Grubhub Reports Second Quarter 2020 Results

CHICAGO, July 30, 2020 /PRNewswire/ -- Grubhub Inc. (NYSE: GRUB), a leading online and mobile food-ordering and delivery marketplace, today announced financial results for the second quarter ended June 30, 2020 and also posted a letter to shareholders on its investor relations website. The Company reported revenues of $459 million, which is a 41% year-over-year increase from $325 million in the same period last year. Gross Food Sales grew 59% year over year to $2.3 billion, up from $1.5 billion in the same period last year.

"Our singular focus for the second quarter was to support our restaurant partners as much as possible in their time of need. With a little help from increased demand, we are proud to announce we were able to spend approximately $100 million supporting and keeping restaurants, drivers and diners safe during these difficult times," said Matt Maloney, Grubhub founder and CEO. "In June, we announced our acquisition by Just Eat Takeaway.com which will create the largest and only profitable online food marketplace outside of China. We are excited to join forces with a team that has demonstrated it can grow this business sustainably on a global basis and who is also focused on capturing a disproportionate share of the profitable growth in the U.S. going forward."

Second Quarter 2020 Highlights
The following results reflect the financial performance and key operating metrics of our business for the three months ended June 30, 2020, as compared to the same period in 2019.

Second Quarter Financial Highlights

  • Revenues: $459.3 million, a 41% year-over-year increase from $325.1 million in the second quarter of 2019.
  • Net Income (Loss): $(45.4) million, or $(0.49) per diluted share, a decrease from $1.3 million, or $0.01 per diluted share, in the second quarter of 2019.
  • Non-GAAP Adjusted EBITDA: $13.3 million, a 76% year-over-year decrease from $54.7 million in the second quarter of 2019.
  • Non-GAAP Net Income (Loss): $(15.9) million, or $(0.17) per diluted share, a decrease from $24.9 million, or $0.27 per diluted share, in the second quarter of 2019.

Second Quarter Key Business Metrics Highlights1

  • Active Diners: 27.5 million, a 35% year-over-year increase from 20.3 million Active Diners in the second quarter of 2019.
  • Daily Average Grubs (DAGs): 647,100, a 32% year-over-year increase from 488,900 DAGs in the second quarter of 2019.
  • Gross Food Sales: $2.3 billion, a 59% year-over-year increase from $1.5 billion in the second quarter of 2019.

"The strong trends we observed in April persisted throughout the quarter with year-over-year DAG growth accelerating each month," said Adam DeWitt, Grubhub President and CFO. "With that strength continuing in July, it is becoming more clear that the current environment has advanced the secular shift toward online food ordering. We remain confident that focusing on restaurant supply and diner loyalty will enable us to keep growing in a sustainable and profitable manner."

Guidance
Given Grubhub's pending acquisition by Just Eat Takeaway.com, it is no longer issuing forward-looking guidance.

About Grubhub
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 over 27 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 225,000 of these restaurants in over 4,000 U.S. cities. The Grubhub portfolio of brands includes Grubhub, Seamless, LevelUp, AllMenus and MenuPages.

Use of Forward-Looking Statements
This communication contains "forward-looking statements" regarding Grubhub, Just Eat Takeaway.com or their respective management's future expectations, beliefs, intentions, goals, strategies, plans and prospects, which, in the case of Grubhub, 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 to differ materially from future results expressed or implied by such forward-looking statements including, but not limited to, the occurrence of any event, change or other circumstances that could give rise to the right of one or both of Grubhub or Just Eat Takeaway.com to terminate the merger agreement; the ability to obtain regulatory approvals and meet other closing conditions to the proposed merger on a timely basis or at all, including the risk that regulatory approvals required for the proposed merger are not obtained on a timely basis or at all or are obtained subject to conditions that are not anticipated or that could adversely affect the combined company or the expected benefits of the proposed merger; the ability to obtain approval by Grubhub stockholders and Just Eat Takeaway.com shareholders on the expected schedule or at all; difficulties and delays in integrating Grubhub's and Just Eat Takeaway.com's businesses; risks that the proposed merger disrupts Grubhub's or Just Eat Takeaway.com's current plans and operations; failing to fully realize anticipated synergies, cost savings and other anticipated benefits of the proposed merger when expected or at all; potential adverse reactions or changes to business relationships resulting from the announcement or completion of the proposed merger; the risk that unexpected costs will be incurred; the ability of Grubhub or Just Eat Takeaway.com to retain and hire key personnel; the diversion of management's attention from ongoing business operations; uncertainty as to the value of the Just Eat Takeaway.com ordinary shares to be issued in connection with the proposed merger; uncertainty as to the long-term value of the common stock of the combined company following the proposed merger; the continued availability of capital and financing following the proposed merger; the outcome of any legal proceedings that may be instituted against Grubhub, Just Eat Takeaway.com or their respective directors and officers; changes in global, political, economic, business, competitive, market and regulatory forces; changes in tax laws, regulations, rates and policies; future business acquisitions or disposals; competitive developments; and the timing and occurrence (or non-occurrence) of other events or circumstances that may be beyond Grubhub's and Just Eat Takeaway.com's control.

These and other risks, uncertainties, assumptions and other factors may be amplified or made more uncertain by the COVID-19 pandemic, which has caused significant economic uncertainty. The extent to which the COVID-19 pandemic impacts Grubhub's and Just Eat Takeaway.com's businesses, operations and financial results, including the duration and magnitude of such effects, will depend on numerous factors, which are unpredictable, including, but not limited to, the duration and spread of the outbreak, its severity, the actions taken to contain the virus or treat its impact, and how quickly and to what extent normal economic and operating conditions can resume. Forward-looking statements generally relate to future events or Grubhub and Just Eat Takeaway.com's future financial or operating performance and include, without limitation, statements relating to the proposed merger and the potential impact of the COVID-19 outbreak on Grubhub and Just Eat Takeaway.com's 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 Grubhub's and Just Eat Takeaway.com's current predictions at the time they are made, you should not rely upon them. Forward-looking statements represent Grubhub's and Just Eat Takeaway.com's management's beliefs and assumptions only as of the date of this communication, unless otherwise indicated, and there is no implication that the information contained in this communication is made subsequent to such date. For additional information concerning factors that could cause actual results and outcomes to differ materially from those expressed or implied in the forward-looking statements, please refer to the cautionary statements and risk factors included in Grubhub's filings with the Securities and Exchange Commission (the "SEC"), including Grubhub's Annual Report on Form 10-K filed with the SEC on February 28, 2020, Grubhub's Quarterly Reports on Form 10-Q and any further disclosures Grubhub makes in Current Reports on Form 8-K. Grubhub's SEC filings are available electronically on Grubhub's investor website at www.investors.grubhub.com or the SEC's website at www.sec.gov. For additional information concerning factors that could cause future results to differ from those expressed or implied in the forward-looking statements, please refer to Just Eat Takeaway.com's non-exhaustive list of key risks and cautionary statements included in Just Eat Takeaway.com's Annual Report, which is available electronically on Just Eat Takeaway.com's investor website at www.justeattakeaway.com. Except as required by law, Grubhub and Just Eat Takeaway.com assume no obligation to update these forward-looking statements or this communication, or to update, supplement or correct the information set forth in this communication 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. All subsequent written and oral forward-looking statements attributable to Grubhub, Just Eat Takeaway.com or any person acting on behalf of either party are expressly qualified in their entirety by the cautionary statements referenced above.

Additional Information and Where to Find It
In connection with the proposed merger, Just Eat Takeaway.com will file with the SEC a registration statement on Form F-4 to register the shares to be issued in connection with the proposed merger. The registration statement will include a preliminary proxy statement of Grubhub/prospectus of Just Eat Takeaway.com which, when finalized, will be sent to the stockholders of Grubhub seeking their approval of the respective merger-related proposals. Also in connection with the proposed merger, Just Eat Takeaway.com will file with the Netherlands Authority for the Financial Markets ("AFM") and/or the UK Financial Conduct Authority ("FCA") a prospectus for the listing and admission to trading on Euronext Amsterdam and/or the admission to listing on the FCA's Official List and to trading on the London Stock Exchange's Main Market for listed securities of the shares to be issued in connection with the proposed merger (the "Prospectus"). INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT ON FORM F-4 AND THE RELATED PROXY STATEMENT/PROSPECTUS INCLUDED WITHIN THE REGISTRATION STATEMENT ON FORM F-4, THE PROSPECTUS, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS AND ANY OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC, THE AFM AND/OR THE FCA IN CONNECTION WITH THE PROPOSED MERGER, WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT GRUBHUB, JUST EAT TAKEAWAY.COM AND THE PROPOSED MERGER.

Investors and security holders may obtain copies of these documents and any other documents filed with or furnished to the SEC by Grubhub or Just Eat Takeaway.com free of charge through the website maintained by the SEC at www.sec.gov, from Grubhub at its website, www.investors.grubhub.com, or from Just Eat Takeaway.com at its website www.justeattakeaway.com. The Prospectus, as well as any supplement thereto, will be made available on the website of Just Eat Takeaway.com at its website www.justeattakeaway.com.

Participants in the Solicitation
Grubhub, Just Eat Takeaway.com and their respective directors and certain of their respective executive officers and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed merger under the rules of the SEC. Information about Grubhub's directors and executive officers is available in Grubhub's proxy statement dated April 9, 2020 for its 2020 Annual Meeting of Stockholders. To the extent holdings of Grubhub securities by directors or executive officers of Grubhub have changed since the amounts contained in the definitive proxy statement for Grubhub's 2020 Annual Meeting of Stockholders, such changes have been or will be reflected on Statements of Change in Ownership on Form 4 filed with the SEC. These documents are available free of charge from the sources indicated above, and from Grubhub by going to its investor relations page on its corporate website at www.investors.grubhub.com. Information about Just Eat Takeaway.com's directors and executive officers and a description of their interests are set forth in Just Eat Takeaway.com's 2019 Annual Report, which may be obtained free of charge from Just Eat Takeaway.com's website, www.justeattakeaway.com. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the proxy statement/prospectus and other relevant materials to be filed with the SEC regarding the proposed merger when they become available. Investors should read the proxy statement/prospectus carefully when it becomes available before making any voting or investment decisions. You may obtain free copies of these documents from Grubhub or Just Eat Takeaway.com using the sources indicated above.

No Offer or Solicitation
This communication shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended and applicable United Kingdom, Dutch and other European regulations.

Use of Non-GAAP Financial Measures
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 merger, 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 merger, 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.

1 Key Business Metrics are defined on pages 28 - 29 of our Annual Report on Form 10-K filed on February 28, 2020. 

GRUBHUB INC.

STATEMENTS OF OPERATIONS

(in thousands, except per share data)



Three Months Ended
June 30,



Six Months Ended
June 30,



2020


2019



2020


2019


Revenues

$

459,282



$

325,058



$

822,262



$

648,828


Costs and expenses:
















Operations and support


318,867




162,406




533,428




323,756


Sales and marketing


94,004




74,128




184,746




152,582


Technology (exclusive of amortization)


30,228




29,400




61,501




56,650


General and administrative


32,237




25,784




71,186




48,571


Depreciation and amortization


34,557




27,223




67,920




52,312


Total costs and expenses


509,893




318,941




918,781




633,871


Income (loss) from operations


(50,611)




6,117




(96,519)




14,957


Interest expense - net


6,816




5,467




13,196




8,279


Income (loss) before provision for income taxes


(57,427)




650




(109,715)




6,678


Income tax benefit


(12,016)




(602)




(30,877)




(1,464)


Net income (loss) attributable to common stockholders

$

(45,411)



$

1,252



$

(78,838)



$

8,142


Net income (loss) per share attributable to common
stockholders:
















Basic

$

(0.49)



$

0.01



$

(0.86)



$

0.09


Diluted

$

(0.49)



$

0.01



$

(0.86)



$

0.09


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
















Basic


92,116




91,177




91,954




91,064


Diluted


92,116




92,786




91,954




92,852


 

KEY BUSINESS METRICS





Three Months Ended
June 30,



Six Months Ended
June 30,





2020



2019



2020



2019


Active Diners (000s)




27,475




20,288




27,475




20,288


Daily Average Grubs




647,100




488,900




581,700




504,900


Gross Food Sales (millions)



$

2,325



$

1,459



$

3,955



$

2,962


 

GRUBHUB INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)























June 30, 2020



December 31, 2019

ASSETS







CURRENT ASSETS:







Cash and cash equivalents

$

484,760



$

375,909

Short-term investments


48,616




49,275

Accounts receivable, less allowances for doubtful accounts


75,726




119,658

Income tax receivable


19,390




3,960

Prepaid expenses and other current assets


18,721




17,515

Total current assets


647,213




566,317

PROPERTY AND EQUIPMENT:







Property and equipment, net of depreciation and amortization


212,772




172,744

OTHER ASSETS:







Other assets


36,836




26,836

Operating lease right-of-use asset


99,058




100,632

Goodwill


1,007,968




1,007,968

Acquired intangible assets, net of amortization


476,309




500,481

Total other assets


1,620,171




1,635,917

TOTAL ASSETS

$

2,480,156



$

2,374,978

LIABILITIES AND STOCKHOLDERS' EQUITY







CURRENT LIABILITIES:







Restaurant food liability

$

206,306



$

131,753

Accounts payable


24,508




26,748

Accrued payroll


34,166




19,982

Current operating lease liability


16,642




9,376

Other accruals


124,555




61,504

Total current liabilities


406,177




249,363

LONG-TERM LIABILITIES:







Deferred taxes, non-current


11,607




27,163

Noncurrent operating lease liability


110,193




111,056

Long-term debt


493,475




493,009

Other accruals


4,152




817

Total long-term liabilities


619,427




632,045

STOCKHOLDERS' EQUITY:







Common stock, $0.0001 par value


9




9

Accumulated other comprehensive loss


(2,330)




(1,628)

Additional paid-in capital


1,204,922




1,164,400

Retained earnings


251,951




330,789

Total Stockholders' Equity

$

1,454,552



$

1,493,570

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

2,480,156



$

2,374,978

 

GRUBHUB INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)











Six Months Ended June 30,



2020



2019

CASH FLOWS FROM OPERATING ACTIVITIES








Net income (loss)


$

(78,838)



$

8,142

Adjustments to reconcile net income (loss) to net cash from operating
activities:








Depreciation



18,820




13,626

Amortization of intangible assets and developed software



49,100




38,686

Stock-based compensation



41,221




36,527

Deferred taxes



(15,556)




298

Other



2,548




3,240

Change in assets and liabilities:








Accounts receivable



43,390




(13,349)

Income taxes receivable



(15,429)




429

Prepaid expenses and other assets



(5,476)




(14,857)

Restaurant food liability



74,612




(3,078)

Accounts payable



547




(10,216)

Accrued payroll



14,190




3,122

Other accruals



61,732




7,219

Net cash provided by operating activities



190,861




69,789

CASH FLOWS FROM INVESTING ACTIVITIES








Purchases of investments



(56,554)




(25,526)

Proceeds from maturity of investments



57,500




21,636

Capitalized website and development costs



(29,269)




(22,188)

Purchases of property and equipment



(41,800)




(23,140)

Acquisition of other intangible assets



(510)




(8,889)

Acquisitions of businesses, net of cash acquired






127

Other cash flows from investing activities



(525)




Net cash used in investing activities



(71,158)




(57,980)

CASH FLOWS FROM FINANCING ACTIVITIES








Proceeds from the issuance of long-term debt



175,000




500,000

Repayments of borrowings under the credit facility



(175,000)




(342,313)

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



(14,240)




(15,360)

Proceeds from exercise of stock options



3,667




2,930

Payments for debt issuance costs



(259)




(8,954)

Other cash flows from financing activities



(454)




Net cash provided by (used in) financing activities



(11,286)




136,303

Net change in cash, cash equivalents, and restricted cash



108,417




148,112

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



(651)




(2)

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



379,595




215,802

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


$

487,361



$

363,912

SUPPLEMENTAL DISCLOSURE OF NON-CASH ITEMS








Cash paid for income taxes


$



$

567

 

GRUBHUB INC.

NON-GAAP FINANCIAL MEASURES RECONCILIATION

(in thousands, except per share and per order data)



Three Months Ended
June 30,


Six Months Ended
June 30,



2020


2019


2020



2019


Net income (loss)

$

(45,411)



$

1,252



$

(78,838)



$

8,142


Income taxes


(12,016)




(602)




(30,877)




(1,464)


Interest expense - net


6,816




5,467

2



13,196




8,279

2

Depreciation and amortization


34,557




27,223




67,920




52,312


EBITDA


(16,054)




33,340




(28,599)




67,269


Merger, acquisition, restructuring and certain
legal costs


8,316




1,341




21,692




1,827


Stock-based compensation


21,036




20,049

3



41,221




36,527

3

Adjusted EBITDA

$

13,298



$

54,730



$

34,314



$

105,623


















Net income (loss) per order

$

(0.77)



$

0.03



$

(0.74)



$

0.09


Adjusted EBITDA per order

$

0.23



$

1.23



$

0.32



$

1.16




Three Months Ended
June 30,


Six Months Ended
June 30,



2020


2019


2020



2019


Net income (loss)

$

(45,411)



$

1,252



$

(78,838)



$

8,142


Stock-based compensation


21,036




20,049

3



41,221




36,527

3 

Amortization of acquired intangible assets


11,487




11,828




24,172




23,770


Merger, acquisition, restructuring and certain
legal costs


8,316




1,341




21,692




1,827


Income tax adjustments


(11,354)




(9,595)




(24,210)




(17,457)


Non-GAAP income (loss)

$

(15,926)



$

24,875



$

(15,963)



$

52,809


Weighted-average diluted shares used to compute
income (loss) per share attributable to common
stockholders


92,116




92,786




91,954




92,852


Non-GAAP income (loss) per diluted share
attributable to common stockholders

$

(0.17)



$

0.27



$

(0.17)



$

0.57



2

Interest expense for the three and six months ended June 30, 2019 included $1.8 million and $1.9 million, respectively, of expense for the write-off of unamortized debt issuance costs in February and June of 2019.



3

Stock-based compensation for the three and six months ended June 30, 2019 included $1.6 million of expense related to the accelerated vesting of equity awards to a terminated acquired employee.

 

Grubhub logo (PRNewsfoto/Grubhub)

 

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SOURCE Grubhub Inc.

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