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Grubhub (GRUB) Q3 Earnings Beat Estimates, Revenues Up Y/Y
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Grubhub reported third-quarter 2020 earnings of 16 cents per share that beat the Zacks Consensus Estimate by 328.6% but declined 40.7% year over year.
The company reported net loss per order of 15 cents in the third quarter against the year-ago quarter’s net income per order of 2 cents.
Revenues surged 53.4% year over year to $494 million, beating the consensus mark by 10.2%.
The company’s capture rate, net revenues divided by gross food sales, was 21% and included nearly 60 basis points (bps) from LevelUp and other technology-oriented revenues.
Excluding technology-oriented revenues, Grubhub’s capture rate increased approximately 120 bps from the second quarter.
Markedly, in June, Grubhub announced its acquisition by Just Eat Takeaway.com that will create the largest and the only profitable online food marketplace outside of China. Due to the pending acquisition, the company didn’t provide any forward-looking guidance.
Operating Details
Total costs & expenses surged 59.9% year over year to $509.1 million. Operations & support; sales & marketing; technology; and general & administrative expenses grew 96.1%, 36.6%, 4.5% and 8.5%, respectively.
Markedly, Grubhub continues to ensure consistency in delivery operations in response to COVID-19 by providing monetary support to partner restaurants, forgiving and reducing commissions, increasing marketing support and providing restaurant-specific coupons funded by the company.
Revenues excluding operations and support costs were $2.89 per order, up from $2.38 in the previous quarter.
Adjusted EBITDA declined 18.7% from the year-ago quarter to $43.8 million. Adjusted EBITDA per order was 71 cents, decreasing from $1.28 in the year-ago quarter but increasing from 23 cents in the previous quarter.
Gross Food Sales & Active Diners See a Spike
Gross Food Sales (GFS) rose 68.1% year over year to $2.4 billion. Average order size increased 15% year over year to $38. Grubhub exited the quarter with an annual GFS run-rate approaching $10 billion.
Active diners were nearly 30 million, up 41.3% year over year. The company added 2.5 million net new active diners sequentially.
Daily Average Grubs (DAGs) were 668,600, up 46.2% year over year.
Grubhub now has more than 300K restaurants on its platform, including 245K restaurant partners. The expanding partner base is expected to help the company rapidly penetrate the growing food takeout market in the United States.
Balance Sheet
As of Sep 30, 2020, cash and cash equivalents (including short-term investments) were $466.8 million compared with $533.4 million as of Jun 30.
Long-term debt as of Sep 30, 2020, was $493.9 million compared with $493.5 million as of Jun 30.
Both CDW and Skyworks are scheduled to report their quarterly earnings on Nov 2. Qorvo is set to report on Nov 4.
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Grubhub (GRUB) Q3 Earnings Beat Estimates, Revenues Up Y/Y
Grubhub reported third-quarter 2020 earnings of 16 cents per share that beat the Zacks Consensus Estimate by 328.6% but declined 40.7% year over year.
The company reported net loss per order of 15 cents in the third quarter against the year-ago quarter’s net income per order of 2 cents.
Revenues surged 53.4% year over year to $494 million, beating the consensus mark by 10.2%.
The company’s capture rate, net revenues divided by gross food sales, was 21% and included nearly 60 basis points (bps) from LevelUp and other technology-oriented revenues.
Excluding technology-oriented revenues, Grubhub’s capture rate increased approximately 120 bps from the second quarter.
Grubhub Inc. Price, Consensus and EPS Surprise
Grubhub Inc. price-consensus-eps-surprise-chart | Grubhub Inc. Quote
Markedly, in June, Grubhub announced its acquisition by Just Eat Takeaway.com that will create the largest and the only profitable online food marketplace outside of China. Due to the pending acquisition, the company didn’t provide any forward-looking guidance.
Operating Details
Total costs & expenses surged 59.9% year over year to $509.1 million. Operations & support; sales & marketing; technology; and general & administrative expenses grew 96.1%, 36.6%, 4.5% and 8.5%, respectively.
Markedly, Grubhub continues to ensure consistency in delivery operations in response to COVID-19 by providing monetary support to partner restaurants, forgiving and reducing commissions, increasing marketing support and providing restaurant-specific coupons funded by the company.
Revenues excluding operations and support costs were $2.89 per order, up from $2.38 in the previous quarter.
Adjusted EBITDA declined 18.7% from the year-ago quarter to $43.8 million. Adjusted EBITDA per order was 71 cents, decreasing from $1.28 in the year-ago quarter but increasing from 23 cents in the previous quarter.
Gross Food Sales & Active Diners See a Spike
Gross Food Sales (GFS) rose 68.1% year over year to $2.4 billion. Average order size increased 15% year over year to $38. Grubhub exited the quarter with an annual GFS run-rate approaching $10 billion.
Active diners were nearly 30 million, up 41.3% year over year. The company added 2.5 million net new active diners sequentially.
Daily Average Grubs (DAGs) were 668,600, up 46.2% year over year.
Grubhub now has more than 300K restaurants on its platform, including 245K restaurant partners. The expanding partner base is expected to help the company rapidly penetrate the growing food takeout market in the United States.
Balance Sheet
As of Sep 30, 2020, cash and cash equivalents (including short-term investments) were $466.8 million compared with $533.4 million as of Jun 30.
Long-term debt as of Sep 30, 2020, was $493.9 million compared with $493.5 million as of Jun 30.
Zacks Rank & Stocks to Consider
GrubHub currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader technology sector are CDW Corporation (CDW - Free Report) , Qorvo (QRVO - Free Report) and Skyworks Solutions (SWKS - Free Report) . CDW and Qorvo both sport a Zacks Rank #1 (Strong Buy), while Skyworks carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Both CDW and Skyworks are scheduled to report their quarterly earnings on Nov 2. Qorvo is set to report on Nov 4.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot stocks we're targeting >>