What happened
Shares of Grubhub Inc (GRUB) were skyrocketing today after the online takeout marketplace posted another blowout earnings report and announced a new partnership with Yum! Brands (YUM -0.44%).
The food delivery specialist beat estimates on both top and bottom lines, and the stock was up 31.2% as of 12:44 p.m. EST Thursday.
Image source: Grubhub.
So what
Boosted by the acquisition of Eat24 from Yelp in October, revenue surged 49% in the quarter to $205.1 million, ahead of the analyst consensus at $201.7 million. Active diners jumped 77% to 14.5 million as the company took hold of the Eat24 user base, and adjusted earnings per share rose from $0.23 to $0.37, topping expectations at $0.31.
CEO Matt Maloney touted the "incredible strides" the company has made over the last two years as it's doubled its number of participating restaurants to 80,000, and said he expects growth to accelerate with the new Yum! partnership.
Yum! will invest $200 million in Grubhub, which will become its only national online ordering partner, as Yum! expects to drive incremental sales for KFC and Taco Bell both through online ordering and delivery.
Now what
The report marked the fourth time in a row that the stock has surged on quarterly results as the company, with the recent growth of its delivery program which reached an annual run rate of over $1 billion, seems to be a reaching a scale and tipping point in restaurant delivery. The Yum! partnership only seems to confirm that.
The company sees more growth ahead for 2018 with full-year revenue expected to increase about 38% to $910-$960 million, and first-quarter revenue up about 46% to $224-$232 million. After shares jumped 91% last year, it won't be easy for the company to pull off a repeat performance, but it's clearly off to a good start with today's strong numbers and the new Yum! partnership.
