Grubhub Reports Record Fourth Quarter Results
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 Year Ended
December 31, 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 Year Ended
December 31, 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 December 31, 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 Year Ended
December 31, 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
------- ------- -------- --------
(a) 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.
Three Months Ended Year Ended
December 31, December 31,
------------ ------------
2017 2016 2017 2016
---- ---- ---- ----
Net income $53,526 $13,637 $98,983 $49,557
Stock-based compensation 8,835 5,804 32,748 23,559
Amortization of acquired
intangible assets 11,238 4,801 28,066 20,871
Acquisition, restructuring
and legal costs 3,199 253 9,642 2,042
Income tax benefit of the
U.S. Tax Act (34,054) - (34,054) -
Income tax adjustments (9,469) (4,692) (29,239) (19,472)
------ ------ ------- -------
Non-GAAP net income $33,275 $19,803 $106,146 $76,557
======= ======= ======== =======
Weighted-average diluted
shares used to compute net
income per share
attributable to common
stockholders 89,366 86,666 88,182 86,135
Non-GAAP net income per
diluted share attributable
to common stockholders $0.37 $0.23 $1.20 $0.89
Guidance
--------
Three Months Ended Year Ended
March 31, 2018 December 31, 2018
-------------- -----------------
Low High Low High
--- ---- --- ----
(in millions)
Net income $16.2 $20.5 $65.6 $87.2
Income taxes 6.3 8.0 25.4 33.8
Interest expense ? net 1.0 1.0 4.0 4.0
Depreciation and
amortization 20.0 20.0 82.0 82.0
---- ---- ---- ----
EBITDA 43.5 49.5 177.0 207.0
---- ---- ----- -----
Acquisition and
restructuring costs - - - -
Stock-based compensation 10.5 10.5 48.0 48.0
---- ---- ---- ----
Adjusted EBITDA $54.0 $60.0 $225.0 $255.0
----- ----- ------ ------
View original content with multimedia:http://www.prnewswire.com/news-releases/grubhub-reports-record-fourth-quarter-results-300595524.html
SOURCE Grubhub Inc.
