On Thursday, Grubhub revealed its first fiscal quarter earnings of this 2017, registering record numbers all across the board. The food delivery startup had positive year-over-year figures for both revenue and net income.
The industry of food delivery in the United States is growing fast amid fierce competition between several rising startups. Grubhub’s record growth made headlines because just a few years ago it was considered one more from the bunch.
Instead, it has managed to displace even established companies like Amazon and Uber at a national scale due to its narrow focus. Q1 closing figures for Grubhub made its stock rise as much as 22 percent in late Thursday trading.
Quality over quantity works for Grubhub
It is paramount for any startup to have an all-around solid financial performance, and many would be jealous at Grubhub’s latest feat. At the top of its first quarter highlights, the company registered a net income jump of 78% since 2016.
In this same period last year, the rising star of food delivery made $9.9 million, while this year it reported $17.7 million in net income. Revenue was also up almost 40% from $112.2 million to $156.1 million by March 31.
This quarter, Grubhub’s gross food sales amounted nearly $900 million (up 26%), and daily average grubs were close to 325,000 (a 21% increase year-over-year). However, one of the most meaningful metrics was the number of active diners.
Much like other apps which track performance based on daily active users, Grubhub’s magic number uses the same measurement method. These are people who regularly place orders via their platform, and in Q1 2017 that number was up 26% at 8.75 million.
The man behind the steering wheel
Matt Maloney, Grubhub’s CEO, offered a forward-looking statement along with the press release to report first quarter results. The executive said they saw “clear signs of success” in the final numbers:
“WE ALREADY HAD THE MOST COMPREHENSIVE TAKEOUT MARKETPLACE IN THE U.S., AND DELIVERY HAS ENABLED OUR RESTAURANT NETWORK TO GROW SIGNIFICANTLY IN BOTH BREADTH AND DEPTH, MAKING GRUBHUB THE PLACE TO GO FOR ONLINE TAKEOUT.”
The platform allows users to order food and select between picking it up themselves and having it delivered to their location. The startup has an app and a website that are both free to use, and it only charges a fee on deliveries agreed with companies and restaurants.
Grubhub’s narrow focus consists of sticking just to delivery when everyone else is trying to diversify. Uber’s UberEATS and Amazon’s Prime Now delivery services are popular in the major cities, but Maloney’s company brings takeout to the doorsteps of people in over 1,000 American cities.
The startup has partnerships with over 50,000 restaurants in the U.S., and it has both local and foreign headquarters in London, U.K. It has absorbed nearly ten competing brands so far, and it is expected to make close to $700 million this year alone.