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GrubHub Beats Revenue And EPS Estimates, Guidance Strong

GrubHub Inc GRUB released its Q2 results on Thursday. Revenues and EPS came in above Wall Street consensus expectation, while guidance proved strong. GrubHub reported EPS of $0.23 and revenues of $120.2 million. Analyst consensus had an EPS estimate of $0.19 and $114.32 million in revenue.

Daily Average Grubs were 271,100, a 23 percent year-over-year increase from 220,100 Daily Average Grubs in the second quarter of 2015.

GrubHub management saw Q3 adjusted EBITDA at $30-$32 million and sales of $116-$119 million vs. $113.9 million estimate.

During its Q1 earnings call, GrubHub had indicated significant acceleration in revenue growth in April. Key drivers for that acceleration "appeared sustainable and likely to have persisted through the remainder of Q2," said Citi's Mark May.

May believed Grubhub had a relatively high likelihood of a positive earnings revision, keeping most investors constructive on the stock. The company's earnings report confirmed May's assumptions.

"Product improvements, our delivery initiative and an updated brand drove better diner growth and significantly higher engagement in the second quarter," noted CEO Matt Maloney.

"Demonstrating the powerful economics of scale in our business, we achieved an adjusted EBITDA margin of 31%, just under the levels in the first and second quarters of 2015 before we began investing meaningfully in our own delivery capabilities," stated Maloney

At time of writing, GrubHub traded at $30.74 in Thursday's pre-market session, up 11.91 percent.

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