CHICAGO, April 13, 2020 /PRNewswire/ -- Grubhub Inc.
(NYSE: GRUB), a leading online and mobile food-ordering and
delivery marketplace, today announced it will release first quarter
2020 earnings results after the market close on Wednesday, May 6, 2020, followed by a conference
call to discuss its results on Thursday, May
7, 2020, at 8:00 a.m. CT.
The company also today provided a brief business update due to
the extraordinary circumstances stemming from the COVID-19
pandemic.
Business Update
During these unprecedented times, our priority is the health,
safety and sustainability of our community – the drivers,
restaurants and diners who make up our marketplace and our
approximately 2,800 Grubhub employees. We have responded quickly to
the crisis by launching a number of initiatives to support
restaurants, drivers and diners; our focus is on driving as much
business as we can to our restaurant partners while dining rooms
remain closed. And we will continue to support the local
communities and restaurants that are struggling during this
uncertain and difficult period.
For the first quarter of 2020, we expect our revenue and
adjusted EBITDA to be slightly above the midpoints of the guidance
we issued on February 5, 2020. While
the business was trending at or above the high end of our guidance
range for the first 10 weeks of the quarter, like most businesses,
we experienced a swift change in customer behavior in the middle of
March when the pandemic took hold across the country.
Initially, we observed a decrease in orders across our entire
business as the news upended typical routines and there was
considerable uncertainty about what day-to-day life would be like.
In particular, our corporate business, which accounted for a
mid-single digit percentage of our orders in the fourth quarter,
was dramatically impacted in mid-March as virtually all of our
corporate clients shifted to work-from-home models.
In New York City our consumer
business was affected more than in other metro areas due to the
severity of the COVID-19 impact in that market. We believe this is
due to a number of factors, including New
York City residents choosing to temporarily leave the city
and/or cooking at home more often, as well as more local
restaurants deciding to pause operations because of the temporary
drop in demand. As a result of all of these factors, our first
quarter DAGs ended up flattish compared to the first quarter of
2019.
Exiting the first quarter and in the beginning of the second
quarter, we have seen trends improve significantly – so far in
April our overall year-over-year DAG growth has been approximately
10%. In markets less affected by the outbreak, diner ordering has
returned to, and in many cases exceeded, our pre-COVID-19
expectations. We are also seeing record numbers of new diners and
new restaurants on the platform. In markets more affected,
New York in particular, we have
seen a stabilization in consumer orders, and even some improvement
from the low points observed in March, but New York orders remain below pre-COVID
volumes. We will discuss these dynamics in more detail during
earnings, but we believe what we are now observing on both the
positive and negative side, including corporate, is ephemeral, and
we expect to see a return to more typical behavior when the
COVID-19 impact on daily life wanes.
In this difficult and uncertain environment, we believe Grubhub
has a clear responsibility to help restaurants and all working
individuals in our ecosystem. We further believe the absolute best
way we can support our industry is by driving as much demand as
possible to local restaurants, which in turn has significant
downstream benefits for restaurant workers, restaurant suppliers,
our drivers and countless others in the value chain.
While we are confident we could generate meaningful profits in
the second quarter that would keep us comfortably on the previously
announced path to deliver at least $100
million of Adjusted EBITDA in 2020, we are instead planning
to reinvest most of the profits we expect to generate during the
second quarter into programs that directly drive more business to
our restaurant partners. We anticipate this enhanced support will
take several forms, including numerous Grubhub-funded diner
promotions, reduced or eliminated diner delivery fees, platform
improvements and products and procedures to help keep drivers,
diners and restaurant workers safe.
As a result, we plan to intentionally manage the business to
approximately $5 million of Adjusted
EBITDA in the second quarter to continue to support our ecosystem.
To be clear, this is a completely discretionary short-term business
decision designed to support our industry. We are proud that our
consistent profitability, highly variable cost structure and strong
balance sheet afford us ample liquidity (approximately $600 million as of March
31, including $175 million we
added from our revolver) and flexibility during times like
these.
We are confident that our ability to manage our business
profitably while competing aggressively has not changed, but
because of the uncertainty surrounding the timing of when and how
the COVID-19 outbreak will resolve, we believe it's prudent to
withdraw our full year 2020 revenue and EBITDA guidance.
When business and social conditions normalize, we expect to
return Grubhub to the growth and profit trajectory we were on
before COVID-19 – which was at the high end of our expectations
laid out over the last couple of quarters. We remain bullish on our
industry and our long-term competitive strategy.
Stay safe, and we look forward to providing you with a more
comprehensive update on the business in early May.
Matt Maloney, Founder and CEO
Adam DeWitt, President and CFO
First Quarter Earnings Call
Grubhub will release
first quarter 2020 earnings results after the market close on
Wednesday, May 6, 2020, followed by a
conference call to discuss its results on Thursday, May 7, 2020, at 8:00 a.m. CT. Founder & CEO
Matt Maloney and President & CFO
Adam DeWitt will host the conference
call.
The live webcast of the conference call will be available on the
investor relations section of the Grubhub website at
http://investors.grubhub.com. Following completion of the call, a
recording of the webcast will be available on the website.
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 more than 22 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 350,000 restaurants and
is proud to partner with more than 165,000 of these restaurants in
over 3,200 U.S. cities and London.
The Grubhub portfolio of brands includes Grubhub, Seamless,
LevelUp, AllMenus and MenuPages.
Use of Forward Looking Statements
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, including the
expected benefits to, and financial performance of, Grubhub
including its acquisitions. 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 substantial known and
unknown risks, uncertainties and assumptions that could cause
actual results, performance or achievements including, but not
limited to, achievement of the benefits of our planned additional
investments, 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, statements related to the potential impact
of the COVID-19 outbreak on our business and operations, as well as
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 February
28, 2020, which is on file with the SEC and are available on
the Investor Relations section of our website at
https://investors.grubhub.com. 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 disclaim any intention to, and undertake 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 is
a financial measure that is 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. We use 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 is not a
measurement of our financial performance under GAAP and should not
be considered as an alternative to performance measures derived in
accordance with GAAP.
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SOURCE Grubhub Inc.