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Exhibit 99.1

 

GRUBHUB REPORTS RECORD first QUARTER RESULTS

 

Grubhub generates 49% revenue growth in the first quarter

 

CHICAGO, May 1, 2018 – Grubhub Inc. (NYSE: GRUB), the nation’s leading online and mobile food-ordering and delivery marketplace, today announced financial results for the first quarter ended March 31, 2018. For the first quarter, the Company posted revenues of $232.6 million, which is a 49% year-over-year increase from $156.1 million in the first quarter of 2017. Gross Food Sales grew 39% year-over-year to $1.2 billion, up from $898 million in the year ago period.

 

"Our team executed well in the first quarter, making meaningful progress toward our most significant goals for 2018. We’ve already launched dozens of new delivery markets, completed our Yelp and Eat24 integrations a quarter earlier than expected, and attracted a record quarterly number of organic new diners," said Grubhub CEO, Matt Maloney. "Our restaurant partnerships are broader and deeper than ever before, increasing our value to diners and driving sustained diner and order growth.”

 

First Quarter 2018 Highlights

 

The following results reflect the financial performance and key operating metrics of our business for the three months ended March 31, 2018, as compared to the same period in 2017.

 

First Quarter Financial Highlights

 

 

Revenues: $232.6 million, a 49% year-over-year increase from $156.1 million in the first quarter of 2017.

 

Net Income: $30.8 million, or $0.34 per diluted share, a 74% year-over-year increase from $17.7 million, or $0.20 per diluted share, in the first quarter of 2017.

 

Non-GAAP Adjusted EBITDA: $64.1 million, a 51% year-over-year increase from $42.5 million in the first quarter of 2017.

 

Non-GAAP Net Income: $47.2 million, or $0.52 per diluted share, an 88% year-over-year increase from $25.1 million, or $0.29 per diluted share, in the first quarter of 2017.

 

First Quarter Key Business Metrics Highlights

 

 

Active Diners were 15.1 million, a 72% year-over-year increase from 8.8 million Active Diners in the first quarter of 2017.

 

Daily Average Grubs (DAGs) were 436,900, a 35% year-over-year increase from 324,600 DAGs in the first quarter of 2017.

 

Gross Food Sales were $1.2 billion, a 39% year-over-year increase from $898 million in the first quarter of 2017.


 

 

 

"Organic DAG growth accelerated for the second quarter in a row, fueled by the most comprehensive restaurant marketplace and our efficient delivery," said Grubhub President and CFO Adam DeWitt. "Our scale continues to generate improving profitability, leading to record EBITDA per order of $1.63 during the first quarter, even as we push hard on delivery market expansion and spreading diner awareness."

 

Second Quarter and Full Year 2018 Guidance

 

Based on information available as of May 1, 2018, the Company is providing the following financial guidance for the second quarter and full year of 2018:

 

 

Second Quarter 2018

 

Full Year 2018

 

(in millions)

Expected Revenue range

$228 - $236

 

$930 - $965

Expected Adjusted EBITDA range

$59 - $65

 

$242 - $262

 

 

First Quarter 2018 Financial Results Conference Call 

Grubhub will webcast a conference call today at 9 a.m. CT to discuss the first quarter 2018 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 May 15, 2018.

About Grubhub

Grubhub (NYSE: GRUB) is the nation’s leading online and mobile takeout food-ordering marketplace with the largest and most comprehensive network of restaurant partners, as well as the largest diner base. Dedicated to connecting diners with the food they love from their favorite local restaurants, Grubhub strives to elevate food ordering through innovative restaurant technology, easy-to-use platforms and an improved delivery experience. Grubhub is proud to work with more than 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, 2018, which is on file with the SEC and is 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 March 31, 2018, 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 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 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:

Dave Zaragoza

Corporate Finance & Investor Relations

ir@grubhub.com

 

Katie Norris

Press

press@grubhub.com

 


 

 

GRUBHUB INC.

STATEMENTS OF OPERATIONS

(in thousands, except per share data)

 

 

Three Months Ended March 31,

 

 

2018

 

 

2017

 

Revenues

$

232,570

 

 

$

156,134

 

Costs and expenses:

 

 

 

 

 

 

 

Operations and support

 

96,283

 

 

 

59,519

 

Sales and marketing

 

48,756

 

 

 

35,438

 

Technology (exclusive of amortization)

 

17,331

 

 

 

13,192

 

General and administrative

 

17,697

 

 

 

13,181

 

Depreciation and amortization

 

20,951

 

 

 

10,040

 

Total costs and expenses

 

201,018

 

 

 

131,370

 

Income from operations

 

31,552

 

 

 

24,764

 

Interest (income) expense - net

 

1,022

 

 

 

(221

)

Income before provision for income taxes

 

30,530

 

 

 

24,985

 

Income tax (benefit) expense

 

(236

)

 

 

7,270

 

Net income attributable to common stockholders

$

30,766

 

 

$

17,715

 

Net income per share attributable to common stockholders:

 

 

 

 

 

 

 

Basic

$

0.35

 

 

$

0.21

 

Diluted

$

0.34

 

 

$

0.20

 

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

 

 

 

 

 

 

 

Basic

 

87,085

 

 

 

85,874

 

Diluted

 

90,091

 

 

 

87,120

 

 

KEY OPERATING METRICS

 

 

 

 

Three Months Ended March 31,

 

 

 

 

 

2018

 

 

2017

 

 

Active Diners (000s)

 

 

 

15,078

 

 

 

8,751

 

 

Daily Average Grubs

 

 

 

436,900

 

 

 

324,600

 

 

Gross Food Sales (millions)

 

 

$

1,245.0

 

 

$

898.1

 

 

 



 

GRUBHUB INC.

 

CONSOLIDATED BALANCE SHEETS

 

(in thousands, except share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31, 2018

 

 

December 31, 2017

 

ASSETS

 

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

 

Cash and cash equivalents

$

272,258

 

 

$

234,090

 

Short-term investments

 

16,052

 

 

 

23,605

 

Accounts receivable, less allowances for doubtful accounts

 

100,129

 

 

 

95,970

 

Prepaid expenses and other current assets

 

9,847

 

 

 

6,818

 

Total current assets

 

398,286

 

 

 

360,483

 

PROPERTY AND EQUIPMENT:

 

 

 

 

 

 

 

Property and equipment, net of depreciation and amortization

 

79,399

 

 

 

71,384

 

OTHER ASSETS:

 

 

 

 

 

 

 

Other assets

 

6,697

 

 

 

6,487

 

Goodwill

 

589,862

 

 

 

589,862

 

Acquired intangible assets, net of amortization

 

504,011

 

 

 

515,553

 

Total other assets

 

1,100,570

 

 

 

1,111,902

 

TOTAL ASSETS

$

1,578,255

 

 

$

1,543,769

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

 

 

Restaurant food liability

$

126,853

 

 

$

119,922

 

Accounts payable

 

12,202

 

 

 

7,607

 

Accrued payroll

 

9,897

 

 

 

13,186

 

Taxes payable

 

1,514

 

 

 

3,109

 

Short-term debt

 

4,688

 

 

 

3,906

 

Other accruals

 

34,237

 

 

 

26,818

 

Total current liabilities

 

189,391

 

 

 

174,548

 

LONG-TERM LIABILITIES:

 

 

 

 

 

 

 

Deferred taxes, non-current

 

71,316

 

 

 

74,292

 

Other accruals

 

17,207

 

 

 

7,468

 

Long-term debt

 

143,121

 

 

 

169,645

 

Total long-term liabilities

 

231,644

 

 

 

251,405

 

STOCKHOLDERS’ EQUITY:

 

 

 

 

 

 

 

Common stock, $0.0001 par value

 

9

 

 

 

9

 

Accumulated other comprehensive loss

 

(872

)

 

 

(1,228

)

Additional paid-in capital

 

856,443

 

 

 

849,043

 

Retained earnings

 

301,640

 

 

 

269,992

 

Total Stockholders’ Equity

$

1,157,220

 

 

$

1,117,816

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$

1,578,255

 

 

$

1,543,769

 

 


 

GRUBHUB INC.

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31,

 

 

 

2018

 

 

2017

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

 

 

Net income

 

$

30,766

 

 

$

17,715

 

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

 

 

 

 

 

 

 

 

Depreciation

 

 

5,050

 

 

 

2,412

 

Provision for doubtful accounts

 

 

325

 

 

 

95

 

Deferred taxes

 

 

(2,976

)

 

 

(4,741

)

Amortization of intangible assets

 

 

15,901

 

 

 

7,628

 

Stock-based compensation

 

 

10,231

 

 

 

7,243

 

Deferred rent

 

 

1,633

 

 

 

58

 

Amortization of deferred loan costs

 

 

333

 

 

 

124

 

Other

 

 

(243

)

 

 

(234

)

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

 

 

 

 

 

 

 

 

Accounts receivable

 

 

3,918

 

 

 

(1,721

)

Prepaid expenses and other assets

 

 

(3,516

)

 

 

2,957

 

Restaurant food liability

 

 

6,885

 

 

 

11,297

 

Accounts payable

 

 

601

 

 

 

483

 

Accrued payroll

 

 

(3,295

)

 

 

(1,534

)

Other accruals

 

 

5,887

 

 

 

9,808

 

Net cash provided by operating activities

 

 

71,500

 

 

 

51,590

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

Purchases of investments

 

 

(10,537

)

 

 

(57,783

)

Proceeds from maturity of investments

 

 

18,166

 

 

 

55,833

 

Capitalized website and development costs

 

 

(6,262

)

 

 

(4,150

)

Purchases of property and equipment

 

 

(5,462

)

 

 

(3,056

)

Acquisitions of business, net of cash acquired

 

 

737

 

 

 

 

Acquisition of other intangible assets

 

 

 

 

 

(5,000

)

Other cash flows from investing activities

 

 

16

 

 

 

91

 

Net cash used in investing activities

 

 

(3,342

)

 

 

(14,065

)

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

Repayments of borrowings under the credit facility

 

 

(25,781

)

 

 

 

Proceeds from exercise of stock options

 

 

6,948

 

 

 

1,584

 

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

 

 

(11,485

)

 

 

(3,688

)

Net cash used in financing activities

 

 

(30,318

)

 

 

(2,104

)

Net change in cash, cash equivalents, and restricted cash

 

 

37,840

 

 

 

35,421

 

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

 

 

356

 

 

 

97

 

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

 

 

238,239

 

 

 

242,214

 

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

 

$

276,435

 

 

$

277,732

 

SUPPLEMENTAL DISCLOSURE OF NON-CASH ITEMS

 

 

 

 

 

 

 

 

Cash paid for income taxes

 

$

227

 

 

$

746

 

 


 

GRUBHUB INC.

NON-GAAP FINANCIAL MEASURES RECONCILIATION

(in thousands, except per share data)

 

 

Three Months Ended March 31,

 

 

 

2018

 

 

2017

 

 

Net income

$

30,766

 

 

$

17,715

 

 

Income taxes

 

(236

)

 

 

7,270

 

 

Interest (income) expense - net

 

1,022

 

 

 

(221

)

 

Depreciation and amortization

 

20,951

 

 

 

10,040

 

 

EBITDA

 

52,503

 

 

 

34,804

 

 

Acquisition, restructuring and legal costs

 

1,329

 

 

 

409

 

 

Stock-based compensation

 

10,231

 

 

 

7,243

 

 

Adjusted EBITDA

$

64,063

 

 

$

42,456

 

 

 

 

Three Months Ended March 31,

 

 

 

2018

 

 

2017

 

 

Net income

$

30,766

 

 

$

17,715

 

 

Stock-based compensation

 

10,231

 

 

 

7,243

 

 

Amortization of acquired intangible assets

 

11,543

 

 

 

5,273

 

 

Acquisition, restructuring and legal costs

 

1,329

 

 

 

409

 

 

Income tax adjustments

 

(6,677

)

 

 

(5,519

)

 

Non-GAAP net income

$

47,192

 

 

$

25,121

 

 

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

 

90,091

 

 

 

87,120

 

 

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

$

0.52

 

 

$

0.29

 

 

 

 

Guidance

 

 

Three Months Ended

June 30, 2018

 

 

Year Ended

December 31, 2018

 

 

Low

 

 

High

 

 

Low

 

 

High

 

 

(in millions)

 

Net income

$

19.5

 

 

$

23.8

 

 

$

79.8

 

 

$

94.2

 

Income taxes

 

7.5

 

 

 

9.2

 

 

 

30.9

 

 

 

36.5

 

Interest expense ̶ net

 

1.0

 

 

 

1.0

 

 

 

4.0

 

 

 

4.0

 

Depreciation and amortization

 

19.0

 

 

 

19.0

 

 

 

80.0

 

 

 

80.0

 

EBITDA

 

47.0

 

 

 

53.0

 

 

 

194.7

 

 

 

214.7

 

Acquisition and restructuring costs

 

 

 

 

 

 

 

1.3

 

 

 

1.3

 

Stock-based compensation

 

12.0

 

 

 

12.0

 

 

 

46.0

 

 

 

46.0

 

Adjusted EBITDA

$

59.0

 

 

$

65.0

 

 

$

242.0

 

 

$

262.0