Grubhub (NYSE:GRUB) devoured analyst expectations by posting a 41% jump in pandemic-fueled second-quarter revenue that pushed key business metrics to large gains.

Yet it was still a money-losing operation, notching adjusted net losses of $16 million, or $0.17 per share, worse than the $37,000 loss, or breakeven on a per share basis, it recorded in the first quarter and a complete reversal of the $25 million, or $0.27-per-share profit, it put up a year ago. Analysts had forecast an $0.18-per-share loss.

However, adjusted earnings before interest, taxes, depreciation, and amortization of $13.3 million, though down 76% year over year, was far better than the $5 million in adjusted EBITDA it had guided toward in the first quarter.

Grubhub delivery woman

Image source: Grubhub.

Ready for the next stage of growth

Grubhub is poised to be acquired by Just Eat Takeaway and the third-party delivery specialist is setting itself up to be a better-positioned business in the industry for its new owner, albeit a loss-generating one.

Daily average grubs, or the number of orders placed by customers, jumped 32% in the quarter to 647,100, a strong showing considering it had lost 1% of its DAG in the first quarter. DAG growth actually accelerated each month in the quarter, growing 20% in April, 35% in May, and 40% in June.

That helped push gross food sales up an impressive 59% in the quarter to $2.3 billion as it added more partnered restaurants to its platform in the first half of 2020 than it did during all of 2019.

Third-party delivery has become a cutthroat business that is now in the midst of consolidation because, as Grubhub's earnings show, it is difficult to make a profit.