 2019.
  • Non-GAAP Net Income (Loss): $(37) thousand, or $(0.00) per diluted share, a decrease from $27.9 million, or $0.30 per diluted share, in the first quarter of 2019.

First Quarter Key Business Metrics Highlights1

  • Active Diners: 23.9 million, a 24% year-over-year increase from 19.3 million Active Diners in the first quarter of 2019.
  • Daily Average Grubs (DAGs): 516,300, a 1% year-over-year decrease from 521,000 DAGs in the first quarter of 2019.
  • Gross Food Sales: $1.6 billion, an 8% year-over-year increase from $1.5 billion in the first quarter of 2019.

"COVID-19 has driven a significant uptick in new diners and orders from existing users as most restaurant dining rooms have been temporarily closed nationwide," said Adam DeWitt, Grubhub president and CFO. "At current volume trends, we could be generating meaningful Adjusted EBITDA in the second quarter. But as Matt highlighted, we believe the absolute best use of our cash is to support our restaurants, their employees, our drivers and the entire takeout ecosystem through this crisis, by generating as many orders as possible while funding extra safety measures for restaurants, drivers and diners. We hope that these additional sales help make a difference to our partners in this time of crisis."

Second Quarter 2020 Guidance
Based on information available as of May 6, 2020, the Company is providing the following financial guidance for the second quarter of 2020.



Second Quarter 2020



(in millions)

Expected Adjusted EBITDA


$5




First Quarter 2020 Financial Results Conference Call
Grubhub will webcast a conference call tomorrow at 8:00 a.m. CT to discuss the first quarter 2020 financial results. The webcast can be accessed on the Grubhub Investor Relations website at https://investors.grubhub.com, along with the Company's letter to shareholders, earnings press release and financial tables. A replay of the webcast will be available on the same website.

About Grubhub
Grubhub (NYSE: GRUB) is a leading online and mobile food-ordering and delivery marketplace with the largest and most comprehensive network of restaurant partners, as well as nearly 24 million active diners. Dedicated to connecting diners with the food they love from their favorite local restaurants, Grubhub elevates food ordering through innovative restaurant technology, easy-to-use platforms and an improved delivery experience. Grubhub features over 300,000 restaurants and is proud to partner with more than 200,000 of these restaurants in over 4,000 U.S. cities and London. The Grubhub portfolio of brands includes Grubhub, Seamless, LevelUp, 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, which are made in reliance on the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve substantial risks, known and unknown, uncertainties, assumptions and other factors that may cause actual results, performance or achievements including, but not limited to, achievement of the benefits of our planned additional investments, to differ materially from future results expressed or implied by such forward-looking statements. Forward-looking statements generally relate to future events or our future financial or operating performance and include, without limitation, statements relating to the potential impact of the COVID-19 outbreak on our business and operations. In some cases, you can identify forward-looking statements because they contain words such as "anticipates," "believes," "contemplates," "could," "seeks," "estimates," "intends," "may," "plans," "potential," "predicts," "projects," "should," "will," "would" or similar expressions and the negatives of those terms. While forward-looking statements are our best prediction at the time they are made, you should not rely upon them. Forward-looking statements represent our management's beliefs and assumptions only as of May 6, 2020, unless otherwise indicated, and there is no implication that the information contained in this press release is made subsequent to such date. For additional information concerning factors that could affect our financial results or cause actual results to differ materially from those expressed or implied in the forward-looking statements, please refer to the cautionary statements included in our filings with the Securities and Exchange Commission (the "SEC"), including the "Risk Factors" section of our Annual Report on Form 10-K filed with the SEC on February 28, 2020 and our Quarterly Reports on Form 10-Q and any further disclosures we make in our Current Reports on Form 8-K. Our SEC filings are available electronically on our investor website at investors.grubhub.com or the SEC's website at www.sec.gov. Except as required by law, we assume no obligation to update these forward-looking statements or this press release, or to update, supplement or correct the information set forth in the press release or 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 (loss) and non-GAAP net income (loss) 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 (loss) adjusted to exclude acquisition, restructuring and certain legal costs, income taxes, net interest expense, depreciation and amortization and stock-based compensation expense. Non-GAAP net income (loss) and non-GAAP net income (loss) per diluted share attributable to common stockholders exclude acquisition, restructuring and certain legal 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, restructuring and certain legal costs, 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 (loss) and non-GAAP net income (loss) 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 "Non-GAAP Financial Measures Reconciliation" below for a reconciliation of net income (loss) to Adjusted EBITDA, non-GAAP net income (loss) and non-GAAP net income (loss) per diluted share attributable to common stockholders.

1 Key Business Metrics are defined on pages 28 - 29 of our Annual Report on Form 10-K filed on February 28, 2020. 

GRUBHUB INC.

STATEMENTS OF OPERATIONS

(in thousands, except per share data)



Three Months Ended
March 31,



2020



2019


Revenues

$

362,980



$

323,770


Costs and expenses:








Operations and support


214,561




161,350


Sales and marketing


90,742




78,454


Technology (exclusive of amortization)


31,273




27,250


General and administrative


38,949




22,787


Depreciation and amortization


33,363




25,089


Total costs and expenses


408,888




314,930


Income (loss) from operations


(45,908)




8,840


Interest expense – net


6,380




2,812


Income (loss) before provision for income taxes


(52,288)




6,028


Income tax benefit


(18,861)




(862)


Net income (loss) attributable to common stockholders

$

(33,427)



$

6,890


Net income (loss) per share attributable to common stockholders:








Basic

$

(0.36)



$

0.08


Diluted

$

(0.36)



$

0.07


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








Basic


91,793




90,951


Diluted


91,793




92,918


 

KEY BUSINESS METRICS





Three Months Ended
March 31,






2020



2019



Active Diners (000s)




23,892




19,286



Daily Average Grubs




516,300




521,000



Gross Food Sales (millions)



$

1,630



$

1,502



 

GRUBHUB INC.


CONSOLIDATED BALANCE SHEETS


(in thousands, except share data)



























March 31, 2020



December 31,   2019


ASSETS








CURRENT ASSETS:








Cash and cash equivalents

$

560,708



$

375,909


Short-term investments


36,359




49,275


Accounts receivable, less allowances for doubtful accounts


135,661




119,658


Income tax receivable


20,271




3,960


Prepaid expenses and other current assets


18,051




17,515


Total current assets


771,050




566,317


PROPERTY AND EQUIPMENT:








Property and equipment, net of depreciation and amortization


189,050




172,744


OTHER ASSETS:








Other assets


32,154




26,836


Operating lease right-of-use asset


101,758




100,632


Goodwill


1,007,968




1,007,968


Acquired intangible assets, net of amortization


487,797




500,481


Total other assets


1,629,677




1,635,917


TOTAL ASSETS

$

2,589,777



$

2,374,978


LIABILITIES AND STOCKHOLDERS' EQUITY








CURRENT LIABILITIES:








Restaurant food liability

$

152,551



$

131,753


Accounts payable


29,317




26,748


Accrued payroll


24,255




19,982


Current operating lease liability


11,999




9,376


Other accruals


87,438




61,504


Total current liabilities


305,560




249,363


LONG-TERM LIABILITIES:








Deferred taxes, non-current


24,438




27,163


Noncurrent operating lease liability


112,863




111,056


Long-term debt


668,242




493,009


Other accruals


817




817


Total long-term liabilities


806,360




632,045


STOCKHOLDERS' EQUITY:








Common stock, $0.0001 par value


9




9


Accumulated other comprehensive loss


(2,271)




(1,628)


Additional paid-in capital


1,182,757




1,164,400


Retained earnings


297,362




330,789


Total Stockholders' Equity

$

1,477,857



$

1,493,570


TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

2,589,777



$

2,374,978


 

GRUBHUB INC.



CONSOLIDATED STATEMENTS OF CASH FLOWS



(in thousands)














Three Months Ended
March 31,





2020



2019



CASH FLOWS FROM OPERATING ACTIVITIES









Net income (loss)


$

(33,427)



$

6,890


Adjustments to reconcile net income (loss) to net cash from operating activities:









Depreciation



8,658




6,193


Amortization of intangible assets and developed software



24,705




18,896


Stock-based compensation



20,185




16,478


Deferred taxes



(2,725)




(986)


Other



3,479




735


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









Accounts receivable



(18,333)




(30,391)


Income taxes receivable



(16,311)




(916)


Prepaid expenses and other assets



(4,602)




(10,666)


Restaurant food liability



20,857




13,099


Accounts payable



4,678




(18,644)


Accrued payroll



4,277




411


Other accruals



26,085




12,845


Net cash provided by operating activities



37,526




13,944


CASH FLOWS FROM INVESTING ACTIVITIES









Purchases of investments



(19,790)




(12,160)


Proceeds from maturity of investments



32,900




11,636


Capitalized website and development costs



(14,243)




(10,692)


Purchases of property and equipment



(19,678)




(8,018)


Acquisition of other intangible assets



(510)




(5,379)


Acquisitions of businesses, net of cash acquired






127


Other cash flows from investing activities



(250)





Net cash used in investing activities



(21,571)




(24,486)


CASH FLOWS FROM FINANCING ACTIVITIES









Proceeds from borrowings under the credit facility



175,000





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



(8,051)




(9,966)


Proceeds from exercise of stock options



1,414




2,424


Repayments of borrowings under the credit facility






(2,031)


Payments for debt issuance costs






(1,647)


Net cash provided by (used in) financing activities



168,363




(11,220)


Net change in cash, cash equivalents, and restricted cash



184,318




(21,762)


Effect of exchange rates on cash, cash equivalents and restricted cash



(600)




232


Cash, cash equivalents, and restricted cash at beginning of year



379,594




215,802


Cash, cash equivalents, and restricted cash at end of the period


$

563,312



$

194,272


SUPPLEMENTAL DISCLOSURE OF NON-CASH ITEMS









Cash paid for income taxes


$



$

351
















 

GRUBHUB INC.

NON-GAAP FINANCIAL MEASURES RECONCILIATION

(in thousands, except per share and per order data)




Three Months Ended
March 31,




2020



2019


Net income (loss)


$

(33,427)



$

6,890


Income taxes



(18,861)




(862)


Interest expense - net



6,380




2,812


Depreciation and amortization



33,363




25,089


EBITDA



(12,545)




33,929


Acquisition, restructuring and certain legal costs



13,376




486


Stock-based compensation



20,185




16,478


Adjusted EBITDA


$

21,016



$

50,893











Net income (loss) per order


$

(0.71)



$

0.15


Adjusted EBITDA per order


$

0.45



$

1.09








Three Months Ended
March 31,




2020



2019


Net income (loss)


$

(33,427)



$

6,890


Stock-based compensation



20,185




16,478


Amortization of acquired intangible assets



12,685




11,942


Acquisition, restructuring and certain legal costs



13,376




486


Income tax adjustments



(12,856)




(7,862)


Non-GAAP income (loss)


$

(37)



$

27,934


Weighted-average diluted shares used to compute income (loss) per share attributable to common stockholders



91,793




92,918


Non-GAAP income (loss) per diluted share attributable to common stockholders


$

(0.00)



$

0.30








Guidance




Three Months Ended
June 30, 2020




(in millions)


Net loss


$

(42)


Income taxes



(16)


Interest expense - net



7


Depreciation and amortization



34


EBITDA



(17)


Acquisition, restructuring and certain legal costs




Stock-based compensation



22


Adjusted EBITDA


$

5


 

 

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SOURCE Grubhub Inc.

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