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Grubhub (GRUB) Incurs Loss in Q2 on Higher Costs & Expenses
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Grubhub reported second-quarter 2020 loss of 17 cents per share that beat the Zacks Consensus Estimate by 5.6%.
Notably, the company delivered earnings of 27 cents per share in the year-ago quarter.
Net loss per order in the second quarter was 77 cents against the year-ago quarter’s net income per order of 3 cents.
Revenues surged 41.3% year over year to $459.3 million, beating the consensus mark by 15.4%.
The company’s capture rate, net revenues divided by gross food sales, was 20% and included nearly 50 basis points (bps) from LevelUp and other technology-oriented revenues.
Excluding technology-oriented revenues, Grubhub’s capture rate increased roughly 200 bps on a year-over-year basis.
Markedly, in June, Grubhub announced its acquisition by Just Eat Takeaway.com that will create the largest and 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 $509.9 million. Operations & support; sales & marketing; technology; and general & administrative expenses grew 96.3%, 26.8%, 2.8% and 25%, respectively.
Markedly, Grubhub spent $15 million during the quarter to ensure consistent and safe delivery operations in response to coronavirus. Moreover, the company spent roughly $100 million in one-time, discretionary costs to support local restaurants and its operations.
Revenues excluding operations and support costs were $2.38 per order, down from $3.16 in the previous quarter.
Adjusted EBITDA plunged 75.7% from the year-ago quarter to $13.3 million. Adjusted EBITDA per order was 23 cents, down from $1.23 in the year-ago quarter and 45 cents in the sequential quarter.
Gross Food Sales & Active Diners See a Spike
Gross Food Sales (GFS) rose 59.4% year over year to $2.3 billion. Average order size increased 20% year over year to $39. Grubhub exited the quarter with an annual GFS run-rate of more than $9 billion.
Active diners were 27.5 million, up 35.4% year over year. The company added 3.6 million net new active diners sequentially.
Daily Average Grubs (DAGs) were 647,100, up 32.4% year over year.
Grubhub now has more than 300K restaurants on its platform, including 225K restaurant partners. Markedly, in the quarter under review, the company expanded relationships with the likes of Burger King, Chipotle, Dunkin’, McDonald’s and Subway.
Balance Sheet
As of Jun 30, 2020, cash and cash equivalents (including short-term investments) were $533.4 million compared with $597.1 million as of Mar 31, 2020.
Long-term debt, as of Jun 30, 2020, was $493.5 million compared with $668.2 million as of Mar 31, 2020.
Both Dropbox and Everbridge are scheduled to report earnings on Aug 6. Asure Software is set to release quarterly results on Aug 10.
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Grubhub (GRUB) Incurs Loss in Q2 on Higher Costs & Expenses
Grubhub reported second-quarter 2020 loss of 17 cents per share that beat the Zacks Consensus Estimate by 5.6%.
Notably, the company delivered earnings of 27 cents per share in the year-ago quarter.
Net loss per order in the second quarter was 77 cents against the year-ago quarter’s net income per order of 3 cents.
Revenues surged 41.3% year over year to $459.3 million, beating the consensus mark by 15.4%.
The company’s capture rate, net revenues divided by gross food sales, was 20% and included nearly 50 basis points (bps) from LevelUp and other technology-oriented revenues.
Grubhub Inc. Price, Consensus and EPS Surprise
Grubhub Inc. price-consensus-eps-surprise-chart | Grubhub Inc. Quote
Excluding technology-oriented revenues, Grubhub’s capture rate increased roughly 200 bps on a year-over-year basis.
Markedly, in June, Grubhub announced its acquisition by Just Eat Takeaway.com that will create the largest and 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 $509.9 million. Operations & support; sales & marketing; technology; and general & administrative expenses grew 96.3%, 26.8%, 2.8% and 25%, respectively.
Markedly, Grubhub spent $15 million during the quarter to ensure consistent and safe delivery operations in response to coronavirus. Moreover, the company spent roughly $100 million in one-time, discretionary costs to support local restaurants and its operations.
Revenues excluding operations and support costs were $2.38 per order, down from $3.16 in the previous quarter.
Adjusted EBITDA plunged 75.7% from the year-ago quarter to $13.3 million. Adjusted EBITDA per order was 23 cents, down from $1.23 in the year-ago quarter and 45 cents in the sequential quarter.
Gross Food Sales & Active Diners See a Spike
Gross Food Sales (GFS) rose 59.4% year over year to $2.3 billion. Average order size increased 20% year over year to $39. Grubhub exited the quarter with an annual GFS run-rate of more than $9 billion.
Active diners were 27.5 million, up 35.4% year over year. The company added 3.6 million net new active diners sequentially.
Daily Average Grubs (DAGs) were 647,100, up 32.4% year over year.
Grubhub now has more than 300K restaurants on its platform, including 225K restaurant partners. Markedly, in the quarter under review, the company expanded relationships with the likes of Burger King, Chipotle, Dunkin’, McDonald’s and Subway.
Balance Sheet
As of Jun 30, 2020, cash and cash equivalents (including short-term investments) were $533.4 million compared with $597.1 million as of Mar 31, 2020.
Long-term debt, as of Jun 30, 2020, was $493.5 million compared with $668.2 million as of Mar 31, 2020.
Zacks Rank &Stocks to Consider
GrubHub currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader technology sector are Dropbox (DBX - Free Report) , Everbridge (EVBG - Free Report) and Asure Software (ASUR - Free Report) . All the three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Both Dropbox and Everbridge are scheduled to report earnings on Aug 6. Asure Software is set to release quarterly results on Aug 10.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>