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Below is an ongoing record highlighting notes from select GRUB investor presentations and earnings calls (newest content shown first).

Third Quarter 2018 Earnings Call, 10/25/2018


  • For chains and independents, it is no longer a question of if they should go online, but how
  • Added more restaurants to network in 3Q than any previous quarter
  • 95k restaurants and several thousand Taco Bell and KFC locations which have joined the platform in last few months
  • Daily average grubs (DAGs) were 416k, a 37% increase yoy
  • $247mm revenue, up 52% yoy or 34% excluding Eat24 and LevelUp acquisitions
  • Ended quarter with 16.4mm active diners (up 67% yoy), added 800k active diners sequentially (next largest quarterly add was 600k)
  • Plan to invest $10-20mm of incremental marketing spend in 4Q across digital, TV, and promotional offers
    • Investment in diner growth builds a foundation for DAG growth and profit growth for years to come
  • September – announced acquisition of Tapinga, which is a college campus food ordering service across 150 campuses
  • Closed LevelUp acquisition on September 13th
  • Launched delivery in over 100 markets this year to accommodate Taco Bell and KFC additions Momentum in these markets have been so good that we have accelerated our investment in Grubhub delivery markets to capture latent demand
  • Gross food sales excluding Eat24 accelerated to 23% yoy
  • In 3Q, had increasing driver cost per order in new markets offset by decreasing driver cost per order in more mature markets
  • 28-29% expectation for tax rate
  • Based on current plans, will have launched delivery in 200 markets in 2018
  • Total investment to support driver supply in 4Q will be $10mm and expect to gain efficiency in these markets back in early 2019
  • LevelUp contributed $2mm in revenue and $1mm drag to EBITDA for 3Q (closed Sept 13) and includes $10mm in revenue for 4Q guidance and $2mm drag to EBITDA for 4Q
  • 4Q revenue guidance of $283-293mm and 4Q EBITDA guidance of $40-50mm
    • Revenue guidance is up from prior implied range of $262-272mm due to LevelUp impact and higher than expected order trends
    • EBITDA guidance is $25mm lower than prior implied guidance due to $10mm investment in delivery markets, $10mm-$20mm in marketing, and $2mm drag from LevelUp offset by stronger organic momentum
  • Q&A with Sell-side Analysts
  • Cohort behavior of new diners coming in vs. previous diner cohorts?
    • Cohorts are growing in value over time due to better product, more restaurants, etc.
  • $10mm investment in new markets delivery – how quickly to get back to better efficiency?
    • $10mm is an investment in building extra capacity ahead of demand. We originally talked about 100 delivery markets, but we ended up doing 200 markets
    • The $10mm is an amount we would have spent anyways, but we are accelerating that spend
    • Of the EBITDA per order impact, it is an 23-24 cent impact and we expect that impact to shrink over the course of 2019
    • In 2019, we also have to think about marketing spend which is a bigger impact to EBITDA per order in 4Q
  • Competition update
    • Seeing CPA (cost per acquisition) go down
    • No impact to labor cost acquisition from competitors
    • Believe competitors are bringing greater awareness to online food ordering
    • We have lowest diner facing fees and the most restaurants, which is going to have a long-term advantage
    • Saw acceleration in all our markets
  • Organic growth accelerating next year from new investments?
    • We are not guiding yet for 2019. We saw acceleration in 3Q, so we are pressing the gas down on 4Q
    • 4Q guide implies growth that is faster than 1Q and 2Q and at least in-line with 3Q
    • We will talk more on 2019 after 4Q, but we certainly see a strong trajectory. Diner net adds grew by 200k more than the next biggest quarter
  • Increased R&D in 2019 as GRUB supports software platform broadly?
    • Immediate plans don’t call for integrating LevelUp and Grubhub
    • Think about LevelUp as a massive increase in our tech and product teams with ancillary product that generates revenue to cover its expenses
    • We see a lot of synergies with adding delivery to LevelUp
  • Delivery cost per order
    • See pretty similar delivery cost per order in markets with a lot of delivery like Chicago vs. less delivery like Dallas
    • If you back out investments we are talking about, the EBITDA per order in 4Q is higher than 3Q
  • Delivery as a percent of Gross Food Sales
    • Annualized $1.6Bn in delivery
  • Delivery market expansion plans
    • Plan to launch 100 delivery markets in 4Q (from 280 today)
    • We expect to get some leverage from this in early 2019
  • Why restaurants choose Grubhub aside from scale?
    • Restaurants are increasingly frustrated. Restaurants want to build out the store and not pay incremental fees on orders, but that is not realistic given the technology spend
    • Other option is to partner with a bunch of platforms, but that places a 30% toll on all future orders
    • Shift in our acquisitions from scale to what we can do for restaurant partners
    • LevelUp – helps restaurants build a branded platform for them while also allowing restaurants to tap into Grubhub network whenever they want incremental growth
  • Chain restaurants and how LevelUp influences the opportunity?
    • LevelUp is doing the POS integration…execute multiple integrations in parallel
    • Potbelly – they rely on LevelUp to run their website, CRM applications
    • Potbelly is also a customer of Grubhub, so ability to put those two products together to manage digital customer bases together is really beneficial
  • Capital structure
    • We have capacity from a debt perspective
  • Delivery markets of 280 – how many restaurants does that cover?
    • The 280 markets are the vast majority of the US population
    • Once we roll out the additional 100 markets by year-end, there will be very few markets with self-delivery