The stock price of GrubHub plummeted after reporting earning for the third quarter that disappointed investors. The shares of the online and mobile food ordering company were trading $24.01 per share, down by more than 25% at the time of this writing around 12:46 in the afternoon in New York. Earlier today, the stock plunged as low as $22.49 per share.
GrubHub financial results
GrubHub reported a non-GAAP net income of $11.5 million or $0.13 per diluted share, lower than the $0.14 per share expected by Wall Street analysts.
The company’s revenue increased 38% from $61.9 million to $85.7 million. Analysts expected GrubHub to deliver $86.5 million in revenue for the third quarter.
In a statement, GrubHun CEO Matt Maloney said the company “delivered strong year-over-year growth in the third quarter, driven by dependable repeat usage and robust new diner adds.”
Mr. Maloney also stated that the company sent its 300 millionth order— a major milestone demonstrating the extraordinary value created by the company for its partners.
GrubHub delivery initiatives
Furthermore, Mr. Maloney said, “We are seeing encouraging early signs of success with our delivery initiative. While delivery volume remains low relative to overall volume on GrubHub, we’ve seen tangible improvements in diner frequency, order growth and conversion in some of our secondary markets where restaurants we deliver for generate a significant amount of the overall order volume.
GrubHub said its active diners were 6.43 million, up by 41% from 4.57 million during the quarter. Its average, daily grubs increased 22% to 211,500 from 172,700 in the same period last year.
Fourth quarter outlook
For the fourth quarter, GrunHub estimated that it will be able to achieve adjusted EBITDA in the range of $23 million to $25 million. The company expected its revenue to be around $98 million to $100 million.
Data compiled byYahoo Finance showed that analysts are expecting GrubHub to deliver $100.85 million in the fourth quarter.
The company is confronting increasing competition, but Maloney emphasized that the entire food delivery industry “barely scratched the surface” of the market. He believes that GrubHub has an “extremely long runway” for growth.
