Skift Take
Like every delivery service has been saying all year, rapid market expansion is key for the services who will be successful in this space. In the race to be the one to offer the best deal to everybody, Grubhub claims it's the one to beat right now.
Grubhub recorded yet another quarter of double-digit growth in overall revenue (up 52 percent compared to the same quarter last year), number of active diners on the platform (up 67 percent), and daily orders through the service (up 40 percent) in the company's third quarter earnings report today.
Due to increased spend around growth and expansion in new markets, however, the company lowered profit expectations for the rest of the year, sending stock sliding up to 18 percent in early morning trading.
Like Uber Eats, DoorDash, and other national competition, Grubhub is pouring money into rapid expansion in second and third-tier markets across the U.S., planning to open in 100 new markets from October to December 2018 alone.
Grubhub CEO Matt Maloney declined to break that coverage out in terms of population percentage (Uber Eats plans to cover 70 percent of the U.S. population by the end of the year) but noted on the company's earnings call that by the end of the year, Grubhub's reach would extend to the vast majority of the U.S. population, and "virtually all of the major population centers" in the country.
"We will spend easily more than $200 million on growth-related initiatives in 2018," Adam DeWitt, Grubhub's chief financial officer, said on the call. "That we can generate significant profit per order while mainta
