Grubhub Inc. (NYSE: GRUB) reported its fourth quarter and full year financial results for fiscal year 2017. The takeout marketplace company reported stronger than expected fourth quarter and a new partnership with Yum! Brands. Shares were 29 percent higher on Thursday.
For the fourth quarter, Grubhub reported revenue of $205.1 billion, increasing 49 percent year over year, and beating analysts’ estimates of $201.76 million. The company reported an EPS of $0.37, increasing 68 percent year over year, and beating analysts’ estimates of $0.31.
Grubhub reported 14.5 million active diners, increasing 77 percent year over year. Daily average grubs were 392,500, increasing 34 percent year over year. The strong growth in users totaled gross food sales of $1.1 billion, a 39 percent increase year over year.
For the full year, Grubhub reported revenue of $683.1 million, increasing 38 percent year over year. The company reported an EPS of $1.20, increasing 39 percent year over year.
"Over the past two years we have taken incredible strides in expanding the breadth and depth of our restaurant network, growing the number of local restaurants we work with from 40,000 to over 80,000 today," said Grubhub CEO, Matt Maloney.
Grubhub also announced its partnership with Yum! Brands (NYSE: YUM) to help drive sales to its subsidiaries, KFC and Taco Bell, throughout chains in the U.S. Under the agreement, YUM purchased $200 million of Grubhub’s common stock, totaling a 3 percent stake in the company.
The stake in Grubhub will provide the company with additional services to help rapidly grow the takeout business and more orders to YUM restaurants.
"The partnership with Yum! which we announced this morning will accelerate the expansion of our delivery network and amplify our diner acquisition efforts, raising consumer awareness of online ordering and driving more volume for all restaurants across our platform." said Maloney.
“We’re pleased to secure this partnership with Grubhub in order to drive incremental, profitable growth for our U.S. franchisees over the long term. Our partnership and strategic investment in Grubhub demonstrate our laser-like focus on two of our growth drivers: Distinctive, Relevant & Easy Brands and Unmatched Franchise Operating Capability.” said Greg Creed, Chief Executive Officer, Yum! Brands, Inc.
The partnership will also expands Grubhub’s board of directors to 10 members from nine and appoint Pizza Hut U.S. President, Artie Starrs to the new board of directors.
For the first quarter of 2018, Grubhub forecasts revenue in the range between $224 million and $232 million. For the full year, the company forecasts revenue in the range between $910 million and $960 million.