grub-ex991

grub-ex991_6.htm

Exhibit 99.1

GRUBHUB REPORTS RECORD FIRST QUARTER RESULTS

Grubhub generates 39% revenue growth in the first quarter

CHICAGO, Apr. 27, 2017 – Grubhub Inc. (NYSE: GRUB), the nation’s leading takeout marketplace, today announced financial results for the first quarter ended March 31, 2017. DAGs grew 21% year-over-year, and the Company posted quarterly revenues of $156.1 million, which is a 39% year-over-year increase from $112.2 million in the first quarter of 2016.

“More new diners tried Grubhub than ever before in the first quarter. We are seeing clear signs of success from a more diverse restaurant base, broader marketing reach, and continuous improvement of our product,” said Matt Maloney, Grubhub CEO. “We already had the most comprehensive takeout marketplace in the U.S., and delivery has enabled our restaurant network to grow significantly in both breadth and depth, making Grubhub the place to go for online takeout.”

First Quarter 2017 Highlights

The following results reflect the financial performance and key operating metrics of our business for the three months ended March 31, 2017, as compared to the same period in 2016.

First Quarter Financial Highlights

•

Revenues: $156.1 million, a 39% year-over-year increase from $112.2 million in the first quarter of 2016.

•

Net Income: $17.7 million, or $0.20 per diluted share, a 78% year-over-year increase from $9.9 million, or $0.12 per diluted share, in the first quarter of 2016.

•

Non-GAAP Adjusted EBITDA: $42.7 million, a 32% year-over-year increase from $32.4 million in the first quarter of 2016.

•

Non-GAAP Net Income: $25.1 million, or $0.29 per diluted share, a 46% year-over-year increase from $17.2 million, or $0.20 per diluted share, in the first quarter of 2016.

First Quarter Key Business Metrics Highlights

•

Active Diners were 8.75 million, a 26% year-over-year increase from 6.97 million Active Diners in the first quarter of 2016.

•

Daily Average Grubs (DAGs) were 324,600, a 21% year-over-year increase from 267,800 Daily Average Grubs in the first quarter of 2016.

•

Gross Food Sales were $898 million, a 26% year-over-year increase from $713 million in the first quarter of 2016.

“Grubhub’s growth on both sides of our network helped drive DAGs growth of 21% and EBITDA growth of 32% compared to the prior year,” said Adam DeWitt, Grubhub CFO. “We generated significant operating leverage, in part due to our continued improvement in delivery efficiency. As a result, EBITDA per order was up 10% year over year to $1.46, even while we invested aggressively in product and marketing to drive future growth.”

Second Quarter and Full Year 2017 Guidance

Based on information available as of April 27, 2017, the Company is providing the following financial guidance for the second quarter and full year of 2017:

	Second Quarter 2017	Full Year 2017
	(in millions)
Expected Revenue range	$153 - $161	$632 - $662
Expected Adjusted EBITDA range	$38 - $44	$170 - $190

First Quarter 2017 Financial Results Conference Call

Grubhub will webcast a conference call today at 9 a.m. CT to discuss the first 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 May 11, 2017.

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 more than 50,000 restaurant partners in over 1,100 U.S. cities and London. The Grubhub portfolio of brands includes Grubhub, Seamless, AllMenus, MenuPages, LAbite, Restaurants on the Run, DiningIn and Delivered Dish.

Use of Forward Looking Statements

This press release contains forward-looking statements regarding 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 Feb. 28, 2017, which is 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 Mar. 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 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:

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,
	2017		2016
Revenues	$	156,134	$	112,240
Costs and expenses:
Sales and marketing		35,438		28,833
Operations and support		59,519		34,987
Technology (exclusive of amortization)		13,192		10,192
General and administrative		12,960		13,589
Depreciation and amortization		10,040		7,308
Total costs and expenses		131,149		94,909
Income before provision for income taxes		24,985		17,331
Provision for income taxes		7,270		7,398
Net income attributable to common stockholders	$	17,715	$	9,933
Net income per share attributable to common stockholders:
Basic	$	0.21	$	0.12
Diluted	$	0.20	$	0.12
Weighted-average shares used to compute net income per share attributable to common stockholders:
Basic		85,874		84,710
Diluted		87,120		85,699

KEY OPERATING METRICS

	Three Months Ended March 31,
	2017		2016
Active Diners (000s)		8,751		6,970
Daily Average Grubs		324,600		267,800
Gross Food Sales (millions)	$	898.1	$	712.8

GRUBHUB INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)



	March 31, 2017			December 31, 2016
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	275,037		$	239,528
Short term investments		86,235			84,091
Accounts receivable, less allowances for doubtful accounts		62,400			60,550
Prepaid expenses		9,245			12,168
Total current assets		432,917			396,337
PROPERTY AND EQUIPMENT:
Property and equipment, net of depreciation and amortization		51,579			46,555
OTHER ASSETS:
Other assets		4,316			4,530
Goodwill		436,455			436,455
Acquired intangible assets, net of amortization		313,357			313,630
Total other assets		754,128			754,615
TOTAL ASSETS	$	1,238,624		$	1,197,507
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Restaurant food liability	$	94,660		$	83,349
Accounts payable		10,030			7,590
Accrued payroll		5,805			7,338
Taxes payable		3,062			865
Other accruals		18,950			11,348
Total current liabilities		132,507			110,490
LONG TERM LIABILITIES:
Deferred taxes, non-current		100,631			108,022
Other accruals		6,898			6,876
Total long term liabilities		107,529			114,898
STOCKHOLDERS’ EQUITY:
Common stock, $0.0001 par value		9			9
Accumulated other comprehensive loss		(1,971	)		(2,078	)
Additional paid-in capital		811,727			805,731
Retained earnings		188,823			168,457
Total Stockholders’ Equity	$	998,588		$	972,119
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,238,624		$	1,197,507

GRUBHUB INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

	Three Months Ended March 31,
	2017			2016
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	17,715		$	9,933
Adjustments to reconcile net income to net cash from operating activities:
Depreciation		2,412			1,344
Provision for doubtful accounts		95			443
Deferred taxes		(4,741	)		(3,321	)
Amortization of intangible assets		7,628			5,964
Stock-based compensation		7,243			6,901
Deferred rent		58			135
Other		(110	)		(109	)
Change in assets and liabilities, net of the effects of business acquisitions:
Accounts receivable		(1,721	)		(9,956	)
Prepaid expenses and other assets		2,957			(136	)
Restaurant food liability		11,297			10,081
Accounts payable		483			(5,434	)
Accrued payroll		(1,534	)		(1,034	)
Other accruals		9,808			3,855
Net cash provided by operating activities		51,590			18,666
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of investments		(57,783	)		(56,227	)
Proceeds from maturity of investments		55,833			76,615
Capitalized website and development costs		(4,150	)		(2,331	)
Purchases of property and equipment		(3,056	)		(3,259	)
Acquisition of other intangible assets		(5,000	)		(250	)
Other cash flows from investing activities		91			(173	)
Net cash provided by (used in) investing activities		(14,065	)		14,375
CASH FLOWS FROM FINANCING ACTIVITIES
Repurchases of common stock		—			(9,771	)
Proceeds from exercise of stock options		1,584			1,012
Excess tax benefits related to stock-based compensation		—			10,610
Taxes paid related to net settlement of stock-based compensation awards		(3,688	)		(682	)
Net cash provided by (used in) financing activities		(2,104	)		1,169
Net change in cash and cash equivalents		35,421			34,210
Effect of exchange rates on cash		88			(191	)
Cash and cash equivalents at beginning of year		239,528			169,293
Cash and cash equivalents at end of the period	$	275,037		$	203,312

GRUBHUB INC.

NON-GAAP FINANCIAL MEASURES RECONCILIATION

(in thousands, except per share data)

	Three Months Ended March 31,
	2017		2016
Net income	$	17,715	$	9,933
Income taxes		7,270		7,398
Depreciation and amortization		10,040		7,308
EBITDA		35,025		24,639
Acquisition and restructuring costs		409		831
Stock-based compensation		7,243		6,901
Adjusted EBITDA	$	42,677	$	32,371

	Three Months Ended March 31,
	2017			2016
Net income	$	17,715		$	9,933
Stock-based compensation		7,243			6,901
Amortization of acquired intangible assets		5,273			5,045
Acquisition and restructuring costs		409			831
Income tax adjustments		(5,519	)		(5,469	)
Non-GAAP net income	$	25,121		$	17,241
Weighted-average diluted shares used to compute net income per share attributable to common stockholders		87,120			85,699
Non-GAAP net income per diluted share attributable to common stockholders	$	0.29		$	0.20

	Guidance
	Three Months Ended June 30, 2017				Year Ended December 31, 2017
	Low		High		Low		High
	(in millions)
Net income	$	11.6	$	15.2	$	57.2	$	69.1
Income taxes		7.9		10.3		38.9		47.0
Depreciation and amortization		10.5		10.5		42.5		42.5
EBITDA		30.0		36.0		138.6		158.6
Acquisition and restructuring costs		—		—		0.4		0.4
Stock-based compensation		8.0		8.0		31.0		31.0
Adjusted EBITDA	$	38.0	$	44.0	$	170.0	$	190.0