Grubhub's Growth Decelerates for the Third Straight Quarter
Shares of Grubhub (NYSE: GRUB) recently tumbled after the meal delivery company posted mixed second-quarter numbers. Its revenue rose 36% annually to $325 million, which beat expectations by $8 million but marked the company's third straight quarter of decelerating growth.
Grubhub's bottom-line numbers were even messier, with its net income plunging 96% to $1.3 million. On an adjusted basis, which excludes expenses from recent acquisitions, stock-based compensation, and other one-time charges, its net income still declined 46% to $25 million, or $0.27 per share, missing expectations by three cents. Its adjusted EBITDA declined 19% to $54.7 million.
Grubhub's bottom line declines weren't surprising since it repeatedly told investors that it would ramp up its spending on marketing, logistics, and the expansion of its digital ecosystem. However, Grubhub's growth is clearly slowing down as it faces tougher competition from rivals like DoorDash and Uber (NYSE: UBER) Eats.
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