Grubhub Reports Fourth Quarter And Full Year 2015 Results

Grubhub generates 36% revenue growth in the fourth quarter

Feb 04, 2016, 09:00 ET from GrubHub Inc.

CHICAGO, Feb. 4, 2016 /PRNewswire/ -- Grubhub Inc. (NYSE: GRUB), the leading takeout marketplace, today announced financial results for the quarter and year ended December 31, 2015. 

"The fourth quarter capped off a strong year for Grubhub.  We generated a record $643 million in gross food sales during the quarter and $2.4 billion during the year," said Matt Maloney, CEO.  "The growth in our delivery network has greatly expanded our potential universe of restaurant partners, helping us work with restaurants that don't currently offer delivery, but want access to our 6.7 million active diners.  As a result, our restaurant network is broader and deeper than ever, with over 40,000 partners in more than 1,000 cities."

Fourth Quarter and Full Year 2015 Highlights

The following results reflect the financial performance and key operating metrics of our business for the three months and year ended December 31, 2015 as compared to the same period in 2014.

Fourth Quarter Financial Highlights

  • Revenues: $100.0 million, a 36% year-over-year increase from $73.3 million in the fourth quarter of 2014.
  • Non-GAAP Adjusted EBITDA: $26.8 million, a 7% year-over-year increase from $25.0 million in the fourth quarter of 2014.
  • Net Income: $11.3 million, or $0.13 per diluted share, a 5% year-over-year increase from $10.8 million, or $0.13 per diluted share, in the fourth quarter of 2014.
  • Non-GAAP Net Income: $16.7 million, or $0.19 per diluted share, a 16% year-over-year increase from $14.4 million, or $0.17 per diluted share.

Fourth Quarter Key Business Metrics Highlights

  • Active Diners were 6.75 million, a 34% year-over-year increase from 5.03 million Active Diners in the fourth quarter of 2014.
  • Daily Average Grubs were 241,800, a 19% year-over-year increase from 202,700 Daily Average Grubs in the fourth quarter of 2014.
  • Gross Food Sales were $643 million, a 26% year-over-year increase from $508 million in the fourth quarter of 2014.

Full Year Financial Highlights

  • Revenues: $361.8 million, a 43% year-over-year increase from $253.9 million in 2014.
  • Non-GAAP Adjusted EBITDA: $105.0 million, a 33% year-over-year increase from $78.7 million in 2014.
  • Net Income: $38.1 million, or $0.44 per diluted share, a 57% year-over-year increase from $24.3 million, or $0.30 per diluted share, in 2014.
  • Non-GAAP Net Income: $58.1 million, or $0.68 per diluted share, a 51% year-over-year increase from $38.5 million, or $0.47 per diluted share, in 2014.

Full Year Key Business Metrics Highlights

  • Active Diners were 6.75 million, a 34% increase from 5.03 million Active Diners in 2014.
  • Daily Average Grubs were 227,100, a 24% year-over-year increase from 182,800 Daily Average Grubs in 2014.
  • Gross Food Sales were $2.4 billion, a 32% year-over-year increase from $1.8 billion processed in 2014.

"We are incredibly proud of the progress we made in 2015.  Our significant upgrades in product and technology as well as our investments in restaurant partnerships set us up for continued growth in 2016 and beyond," continued Maloney.  "Our capital-efficient model and strong free cash flow have enabled us to introduce a share buyback to return value opportunistically to shareholders while increasing our overall flexibility through the planned establishment of a credit facility.  This flexibility will allow us to acquire attractive assets at reasonable prices if the recent market volatility creates opportunities."

First Quarter and Full Year 2016 Guidance

Based on information available as of February 4, 2016, the company is providing the following financial guidance for the first quarter and full year of 2016:


First Quarter 2016


Full Year 2016


(in millions)

Expected revenue range

$109 - $112


$445 - $465

Expected Adjusted EBITDA range

$30 - $33


$122 - $130

Fourth Quarter 2015 Financial Results Conference Call: Grubhub will webcast a conference call today at 9 a.m. CT to discuss the fourth 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 February 18, 2016.

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 40,000 restaurants in more than 1,000 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, 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 March 5, 2015 and our most recent Quarterly Report on Form 10-Q for the quarter ended September 30, 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 Annual Report on Form 10-K that will be filed for the year ended December 31, 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.


Contacts:


Anan Kashyap

Katie Norris

Corporate Finance & Investor Relations

Press

ir@grubhub.com

press@grubhub.com

 

GRUBHUB INC.


STATEMENTS OF OPERATIONS

(in thousands, except per share data)



Three Months Ended

December 31,



Year Ended

December 31,



2015



2014



2015



2014


Revenues

$

99,959



$

73,313



$

361,825



$

253,873


Costs and expenses:
















Sales and marketing


24,921




19,033




91,150




66,201


Operations and support


32,483




17,766




107,424




62,509


Technology (exclusive of amortization)


8,802




7,212




32,782




25,185


General and administrative


11,457




7,220




40,506




32,307


Depreciation and amortization


6,657




5,809




28,034




22,687


Total costs and expenses


84,320




57,040




299,896




208,889


Income before provision for income taxes


15,639




16,273




61,929




44,984


Provision for income taxes


4,351




5,508




23,852




20,721


Net income

$

11,288



$

10,765



$

38,077



$

24,263


Net income per share attributable to common stockholders:
















Basic

$

0.13



$

0.13



$

0.45



$

0.33


Diluted

$

0.13



$

0.13



$

0.44



$

0.30


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
















Basic


84,823




81,605




84,076




73,571


Diluted


86,028




84,311




85,706




81,698




KEY OPERATING METRICS




Three Months Ended December 31,



Year Ended December 31,




2015



2014



2015



2014


Active Diners (000s)



6,746




5,029




6,746




5,029


Daily Average Grubs



241,800




202,700




227,100




182,800


Gross Food Sales (millions)


$

642.5



$

508.0



$

2,353.6



$

1,787.4






GRUBHUB INC.


CONSOLIDATED BALANCE SHEETS


(in thousands, except share data)











December 31, 2015



December 31, 2014


ASSETS








CURRENT ASSETS:








Cash and cash equivalents

$

169,293



$

201,796


Short term investments


141,448




111,341


Accounts receivable, less allowances for doubtful accounts


42,051




36,127


Prepaid expenses


3,482




2,940


Total current assets


356,274




352,204


PROPERTY AND EQUIPMENT:








Property and equipment, net of depreciation and amortization


19,082




16,003


OTHER ASSETS:








Other assets


3,105




3,543


Goodwill


396,220




352,788


Acquired intangible assets, net of amortization


285,567




254,339


Total other assets


684,892




610,670


TOTAL ASSETS

$

1,060,248



$

978,877


LIABILITIES AND STOCKHOLDERS' EQUITY








CURRENT LIABILITIES:








Restaurant food liability

$

64,326



$

91,575


Accounts payable


8,189




3,371


Accrued payroll


4,841




5,958


Taxes payable


426




1,660


Other accruals


11,830




8,441


Total current liabilities


89,612




111,005


LONG TERM LIABILITIES:








Deferred taxes, non-current


87,584




91,419


Other accruals


5,456




5,931


Total long term liabilities


93,040




97,350


Commitments and contingencies








STOCKHOLDERS' EQUITY:








Common stock, $0.0001 par value


8




8


Accumulated other comprehensive loss


(604)




(262)


Additional paid-in capital


759,292




689,953


Retained earnings


118,900




80,823


Total Stockholders' Equity

$

877,596



$

770,522


TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

1,060,248



$

978,877






GRUBHUB INC.


CONSOLIDATED STATEMENTS OF CASH FLOWS


(in thousands)













Year Ended December 31,




2015



2014


CASH FLOWS FROM OPERATING ACTIVITIES









Net income


$

38,077



$

24,263


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









Depreciation



5,085




5,032


Provision for doubtful accounts



850




426


Loss on disposal of fixed assets






11


Deferred taxes



(3,835)




4,612


Intangible asset amortization



22,949




17,655


Tenant allowance amortization



(159)




(159)


Stock-based compensation



13,450




9,393


Deferred rent



32




(17)


Investment premium amortization



688




315


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









Accounts receivable



(4,343)




(7,394)


Prepaid expenses and other assets



242




(1,669)


Restaurant food liability



(29,409)




13,414


Accounts payable



3,312




(259)


Accrued payroll



(2,104)




4,243


Other accruals



(80)




3,038


Net cash provided by operating activities



44,755




72,904


CASH FLOWS FROM INVESTING ACTIVITIES









Purchases of investments



(220,667)




(113,156)


Proceeds from maturity of investments



189,872




1,500


Capitalized website and development costs



(7,137)




(3,431)


Purchases of property and equipment



(4,150)




(3,653)


Acquisitions of businesses, net of cash acquired



(73,907)





Other cash flows from investing activities



(408)





Net cash used in investing activities



(116,397)




(118,740)


CASH FLOWS FROM FINANCING ACTIVITIES









Net proceeds from the issuance of common stock






142,541


Repurchases of common stock






(116)


Proceeds from exercise of stock options



11,919




8,322


Excess tax benefit related to stock-based compensation



27,830




12,975


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



(345)




(2,070)


Preferred stock tax distributions






(320)


Net cash provided by financing activities



39,404




161,332


Net change in cash and cash equivalents



(32,238)




115,496


Effect of exchange rates on cash



(265)




(242)


Cash and cash equivalents at beginning of year



201,796




86,542


Cash and cash equivalents at end of the period


$

169,293



$

201,796


SUPPLEMENTAL DISCLOSURE OF NON CASH ITEMS









Fair value of common stock issued for acquisitions


$

15,980



$


Cash paid for income taxes






1,326




NON-GAAP FINANCIAL MEASURES RECONCILIATION

(in thousands, except per share data)




Three Months Ended December 31,



Year Ended December 31,




2015



2014



2015



2014


Net income


$

11,288



$

10,765



$

38,077



$

24,263


Income taxes



4,351




5,508




23,852




20,721


Depreciation and amortization



6,657




5,809




28,034




22,687


EBITDA



22,296




22,082




89,963




67,671


Acquisition and restructuring costs



468




477




1,554




1,639


Stock-based compensation



4,072




2,412




13,450




9,393


Adjusted EBITDA


$

26,836



$

24,971



$

104,967



$

78,703





Three Months Ended December 31,



Year Ended December 31,



2015



2014



2015



2014


Net income

$

11,288



$

10,765



$

38,077



$

24,263


Stock-based compensation


4,072




2,412




13,450




9,393


Amortization of acquired intangible assets


4,774




3,526




18,236




14,102


Accelerated write-down of Seamless technology platform








1,897





Acquisition and restructuring costs


468




477




1,554




1,639


Income tax adjustments


(3,928)




(2,778)




(15,109)




(10,883)


Non-GAAP net income

$

16,674



$

14,402



$

58,105



$

38,514


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


86,028




84,311




85,706




81,698


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

$

0.19



$

0.17



$

0.68



$

0.47


 

SOURCE GrubHub Inc.



RELATED LINKS

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