UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549  
 
FORM 8-K  
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 27, 2017  
 
GRUBHUB INC.
(Exact name of Registrant as Specified in Its Charter)  

Delaware	 	001-36389	 	46-2908664	
(State or Other Jurisdiction
of Incorporation)	 	(Commission File Number)	 	(IRS Employer
Identification No.)	
 	 	 	
111 W. Washington Street, Suite 2100,
Chicago, Illinois	 	 	 	60602	
(Address of Principal Executive Offices)	 	 	 	(Zip Code)	
 
Registrant’s Telephone Number, Including Area Code: (877) 585-7878
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)  
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):
☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company       ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.     ☐

 

 
Item 2.02.	Results of Operations and Financial Condition	
On April 27, 2017, the Grubhub Inc. (the “Company”) issued a press release reporting the Company’s financial results for the first quarter ended March 31, 2017.  A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.  
Information in this report, including the exhibit hereto, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (“Exchange Act”), or otherwise subject to the liabilities of that section, and shall not be incorporated by reference into any filing of the Company under the Exchange Act or the Securities Act of 1933, as amended, regardless of any general incorporation by reference language in such a filing except as otherwise expressly stated in such a filing.
Item 9.01.	Financial Statements and Exhibits	
(d) Exhibits
The following exhibit is furnished with this report:
 
Exhibit
Number	  	Description	
 	 	
99.1	  	Press Release issued by GrubHub Inc. on April 27, 2017.	

 

 
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
 	 	 	 	 	GRUBHUB INC.	
 	 	 	 	 	
Date: April 27, 2017	 	 	 	 	By:	 	/s/ Adam DeWitt	
 	 	 	 	 	 	 	Adam DeWitt	
 	 	 	 	 	 	 	Chief Financial Officer	

 

 
EXHIBIT INDEX
 
Exhibit
Number	  	Description	
 	 	 	
99.1	  	Press Release issued by GrubHub Inc. on April 27, 2017.	

 

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 att ributable 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 attrib utable 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