GrubHub’s revenue grew ~40%
Online food delivery company GrubHub (GRUB) announced its first-quarter results on April 25, beating analysts’ top-line and earnings estimates. The company’s revenue rose 39.2% YoY (year-over-year) to $323.8 million, marginally beating Wall Street’s estimate of $323 million. Its growth slowed down from the ~50% YoY growth it saw for most of last year.
GrubHub stock has fallen ~50% since last September, when it was challenged with stiff competition from Uber Eats and DoorDash. Spending heavily on promotion and marketing in light of increasing competition, GrubHub posted its first-ever net loss as a public company during the fourth quarter.
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GrubHub’s bottom line affected by competition
GrubHub’s total costs and expenses in the first quarter grew 57% YoY to $314.9 million, while its sales and marketing expenses grew 61% YoY to $78.5 million. As a result, the company posted a net income of only $6.9 million. Excluding certain one-time items, the company made $0.30 per share, easily beating analysts’ estimate of $0.25 per share. Investors seem to like that GrubHub is taking a more disciplined approach than competitors.
While competition is heating up, the company managed to add 1.6 million new diners in the first quarter, compared with 1.3 million in the prior quarter. The company also said the diners it acquired earlier this year are coming back more often than in the previous two years. At the end of the first quarter, its active diner count grew 28% YoY to 19.3 million.