GrubHub Reports Second Quarter Results

GrubHub generates 47% revenue growth and 68% adjusted EBITDA growth in the second quarter

Jul 28, 2015, 09:00 ET from GrubHub Inc.

CHICAGO, July 28, 2015 /PRNewswire/ -- GrubHub Inc. (NYSE: GRUB), the leading takeout marketplace, today announced financial results for the quarter ended June 30, 2015. 

"We delivered significant year-over-year growth in the seasonally slower second quarter, driven by strong performance in all of our markets across the country," said Matt Maloney, CEO.  "GrubHub's almost 6 million diners ordered more than 20 million times during the quarter, driving revenue growth of 47 percent year-over-year."

Second Quarter 2015 Highlights

The following results reflect the financial performance and key operating metrics of our business for the three months ended June 30, 2015 as compared to the same period in 2014. 

Second Quarter Financial Highlights

  • Revenues: $88.0 million, a 47% year-over-year increase from $60.0 million in the second quarter of 2014.
  • Non-GAAP Adjusted EBITDA: $28.4 million, a 68% year-over-year increase from $16.9 million in the second quarter of 2014.
  • Net Income: $9.4 million, or $0.11 per diluted share, a 247% year-over-year increase from $2.7 million, or $0.03 per diluted share, in the second quarter of 2014.
  • Non-GAAP Net Income: $15.0 million, or $0.17 per diluted share, a 146% year-over-year increase from $6.1 million, or $0.07 per diluted share.

Second Quarter Key Business Metrics Highlights

  • Active Diners were 5.93 million, a 42% year-over-year increase from 4.19 million Active Diners in the second quarter of 2014.
  • Daily Average Grubs were 220,100, a 26% year-over-year increase from 174,500 Daily Average Grubs in the second quarter of 2014.
  • Gross Food Sales were $568 million, a 34% year-over-year increase from $423 million in the second quarter of 2014.

Seamless Upgrade

"In addition to strong financial performance, we released a significant upgrade to the Seamless consumer interface, which brings the best performing elements of all of our platforms into one consolidated experience," continued Maloney.  "The new interface has an updated design and is cleaner, more intuitive and importantly, mobile-centric. We are also now on a single technology stack, which will allow us to scale more easily and will dramatically improve our time to market for new features and functionality."

Delivery Expansion

"We are making great strides expanding our delivery capabilities.  By next week, we will have doubled the number of markets where we offer delivery in the months following our February acquisitions of two of the nation's leading restaurant delivery companies," noted Maloney.  "We are proud that more than half of our 6 million diners live in markets that have GrubHub delivery right now."

Second Quarter and Full Year 2015 Guidance

Based on information available as of July 28, 2015, the company is providing the following financial guidance for the second quarter and full year of 2015:

Third Quarter 2015

Full Year 2015

(in millions)

Expected revenue range

$85 - $87

$358 - $364

Expected Adjusted EBITDA range

$23 - $25

$104 - $112

Second Quarter 2015 Financial Results Conference Call: GrubHub will webcast a conference call today at 9 a.m. CT to discuss the second 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 August 11, 2015.

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 35,000 restaurants in more than 900 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 and DiningIn.

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, 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, 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.

 

GRUBHUB INC.

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

Three Months Ended

June 30,

Six Months Ended June 30,

2015

2014

2015

2014

Revenues

$

87,955

$

60,006

$

176,204

$

118,619

Costs and expenses:

Sales and marketing

20,679

16,168

44,786

32,285

Operations and support

24,603

14,734

47,304

29,841

Technology (exclusive of amortization)

7,902

6,066

15,568

11,413

General and administrative

9,745

8,620

18,846

16,944

Depreciation and amortization

8,829

5,615

15,078

11,130

Total costs and expenses

71,758

51,203

141,582

101,613

Income before provision for income taxes

16,197

8,803

34,622

17,006

Provision for income taxes

6,845

6,111

14,700

9,961

Net income

$

9,352

$

2,692

$

19,922

$

7,045

Net income per share attributable to common stockholders:

Basic

$

0.11

$

0.03

$

0.24

$

0.10

Diluted

$

0.11

$

0.03

$

0.23

$

0.09

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

Basic

84,116

78,042

83,449

66,626

Diluted

85,833

82,074

85,465

79,854

KEY OPERATING METRICS

Three Months Ended June 30,

Six Months Ended June 30,

2015

2014

2015

2014

Active Diners (000s)

5,932

4,192

5,932

4,192

Daily Average Grubs

220,100

174,500

227,300

177,800

Gross Food Sales (millions)

$

567.6

$

422.6

$

1,157.5

$

855.6

 

GRUBHUB INC.

CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED

(in thousands, except share data)

June 30, 2015

December 31, 2014

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

$

195,595

$

201,796

Short term investments

111,836

111,341

Accounts receivable, less allowances for doubtful accounts

46,228

36,127

Deferred taxes, current

499

825

Prepaid expenses

3,655

2,940

Total current assets

357,813

353,029

PROPERTY AND EQUIPMENT:

Property and equipment, net of depreciation and amortization

14,975

16,003

OTHER ASSETS:

Other assets

3,598

3,543

Goodwill

387,566

352,788

Acquired intangible assets, net of amortization

284,821

254,339

Total other assets

675,985

610,670

TOTAL ASSETS

$

1,048,773

$

979,702

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:

Restaurant food liability

$

94,654

$

91,575

Accounts payable

2,235

3,371

Accrued payroll

3,844

5,958

Taxes payable

549

1,660

Other accruals

12,567

8,441

Total current liabilities

113,849

111,005

LONG TERM LIABILITIES:

Deferred taxes, non-current

91,953

92,244

Other accruals

5,763

5,931

Total long term liabilities

97,716

98,175

Commitments and Contingencies

STOCKHOLDERS' EQUITY:

Common stock, $0.0001 par value

8

8

Accumulated other comprehensive loss

(159)

(262)

Additional paid-in capital

736,614

689,953

Retained earnings

100,745

80,823

Total Stockholders' Equity

$

837,208

$

770,522

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

1,048,773

$

979,702

 

GRUBHUB INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED

(in thousands)

Six Months Ended June 30,

2015

2014

CASH FLOWS FROM OPERATING ACTIVITIES

Net income

$

19,922

$

7,045

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

Depreciation

2,721

2,390

Provision for doubtful accounts

260

166

Deferred taxes

35

8,138

Intangible asset amortization

12,357

8,740

Tenant allowance amortization

(79)

(79)

Stock-based compensation

6,265

4,687

Deferred rent

(36)

76

Investment premium amortization

532

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

Accounts receivable

(8,460)

(8,725)

Prepaid expenses and other assets

(485)

(1,592)

Restaurant food liability

3,052

6,241

Accounts payable

(3,957)

(962)

Accrued payroll

(3,000)

1,721

Other accruals

1,417

2,439

Net cash provided by operating activities

30,544

30,285

CASH FLOWS FROM INVESTING ACTIVITIES

Purchases of investments

(65,645)

Proceeds from maturity of investments

64,618

Capitalized website and development costs

(3,104)

(1,112)

Purchases of property and equipment

(1,201)

(2,378)

Acquisitions of businesses, net of cash acquired

(55,687)

Net cash used in investing activities

(61,019)

(3,490)

CASH FLOWS FROM FINANCING ACTIVITIES

Net proceeds from the issuance of common stock

94,927

Repurchases of common stock

(116)

Proceeds from exercise of stock options

9,777

1,145

Excess tax benefit related to stock-based compensation

14,421

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

(2,061)

Preferred stock tax distributions

(320)

Net cash provided by financing activities

24,198

93,575

Net change in cash and cash equivalents

(6,277)

120,370

Effect of exchange rates on cash

76

184

Cash and cash equivalents at beginning of year

201,796

86,542

Cash and cash equivalents at end of the period

$

195,595

$

207,096

SUPPLEMENTAL DISCLOSURE OF NON CASH ITEMS

Fair value of common stock issued for acquisitions

$

15,980

$

Cash paid for income taxes

1,321

 

NON-GAAP FINANCIAL MEASURES RECONCILIATION (in thousands, except per share data)

Three Months Ended June 30,

Six Months Ended June 30,

2015

2014

2015

2014

Net income

$

9,352

$

2,692

$

19,922

$

7,045

Income taxes

6,845

6,111

14,700

9,961

Depreciation and amortization

8,829

5,615

15,078

11,130

EBITDA

25,026

14,418

49,700

28,136

Acquisition and restructuring costs

134

207

703

492

Stock-based compensation

3,258

2,284

6,265

4,687

Adjusted EBITDA

$

28,418

$

16,909

$

56,668

$

33,315

Three Months Ended June 30,

Six Months Ended June 30,

2015

2014

2015

2014

Net income

$

9,352

$

2,692

$

19,922

$

7,045

Stock-based compensation

3,258

2,284

6,265

4,687

Amortization of acquired intangible assets

4,673

3,526

8,788

7,051

Accelerated write-down of Seamless technology platform

1,897

1,897

Acquisition and restructuring costs

134

207

703

492

Income tax adjustments

(4,314)

(2,606)

(7,644)

(5,296)

Non-GAAP net income

$

15,000

$

6,103

$

29,931

$

13,979

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

85,833

82,074

85,465

79,854

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

$

0.17

$

0.07

$

0.35

$

0.18

Three Months Ended

June 30,

2015

March 31,

2015

December 31,

2014

September 30,

2014

June 30,

2014

March 31,

2014

Net income

$

9,352

$

10,570

$

10,765

$

6,453

$

2,692

$

4,353

Stock-based compensation

3,258

3,007

2,412

2,294

2,284

2,403

Amortization of acquired intangible assets

4,673

4,115

3,526

3,525

3,526

3,525

Accelerated write-down of Seamless technology platform

1,897

Acquisition and restructuring costs

134

569

477

670

207

285

Income tax adjustments

(4,314)

(3,330)

(2,778)

(2,809)

(2,606)

(2,690)

Non-GAAP net income

$

15,000

$

14,931

$

14,402

$

10,133

$

6,103

$

7,876

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

85,833

85,098

84,311

82,771

82,074

77,635

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

$

0.17

$

0.18

$

0.17

$

0.12

$

0.07

$

0.10

 

 

SOURCE GrubHub Inc.



RELATED LINKS

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