Grubhub (NYSE: GRUB) posted 52% revenue growth in Q1 2021 on revenues of $551 million compared to $363 million in Q1 2020, it said on Wednesday after market close.
Gross food sales grew 60% year-over-year to $2.6 billion, up from $1.6 billion in the first quarter of 2020, and the company said it saw high-single-digit year-over-year growth in orders.
“We are proud of our continued role in helping restaurants grow their businesses and supporting the communities where they operate. Our team continued its strong execution in the first quarter — easily hitting records for all of our key business metrics,” said Matt Maloney, Grubhub founder and CEO.
A consensus of analysts expected revenue of $509.3 million and adjusted earnings per share (EPS) of 1 cent. EPS for Q1 2021 was negative 56 cents.
In Q1, Grubhub reported a net loss of $75.5 million, or 81 cents per diluted share, up from a $33.4 million loss year-over-year. First-quarter 2021 negative adjusted earnings before interest, taxes, depreciation and amortization was $9 million or 14 cents per order compared to $31 million and 52 cents per order in the fourth quarter. The company attributed this to “temporary restaurant fee caps,” without which the adjusted EBITDA per order would have been approximately 80 cents, it said. Grubhub reported a net loss per order of $1.12, up from 71 cents a year ago.
The online and mobile food ordering and delivery marketplace holds 17% of the U.S. market, including its subsidiaries Seamless and Eat24, according to data from Second Measure.
Due to its pending acquisition by Just Eat Takeaway.com, Grubhub did not hold a conference call to discuss the earnings results. Last year, Just Eat merged with Takeaway.com in an $8.5 billion deal. Almost immediately, the new company announced the acquisition of U.S.-based Grubhub for $7.3 billion. That deal, which has been approved by Grubhub’s board, is expected to close in the first half of this year and will create the largest food delivery service outside of China.
In a letter to employees on Tuesday, Adam DeWitt, president and CFO, said the company had “completed one of the last meaningful steps in the process to finalize our acquisition with Just Eat Takeaway.com. A registration statement and preliminary proxy have been filed with the SEC, he said.
A Grubhub shareholder meeting is scheduled for June 18, when a vote on the transaction is expected.
“With yesterday’s public filing of the registration statement and preliminary proxy statement with the SEC and the Grubhub special stockholder meeting expected to take place in June, we are looking forward to closing the transaction in the coming months and beginning our next chapter as part of the Just Eat Takeaway.com family,” Maloney said.
Active diners on the platform increased 38% to 33 million, and daily average Grubs (DAGs) increased 44% year-over-year to 745,700.
“We saw strength across all of our markets during the first quarter, with the highest growth coming in places with a heavy existing competitive presence. We also observed a continued, steady recovery in our largest market, New York City,” said DeWitt. “Order growth accelerated in the high-single digits compared to the fourth quarter of 2020, even when normalizing for the initial COVID-related deceleration in the second half of March 2020. We believe our robust hybrid marketplace model is well positioned as we transition to a post-COVID environment.”
In a letter to shareholders, Grubhub attributed the surprising loss to a number of factors.
“Adjusted EBITDA was also impacted by increased delivery driver costs due to a number of transient factors during the quarter, including short-term driver supply imbalances from surging demand, extreme winter weather in numerous parts of the country, and to a lesser degree, the issuance of economic impact payments (i.e., stimulus payments) caused some drivers to temporarily reduce hours in March,” it said.