(Reuters) - GrubHub Inc attracted more customers to its online food delivery platform, helping it beat Wall Street’s expectations for quarterly profit and sales and forecast better-than-expected revenue growth for the current quarter.
The company’s shares jumped as much as 26 percent to a record high of $137.89, adding more than $2 billion to its market capitalization.
GrubHub’s active diners - the number of unique customer accounts from which an order has been placed - surged 70 percent to 15.58 million in the second quarter ended June 30, edging past analysts’ average estimate of 15.54 million diners, according to research firm FactSet.
While GrubHub faces competition from companies including Amazon.com Inc’s Amazon Restaurants and Uber’s Uber Eats, the Chicago-based company has stayed ahead of the curve by making a string of acquisitions.
On Wednesday, the company said it will buy mobile ordering and payments platform LevelUp for $390 million, to offer more analytical tools to restaurant clients such as KFC, Taco Bell and Roti.
The LevelUp acquisition adds over 200 clients with point-of-sale integrations to the GrubHub platform with about $400 million in annualized restaurant sales currently being processed on Levelup’s platforms.
“GrubHub continues to roll up in the category with their acquisitions, D.A. Davidson Companies analyst Tom Forte said, adding that, “On one hand, they did a good job growing their business on their own and on the other, they have been buying a lot of growth.”
Over the past year, GrubHub has acquired Foodler Inc, OrderUp and Yelp’s Eat24. In February, KFC and Taco Bell owner Yum Brands picked up a 3 percent stake, worth $200 million, in GrubHub.
On a conference call with analysts on Wednesday, GrubHub Chief Executive Officer Matthew Maloney said the company would “sunset” the Eat24 brand and existing Eat24 diners will be converted to the Grubhub platform.
The Chicago-based company forecast revenue of between $232 million and $240 million for the third quarter, ahead of Wall Street estimates of $230.7 million, according to Thomson Reuters I/B/E/S.
Net income attributable to common stockholders more than doubled to $30.1 million or 33 cents per share in the second quarter. Excluding one-time items, GrubHub earned 50 cents per share, above analysts’ estimates of 41 cents.
Revenue rose about 51 percent to $239.7 million. Analysts had expected revenue of $233 million.
Reporting by Shariq Khan and Vibhuti Sharma in Bengaluru; Editing by Shailesh Kuber and Sai Sachin Ravikumar