grub-ex991

CHICAGO, May 6, 2020 – Grubhub Inc. (NYSE: GRUB), a leading online and mobile food-ordering and delivery marketplace, today announced financial results for the first quarter ended March 31, 2020 and also posted a letter to shareholders on its investor relations website. The Company reported revenues of $363 million, which is a 12% year-over-year increase from $324 million in the same period last year. Gross Food Sales grew 8% year-over-year to $1.6 billion, up from $1.5 billion in the same period last year.

“The restaurant industry is facing enormous challenges in light of the difficult, but necessary, steps taken to keep us safe as we fight COVID-19,” said Matt Maloney, Grubhub founder and CEO. “Grubhub is using nearly all of our profits in the second quarter to generate as many additional orders for our restaurant partners as possible. We hope that the darkest days are behind our restaurant partners and they can start focusing on the recovery.”

The following results reflect the financial performance and key operating metrics of our business for the three months ended March 31, 2020, as compared to the same period in 2019.

“COVID-19 has driven a significant uptick in new diners and orders from existing users as most restaurant dining rooms have been temporarily closed nationwide,” said Adam DeWitt, Grubhub president and CFO. “At current volume trends, we could be generating meaningful Adjusted EBITDA in the second quarter. But as Matt highlighted, we believe the absolute best use of our cash is to support our restaurants, their employees, our drivers and the entire takeout ecosystem through this crisis, by generating as many orders as possible while funding extra safety measures

for restaurants, drivers and diners. We hope that these additional sales help make a difference to our partners in this time of crisis.”

Based on information available as of May 6, 2020, the Company is providing the following financial guidance for the second quarter of 2020.

Grubhub will webcast a conference call tomorrow at 8:00 a.m. CT to discuss the first quarter 2020 financial results. The webcast can be accessed on the Grubhub Investor Relations website at https://investors.grubhub.com, along with the Company’s letter to shareholders, earnings press release and financial tables. A replay of the webcast will be available on the same website.

Grubhub (NYSE: GRUB) is a leading online and mobile food-ordering and delivery marketplace with the largest and most comprehensive network of restaurant partners, as well as nearly 24 million active diners. Dedicated to connecting diners with the food they love from their favorite local restaurants, Grubhub elevates food ordering through innovative restaurant technology, easy-to-use platforms and an improved delivery experience. Grubhub features over 300,000 restaurants and is proud to partner with more than 200,000 of these restaurants in over 4,000 U.S. cities and London. The Grubhub portfolio of brands includes Grubhub, Seamless, LevelUp, AllMenus and MenuPages.

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, which are made in reliance on the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve substantial risks, known and unknown, uncertainties, assumptions and other factors that may cause actual results, performance or achievements including, but not limited to, achievement of the benefits of our planned additional investments, to differ materially from future results expressed or implied by such forward-looking statements. Forward-looking statements generally relate to future events or our future financial or operating performance and include, without limitation, statements relating to the potential impact of the COVID-19 outbreak on our business and operations. In some cases, you can identify forward-looking statements because they contain words such as “anticipates,” “believes,” “contemplates,” “could,” “seeks,” “estimates,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “will,” “would” or similar expressions and the negatives of those terms. While forward-looking statements are our best prediction at the time they are made, you should not rely upon them. Forward-looking statements represent our management’s beliefs and assumptions only as of May 6, 2020, unless otherwise indicated, and there is no implication that the information contained in this press release is made subsequent to such date. For additional information concerning factors that could affect our financial results or cause actual results to differ materially from those expressed or implied in the forward-looking statements, please refer to the cautionary statements included in our filings with the Securities and Exchange Commission (the “SEC”), including the “Risk Factors” section of our Annual Report on Form 10-K filed with the SEC on February 28, 2020 and our Quarterly Reports on Form 10-Q and any further disclosures we make in our Current Reports on Form 8-K. Our SEC filings are available electronically on our investor website at investors.grubhub.com or the SEC’s website at www.sec.gov. Except as required by

law, we assume no obligation to update these forward-looking statements or this press release, or to update, supplement or correct the information set forth in the press release or the reasons actual results could differ materially from those anticipated in the forward-looking statements, even if new information becomes available in the future.

Adjusted EBITDA, non-GAAP net income (loss) and non-GAAP net income (loss) 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 (loss) adjusted to exclude acquisition, restructuring and certain legal costs, income taxes, net interest expense, depreciation and amortization and stock-based compensation expense. Non-GAAP net income (loss) and non-GAAP net income (loss) 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 (loss) and non-GAAP net income (loss) 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 “Non-GAAP Financial Measures Reconciliation” below for a reconciliation of net income (loss) to Adjusted EBITDA, non-GAAP net income (loss) and non-GAAP net income (loss) per diluted share attributable to common stockholders.

	Three Months Ended March 31,
	2020			2019
Revenues	$	362,980		$	323,770
Costs and expenses:
Operations and support		214,561			161,350
Sales and marketing		90,742			78,454
Technology (exclusive of amortization)		31,273			27,250
General and administrative		38,949			22,787
Depreciation and amortization		33,363			25,089
Total costs and expenses		408,888			314,930
Income (loss) from operations		(45,908	)		8,840
Interest expense – net		6,380			2,812
Income (loss) before provision for income taxes		(52,288	)		6,028
Income tax benefit		(18,861	)		(862	)
Net income (loss) attributable to common stockholders	$	(33,427	)	$	6,890
Net income (loss) per share attributable to common stockholders:
Basic	$	(0.36	)	$	0.08
Diluted	$	(0.36	)	$	0.07
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders:
Basic		91,793			90,951
Diluted		91,793			92,918

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



	March 31, 2020			December 31, 2019
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	560,708		$	375,909
Short-term investments		36,359			49,275
Accounts receivable, less allowances for doubtful accounts		135,661			119,658
Income tax receivable		20,271			3,960
Prepaid expenses and other current assets		18,051			17,515
Total current assets		771,050			566,317
PROPERTY AND EQUIPMENT:
Property and equipment, net of depreciation and amortization		189,050			172,744
OTHER ASSETS:
Other assets		32,154			26,836
Operating lease right-of-use asset		101,758			100,632
Goodwill		1,007,968			1,007,968
Acquired intangible assets, net of amortization		487,797			500,481
Total other assets		1,629,677			1,635,917
TOTAL ASSETS	$	2,589,777		$	2,374,978
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Restaurant food liability	$	152,551		$	131,753
Accounts payable		29,317			26,748
Accrued payroll		24,255			19,982
Current operating lease liability		11,999			9,376
Other accruals		87,438			61,504
Total current liabilities		305,560			249,363
LONG-TERM LIABILITIES:
Deferred taxes, non-current		24,438			27,163
Noncurrent operating lease liability		112,863			111,056
Long-term debt		668,242			493,009
Other accruals		817			817
Total long-term liabilities		806,360			632,045
STOCKHOLDERS’ EQUITY:
Common stock, $0.0001 par value		9			9
Accumulated other comprehensive loss		(2,271	)		(1,628	)
Additional paid-in capital		1,182,757			1,164,400
Retained earnings		297,362			330,789
Total Stockholders’ Equity	$	1,477,857		$	1,493,570
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	2,589,777		$	2,374,978

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

	Three Months Ended March 31,
	2020			2019
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	(33,427	)	$	6,890
Adjustments to reconcile net income (loss) to net cash from operating activities:
Depreciation		8,658			6,193
Amortization of intangible assets and developed software		24,705			18,896
Stock-based compensation		20,185			16,478
Deferred taxes		(2,725	)		(986	)
Other		3,479			735
Change in assets and liabilities, net of the effects of business acquisitions:
Accounts receivable		(18,333	)		(30,391	)
Income taxes receivable		(16,311	)		(916	)
Prepaid expenses and other assets		(4,602	)		(10,666	)
Restaurant food liability		20,857			13,099
Accounts payable		4,678			(18,644	)
Accrued payroll		4,277			411
Other accruals		26,085			12,845
Net cash provided by operating activities		37,526			13,944
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of investments		(19,790	)		(12,160	)
Proceeds from maturity of investments		32,900			11,636
Capitalized website and development costs		(14,243	)		(10,692	)
Purchases of property and equipment		(19,678	)		(8,018	)
Acquisition of other intangible assets		(510	)		(5,379	)
Acquisitions of businesses, net of cash acquired		—			127
Other cash flows from investing activities		(250	)		—
Net cash used in investing activities		(21,571	)		(24,486	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings under the credit facility		175,000			—
Taxes paid related to net settlement of stock-based compensation awards		(8,051	)		(9,966	)
Proceeds from exercise of stock options		1,414			2,424
Repayments of borrowings under the credit facility		—			(2,031	)
Payments for debt issuance costs		—			(1,647	)
Net cash provided by (used in) financing activities		168,363			(11,220	)
Net change in cash, cash equivalents, and restricted cash		184,318			(21,762	)
Effect of exchange rates on cash, cash equivalents and restricted cash		(600	)		232
Cash, cash equivalents, and restricted cash at beginning of year		379,594			215,802
Cash, cash equivalents, and restricted cash at end of the period	$	563,312		$	194,272
SUPPLEMENTAL DISCLOSURE OF NON-CASH ITEMS
Cash paid for income taxes	$	—		$	351

	Three Months Ended March 31,
	2020			2019
Net income (loss)	$	(33,427	)	$	6,890
Income taxes		(18,861	)		(862	)
Interest expense - net		6,380			2,812
Depreciation and amortization		33,363			25,089
EBITDA		(12,545	)		33,929
Acquisition, restructuring and certain legal costs		13,376			486
Stock-based compensation		20,185			16,478
Adjusted EBITDA	$	21,016		$	50,893

Net income (loss) per order	$	(0.71	)	$	0.15
Adjusted EBITDA per order	$	0.45		$	1.09

	Three Months Ended March 31,
	2020			2019
Net income (loss)	$	(33,427	)	$	6,890
Stock-based compensation		20,185			16,478
Amortization of acquired intangible assets		12,685			11,942
Acquisition, restructuring and certain legal costs		13,376			486
Income tax adjustments		(12,856	)		(7,862	)
Non-GAAP income (loss)	$	(37	)	$	27,934
Weighted-average diluted shares used to compute income (loss) per share attributable to common stockholders		91,793			92,918
Non-GAAP income (loss) per diluted share attributable to common stockholders	$	(0.00	)	$	0.30

		Second Quarter 2020
		(in millions)
Expected Adjusted EBITDA		$5

	Three Months Ended March 31,
	2020		2019
Active Diners (000s)		23,892		19,286
Daily Average Grubs		516,300		521,000
Gross Food Sales (millions)	$	1,630	$	1,502

	Guidance
	Three Months Ended June 30, 2020
	(in millions)
Net loss	$	(42	)
Income taxes		(16	)
Interest expense - net		7
Depreciation and amortization		34
EBITDA		(17	)
Acquisition, restructuring and certain legal costs		—
Stock-based compensation		22
Adjusted EBITDA	$	5