Takeout food delivery platform Grubhub stock soared 26 percent following a way-better-than-expected second quarter earnings release. The online marketplace connecting restaurants and takeout diners beat analysts expectations, both for revenue and adjusted EPS.
For the second quarter ended June 30, the company posted $120.2 million in revenue, whereas Wall Street was expecting $114.2 million. Non-GAAP net income per diluted share was 23 cents, or four cents above adjusted EPS expectations of 19 cents.
In a phone interview, co-founder and CEO Matt Maloney said that the company did so well during the quarter because of investments in product improvement and, specifically, in the ratings and reviews of restaurants.
Maloney added that investments in the delivery systems also led to more orders from diners. The company said it manages 271.000 orders a day and 7.4 million active customers, by creating a network of 44,000 restaurants. The majority of orders come from the largest metropolitan areas: Chicago, where Grubhub headquarters, is responsible for 10 percent of the orders, Maloney reported.
“In the next year, we’re going to keep investing in product and delivery across the country,” Maloney told TechCrunch. “Most people will want to order in local businesses from us.”
Grubhub is not the only option for people who want to order takeout. Other San-Francisco based startups in the delivery business, such as Postmates and DoorDash, have recently announced new features to attract customers. Postmates, for example, launched a 15-minute food delivery service in NYC and lowered the minimum order price for monthly subscription service, while DoorDash added the ability to purchase alcohol through its portal, at least as a pilot service. Adding a “special” feature to the online platform’s services menu – such as, quicker deliveries or alcohol orders – could be the key move for these startups to differentiate from Grubhub and grow.
Now, neither Postmates nor DoorDash have numbers to compete with Grubhub, a $3 billion company.
In the latest quarter, Grubhub posted net income attributable to common stockholders of $12.8 million, up 37 percent from $9.4 million last year. Profits were up considering the last six months and the 2015 comparable period as well. For the first half of 2016, the company posted net income of $22.7 million, up 14 percent from $19.9 million.
In New York Stock Exchange trading today, Grubhub shares were trading up $7.37, or 23.98 percent, at $38.11. On July 27, the day before today’s earnings announcement, the stock closed at $30.74.
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