With all the talk about competition in the food delivery space, Grubhub continues to stay ahead of its rivals.
This week Chicago-based Grubhub delivered strong third quarter earnings, reporting revenues of $163 million, up 32 percent year-over-year. It sold $867 million worth of food last quarter, up 18% from last year. The company is also profitable, reporting a net income of $13 million for the quarter.
That sent Grubhub’s stock up more than 11 percent Wednesday when the company’s earnings were released. Grubhub’s shares are up 57 percent on the year, as it now partners with 75,000 restaurants in 1,300 cities. It had 9.8 million active diners last quarter, up from 7.7 million in the same quarter last year.
Grubhub also closed three acquisitions—Foodler, OrderUp and Yelp’s Eat24—which has the company poised for even more growth and ownership of the food delivery space, CEO Matt Maloney said.
Maloney, during an interview with CNBC’s Jim Cramer, said people in the U.S. spend around $200 billion annually on take-out and delivery. Grubhub is on pace to sell around $4 billion worth of food, meaning as the leader in the category Grubhub has a lot more room to grow.
“We could 10x this company and it still wouldn’t even barely touch [$200 billion],” he said.
Over the last several years. venture-backed food delivery startups have spent big to try and take Grubhub’s lunch, and many have failed. Companies like Sprig, Maple and SpoonRocket have all shut down, and others like Munchery and Zesty have reduced their staffs. Meal kit startup Blue Apron is facing major problems on the public market, having just fired hundreds of employees after the company lost nearly 50 percent of its value as it struggles to retain customers.
Maloney said venture capitalists have “wasted” billions of dollars backing food delivery challengers to Grubhub, who have spent heavily on promos to entice new users. “They’ve thrown it away, and then they pull back from the markets because you know what? It’s not about the promos,” Maloney told Cramer. “People want to connect with their restaurants. It’s about the service.”
Grubhub’s strong Q3 is all the more impressive given Amazon’s Whole Foods acquisition and the looming threat it has to Grubhub’s business. UberEats, another healthy competitor to Grubhub, is reportedly growing fast and profitable in a quarter of the cities where it operates.
But competition is nothing new for Grubhub, and Maloney believes the company is positioned to handle whatever the competition throws at it.
“…the reality is, we still haven’t seen any competitor impact to our growth rate,” Maloney said during Grubhub’s Q3 earnings call. “And every meaningful competitor was in the market over a year ago. So we still believe we have a significant structural advantage and that we are only known for takeout ordering and we are going to succeed because of the singular focus on this specific transaction.”
“We are seeing a lot of people lose a lot of money,” he continued. “We are going to continue to be financially rational and continue to grow on a scalable sustainable way, which is not going to change.”