10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2018

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 1-36389

GRUBHUB INC.

(Exact name of registrant as specified in its charter)

Delaware	46-2908664
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
111 W. Washington Street, Suite 2100 Chicago, Illinois	60602
(Address of principal executive offices)	(Zip code)

(877) 585-7878

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes   ☒      No    ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).     Yes   ☒      No   ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated filer	☒	Accelerated filer	☐
Non-Accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.     ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes  ☐    No  ☒

As of November 2, 2018, 90,701,489 shares of common stock were outstanding.

GRUBHUB INC.

TABLE OF CONTENTS

PART I
		Page
FINANCIAL INFORMATION
Item 1:	Condensed Consolidated Financial Statements (unaudited)	3
	Condensed Consolidated Balance Sheets as of September 30, 2018 and December 31, 2017	3
	Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2018 and 2017	4
	Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2018 and 2017	4
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2018 and 2017	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3:	Quantitative and Qualitative Disclosures About Market Risk	34
Item 4:	Controls and Procedures	34
PART II
OTHER INFORMATION
Item 1:	Legal Proceedings	35
Item 1A:	Risk Factors	35
Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	35
Item 3:	Defaults Upon Senior Securities	35
Item 4:	Mine Safety Disclosures	35
Item 5:	Other Information	35
Item 6:	Exhibits	36
Signatures		37

2

Part I. FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

GRUBHUB INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

(UNAUDITED)

	September 30, 2018			December 31, 2017
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	294,550		$	234,090
Short-term investments		16,687			23,605
Accounts receivable, less allowances for doubtful accounts		120,306			87,377
Income tax receivable		14,125			8,593
Prepaid expenses and other current assets		17,024			6,818
Total current assets		462,692			360,483
PROPERTY AND EQUIPMENT:
Property and equipment, net of depreciation and amortization		105,434			71,384
OTHER ASSETS:
Other assets		11,666			6,487
Goodwill		885,350			589,862
Acquired intangible assets, net of amortization		520,867			515,553
Total other assets		1,417,883			1,111,902
TOTAL ASSETS	$	1,986,009		$	1,543,769
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Restaurant food liability	$	122,900		$	119,922
Accounts payable		17,184			7,607
Accrued payroll		19,036			13,186
Taxes payable		1,566			3,109
Short-term debt		6,250			3,906
Other accruals		33,186			26,818
Total current liabilities		200,122			174,548
LONG-TERM LIABILITIES:
Deferred taxes, non-current		44,073			74,292
Other accruals		19,683			7,468
Long-term debt		290,073			169,645
Total long-term liabilities		353,829			251,405
Commitments and contingencies
STOCKHOLDERS’ EQUITY:
Preferred Stock, $0.0001 par value. Authorized: 25,000,000 shares as of September 30, 2018 and December 31, 2017; issued and outstanding: no shares as of September 30, 2018 and December 31, 2017.		—			—
Common stock, $0.0001 par value. Authorized: 500,000,000 shares at September 30, 2018 and December 31, 2017; issued and outstanding: 90,598,259 and 86,790,624 shares as of September 30, 2018 and December 31, 2017, respectively		9			9
Accumulated other comprehensive loss		(1,620	)		(1,228	)
Additional paid-in capital		1,079,165			849,043
Retained earnings		354,504			269,992
Total Stockholders’ Equity	$	1,432,058		$	1,117,816
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,986,009		$	1,543,769

(See Notes to Condensed Consolidated Financial Statements (unaudited))

3

GRUBHUB INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(UNAUDITED)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018		2017
Revenues	$	247,225		$	163,059		$	719,536	$	477,987
Costs and expenses:
Operations and support		111,511			65,352			310,239		187,795
Sales and marketing		49,426			35,138			144,413		105,346
Technology (exclusive of amortization)		21,258			14,292			57,306		41,560
General and administrative		22,195			18,617			58,072		46,627
Depreciation and amortization		20,987			12,613			61,787		33,067
Total costs and expenses		225,377			146,012			631,817		414,395
Income from operations		21,848			17,047			87,719		63,592
Interest (income) expense - net		337			(373	)		1,367		(908	)
Income before provision for income taxes		21,511			17,420			86,352		64,500
Income tax (benefit) expense		(1,234	)		4,432			2,721		19,043
Net income attributable to common stockholders	$	22,745		$	12,988		$	83,631	$	45,457
Net income per share attributable to common stockholders:
Basic	$	0.25		$	0.15		$	0.94	$	0.53
Diluted	$	0.24		$	0.15		$	0.91	$	0.52
Weighted-average shares used to compute net income per share attributable to common stockholders:
Basic		90,494			86,449			89,027		86,162
Diluted		93,678			88,543			92,091		87,788

GRUBHUB INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

(UNAUDITED)

	Three Months Ended September 30,					Nine Months Ended September 30,
	2018			2017		2018			2017
Net income	$	22,745		$	12,988	$	83,631		$	45,457
OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation adjustments		(92	)		299		(392	)		749
COMPREHENSIVE INCOME	$	22,653		$	13,287	$	83,239		$	46,206

(See Notes to Condensed Consolidated Financial Statements (unaudited))

4

GRUBHUB INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(UNAUDITED)

	Nine Months Ended September 30,
	2018			2017
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	83,631		$	45,457
Adjustments to reconcile net income to net cash from operating activities:
Depreciation		16,189			7,949
Provision for doubtful accounts		741			338
Deferred taxes		2,048			(2,162	)
Amortization of intangible assets		45,598			25,118
Stock-based compensation		36,445			23,913
Deferred rent		3,975			130
Amortization of deferred loan costs		588			349
Other		(732	)		(823	)
Change in assets and liabilities, net of the effects of business acquisitions:
Accounts receivable		(17,969	)		(15,903	)
Income taxes receivable		(5,533	)		3,795
Prepaid expenses and other assets		(15,455	)		4,193
Restaurant food liability		1,608			4,591
Accounts payable		5,265			2,965
Accrued payroll		5,311			1,575
Other accruals		3,752			6,351
Net cash provided by operating activities		165,462			107,836
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions of businesses, net of cash acquired		(366,856	)		(51,859	)
Purchases of investments		(47,642	)		(145,667	)
Proceeds from maturity of investments		54,916			164,733
Capitalized website and development costs		(21,471	)		(15,281	)
Purchases of property and equipment		(31,984	)		(12,549	)
Acquisition of other intangible assets		—			(25,147	)
Other cash flows from investing activities		38			589
Net cash used in investing activities		(412,999	)		(85,181	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of common stock		200,000			—
Proceeds from borrowings under the Credit Agreement		175,000			—
Repayments of borrowings under the Credit Agreement		(52,344	)		—
Proceeds from exercise of stock options		13,010			12,505
Taxes paid related to net settlement of stock-based compensation awards		(28,238	)		(7,696	)
Payments for debt issuance costs		—			(285	)
Net cash provided by financing activities		307,428			4,524
Net change in cash, cash equivalents, and restricted cash		59,891			27,179
Effect of exchange rates on cash, cash equivalents and restricted cash		(406	)		709
Cash, cash equivalents, and restricted cash at beginning of year		238,239			242,214
Cash, cash equivalents, and restricted cash at end of the period	$	297,724		$	270,102
SUPPLEMENTAL DISCLOSURE OF NON-CASH ITEMS
Cash paid for income taxes	$	7,508		$	16,340
Capitalized property, equipment and website and development costs in accounts payable at period end		4,069			1,048
Net working capital adjustment receivable		530			887
Fair value of equity awards assumed on acquisition		2,594			—
RECONCILIATION OF CASH, CASH EQUIVALENTS, AND RESTRICTED CASH
Cash and cash equivalents	$	294,550		$	265,958
Restricted cash included in prepaid expenses and other current assets		—			1,500
Restricted cash included in other assets		3,174			2,644
Total cash, cash equivalents, and restricted cash	$	297,724		$	270,102

(See Notes to Condensed Consolidated Financial Statements (unaudited))

5

GRUBHUB INC.

Notes to Condensed Consolidated Financial Statements (unaudited)

1. Organization

Grubhub Inc., a Delaware corporation, and its wholly-owned subsidiaries (collectively referred to as the “Company”) provide an online and mobile platform for restaurant pick-up and delivery orders. Diners enter their delivery address or use geo-location within the mobile applications and the Company displays the menus and other relevant information for restaurants in its network. Orders may be placed directly online, via mobile applications or over the phone at no cost to the diner. The Company charges the restaurant a per order commission that is largely fee based. In certain markets, the Company also provides delivery services to restaurants on its platform that do not have their own delivery operations.

2. Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The accompanying unaudited condensed consolidated interim financial statements include the accounts of Grubhub Inc. and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. These unaudited condensed consolidated interim financial statements include all wholly-owned subsidiaries and reflect all normal and recurring adjustments, as well as any other than normal adjustments, that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods and should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017 filed with the SEC on February 28, 2018 (the “2017 Form 10-K”). All significant intercompany transactions have been eliminated in consolidation. Operating results for the three and nine months ended September 30, 2018 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2018.

On January 1, 2018, the Company adopted Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“ASC Topic 606”) using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning on or after January 1, 2018 are presented under ASC Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with historic accounting guidance under ASC Topic 605. See Recently Issued Accounting Pronouncements and Note 3, Revenue, below for additional details.

Use of Estimates

The preparation of condensed consolidated financial statements in accordance with GAAP requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and the related disclosures at the date of the financial statements, as well as the reported amounts of revenue and expenses during the periods presented. Estimates include revenue recognition, the allowance for doubtful accounts, website and internal-use software development costs, goodwill, depreciable lives of property and equipment, recoverability of intangible assets with definite lives and other long-lived assets, stock-based compensation and income taxes. Actual results could differ from these estimates.

Changes in Accounting Principle

See “Recently Issued Accounting Pronouncements” below for a description of accounting principle changes adopted during the nine months ended September 30, 2018 related to revenue and the statement of cash flows. There have been no other material changes to the Company’s significant accounting policies described in the 2017 Form 10-K.

Recently Issued Accounting Pronouncements

In August 2018, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update No. 2018-15, “Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract” (“ASU 2018-15”). ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in hosting arrangements that are service contracts and that include an internal-use software license with the requirement for capitalizing implementation costs incurred to develop or obtain internal-use software. The capitalized implementation costs are required to be expensed over the term of the hosting arrangement. The guidance also clarifies the presentation requirements for reporting such costs in the entity’s financial statements. The Company has elected to early adopt ASU 2018-15. The amendments will be applied prospectively to all implementation costs incurred after the date of adoption. The adoption of ASU 2018-15 is not expected to have a material impact on the Company’s consolidated financial position, results of operations or cash flows.

In May 2017, the FASB issued Accounting Standards Update No. 2017-09, “Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting” (“ASU 2017-09”). ASU 2017-09 provides clarification on when modification accounting should

6

GRUBHUB INC.

Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

be used for changes to the terms or conditions of a share-based payment award. This ASU does not change the accounting for modifications but clarifies that modification accounting guidance should only be applied if there is a change to the value, vesting conditions, or award classification and would not be required if the changes are considered non-substantive. ASU 2017-09 is effective for the Company beginning in the first quarter of 2018 on a prospective basis. The adoption of ASU 2017-09 has not had and is not expected to have a material impact on the Company’s consolidated financial position, results of operations or cash flows.

In August 2016, the FASB issued Accounting Standards Update No. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments” (“ASU 2016-15”). ASU2016-15 adds or clarifies guidance on the classification of certain cash receipts and payments in the statement of cash flows with the intent of reducing diversity in practice related to eight types of cash flows including, among others, debt prepayment or debt extinguishment costs, contingent consideration payments made after a business combination, and separately identifiable cash flows and application of the predominance principle. In addition, in November 2016, the FASB issued Accounting Standards Update No. 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash” (“ASU 2016-18”). ASU 2016-18 requires companies to include amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the statement of cash flow. ASU 2016-15 and ASU 2016-18 were effective for and adopted by the Company beginning in the first quarter of 2018. The amendments were applied using a retrospective transition method to each period presented and impacted the Company’s presentation of the consolidated statements of cash flows. The adoption of ASU 2016-15 and ASU 2016-18 had no material impact on the Company’s consolidated financial position, results of operations or cash flows as the Company’s restricted cash balances are immaterial.

In June 2016, the FASB issued Accounting Standards Update No. 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). ASU 2016-13 introduces a new forward-looking approach, based on expected losses, to estimate credit losses on certain types of financial instruments, including trade receivables and held-to-maturity debt securities, which will require entities to incorporate considerations of historical information, current information and reasonable and supportable forecasts. This ASU also expands disclosure requirements. ASU 2016-13 is effective for the Company beginning in the first quarter of 2020 and early adoption is permitted. The guidance will be applied using the modified-retrospective approach. The adoption of ASU 2016-13 is not expected to have a material impact on the Company’s consolidated financial position, results of operations or cash flows.

In February 2016, the FASB issued Accounting Standards Update No. 2016-02, “Leases (Topic 842)” (“ASU 2016-02”). Under ASU 2016-02, a lessee will recognize in the statement of financial position a liability to make lease payments and a right-of-use asset for all leases (with the exception of short-term leases) at the commencement date. The recognition, measurement, and presentation of expenses and cash flows arising from a lease under ASU 2016-02 will not significantly change from current GAAP. ASU 2016-02 is effective beginning in the first quarter of 2019 with early adoption permitted. In July 2018, the FASB issued Accounting Standards Update No. 2018-11 “Leases (Topic 842): Targeted Improvements” (“ASU 2018-11”), which provides for the election of transition methods between the modified retrospective method and the optional transition relief method. The modified retrospective method is applied to all prior reporting periods presented with a cumulative-effect adjustment recorded in the earliest comparative period while the optional transition relief method is applied beginning in the period of adoption with a cumulative-effect adjustment recorded in the first quarter of 2019.The Company will apply the optional transition relief method and has elected the optional practical expedient package, which includes retaining the current classification of leases.The Company is currently evaluating the impact of adoption of ASU 2016-02 on its consolidated financial statements under ASU 2018-11. Management anticipates that it will result in a significant increase in the Company’s long-term assets and liabilities but will have no material impact to its results of operations or cash flows.

In May 2014, and in subsequent updates, the FASB issued ASC Topic 606, Revenue from Contracts with Customers, which supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, including most industry-specific requirements. ASC Topic 606 establishes a five-step revenue recognition process in which an entity will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. ASC Topic 606 also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenues and cash flows from contracts with customers. ASC Topic 606 was effective for and adopted by the Company in the first quarter of 2018. The Company applied the modified retrospective approach to contracts which were not completed as of January 1, 2018. The adoption of these ASUs did not have and is not expected to have a material impact on the Company’s consolidated financial position, results of operations or cash flows or its business processes, systems and controls.

The adoption of ASC Topic 606 resulted in an increase in revenues of $0.1 million and $0.9 million for the three and nine months ended September 30, 2018, respectively, and primarily had the following impact on the Company’s financial statements:

• Beginning in January 1, 2018, the Company defers the incremental costs of obtaining contracts as contract acquisition assets resulting in a net decrease of $2.0 million and $6.6 million in sales and marketing expense in the condensed consolidated statements of operations for the three and nine months ended September 30, 2018, respectively, and corresponding increase in other assets on the condensed consolidated balance sheets. Contract acquisition assets are amortized to sales and marketing

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GRUBHUB INC.

Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

expense in the consolidated statements of operations over the period in which services are expected to be provided to the customer, which is estimated to be approximately 4 years. Prior to the adoption of ASC Topic 606, the cost of obtaining a contract was recognized as it was incurred.

• Beginning in the first quarter of 2018, the Company recognizes revenue from estimated unredeemed gift cards that are not subject to unclaimed property laws over the expected customer redemption period, rather than when the likelihood of redemption became remote. The Company recorded a cumulative-effect adjustment to opening retained earnings as of January 1, 2018 of $0.9 million related to unredeemed gift cards, breakage income of $0.3 million and $0.9 million in revenues in the condensed consolidated statements of operations during the three and nine months ended September 30, 2018, respectively, and a corresponding decrease in other accruals of $2.0 million on the condensed consolidated balance sheets.

• Changes in the timing of revenue recognition under ASC Topic 606 related to incentives, refunds and adjustments resulted in a $0.1 million decrease and $0.1 million increase in revenues in the condensed consolidated statements of operations during the three and nine months ended September 30, 2018, respectively.

• The adoption of ASC Topic 606 had no impact to the Company’s total net cash provided by or used in operations, investing or financing activities within the Company’s condensed consolidated statement of cash flows for the nine months ended September 30, 2018.

See Note 3, Revenue, for additional details.

3. Revenue

Revenues are recognized when control of the promised goods or services is transferred to the customer, in the amount that reflects the consideration the Company expects to receive in exchange for those good or services.

The Company generates revenues primarily when diners place an order on the platform through its mobile applications, its websites, or through third-party websites that incorporate the Company’s API or one of the Company’s listed phone numbers. Restaurants pay a commission, typically a percentage of the transaction, on orders that are processed through the platform. Most of the restaurants on the Company’s platform can choose their level of commission rate, at or above a base rate. A restaurant can choose to pay a higher rate that affects its prominence and exposure to diners on the platform. Additionally, restaurants that use the Company’s delivery services pay an additional commission for the use of those services. The Company may also charge a delivery fee directly to the diner.

Revenues from online and phone pick-up and delivery orders are recognized when the orders are transmitted to the restaurants, including revenues for managed delivery services due to the simultaneous nature of the Company’s delivery operations. The amount of revenue recognized by the Company is based on the arrangement with the related restaurant and is adjusted for any expected refunds or adjustments based on historical experience and any cash credits related to the transaction, including incentive offers provided to restaurants and diners. The Company also recognizes as revenue any fees charged to the diner for delivery services provided by the Company. Although the Company processes and collects the entire amount of the transaction with the diner, it records revenue for transmitting orders to restaurants on a net basis because the Company is acting as an agent for takeout orders, which are prepared by the restaurants. The Company is the principal in the transaction with respect to credit card processing and managed delivery services because it controls the respective services. As a result, costs incurred for processing the credit card transactions and providing delivery services are included in operations and support expense in the consolidated statements of operations.

The Company periodically provides incentive offers to restaurants and diners to use our platform. These promotions are generally cash credits to be applied against purchases. These incentive offers are recorded as a reduction in revenues, generally on the date the corresponding order revenue is recognized. For those incentives related to current orders that create an obligation to discount future orders, the Company allocates the incentives that are expected to be redeemed proportionally to current and future orders based on their relative expected transaction prices.  

For most orders, diners use a credit card to pay for their meal when the order is placed. For these transactions, the Company collects the total amount of the diner’s order net of payment processing fees from the payment processor and remits the net proceeds to the restaurant less commission. The Company generally accumulates funds and remits the net proceeds to the restaurants on at least a monthly basis, depending on the payment terms with the restaurant. The Company also accepts payment for orders via gift cards offered on its platform. For gift cards that are not subject to unclaimed property laws, the Company recognizes revenue from estimated unredeemed gift cards, based on its historical breakage experience, over the expected customer redemption period.

Certain governmental taxes are imposed on the products and services provided through the Company’s platform and are included in the order fees charged to the diner and collected by the Company. Sales taxes are either remitted to the restaurant for payment or are paid directly to certain states. These fees are recorded on a net basis, and, as a result, are excluded from revenues.

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GRUBHUB INC.

Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

The Company also generates a small amount of revenues directly from companies that participate in our corporate ordering program and by selling advertising to third parties on our allmenus.com website. The Company does not anticipate that the foregoing will generate a material portion of our revenues in the foreseeable future.

During the three months ended September 30, 2018, the Company recognized a small amount of revenues from software and professional services, which are generally recognized ratably over the subscription period beginning on the date the software is available. Revenues for certain professional services may be recognized in full once the services are performed if they are distinct and separately identifiable.  

Accounts Receivable

Accounts receivable primarily represent the net cash due from the Company’s payment processor for cleared transactions and amounts owed from corporate customers, which are generally invoiced on a monthly basis. The carrying amount of the Company’s receivables is reduced by an allowance for doubtful accounts that reflects management’s best estimate of amounts that will not be collected based on historical loss experience and any current or forecasted specific risks.

Deferred Revenues

The Company’s deferred revenues consist primarily of gift card liabilities and certain incentive liabilities. These amounts are included within other accruals on the consolidated balance sheets and are not material to the Company’s consolidated financial position. The majority of gift cards and incentives issued by the Company are redeemed within a year.

Contract Acquisition Costs

The Company defers the incremental costs of obtaining contracts including certain commissions and bonuses and related payroll taxes as contract acquisition assets within other assets on the consolidated balance sheets. Contract acquisition assets are amortized using the straight-line method to sales and marketing expense in the consolidated statements of operations over the useful life of the contract, which is estimated to be approximately 4 years. During the three and nine months ended September 30, 2018, the Company deferred $2.4 million and $7.3 million, respectively, of contract acquisitions costs. During the three and nine months ended September 30, 2018, the Company amortized $0.4 million and $0.7 million, respectively, of related expense.

4. Acquisitions

2018 Acquisitions

On September 13, 2018, the Company acquired SCVNGR, Inc. d/b/a LevelUp (“LevelUp”) for approximately $369.7 million, including $367.6 million of cash paid (net of cash acquired of $6.0 million), $2.6 million of other non-cash consideration and a net working capital adjustment receivable of $0.5 million. LevelUp is a leading provider of mobile diner engagement and payment solutions for national and regional restaurant brands. The acquisition of LevelUp is expected to simplify the Company’s integrations with restaurants’ systems, increase diner engagement and accelerate product development.

The Company assumed LevelUp employees’ unvested incentive stock option (“ISO”) awards as of the closing date. Approximately $2.6 million of the fair value of the assumed ISO awards granted to acquired LevelUp employees was attributable to the pre-combination services of the LevelUp awardees and was included in the $369.7 million purchase price. This amount is reflected within goodwill in the purchase price allocation. As of the acquisition date, post-combination expense of approximately $17.0 million is expected to be recognized related to the assumed ISO awards over the remaining post-combination service period.

The results of operations of LevelUp have been included in the Company’s financial statements since September 13, 2018 but did not have a material impact on the Company’s condensed consolidated results of operations for the three and nine months ended September 30, 2018.

The excess of the consideration transferred in the acquisition over the net amounts assigned to the fair value of the assets was recorded as goodwill, which represents the value of LevelUp’s technology team and the ability to simplify integrations with restaurants on the Company’s platform. The goodwill related to this acquisition of $295.5 million is not deductible for income tax purposes.

The assets acquired and liabilities assumed of LevelUp were recorded at their estimated fair values as of the closing date of September 13, 2018.

The following table summarizes the preliminary purchase price allocation acquisition-date fair values of the asset and liabilities acquired in connection with the LevelUp acquisition:

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GRUBHUB INC.

Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

	LevelUp
	(in thousands)
Accounts receivable	$	6,201
Prepaid expenses and other current assets		1,396
Property and equipment		895
Restaurant relationships		10,217
Diner acquisition		3,912
Below-market lease intangible		2,205
Developed technology		20,107
Goodwill		295,488
Net deferred tax asset		32,267
Accounts payable and accrued expenses		(3,031	)
Total purchase price net of cash acquired	$	369,657
Net working capital adjustment receivable		530
Fair value of assumed ISOs attributable to pre-combination service		(2,594	)
Net cash paid	$	367,593

2017 Acquisitions

On October 10, 2017, the Company acquired all of the issued and outstanding equity interests of Eat24, LLC (“Eat24”), a wholly owned subsidiary of Yelp Inc., for approximately $281.8 million, including $281.4 million in net cash paid and $0.3 million of other non-cash consideration. Of such amount, $28.8 million will be held in escrow for an 18-month period after closing to secure the Company’s indemnification rights under the purchase agreement. Eat24 provides online and mobile food ordering for restaurants and diners across the United States. The acquisition expanded the breadth and depth of the Company’s national network of restaurant partners and active diners.

The Company granted RSU awards to acquired Eat24 employees in replacement of their unvested equity awards as of the closing date. Approximately $0.3 million of the fair value of the replacement RSU awards granted to acquired Eat24 employees was attributable to the pre-combination services of the Eat24 awardees and was included in the $281.8 million purchase price. This amount is reflected within goodwill in the purchase price allocation. As of the acquisition date, post-combination expense of approximately $4.1 million is expected to be recognized related to the replacement awards over the remaining post-combination service period.

On August 23, 2017, the Company acquired substantially all of the assets and certain expressly specified liabilities of A&D Network Solutions, Inc. and Dashed, Inc. (collectively, “Foodler”). The purchase price for Foodler was $51.2 million in cash, net of cash acquired of $0.1 million. Foodler is an independent online food-ordering company with an established diner base in the Northeast United States. The acquisition expanded the breadth and depth of the Company’s restaurant network, active diners and delivery network.

The results of operations of Eat24 and Foodler have been included in the Company’s financial statements since October 10, 2017 and August 23, 2017, respectively.

The excess of the consideration transferred in the acquisitions over the net amounts assigned to the fair value of the assets were recorded as goodwill, which represents the value of increasing the breadth and depth of the Company’s network of restaurants and diners. The total goodwill related to the acquisitions of Eat24 and Foodler of $153.4 million is expected to be deductible for income tax purposes.

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Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

The assets acquired and liabilities assumed of Eat24 and Foodler were recorded at their estimated fair values as of the respective closing dates of October 10, 2017 and August 23, 2017. The following table summarizes the final purchase price allocation acquisition-date fair values of the assets and liabilities acquired in connection with the Eat24 and Foodler acquisitions:

	Eat24			Foodler			Total
	(in thousands)
Cash	$	40		$	86		$	126
Accounts receivable		8,267			307			8,574
Prepaid expenses and other current assets		221			—			221
Property and equipment		1,113			—			1,113
Restaurant relationships		126,232			35,217			161,449
Diner acquisition		35,226			1,354			36,580
Trademarks		2,225			74			2,299
Developed technology		2,559			1,955			4,514
Goodwill		135,955			17,452			153,407
Accounts payable and accrued expenses		(30,082	)		(5,237	)		(35,319	)
Total purchase price plus cash acquired		281,756			51,208			332,964
Fair value of replacement RSUs attributable to pre-combination service		(274	)		—			(274	)
Cash acquired		(40	)		(86	)		(126	)
Net cash paid	$	281,442		$	51,122		$	332,564

Additional Information

The estimated fair values of the intangible assets acquired were determined based on a combination of the income, cost, and market approaches to measure the fair value of the restaurant relationships, diner acquisition, developed technology and trademarks as follows:

	Valuation Method
	LevelUp	Foodler	Eat24
Restaurant relationships	With or without comparative business valuation	Multi-period excess earnings	Multi-period excess earnings
Diner acquisition	Cost to recreate	Cost to recreate	Cost to recreate
Developed technology	Multi-period excess earnings	Cost to recreate	Cost to recreate
Trademark	n/a	Relief  from royalty	Relief  from royalty

The fair value of the below market lease was measured based on the present value of the difference between the contractual amounts to be paid pursuant to the lease and an estimate of current fair market lease rates measured over the non-cancelable remaining term of the lease. These fair value measurements were based on significant inputs not observable in the market and thus represent Level 3 measurements within the fair value hierarchy.

The Company incurred certain expenses directly and indirectly related to acquisitions which were recognized in general and administrative expenses within the condensed consolidated statements of operations for the three months ended September 30, 2018 and 2017 of $2.6 million and $1.7 million, respectively, and for the nine months ended September 30, 2018 and 2017 of $5.1 million and $3.6 million, respectively.

Pro Forma

The following unaudited pro forma information presents a summary of the operating results of the Company for the three and nine months ended September 30, 2018 and 2017 as if the acquisitions of LevelUp, Eat24 and Foodler had occurred as of January 1 of the year prior to acquisition:

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Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
	(in thousands, except per share data)
Revenues	$	255,777	$	190,833	$	746,545	$	562,364
Net income		22,352		5,084		75,348		15,869
Net income per share attributable to common shareholders:
Basic	$	0.25	$	0.06	$	0.85	$	0.18
Diluted	$	0.24	$	0.06	$	0.82	$	0.18

The pro forma adjustments that reflect the amortization that would have been recognized for intangible assets, elimination of transaction costs incurred, stock-based compensation expense for replacement awards, interest expense for transaction financings and other adjustments, as well as the pro forma tax impact of such adjustments for the three and nine months ended September 30, 2018 and 2017 were as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
	(in thousands)
Depreciation and amortization	$	(186	)	$	2,085		$	(248	)	$	9,488
Transaction costs		(2,646	)		(1,799	)		(5,010	)		846
Stock-based compensation		(458	)		728			2,325			3,748
Interest expense		33			1,128			244			3,547
Other		—			1,571			—			4,401
Income tax (benefit) expense		964			(1,546	)		796			(9,367	)

The unaudited pro forma revenues and net income are not intended to represent or be indicative of the Company’s condensed consolidated results of operations or financial condition that would have been reported had the acquisitions been completed as of the beginning of theperiods presented and should not be taken as indicative of the Company’s future consolidated results of operations or financial condition.

5. Marketable Securities

The amortized cost, unrealized gains and losses and estimated fair value of the Company’s held-to-maturity marketable securities as of September 30, 2018 and December 31, 2017 were as follows:

	September 30, 2018
	Amortized Cost		Unrealized Gains		Unrealized Losses			Estimated Fair Value
	(in thousands)
Cash and cash equivalents
Commercial paper	$	10,231	$	—	$	(12	)	$	10,219
Short-term investments
Commercial paper		14,938		—		(112	)		14,826
Corporate bonds		1,749		—		—			1,749
Total	$	26,918	$	—	$	(124	)	$	26,794

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Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

	December 31, 2017
	Amortized Cost		Unrealized Gains		Unrealized Losses			Estimated Fair Value
	(in thousands)
Cash and cash equivalents
Commercial paper	$	39,979	$	—	$	(43	)	$	39,936
Corporate bonds		1,250		—		—			1,250
Short-term investments
Commercial paper		21,480		—		(99	)		21,381
Corporate bonds		2,125		—		(1	)		2,124
Total	$	64,834	$	—	$	(143	)	$	64,691

All of the Company’s marketable securities were classified as held-to-maturity investments and have maturities within one year of September 30, 2018. Approximately $40 million of the Company’s marketable securities matured during the nine months ended September 30, 2018, which was invested in other interest-bearing accounts upon maturity.

The gross unrealized losses, estimated fair value and length of time the individual marketable securities were in a continuous loss position for those marketable securities in an unrealized loss position as of September 30, 2018 and December 31, 2017 were as follows:

	September 30, 2018
	Less Than 12 Months					12 Months or Greater				Total
	Estimated Fair Value		Unrealized Loss			Estimated Fair Value		Unrealized  Loss		Estimated Fair Value		Unrealized Loss
	(in thousands)
Commercial paper	$	25,045	$	(124	)	$	—	$	—	$	25,045	$	(124	)
Total	$	25,045	$	(124	)	$	—	$	—	$	25,045	$	(124	)

	December 31, 2017
	Less Than 12 Months					12 Months or Greater				Total
	Estimated Fair Value		Unrealized Loss			Estimated Fair Value		Unrealized  Loss		Estimated Fair Value		Unrealized Loss
	(in thousands)
Commercial paper	$	61,317	$	(142	)	$	—	$	—	$	61,317	$	(142	)
Corporate bonds		3,374		(1	)		—		—		3,374		(1	)
Total	$	64,691	$	(143	)	$	—	$	—	$	64,691	$	(143	)

The Company recognized interest income during the three months ended September 30, 2018 and 2017 of $1.3 million and $0.5 million, respectively, and for the nine months ended September 30, 2018 and 2017 of $3.2 million and $1.5 million, respectively, within net interest (income) expense on the condensed consolidated statements of operations. During the three and nine months ended September 30, 2018 and 2017, the Company did not recognize any other-than-temporary impairment losses related to its marketable securities.

The Company’s marketable securities are classified within Level 2 of the fair value hierarchy (see Note 14, Fair Value Measurement, for further details).

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Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

6. Goodwill and Acquired Intangible Assets

The components of acquired intangible assets as of September 30, 2018 and December 31, 2017 were as follows:

	September 30, 2018							December 31, 2017
	Gross Carrying Amount		Accumulated Amortization			NetCarrying Value		GrossCarrying Amount		Accumulated Amortization			NetCarrying Value
	(in thousands)
Restaurant relationships	$	467,797	$	(96,321	)	$	371,476	$	457,580	$	(76,852	)	$	380,728
Diner acquisition		44,159		(7,982	)		36,177		40,247		(1,906	)		38,341
Developed technology		28,630		(8,591	)		20,039		8,523		(6,418	)		2,105
Trademarks		2,225		(2,225	)		—		2,225		(402	)		1,823
Below-market lease intangible		2,206		(21	)		2,185		—		—			—
Other		3,676		(2,362	)		1,314		6,888		(4,008	)		2,880
Total amortizable intangible assets		548,693		(117,502	)		431,191		515,463		(89,586	)		425,877
Indefinite-lived trademarks		89,676		—			89,676		89,676		—			89,676
Total acquired intangible assets	$	638,369	$	(117,502	)	$	520,867	$	605,139	$	(89,586	)	$	515,553

The gross carrying amount and accumulated amortization of the Company’s other intangible assets as of September 30, 2018 were adjusted by $3.2 million and $2.5 million, respectively, for certain assets that were no longer in use. Amortization expense for acquired intangible assets was $10.0 million and $6.4 million for the three months ended September 30, 2018 and 2017, respectively, and $31.1 million and $16.8 million for the nine monthsended September 30, 2018 and 2017, respectively. Amortization of the acquired below-market lease intangible is recognized as rent expense within the condensed consolidated statements of operations.

The changes in the carrying amount of goodwill during the nine months ended September 30, 2018 were as follows:

	Goodwill		Accumulated Impairment Losses		Net Book Value
	(in thousands)
Balance as of December 31, 2017	$	589,862	$	—	$	589,862
Acquisition of LevelUp		295,488		—		295,488
Balance as of September 30, 2018	$	885,350	$	—	$	885,350

During the nine monthsended September 30, 2018, the Company recorded additions to acquired intangible assets of $36.4 million as a result of the acquisition of LevelUp. The components of the acquired intangible assets added during the nine monthsended September 30, 2018 were as follows:

	Nine Months Ended September 30, 2018
	Amount		Weighted-Average Amortization Period
	(in thousands)		(years)
Developed technology	$	20,107		6.0
Restaurant relationships		10,217		19.0
Diner acquisition		3,912		5.0
Below-market lease intangible		2,205		5.8
Total	$	36,441

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Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

Estimated future amortization expense of acquired intangible assets as of September 30, 2018 was as follows:

	(in thousands)
The remainder of 2018	$	10,117
2019		38,485
2020		37,315
2021		37,304
2022		35,334
Thereafter		272,636
Total	$	431,191

7. Property and Equipment

The components of the Company’s property and equipment as of September 30, 2018 and December 31, 2017 were as follows:

	September 30, 2018			December 31, 2017
	(in thousands)
Developed software	$	78,332		$	52,041
Computer equipment		44,896			31,601
Leasehold improvements		31,809			23,400
Furniture and fixtures		8,704			6,857
Purchased software and digital assets		3,581			2,881
Construction in progress		5,559			—
Property and equipment		172,881			116,780
Accumulated depreciation and amortization		(67,447	)		(45,396	)
Property and equipment, net	$	105,434		$	71,384

The Company recorded depreciation and amortization expense for property and equipment other than developed software of $5.7 million and $2.9 million for the three months ended September 30, 2018 and 2017, respectively, and $16.2 million and $8.0 million for the nine monthsended September 30, 2018 and 2017, respectively.

The gross carrying amount and accumulated amortization of the Company’s leasehold improvements, developed software, furniture and fixtures and purchased software and digital assets as of September 30, 2018 were adjusted in aggregate by $8.6 million and $8.2 million, respectively, for certain assets that were no longer in use. The Company capitalized developed software costs of $10.8 million and $6.8 million for the three months ended September 30, 2018 and 2017, respectively, and $28.1 million and $18.9 million for the nine monthsended September 30, 2018 and 2017, respectively. Amortization expense for developed software costs, recognized in depreciation and amortization in the condensed consolidated statements of operations, for the three months ended September 30, 2018 and 2017 was $5.3 million and $3.3 million, respectively, and $14.5 million and $8.3 million for the nine monthsended September 30, 2018 and 2017, respectively.

8. Commitments and Contingencies

Legal

In August 2011, Ameranth, Inc. (“Ameranth”) filed a patent infringement action against a number of defendants, including Grubhub Holdings Inc., in the U.S. District Court for the Southern District of California (the “Court”), Case No. 3:11-cv-1810 (“’1810 action”).

In March 2012, Ameranth initiated eight additional actions for infringement of a related patent, U.S. Patent No. 8,146,077 (“’077 patent”), in the same forum, including separate actions against Grubhub Holdings Inc., Case No. 3:12-cv-739 (“’739 action”), and Seamless North America, LLC, Case No. 3:12-cv-737 (“’737 action”). In August 2012, the Court severed the claims against Grubhub Holdings Inc. and Seamless North America, LLC in the ’1810 action and consolidated them with the ’739 action and the ’737 action, respectively. Later, the Court consolidated these separate cases against Grubhub Holdings Inc. and Seamless North America, LLC, along with the approximately 40 other cases Ameranth filed in the same district, with the original ’1810 action. In their

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GRUBHUB INC.

Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

answers, Grubhub Holdings Inc. and Seamless North America, LLC denied infringement and interposed various defenses, including non-infringement, invalidity, unenforceability and inequitable conduct.

The consolidated district court case was stayed until January 2017, when Ameranth’s motion to lift the stay and proceed on only the ‘077 patent was granted. In September 2018, the court granted summary judgment of unpatentability on the ‘077 patent and vacated the December 3, 2018 jury trial date for the claims against Grubhub Holdings Inc. and Seamless North America, LLC. The Company believes this case lacks merit and that it has strong defenses to all of the infringement claims. The Company intends to defend the suit vigorously. However, the Company is unable to predict the likelihood of success of Ameranth’s infringement claims and is unable to predict the likelihood of success of its counterclaims. The Company has not recorded an accrual related to this lawsuit as of September 30, 2018, as it does not believe a material loss is probable. It is a reasonable possibility that a loss may be incurred; however, the possible range of loss is not estimable given the status of the case and the uncertainty as to whether the claims at issue are with or without merit, will be settled out of court, or will be determined in the Company’s favor, whether the Company may be required to expend significant management time and financial resources on the defense of such claims, and whether the Company will be able to recover any losses under its insurance policies.

In addition to the matter described above, from time to time, the Company is involved in various other legal proceedings arising from the normal course of business activities, including labor and employment claims, some of which relate to the alleged misclassification of independent contractors. In September 2015, a claim was brought in the United States District Court for the Northern District of California under the Private Attorneys General Act by an individual plaintiff on behalf of himself and seeking to represent other drivers and the State of California. The claim sought monetary penalties and injunctive relief for alleged violations of the California Labor Code based on the alleged misclassification of drivers as independent contractors. A decision was issued on February 8, 2018, and the court ruled in favor of the Company, finding that plaintiff was properly classified as an independent contractor. In March 2018, the plaintiff appealed this decision to the Ninth Circuit. The Company does not believe any of the foregoing claims will have a material impact on its consolidated financial statements. However, there is no assurance that any claim will not be combined into a collective or class action.

Indemnification

In connection with the merger of Seamless North America, LLC, Seamless Holdings Corporation and Grubhub Holdings Inc. in August 2013, the Company agreed to indemnify Aramark Holdings Corporation for negative income tax consequences associated with the October 2012 spin-off of Seamless Holdings Corporation that were the result of certain actions taken by the Company through October 29, 2014, in certain instances subject to a $15.0 million limitation. Management is not aware of any actions that would impact the indemnification obligation.

9. Debt

The following table summarizes the carrying value of the Company’s debt as of September 30, 2018 and December 31, 2017:

	September 30, 2018			December 31, 2017
	(in thousands)
Term loan	$	121,875		$	124,219
Revolving loan		175,000			50,000
Total debt		296,875			174,219
Less current portion		(6,250	)		(3,906	)
Less unamortized deferred debt issuance costs		(552	)		(668	)
Long-term debt	$	290,073		$	169,645

On October 10, 2017, the Company entered into a credit agreement which provides, among other things, for aggregate revolving loans up to $225 million and term loans in an aggregate principal amount of $125 million (the “Credit Agreement”). In addition, the Company may incur up to $150 million of incremental revolving loans or incremental revolving term loans pursuant to the terms and conditions of the Credit Agreement. The credit facility will be available to the Company until October 9, 2022. There have been no changes in the terms of the Credit Agreement during the nine months ended September 30, 2018.

During the nine months ended September 30, 2018, the Company borrowed $175.0 million of revolving loans under the Credit Agreement. The Company utilized the revolving loan proceeds to finance a portion of the purchase price and transaction costs in connection with the acquisition of LevelUp. During the nine months ended September 30, 2018, the Company made principal payments of $52.3 million from cash on hand. As of September 30, 2018, outstanding borrowings under the Credit Agreement were $296.9 million.  The fair value of the Company’s outstanding debt approximates its carrying value as of September 30, 2018 (see Note 14, Fair Value Measurement, for additional details). The Company was in compliance with the covenants of the Credit Agreement as

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Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

of September 30, 2018. Additional capacity under the Credit Agreement may be used for general corporate purposes, including funding working capital and future acquisitions.

As of September 30, 2018, total unamortized debt issuance costs of $2.0 million were recorded as other assets and as a reduction of long-term debt on the condensed consolidated balance sheets in proportion to the borrowing capacities of the revolving and term loans.

Interest expense includes interest on outstanding borrowings, amortization of debt issuance costs and commitment fees on the undrawn portion available under the Credit Agreement. The Company recognized interest expense of $1.7 million and $0.2 million, during the three months ended September 30, 2018 and 2017, respectively, and $4.6 million and $0.6 million during the nine months ended September 30, 2018 and 2017, respectively.

10. Stock-Based Compensation

The Company has granted non-qualified and incentive stock options, restricted stock units and restricted stock awards under its incentive plans.The Company recognizes compensation expense based on estimated grant date fair values for all stock-based awards issued to employees and directors, including stock options, restricted stock awards and restricted stock units.

Stock-based Compensation Expense

The total stock-based compensation expense related to all stock-based awards was $14.2 million and $8.5 million during the three months ended September 30, 2018 and 2017, respectively, and $36.4 million and $23.9 million during the nine monthsended September 30, 2018 and 2017, respectively. As of September 30, 2018, $175.7 million of total unrecognized stock-based compensation expense is expected to be recognized over a weighted-average period of 3.0 years.

Excess tax benefits reflect the total realized value of the Company’s tax deductions from individual stock option exercise transactions and the vesting of restricted stock units in excess of the deferred tax assets that were previously recorded. During the three months ended September 30, 2018 and 2017, the Company recognized excess tax benefits from stock-based compensation of $7.6 million and $2.2 million, respectively, and$21.5 million and $5.7 million during the nine months ended September 30, 2018 and 2017, respectively, within income tax (benefit) expense on the condensed consolidated statements of operations and within cash flows from operating activities on the condensed consolidated statements of cash flows.

The Company capitalized stock-based compensation expense as website and software development costs of $2.6 million and $1.2 million during the three months ended September 30, 2018 and 2017, respectively, and $6.3 million and $3.3 million during the nine monthsended September 30, 2018 and 2017, respectively.

Stock Options

The Company granted 584,305, including unvested ISOs assumed with the acquisition of LevelUp, and 618,899 stock options during the nine months ended September 30, 2018 and 2017, respectively. The fair value of each stock option award was estimated based on the assumptions below as of the grant date using the Black-Scholes-Merton option pricing model. Beginning in the first quarter of 2018, expected volatility is based on the historical and implied volatilities of the Company’s own common stock. The Company uses historical data to estimate option exercises and employee terminations within the valuation model. Separate groups of employees that have similar historical exercise behavior are considered separately for valuation purposes. The expected term calculation for option awards considers a combination of the Company’s historical and estimated future exercise behavior. The risk-free rate for the period within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The assumptions used to determine the fair value of the stock options granted during the nine months ended September 30, 2018 and 2017 were as follows:

	Nine Months Ended September 30,
	2018			2017
Weighted-average fair value options granted	$	65.86		$	15.19
Average risk-free interest rate		2.55	%		1.65	%
Expected stock price volatility (a)		46.1	%		48.7	%
Dividend yield	None			None
Expected stock option life (years) (b)		3.64			4.00

(a) Prior to the first quarter of 2018, the expected stock price volatility was based on a combination of the historical and implied volatilities of comparable publicly-traded companies and the historical volatility of the Company’s

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Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

own common stock due to its limited trading history as there was no active external or internal market for the Company’s common stock prior to the Company’s initial public offering in April 2014.

(b) The expected term for the LevelUp assumed ISO awards was calculated based on their respective remaining vesting periods as of the acquisition date.

Stock option awards as of December 31, 2017 and September 30, 2018, and changes during the nine months ended September 30, 2018, were as follows: 

	Options			Weighted-Average Exercise Price		Aggregate Intrinsic Value (thousands)		Weighted-Average Exercise Term (years)
Outstanding at December 31, 2017		2,705,849		$	25.53	$	125,197		7.28
Granted		584,305			68.74
Forfeited		(115,035	)		34.21
Exercised		(487,317	)		26.70
Outstanding at September 30, 2018		2,687,802			34.34		280,279		7.11
Vested and expected to vest at September 30, 2018		2,682,769			34.28		279,912		7.10
Exercisable at September 30, 2018		1,415,269		$	21.73	$	165,427		6.10

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the fair value of the common stock and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their in-the-money options on each date. The aggregate intrinsic value of assumed LevelUp ISOs as of September 30, 2018 was approximately $23.0 million. This amount will change in future periods based on the fair value of the Company’s stock and the number of options outstanding. The aggregate intrinsic value of stock options exercised during the three months ended September 30, 2018 and 2017 was $13.6 million and $5.6 million, respectively. The aggregate intrinsic value of awards exercised during the nine months ended September 30, 2018 and 2017 was $36.1 million and $13.7 million, respectively.

The Company recorded compensation expense for stock options of $4.5million and $3.0 million for the three months ended September 30, 2018 and 2017, respectively, and $9.4 million and $8.9 million for the nine months ended September 30, 2018 and 2017, respectively. As of September 30, 2018, total unrecognized compensation cost, adjusted for estimated forfeitures, related to non-vested stock options was $40.1 million and is expected to be recognized over a weighted-average period of 2.7 years, including post-combination expense of approximately $14.5 million expected to be recognized related to the assumed LevelUp ISO awards.

Restricted Stock Units

Non-vested restricted stock units as of December 31, 2017 and September 30, 2018, and changes during the nine months ended September 30, 2018 were as follows:

	Restricted Stock Units
	Shares			Weighted-Average Grant Date Fair Value
Outstanding at December 31, 2017		2,454,801		$	37.56
Granted		1,107,806			94.35
Forfeited		(292,409	)		51.67
Vested		(796,579	)		35.94
Outstanding at September 30, 2018		2,473,619		$	61.84

Compensation expense related to restricted stock units was $9.7 million and $5.5 million during the three months ended September 30, 2018 and 2017, respectively, and $27.0 million and $15.0 million during the nine months ended September 30, 2018 and 2017, respectively. The aggregate fair value as of the vest date of restricted stock units that vested during the three months ended September 30, 2018 and 2017 was $26.3 million and $5.7 million, respectively, and $76.3 million and $19.9 million during the nine months ended September 30, 2018 and 2017, respectively. As of September 30, 2018, $135.6 million of total unrecognized compensation cost, adjusted for estimated forfeitures, related to 2,458,380 non-vested restricted stock units expected to vest with weighted-average grant date fair values of $61.60 is expected to be recognized over a weighted-average period of 3.0 years. The fair value of these awards was determined based on the Company’s stock price at the grant date and assumes no expected dividend payments through the vesting period.

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GRUBHUB INC.

Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

11. Income Taxes

The Company’s effective tax rate was negative 5.7% and 25.4% during the three months ended September 30, 2018 and 2017, respectively, and 3.2% and 29.5% during the nine months ended September 30, 2018 and 2017, respectively. The income tax expense included the net impact of excess tax benefits for stock-based compensation of $7.6 million and $2.2 million for the three months ended September 30, 2018 and 2017, respectively, and $21.5 million and $5.7 million for the nine months ended September 30, 2018 and 2017, respectively (see Note 10, Stock-based Compensation, for additional details). Additionally, the federal corporate income tax rate decreased from 35% to 21% during the same periods as a result of the Tax Cuts and Jobs Act.

In July 2018, the examination in New York for corporate income tax returns for the tax years ended December 31, 2014, 2015 and 2016 was completed with no material findings. The Company does not expect any material additional tax liabilities, penalties and/or interest as a result of the audit.

12. Stockholders’ Equity

As of September 30, 2018 and December 31, 2017, the Company was authorized to issue two classes of stock: common stock and preferred stock.

Common Stock

Each holder of common stock has one vote per share of common stock held on all matters that are submitted for stockholder vote. At September 30, 2018 and December 31, 2017, there were 500,000,000 shares of common stock authorized. At September 30, 2018 and December 31, 2017, there were 90,598,259 and 86,790,624 shares issued and outstanding, respectively. The Company did not hold any shares as treasury shares as of September 30, 2018 or December 31, 2017.

On April 25, 2018, the Company issued and sold 2,820,464 shares of the Company’s common stock to Yum Restaurant Services Group, LLC (the “Investor”), a wholly owned subsidiary of Yum! Brands, Inc., for an aggregate purchase price of $200 million pursuant to an investment agreement dated February 7, 2018, by and between the Company and the Investor. The Company has used and expects to use the proceeds for general corporate purposes.

On January 22, 2016, the Company’s Board of Directors approved a program that authorizes the repurchase of up to $100 million of the Company’s common stock exclusive of any fees, commissions or other expenses relating to such repurchases through open market purchases or privately negotiated transactions at the prevailing market price at the time of purchase. The repurchase program was announced on January 25, 2016. The repurchased stock may be retired or held as authorized but unissued treasury shares. The repurchase authorizations do not obligate the Company to acquire any particular amount of common stock or adopt any particular method of repurchase and may be modified, suspended or terminated at any time at management’s discretion. Repurchased and retired shares will result in an immediate reduction of the outstanding shares used to calculate the weighted-average common shares outstanding for basic and diluted net income per share at the time of the transaction. During the nine months ended September 30, 2018, the Company did not repurchase any shares of its common stock.

Preferred Stock

The Company was authorized to issue 25,000,000 shares of preferred stock. There were no issued or outstanding shares of preferred stock as of September 30, 2018 or December 31, 2017.

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GRUBHUB INC.

Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

The Company’s equity as of December 31, 2017 and September 30, 2018, and changes during the nine months ended September 30, 2018, were as follows:

	(in thousands)
Balance at December 31, 2017	$	1,117,816
Net income		83,631
Cumulative effect of change in accounting principle(a)		882
Currency translation		(392	)
Stock-based compensation		42,755
Shares repurchased and retired to satisfy tax withholding upon vesting		(28,238	)
Stock option exercises, net of withholdings and other		13,010
Stock-based compensation, assumed ISO awards		2,594
Issuance of common stock		200,000
Balance at September 30, 2018	$	1,432,058

(a) See Note 2, Significant Accounting Policies, for additional details related to the impact of the adoption of ASC Topic 606 during the nine months ended September 30, 2018.

13. Earnings Per Share Attributable to Common Stockholders

Basic earnings per share is computed by dividing net income attributable to common stockholders by the weighted-average number of common shares outstanding during the period without consideration for common stock equivalents. Diluted net income per share attributable to common stockholders is computed by dividing net income by the weighted-average number of common shares outstanding during the period and potentially dilutive common stock equivalents, including stock options and restricted stock units, except in cases where the effect of the common stock equivalent would be antidilutive. Potential common stock equivalents consist of common stock issuable upon exercise of stock options and vesting of restricted stock units using the treasury stock method.

The sale of 2,820,464 shares of the Company’s common stock to the Investor on April 25, 2018 resulted in an immediate increase in the outstanding shares used to calculate the weighted-average common shares outstanding for the nine months ended September 30, 2018 (see Note 12, Stockholders’ Equity).

The following tables present the calculation of basic and diluted net income per share attributable to common stockholders for the three and nine months ended September 30, 2018 and 2017:

	Three Months Ended September 30, 2018						Three Months Ended September 30, 2017
	Income (Numerator)		Shares (Denominator)		Per  Share Amount		Income (Numerator)		Shares (Denominator)		Per  Share Amount
	(in thousands, except per share data)
Basic EPS
Net income attributable to common stockholders	$	22,745		90,494	$	0.25	$	12,988		86,449	$	0.15
Effect of Dilutive Securities
Stock options		—		1,704				—		1,105
Restricted stock units		—		1,480				—		989
Diluted EPS
Net income attributable to common stockholders	$	22,745		93,678	$	0.24	$	12,988		88,543	$	0.15

	Nine Months Ended September 30, 2018						Nine Months Ended September 30, 2017
	Income (Numerator)		Shares (Denominator)		Per  Share Amount		Income (Numerator)		Shares (Denominator)		Per  Share Amount
	(in thousands, except per share data)
Basic EPS
Net income attributable to common stockholders	$	83,631		89,027	$	0.94	$	45,457		86,162	$	0.53
Effect of Dilutive Securities
Stock options		—		1,649				—		951
Restricted stock units		—		1,415				—		675
Diluted EPS
Net income attributable to common stockholders	$	83,631		92,091	$	0.91	$	45,457		87,788	$	0.52

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GRUBHUB INC.

Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

The number of shares of common stock underlying stock-based awards excluded from the calculation of diluted net income per share attributable to common stockholders because their effect would have been antidilutive for the three and nine months ended September 30, 2018 and 2017 were as follows:  

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Anti-dilutive shares underlying stock-based awards:
Stock options		251,582		685,671		251,582		685,671
Restricted stock units		84,668		84,358		84,668		84,358

14. Fair Value Measurement

Certain assets and liabilities are required to be recorded at fair value on a recurring basis. Accounting standards define fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. The standards also establish a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

The accounting guidance for fair value measurements prioritizes valuation methodologies based on the reliability of the inputs in the following three-tier value hierarchy:

Level 1 Quoted prices in active markets for identical assets or liabilities.

Level 2 Assets and liabilities valued based on observable market data for similar instruments, such as quoted prices for similar assets or liabilities.

Level 3 Unobservable inputs that are supported by little or no market activity; instruments valued based on the best available data, some of which is internally developed, and considers risk premiums that a market participant would require.

The Company applied the following methods and assumptions in estimating its fair value measurements. The Company’s commercial paper, investments in corporate bonds and certain money market funds are classified as Level 2 within the fair value hierarchy because they are valued using inputs other than quoted prices in active markets that are observable directly or indirectly. The Company’s long-term debt is classified as Level 3 within the fair value hierarchy because it is valued using an income approach, which utilizes a discounted cash flow technique that considers the credit profile of the Company. Accounts receivable, restaurant food liability and accounts payable approximate fair value due to their generally short-term maturities.

The following table presents the fair value, for disclosure purposes only, and carrying value of the Company’s assets and liabilities that are recorded at other than fair value as of September 30, 2018 and December 31, 2017:

	September 30, 2018						December 31, 2017
	Level 2		Level 3		Carrying Value		Level 2		Level 3		Carrying Value
	(in thousands)
Assets
Money market funds	$	18	$	—	$	18	$	93	$	—	$	93
Commercial paper		25,045		—		25,169		61,317		—		61,459
Corporate bonds		1,749		—		1,749		3,374		—		3,375
Total assets	$	26,812	$	—	$	26,936	$	64,784	$	—	$	64,927
Liabilities
Long-term debt, including current maturities		—		303,001		296,875		—		175,700		174,219
Total liabilities	$	—	$	303,001	$	296,875	$	—	$	175,700	$	174,219

The Company is required to record certain assets and liabilities at fair value on a nonrecurring basis, generally as a result of acquisitions. See Note 4, Acquisitions, for further discussion of the fair value of assets and liabilities associated with acquisitions.

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GRUBHUB INC.

Notes to Condensed Consolidated Financial Statements (unaudited) (continued)

15. Subsequent Events

On September 25, 2018, the Company entered into a share purchase agreement by and among the Company, Grubhub Holdings Inc., Tapingo Ltd. (“Tapingo”), Shareholder Representative Services LLC, solely in its capacity as representative of the securityholders, and other parties signatory thereto, to acquire all of the issued and outstanding shares of Tapingo. Tapingo is a leading platform for campus food ordering with direct integration into college meal plans and point of sale systems. The acquisition is expected to enhance the Company’s diner network on college campuses.

On September 12, 2018, the Company entered into a definitive agreement to complete the acquisition of substantially all of the restaurant and diner network assets of OrderUp, Inc. (“OrderUp”), a wholly-owned subsidiary of Groupon, Inc. The Company previously completed the acquisition of certain assets of OrderUp on September 14, 2017.

Pursuant to the purchase agreements, the Company will acquire Tapingo and certain additional assets of OrderUp for total aggregate consideration of approximately $170 million, subject to customary adjustments and closing conditions. The purchase price is currently expected to be funded through a combination of cash on hand and proceeds from borrowings under the Company’s existing Credit Agreement.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following should be read in conjunction with the condensed consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q and with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017 (“2017 Form 10-K”) filed with the United States Securities and Exchange Commission (the “SEC”) on February 28, 2018. In addition to historical condensed consolidated financial information, the following discussion contains forward-looking statements that reflect the Company’s plans, estimates, and beliefs. Actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Quarterly Report on Form 10-Q, including those set forth in “Cautionary Statement Regarding Forward-Looking Statements” below.

Company Overview

Grubhub Inc. and its wholly-owned subsidiaries (collectively referred to as the “Company,” “Grubhub,” “we,” “us,” and “our”) is the leading online and mobile platform for restaurant pick-up and delivery orders, which the Company refers to as takeout. The Company connects more than 95,000 local restaurants with hungry diners in over 1,700 cities across the United States and is focused on transforming the takeout experience. In certain markets, the Company also provides delivery services to restaurants on its platform that do not have their own delivery operations. As of September 30, 2018, the Company was providing delivery services in more than 180 markets across the country. For restaurants, Grubhub generates higher margin takeout orders at full menu prices. The Grubhub platform empowers diners with a “direct line” into the kitchen, avoiding the inefficiencies, inaccuracies and frustrations associated with paper menus and phone orders. The Company has a powerful takeout marketplace that creates additional value for both restaurants and diners as it grows. The Company charges restaurants a per-order commission that is primarily percentage-based. Most of the restaurants on the Company’s platform can choose their level of commission rate, at or above the base rate. A restaurant can choose to pay a higher rate, which affects its prominence and exposure to diners on the platform. Additionally, restaurants that use the Company’s delivery services pay an additional commission on the transaction for the use of those services.

Acquisitions of Business and Other Intangible Assets

On September 25, 2018, the Company entered into a share purchase agreement to acquire all of the issued and outstanding shares of Tapingo Ltd. (“Tapingo”), a leading platform for campus food ordering. On September 12, 2018, the Company entered into a definitive agreement to complete the acquisition of substantially all of the restaurant and diner network assets of OrderUp, Inc. (“OrderUp”), an online and mobile food-ordering company and wholly-owned subsidiary of Groupon, Inc. The Company previously acquired certain assets of OrderUp on September 14, 2017. For a description of the pending transactions, see Note 15, Subsequent Events.

On September 13, 2018, the Company acquired SCVNGR, Inc. d/b/a LevelUp (“LevelUp”), a leading provider of mobile diner engagement and payment solutions for national and regional restaurant brands, see Note 4, Acquisitions. 

On October 10, 2017, the Company acquired all of the issued and outstanding equity interests of Eat24, LLC (“Eat24”), a wholly-owned subsidiary of Yelp Inc. and provider of online and mobile food-ordering services for restaurants across the United States. On August 23, 2017, the Company acquired substantially all of the assets and certain expressly specified liabilities of A&D Network Solutions, Inc. and Dashed, Inc. (collectively, “Foodler”), a food-ordering company headquartered in Boston. For a description of the Company’s acquisitions, see Note 4, Acquisitions.

Key Business Metrics

Within this Management’s Discussion and Analysis of Results of Operations, the Company discusses key business metrics, including Active Diners, Daily Average Grubs and Gross Food Sales. The Company’s key business metrics are defined as follows:

• Active Diners.    The number of unique diner accounts from which an order has been placed in the past twelve months through the Company’s platform. Some diners could have more than one account if they were to set up multiple accounts using a different e-mail address for each account. As a result, it is possible that the Active Diner metric may count certain diners more than once during any given period.

• Daily Average Grubs.    The number of revenue generating orders placed on the Company’s platform divided by the number of days for a given period.

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• Gross Food Sales.    The total value of food, beverages, taxes, prepaid gratuities, and any delivery fees processed through the Company’s platform. The Company includes all revenue generating orders placed on its platform in this metric; however, revenues are recognized on a net basis for the Company’s commissions from the transaction, which are a percentage of the total Gross Food Sales for such transaction.

The Company’s key business metrics were as follows for the periods presented:

	Three Months Ended September 30,							Nine Months Ended September 30,
	2018(a)		2017		% Change			2018(a)		2017		% Change
Active Diners		16,379,000		9,806,000		67	%		16,379,000		9,806,000		67	%
Daily Average Grubs		416,000		304,500		37	%		425,300		314,200		35	%
Gross Food Sales (in millions)	$	1,214.5	$	867.3		40	%	$	3,679.9	$	2,645.1		39	%

(a) The key business metrics for the three and nine months ended September 30, 2018 exclude the impact of the acquisition of LevelUp, which closed on September 13, 2018 and was immaterial to the periods presented.

The Company experienced significant growth across all of its key business metrics, Active Diners, Daily Average Grubs and Gross Food Sales, during the three and nine months ended September 30, 2018 as compared to the same periods in the prior year. Growth in all metrics was primarily attributable to increased product and brand awareness by diners largely as a result of marketing efforts and word-of-mouth referrals, better restaurant choices for diners in our markets and technology and product improvements. The increase in our key business metrics, particularly Active Diners, was also impacted by the inclusion of results from Eat24, OrderUp and Foodler.

Basis of Presentation

On January 1, 2018, the Company adopted Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“ASC Topic 606”) using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning on or after January 1, 2018 are presented under ASC Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with historic accounting guidance under ASC Topic 605. See Note 2, Significant Account Policies,and Note 3, Revenue, for additional details, including a description of the Company’s revenue recognition policies under ASC Topic 606. The adoption of ASC Topic 606 did not have a material impact on the Company’s results of operations, financial position or cash flows.

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Results of Operations

Three Months Ended September 30, 2018 and 2017

The following table sets forth the Company’s results of operations for the three months ended September 30, 2018 as compared to the same period in the prior year presented in dollars and as a percentage of revenues:

	Three Months Ended September 30,
	2018						2017
	Amount			% of revenue			Amount			% of revenue			$ Change			% Change
	(in thousands, except percentages)
Revenues	$	247,225			100	%	$	163,059			100	%	$	84,166			52	%
Costs and expenses:
Operations and support		111,511			45	%		65,352			40	%		46,159			71	%
Sales and marketing		49,426			20	%		35,138			22	%		14,288			41	%
Technology (exclusive of amortization)		21,258			9	%		14,292			9	%		6,966			49	%
General and administrative		22,195			9	%		18,617			11	%		3,578			19	%
Depreciation and amortization		20,987			8	%		12,613			8	%		8,374			66	%
Total costs and expenses(a)		225,377			91	%		146,012			90	%		79,365			54	%
Income from operations		21,848			9	%		17,047			10	%		4,801			28	%
Interest (income) expense - net		337			0	%		(373	)		0	%		710			(190	%)
Income before provision for income taxes		21,511			9	%		17,420			11	%		4,091			23	%
Income tax (benefit) expense		(1,234	)		0	%		4,432			3	%		(5,666	)		(128	%)
Net income attributable to common stockholders	$	22,745			9	%	$	12,988			8	%	$	9,757			75	%
NON-GAAP FINANCIAL MEASURES:
Adjusted EBITDA(b)	$	60,134			24	%	$	42,674			26	%	$	17,460			41	%

(a) Totals of percentage of revenues may not foot due to rounding.

(b) For an explanation of Adjusted EBITDA as a measure of the Company’s operating performance and a reconciliation to net earnings, see “Non-GAAP Financial Measure—Adjusted EBITDA.”

Revenues

Revenues increased by $84.2 million, or 52%, for the three months ended September 30, 2018 compared to the same period in 2017. The increase was primarily related to the significant growth in Active Diners, which increased from 9.8 million to 16.4 million at the end of each period, driving an increase in Daily Average Grubs to 416,000during the three months ended September 30, 2018 from 304,500 Daily Average Grubs during the same period in 2017, an increase in the Company’s average commission rates as well as a higher average order size. The growth in Active Diners and Daily Average Grubs was due to increased product and brand awareness largely as a result of marketing efforts and word-of-mouth referrals, better restaurant choices for diners in our markets and technology and product improvements to drive more orders, as well as the impact of Eat24, OrderUp and Foodler.

Operations and Support

Operations and support expense increased by $46.2 million, or 71%, for the three months ended September 30, 2018 compared to the same period in 2017. This increase was primarily attributable to expenses to support the 40% growth in Gross Food Sales and the related increase in expenses to support higher order volumes including expenses related to delivering orders, the inclusion of results from recent acquisitions, payment processing costs and customer care and operations personnel costs. Delivery expenses increased disproportionally to revenue growth during the three months ended September 30, 2018 compared to the prior year due to organic growth of delivery orders and expansion of the delivery network in general.

Sales and Marketing

Sales and marketing expense increased by $14.3 million, or 41%, for the three months ended September 30, 2018 compared to the same period in 2017. The increase was primarily attributable to an increase of $14.2 million in the Company’s advertising campaigns across various media channels. The increase was partially offset by the net deferral of $2.0 million of payroll commission and bonus costs during the three months ended September 30, 2018 as a result of adopting ASC Topic 606 (see Note 3, Revenue).

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Technology (exclusive of amortization)

Technology expense increased by $7.0 million, or 49%, for the three months ended September 30, 2018 compared to the same period in 2017. The increase was primarily attributable to the growth in the Company’s technology team, including salaries, stock-based compensation expense, benefits and payroll taxes to support the growth and development of our platform.

General and Administrative

General and administrative expense increased by $3.6 million, or 19%, for the three months ended September 30, 2018 compared to the same period in 2017. The increase was primarily attributable to the inclusion of results from recent acquisitions and an increase in stock-based compensation expense, as well as a number of miscellaneous expenses required to support growth in the business.

Depreciation and Amortization

Depreciation and amortization expense increased by $8.4 million, or 66%, for the three months ended September 30, 2018 compared to the same period in 2017. The increase was primarily attributable to higher depreciation and amortization expense related to the amortization of intangible assets acquired in recent acquisitions as well as an increase in capital spending on internally developed software, leasehold improvements, restaurant facing technology and office equipment to support the growth of the business.

Income Tax (Benefit) Expense

Income tax expense decreased by $5.7 million for the three months ended September 30, 2018 compared to the same period in 2017. The decrease was primarily due to the $5.4 million increase in discrete excess tax benefits from stock-based compensation recognized in income tax (benefit) expense during the three months ended September 30, 2018 as compared to the prior year period as well as the decrease in the federal corporate income tax rate from 35% to 21% as a result of the Tax Cuts and Jobs Act, partially offset by higher income before provision for income taxes due to the factors described above. The Company anticipates the potential for increased periodic volatility in future effective tax rates as a result of discrete excess tax benefits from stock-based compensation. The Company calculated the income tax expense for the periods presented based on the expected annual effective tax rate as adjusted to reflect the tax impact of items discrete to the fiscal period.

Nine Months Ended September 30, 2018 and 2017

The following table sets forth the Company’s results of operations for the nine months ended September 30, 2018 as compared to the same period in the prior year presented in dollars and as a percentage of revenues:

	Nine Months Ended September 30,
	2018					2017
	Amount		% of revenue			Amount			% of revenue			$ Change			% Change
	(in thousands, except percentages)
Revenues	$	719,536		100	%	$	477,987			100	%	$	241,549			51	%
Costs and expenses:
Operations and support		310,239		43	%		187,795			39	%		122,444			65	%
Sales and marketing		144,413		20	%		105,346			22	%		39,067			37	%
Technology (exclusive of amortization)		57,306		8	%		41,560			9	%		15,746			38	%
General and administrative		58,072		8	%		46,627			10	%		11,445			25	%
Depreciation and amortization		61,787		9	%		33,067			7	%		28,720			87	%
Total costs and expenses(a)		631,817		88	%		414,395			87	%		217,422			52	%
Income from operations		87,719		12	%		63,592			13	%		24,127			38	%
Interest (income) expense - net		1,367		0	%		(908	)		0	%		2,275			(251	%)
Income before provision for income taxes		86,352		12	%		64,500			13	%		21,852			34	%
Income tax expense		2,721		0	%		19,043			4	%		(16,322	)		(86	%)
Net income attributable to common stockholders	$	83,631		12	%	$	45,457			10	%	$	38,174			84	%
NON-GAAP FINANCIAL MEASURES:
Adjusted EBITDA(b)	$	191,616		27	%	$	127,015			27	%	$	64,601			51	%

(a) Totals of percentage of revenues may not foot due to rounding.

(a) For an explanation of Adjusted EBITDA as a measure of the Company’s operating performance and a reconciliation to net earnings, see “Non-GAAP Financial Measure—Adjusted EBITDA.”

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Revenues

Revenues increased by $241.5 million, or 51%, for the nine months ended September 30, 2018 compared to the same period in 2017. The increase was primarily related to growth in Active Diners, which increased from 9.8 million to 16.4 million at the end of each period, driving an increase in Daily Average Grubs to 425,300 during the nine months ended September 30, 2018 from 314,200 Daily Average Grubs during the same period in 2017. The growth in Active Diners and Daily Average Grubs was due primarily to increased product and brand awareness largely as a result of marketing efforts and word-of-mouth referrals, better restaurant choices for diners in our markets and technology and product improvements to drive more orders, as well as the impact of Eat24, OrderUp and Foodler. In addition, revenue increased during the nine months ended September 30, 2018 compared to the same period in 2017 due to the inclusion of results from acquisitions (see Note 4, Acquisitions), an increase in the Company’s average commission rates as well as a higher average order size.

Operations and Support

Operations and support expense increased by $122.4 million, or 65%, for the nine months ended September 30, 2018 compared to the same period in 2017. This increase was primarily attributable to expenses to support the 39% growth in Gross Food Sales and the related increase in order volume including expenses related to delivering orders, the inclusion of results from recent acquisitions, payment processing costs and customer care and operations personnel costs. Delivery expenses increased during the nine months ended September 30, 2018 compared to the prior year due to organic growth of the Company’s delivery orders and expansion of the delivery network in general.

Sales and Marketing

Sales and marketing expense increased by $39.1 million, or 37%, for the nine months ended September 30, 2018 compared to the same period in 2017. The increase was primarily attributable to an increase of $40.5 million in the Company’s advertising campaigns across various media channels. The increase was partially offset by the net deferral of $6.6 million of payroll commission and bonus costs as a result of adopting ASC Topic 606 (see Note 3, Revenue) during the nine months ended September 30, 2018.

Technology (exclusive of amortization)

Technology expense increased by $15.7 million, or 38%, for the nine months ended September 30, 2018 compared to the same period in 2017. The increase was primarily attributable to 39% growth in the Company’s technology team, including salaries, stock-based compensation expense, benefits, payroll taxes and bonuses to support the growth and development of our platform.

General and Administrative

General and administrative expense increased by $11.4 million, or 25%, for the nine months ended September 30, 2018 compared to the same period in 2017. The increase was primarily attributable to stock-based and other compensation expense, the inclusion of expenses from recent acquisitions as well as increases in a number of miscellaneous expenses required to support growth in the business.

Depreciation and Amortization

Depreciation and amortization expense increased by $28.7 million, or 87%, for the nine months ended September 30, 2018 compared to the same period in 2017. The increase was primarily attributable to higher depreciation and amortization expense related to the amortization of intangible assets acquired in recent acquisitions as well as an increase in capital spending on internally developed software, leasehold improvements, restaurant facing technology and office equipment to support the growth of the business.

Income Tax Expense

Income tax expense decreased by $16.3 million for the nine months ended September 30, 2018 compared to the same period in 2017. The decrease was primarily due to the $15.8 million increase in discrete excess tax benefits from stock-based compensation recognized in income tax expense during the nine months ended September 30, 2018 as compared to the prior year period as well as the decrease in the federal corporate income tax rate from 35% to 21% as a result of the Tax Cuts and Jobs Act, partially offset by the increase in income before provision for income taxes due to the factors described above. The Company anticipates the potential for increased periodic volatility in future effective tax rates as a result of discrete excess tax benefits from stock-based compensation. The Company calculated the income tax expense for the periods presented based on the expected annual effective tax rate as adjusted to reflect the tax impact of items discrete to the fiscal period.

Non-GAAP Financial Measure - Adjusted EBITDA

Adjusted EBITDA is a financial measure that is not calculated in accordance with GAAP. The Company defines Adjusted EBITDA as net income adjusted to exclude acquisition, restructuring and certain legal costs, income taxes, net interest (income) expense, depreciation and amortization and stock-based compensation expense. A reconciliation of Adjusted EBITDA to net income, the most directly comparable financial measure calculated and presented in accordance with GAAP, is provided below. Adjusted

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EBITDA should not be considered as an alternative to net income or any other measure of financial performance calculated and presented in accordance with GAAP. The Company’s Adjusted EBITDA may not be comparable to similarly titled measures of other organizations because other organizations may not calculate Adjusted EBITDA in the same manner. 

The Company included Adjusted EBITDA in this Quarterly Report on Form 10-Q because it is an important measure upon which management assesses the Company’s operating performance. The Company uses Adjusted EBITDA as a key performance measure because management believes it facilitates operating performance comparisons from period to period by excluding potential differences primarily caused by variations in capital structures, tax positions, the impact of acquisitions and restructuring, the impact of depreciation and amortization expense on the Company’s fixed assets and the impact of stock-based compensation expense. Because Adjusted EBITDA facilitates internal comparisons of the Company’s historical operating performance on a more consistent basis, the Company also uses Adjusted EBITDA for business planning purposes and in evaluating business opportunities and determining incentive compensation for certain employees. In addition, management believes Adjusted EBITDA and similar measures are widely used by investors, securities analysts, ratings agencies and other parties in evaluating companies in the industry as a measure of financial performance and debt-service capabilities. 

The Company’s use of Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of the Company’s results as reported under GAAP. Some of these limitations are:

• Adjusted EBITDA does not reflect the Company’s cash expenditures for capital equipment or other contractual commitments.

• Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect capital expenditure requirements for such replacements.

• Adjusted EBITDA does not reflect changes in, or cash requirements for, the Company’s working capital needs.

• Other companies, including companies in the same industry, may calculate Adjusted EBITDA differently, which reduces its usefulness as a comparative measure.

In evaluating Adjusted EBITDA, you should be aware that in the future the Company will incur expenses similar to some of the adjustments in this presentation. The presentation of Adjusted EBITDA should not be construed as indicating that the Company’s future results will be unaffected by these expenses or by any unusual or non-recurring items. When evaluating the Company’s performance, you should consider Adjusted EBITDA alongside other financial performance measures, including net income and other GAAP results.

The following table sets forth Adjusted EBITDA and a reconciliation to net income for each of the periods presented below:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018		2017
	(in thousands)
Net income	$	22,745		$	12,988		$	83,631	$	45,457
Income taxes		(1,234	)		4,432			2,721		19,043
Interest (income) expense - net		337			(373	)		1,367		(908	)
Depreciation and amortization		20,987			12,613			61,787		33,067
EBITDA		42,835			29,660			149,506		96,659
Acquisition, restructuring and legal costs(a)		3,024			4,539			5,665		6,443
Stock-based compensation		14,275			8,475			36,445		23,913
Adjusted EBITDA	$	60,134		$	42,674		$	191,616	$	127,015

(a) Acquisition and restructuring costs include transaction and integration-related costs, such as legal and accounting costs, associated with acquisitions and restructuring initiatives. Legal costs included above are not expected to be recurring (see Note 8, Commitments and Contingencies, for additional details).

LIQUIDITY AND CAPITAL RESOURCES

As of September 30, 2018, the Company had cash and cash equivalents of $294.6 million consisting of cash, money market funds, commercial paper and U.S. and non-U.S.-issued corporate debt securities with original maturities of three months or less and short-term investments of $16.7 million consisting of commercial paper and other short-term corporate debt securities with original maturities greater than three months, but less than one year. The Company generates a significant amount of cash flows from operations and has $50.0 million in additional availability under our revolving credit facility, as necessary. Additionally, the Company received proceeds of $200.0 million from the sale of our common stock on April 25, 2018 as further described below.

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Amounts deposited with third-party financial institutions exceed Federal Deposit Insurance Corporation and Securities Investor Protection insurance limits, as applicable. These cash, cash equivalents and short-term investments balances could be affected if the underlying financial institutions fail or if there are other adverse conditions in the financial markets. The Company has not experienced any loss or lack of access to its invested cash, cash equivalents or short-term investments; however, such access could be adversely impacted by conditions in the financial markets in the future.

Management believes that the Company’s existing cash, cash equivalents, short-term investments and available credit facility will be sufficient to meet its working capital requirements for at least the next twelve months. However, the Company’s liquidity assumptions may prove to be incorrect, and the Company could utilize its available financial resources sooner than currently expected. The Company’s future capital requirements and the adequacy of available funds will depend on many factors, including those set forth in “Cautionary Statement Regarding Forward-Looking Statements” below. If the Company is unable to obtain needed additional funds, it will have to reduce operating costs, which could impair the Company’s growth prospects and could otherwise negatively impact its business.

For most orders, diners use a credit card to pay for their meal when the order is placed. For these transactions, the Company collects the total amount of the diner’s order net of payment processing fees from the payment processor and remits the net proceeds to the restaurant less commission. Outstanding credit card receivables are generally settled with the payment processors within two to four business days. The Company generally accumulates funds and remits the net proceeds to the restaurants on at least a monthly basis. Restaurants have different contractual arrangements regarding payment frequency. They may be paid bi-weekly, weekly, monthly or, in some cases, more frequently when requested by the restaurant. The Company generally holds accumulated funds prior to remittance to the restaurants in a non-interest-bearing operating bank account that is used to fund daily operations, including the liability to the restaurants.  However, the Company is not restricted from earning investment income on these funds under its restaurant contract terms and has made short-term investments of proceeds in excess of the restaurant liability as described above.

Seasonal fluctuations in the Company’s business may also affect the timing of cash flows. In metropolitan markets, the Company generally experiences a relative increase in diner activity from September to April and a relative decrease in diner activity from May to August. In addition, the Company benefits from increased order volume in its campus markets when school is in session and experiences a decrease in order volume when school is not in session, during summer breaks and other vacation periods. Diner activity can also be impacted by colder or more inclement weather, which typically increases order volume, and warmer or sunny weather, which typically decreases order volume. These changes in diner activity and order volume have a direct impact on operating cash flows. While management expects this seasonal cash flow pattern to continue, changes in the Company’s business model could affect the timing or seasonal nature of its cash flows.

On April 25, 2018, the Company sold 2,820,464 shares of the Company’s common stock to Yum Restaurant Services Group, LLC (the “Investor”), a wholly owned subsidiary of Yum! Brands, Inc., for an aggregate purchase price of $200 million pursuant to the investment agreement, dated as of February 7, 2018, by and among the Company and the Investor. The Company has used and expects to use the proceeds for general corporate purposes, which may include accelerating the expansion of delivery services, investing in the platform, repayment of borrowings under the Credit Agreement and pursuing growth opportunities including mergers and acquisitions.

On October 10, 2017, the Company entered into a credit agreement which provides, among other things, for aggregate revolving loans up to $225 million and term loans in an aggregate principal amount of $125 million (the “Credit Agreement”). In addition, the Company may incur up to $150 million of incremental revolving loans or incremental revolving term loans pursuant to the terms and conditions of the Credit Agreement. The credit facility under the Credit Agreement will be available to the Company until October 9, 2022. See Note 9, Debt, for additional details.

During the nine months ended September 30, 2018, the Company borrowed $175.0 million of revolving loans under the Credit Agreement to finance a portion of the purchase price and transaction costs in connection with the acquisition of LevelUp. During the nine months ended September 30, 2018, the Company made principal payments of $52.3 million from cash on hand, including $50.0 million applied to prior year borrowings under the revolver and $2.3 million of term loan principal payments. As of September 30, 2018, outstanding borrowings under the Credit Agreement were $296.9 million, including $175.0 million of revolving loans and $121.9 million of term loans. The undrawn portion of the revolving loan of $50.0 million was available as of September 30, 2018. Additional capacity under the Credit Agreement may be used for general corporate purposes, including funding working capital and future acquisitions.

The Credit Agreement contains customary covenants that, among other things, require the Company to satisfy certain financial covenants and may restrict the Company’s ability to incur additional debt, pay dividends and make distributions, make certain investments and acquisitions, create liens, transfer and sell material assets and merge or consolidate. Non-compliance with one or more of the covenants and restrictions could result in any amounts outstanding under the Credit Agreement becoming immediately due and payable and in the termination of the commitments. The Company was in compliance with the covenants of the Credit Agreement as of September 30, 2018. The Company expects to remain in compliance for the foreseeable future.

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On January 22, 2016, the Company’s Board of Directors approved a program that authorizes the repurchase of up to $100 million of the Company’s common stock exclusive of any fees, commissions or other expenses relating to such repurchases through open market purchases or privately negotiated transactions at the prevailing market price at the time of purchase. The repurchase program was announced on January 25, 2016. The repurchased stock may be retired or held as authorized but unissued treasury shares. The repurchase authorizations do not obligate the Company to acquire any particular amount of common stock or adopt any particular method of repurchase and may be modified, suspended or terminated at any time at management’s discretion. During the nine months ended September 30, 2018 and 2017, the Company did not repurchase any of its common stock. Since inception of the program, the Company has repurchased and retired 724,473 shares of our common stock at a weighted-average share price of $20.37, or an aggregate of $14.8 million.

The following table sets forth certain cash flow information for the periods presented:

	Nine Months Ended September 30,
	2018			2017
	(in thousands)
Net cash provided by operating activities	$	165,462		$	107,836
Net cash used in investing activities		(412,999	)		(85,181	)
Net cash provided by financing activities		307,428			4,524

Cash Flows Provided by Operating Activities

For the nine months ended September 30, 2018, net cash provided by operating activities was $165.5 million compared to $107.8 million for the same period in 2017. The increase in cash flows from operations was driven primarily by increases of $50.0 million in non-cash expenses and an increase of $38.2 million of net income, partially offset by changes in operation assets and liabilities. The increase in non-cash expenses primarily related to an increase in depreciation and amortization of $28.7 million, an increase of $12.5 million related to stock-based compensation, an increase in deferred taxes of $4.2 million and an increase in deferred rent of $3.8 million. During the nine months ended September 30, 2018 and 2017, significant changes in the Company’s operating assets and liabilities, net of the effects of business acquisitions, resulted from the following:

• an increase in prepaid expenses and other assets of $15.5 million for the nine months ended September 30, 2018 primarily related to the deferral of contract acquisition costs under ASC Topic 606 (see Note 3, Revenue, for additional details), an increase in prepaid payroll tax withholding related to employee stock-based compensation and an increase in prepaid technology and software services compared to a decrease of $4.2 million for the nine months ended September 30, 2017;

• an increase in income tax receivable of $5.5 million for the nine months ended September 30, 2018 due to the increase in discrete excess tax benefits from stock-based compensation compared to a decrease of $3.8 million for the nine months ended September 30, 2017; and

• an increase in the restaurant food liability of $1.6 million for the nine months ended September 30, 2018 compared to an increase of $4.6 million for the nine months ended September 30, 2017 due to the timing of payments to our restaurant partners at quarter-end.

Cash Flows Used in Investing Activities

The Company’s investing activities during the periods presented consisted primarily of acquisitions of businesses and other intangible assets, purchases of and proceeds from maturities of short-term investments, the purchase of property and equipment to support the growth of the business and the development of mobile-applications, website and internal-use software. 

For the nine months ended September 30, 2018, net cash used in investing activities was $413.0 million compared to $85.2 million for the same period in the prior year. The increase in net cash used in investing activities during the nine months ended September 30, 2018 was primarily due to an increase in acquisitions of businesses of $315.0 million, a decrease of $109.8 million in proceeds from maturities of investments and an increase in purchases of property and equipment of $19.4 million, partially offset by a $98.0 million decrease in the purchases of short-term investments and the acquisition of certain assets of businesses $25.1 million during the nine months ended September 30, 2017.

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Cash Flows Provided by Financing Activities

The Company’s financing activities during the periods presented consisted of proceeds from the issuance of common stock, proceeds from borrowings under the Credit Agreement, repayments of borrowings under the Credit Agreement, taxes paid related to net settlement of stock-based compensation awards and proceeds from the exercises of stock options. 

For the nine months ended September 30, 2018, net cash provided by financing activities was $307.4 million compared to $4.5 million for the nine months ended September 30, 2017. The increase in net cash provided by financing activities was primarily related to $200 million in proceeds received from the issuance of our common stock to Yum Restaurant Services Group, LLC (see Note 12, Stockholders’ Equity) and $175 million in proceeds received from borrowings under the Credit Agreement. These increases were partially offset by the repayment of borrowings under the Credit Agreement of $52.3 million during the nine months ended September 30, 2018 and an increase of $20.5 million in taxes paid related to net share settlement of stock-based compensation awards compared to the prior year period.

Acquisitions of Businesses and Other Intangible Assets

On September 25, 2018, the Company entered into a share purchase agreement to acquire all of the issued and outstanding shares of Tapingo. On September 12, 2018, the Company entered into a definitive agreement to complete the acquisition of substantially all of the restaurant and diner network assets of OrderUp. The total aggregate consideration of approximately $170 million, subject to customary adjustments and closing conditions, is currently expected to be funded through a combination of cash on hand and proceeds from borrowings under the Company’s existing Credit Agreement. See Note 15, Subsequent Events, for additional details.

On September 13, 2018, the Company acquired LevelUp for $367.6 million in cash, net of cash acquired of $6.0 million and excluding non-cash consideration of $2.6 million.

On October 10, 2017, the Company acquired all of the issued and outstanding equity interests of Eat24. On August 23, 2017, the Company acquired substantially all of the assets and certain expressly specified liabilities of Foodler. The Company paid an aggregate of $332.6 million in cash to acquire Eat24 and Foodler, net of cash acquired of $0.1 million and non-cash consideration of $0.3 million.

In September of 2017, the Company acquired certain specified assets of OrderUp for $20.1 million. The Company paid an aggregate of $25.1 million related to acquisition of these and certain other intangibles during the year ended December 31, 2017.

Quantitative and Qualitative Disclosures about Market Risk

The Company is exposed to certain market risks in the ordinary course of business. These risks primarily consist of interest rate fluctuations, inflation rate risk and other market related risks as follows:

Interest Rate Risk

As of September 30, 2018, outstanding borrowings under the Credit Agreement were $296.9 million. The Company is exposed to interest rate risk on its outstanding borrowings. Under the Credit Agreement, the loans bear interest, at the Company’s option, based on LIBOR or an alternate base rate, plus a margin, which in the case of LIBOR loans is between 1.25% and 2.00% and in the case of alternate base rate loans is between 0.25% and 1.00%, and in each case, is based upon the Company’s consolidated total net leverage ratio (as defined in the Credit Agreement). The Company does not use interest rate derivative instruments to manage exposure to interest rate changes.

The Company invests its excess cash primarily in money market accounts, commercial paper and U.S. and non-U.S.-issued corporate debt securities. The Company intends to hold its investments to maturity. The Company’s current investment strategy seeks first to preserve principal, second to provide liquidity for its operating and capital needs and third to maximize yield without putting principal at risk. The Company does not enter into investments for trading or speculative purposes.

The Company’s investments are exposed to market risk due to the fluctuation of prevailing interest rates that may reduce the yield on its investments or their fair value. The Company assesses market risk utilizing a sensitivity analysis that measures the potential change in fair values, interest income and cash flows. As the Company’s investment portfolio is short-term in nature, management does not believe an immediate 100 basis point increase in interest rates would have a material effect on the fair value of the Company’s portfolio, and therefore does not expect the Company’s results of operations or cash flows to be materially affected to any degree by a sudden change in market interest rates. In the unlikely event that the Company would need to sell its investments prior to their maturity, any unrealized gains and losses arising from the difference between the amortized cost and the fair value of the investments at that time would be recognized in the condensed consolidated statements of operations. See Note 5, Marketable

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Securities, to the accompanying Notes to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional details.

Inflation Risk

Management does not believe that inflation has had a material effect on the Company’s business, results of operations or financial condition.

Risks Related to Market Conditions

The Company performs its annual goodwill impairment test as of September 30, or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of the Company below its carrying value. Such indicators may include the following, among others: a significant decline in expected future cash flows, a sustained, significant decline in the Company’s stock price and market capitalization, a significant adverse change in legal factors or in the business climate, unanticipated competition, the testing for recoverability of a significant asset group and slower growth rates. Any adverse change in these factors could have a significant impact on the recoverability of the Company’s goodwill and could have a material impact on the consolidated financial statements. Goodwill represents the excess of the purchase price of an acquired business over the fair value of the net assets acquired. As of September 30, 2018, the Company had $885.4 million in goodwill.

The annual goodwill impairment test consists of comparing the carrying value of the Company’s reporting unit against the fair value. The Company is considered one reporting unit. If the carrying value exceeds the fair value, the Company recognizes an impairment charge for the amount by which the carrying value exceeds the fair value.

Management determined the fair value of the Company by using a market-based approach that utilized the market capitalization of the Company, as adjusted for factors such as a control premium. After consideration of the Company’s market capitalization, management determined that it was more likely than not that the fair value of the Company exceeded its carrying amount and further analysis was not necessary. Nevertheless, significant changes in global economic and market conditions could result in changes to expectations of future financial results and key valuation assumptions. Such changes could result in revisions of management’s estimates of our fair value and could result in a material impairment of goodwill.

OTHER INFORMATION

Off-Balance Sheet Arrangements

The Company did not have any off-balance sheet arrangements as of September 30, 2018.

Contractual Obligations

As of the date of the filing of this Quarterly Report on Form 10-Q, the Company’s total contractual obligations have increased from those disclosed in the Company’s 2017 Form 10-K primarily due to additional borrowings under the Credit Agreement (see Note 9, Debt, for additional details). Our commitments under the Credit Agreement as of September 30, 2018, consist of $296.9 million in term loan and revolving loan borrowings and $42.5 million in interest due on the debt, which includes scheduled interest payments at current interest rates.

There were no other material changes to the Company’s commitments under contractual obligations as compared to the contractual obligations disclosed in the 2017 Form 10-K.

Contingencies

For a discussion of certain litigation involving the Company, see Note 8, Commitments and Contingencies, to the accompanying Notes to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

New Accounting Pronouncements and Pending Accounting Standards

See Note 2, Significant Accounting Policies, to the accompanying Notes to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for pending standards and their estimated effect on the Company’s consolidated financial statements and accounting standards adopted during the nine months ended September 30, 2018.

Critical Accounting Policies and Estimates

The condensed consolidated financial statements are prepared in accordance with GAAP. The preparation of these condensed consolidated financial statements requires the Company to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses, and related disclosures. These estimates form the basis for judgments management makes about the carrying values of the Company’s assets and liabilities, which are not readily apparent from other sources. The Company

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bases its estimates and judgments on historical experience and on various other assumptions that management believes are reasonable under the circumstances. On an ongoing basis, the Company evaluates its estimates and assumptions. Actual results may differ from these estimates under different assumptions or conditions.

The Company believes that the assumptions and estimates associated with revenue recognition, website and software development costs, recoverability of intangible assets with definite lives and other long-lived assets, stock-based compensation, goodwill and income taxeshave the greatest potential impact on the condensed consolidated financial statements. Therefore, these are considered to be the Company’s critical accounting policies and estimates.

Other than the changes disclosed in Note 2, Significant Accounting Policies, in the accompanying Notes to the Condensed Consolidated Financial Statements included in Part I, Item I of this Quarterly Report on Form 10-Q, there have been no material changes to the Company’s critical accounting policies and estimates as compared to the critical accounting policies and estimates described in in the 2017 Form 10-K.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

In this section and elsewhere in this Quarterly Report on Form 10-Q, we discuss and analyze the results of operations and financial condition of the Company.  In addition to historical information about the Company, we also make statements relating to the future called “forward-looking statements,” which are provided under the “safe harbor” of the U.S. Private Securities Litigation Act of 1995.  Forward-looking statements involve substantial risks, known or unknown, and uncertainties that may cause actual results to differ materially from future results or outcomes expressed or implied by such forward-looking statements. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “anticipates,” “believes,” “contemplates,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “target” or “will” or the negative of these words or other similar terms or expressions that concern the Company’s expectations, strategy, plans or intentions.

We cannot guarantee that any forward-looking statement will be realized. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including the following important factors, in addition to those discussed elsewhere in this Quarterly Report on Form 10-Q, in Part I, Item 1A, Risk Factors, of the 2017 Form 10-K and Part II, Item 1A, Risk Factors, in subsequent quarterly reports, that could affect the future results of the Company and could cause those results or other outcomes to differ materially from those expressed or implied in the Company’s forward-looking statements:

• our ability to accurately forecast revenue and appropriately plan expenses;

• our ability to effectively assimilate, integrate and maintain acquired businesses;

• our ability to attract and retain restaurants to use the Company’s platform in a cost effective manner;

• our ability to maintain, protect and enhance our brand in an effort to increase the number of and retain existing diners and their level of engagement using the Company’s websites and mobile applications;

• our ability to strengthen the Company’s takeout marketplace;

• the impact of interruptions or disruptions to our service on our business, reputation or brand;

• our ability to choose and effectively manage third-party service providers;

• the seasonality of our business, including the effect of academic calendars on college campuses and seasonal patterns in restaurant dining;

• our ability to generate positive cash flow and achieve and maintain profitability;

• our ability to maintain an adequate rate of growth and effectively manage that growth;

• the impact of worldwide economic conditions, including the resulting effect on diner spending on takeout;

• the exposure to potential liability and expenses for legal claims and harm to our business;

• our ability to defend the classification of members of our delivery network as independent contractors;

• our ability to keep pace with technology changes in the takeout industry;

• our ability to grow the usage of the Company’s mobile applications and monetize this usage;

• our ability to properly use, protect and maintain the security of personal information and data provided by diners;

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• the impact of payment processor costs and procedures;

• our ability to successfully compete with the traditional takeout ordering process and the effects of increased competition on our business;

• our ability to innovate and provide a superior experience for restaurants and diners;

• our ability to successfully expand in existing markets and into new markets;

• our ability to attract and retain qualified employees and key personnel;

• our ability to grow our restaurant delivery services in an effective and cost efficient manner;

• the impact of weather and the effects of natural or man-made catastrophic events on the Company’s business;

• our ability to maintain, protect and enhance the Company’s intellectual property;

• our ability to obtain capital to support business growth;

• our ability to comply with the operating and financial covenants of our secured, revolving credit facility; and

• our ability to comply with modified or new legislation and governmental regulations affecting our business.

While forward-looking statements are our best prediction at the time they are made, you should not rely on them.  Forward-looking statements speak only as of the date of this document or the date of any document that may be incorporated by reference into this document.

Consequently, you should consider forward-looking statements only as the Company’s current plans, estimates and beliefs. The Company does not undertake and specifically declines any obligation to publicly update or revise forward-looking statements, including those set forth in this Quarterly Report on Form 10-Q, to reflect any new events, information, events or any change in conditions or circumstances unless required by law.  You are advised, however, to consult any further disclosures we make on related subjects in our Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and Annual Reports on Form 10-K and our other filings with the SEC.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

See Part I, Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resource – Quantitative and Qualitative Disclosures About Market Risk, of this Quarterly Report on Form 10-Q.

Item 4. Controls and Procedures

Disclosure controls and procedures.

As required by Rule 13a-15(b) and Rule 15d-15(b) of the Exchange Act, the Company’s management, including the Chief Executive Officer and Chief Financial Officer, is responsible for establishing and maintaining effective disclosure controls and procedures, as defined under Rules 13a-15(e) and 15d-15(e) of the Exchange Act. As of September 30, 2018, an evaluation was performed under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that disclosure controls and procedures as of September 30, 2018 were effective in ensuring information required to be disclosed in the Company’s SEC reports was recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information was accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in internal control over financial reporting.

There have not been any changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended September 30, 2018 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II— OTHER INFORMATION

Item 1. Legal Proceedings

For a description of the Company’s material pending legal proceedings, see Note 8, Commitments and Contingencies, to the accompanying Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Item 1A. Risk Factors

There have been no material changes to the risk factors affecting our business, financial condition or future results from those set forth in Part I, Item 1A (Risk Factors) in the 2017 Form 10-K. However, you should carefully consider the factors discussed in the 2017 Form 10-K and in this Quarterly Report on Form 10-Q, which could materially affect our business, financial condition or future results. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Unregistered Sales of Equity Securities

On April 25, 2018, the Company sold 2,820,464 shares of its common stock (the “Acquired Shares”) to the Investor. This issuance and sale is exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to Section 4(a)(2) of the Securities Act. The Investor represented to the Company that it is an “accredited investor” as defined in Rule 501 of the Securities Act and that the AcquiredShares are being acquired for investment purposes and not with a view to any distribution thereof, and appropriate legends will be affixed to the Acquired Shares. See Note 12, Stockholders’ Equity, to the accompanying notes to the consolidated financial statements of this Quarterly Report on Form 10-Q for additional details.

Issuer Purchases of Equity Securities

On January 22, 2016, the Board of Directors of the Company approved a program (the “Repurchase Program”) that authorizes the repurchase of up to $100 million of the Company’s common stock exclusive of any fees, commissions or other expenses relating to such repurchases through open market purchases or privately negotiated transactions at the prevailing market price at the time of purchase. The Repurchase Program was announced on January 25, 2016. The repurchased stock may be retired or held as authorized but unissued treasury shares. The repurchase authorizations do not obligate the Company to acquire any particular amount of common stock or adopt any particular method of repurchase and may be modified, suspended or terminated at any time at the Company’s discretion.

During the three months ended September 30, 2018, the Company did not repurchase any of its common stock.

Item 3. Defaults Upon Senior Securities

Not applicable

Item 4. Mine Safety Disclosures

Not applicable

Item 5. Other Information

None

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Item 6: Exhibits

		Incorporated by Reference
Exhibit No.	Description	Form	File No.	Exhibit	Filing Date	Filed Herewith
10.1	Fifth Amendment to Lease, dated as of October 1, 2018, by and between Burnham Center – 111 West Washington, LLC and Grubhub Holdings Inc.					X
10.2*	SCVNGR, Inc. 2013 Stock Incentive Plan.	S-8	333-227330	99.1	September 14, 2018
31.1	Certification of Matthew Maloney, Chief Executive Officer, pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.					X
31.2	Certification of Adam DeWitt, Chief Financial Officer, pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.					X
32.1	Certification of Matthew Maloney, Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.					X
32.2	Certification of Adam DeWitt, Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.					X
101.INS	XBRL Instance Document.					X
101.SCH	XBRL Taxonomy Extension Schema Document.					X
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.					X
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.					X
101.LAB	XBRL Taxonomy Extension Labels Linkbase Document.					X
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.					X

* Indicates a management contract or compensatory plan

36

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

GRUBHUB INC.
By:	/s/ Matthew Maloney
	Matthew Maloney
	Chief Executive Officer and Director (Principal Executive Officer)
By:	/s/ Adam DeWitt
	Adam DeWitt
	President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

Date: November 6, 2018

37

EX-10.1

EXHIBIT 10.1

FIFTH AMENDMENT TO LEASE

THIS FIFTH AMENDMENT TO LEASE (this “Amendment”) is made as of October 1^st, 2018 (the “Effective Date”), by and between BURNHAM CENTER-111 WEST WASHINGTON, LLC, a Delaware limited liability company (“Landlord”), and GRUBHUB HOLDINGS INC., a Delaware corporation (“Tenant”).

RECITALS:

A. Landlord and Tenant are parties to an Office Building Lease dated March 23, 2012, as amended by First Amendment to Lease dated December 11, 2013, by Second Amendment to Lease dated October 5, 2015 (the “Second Amendment”), by Third Amendment to Lease dated May 6, 2016, and by Fourth Amendment to Lease dated October 16, 2017 (the “Fourth Amendment” and collectively, the “Existing Lease”), whereby Landlord leases to Tenant certain premises consisting of approximately 146,085 rentable square feet (the “Existing Premises”) in the building located at 111 West Washington Street, Chicago, Illinois (the “Building”), as more particularly described in the Existing Lease. The Existing Lease, together with this Amendment are sometimes collectively referred to as the “Lease”.  

B. The Existing Premises consist of the approximately 128,477 rentable square feet (the “Fourth Amendment Existing Premises”) as set forth in the Fourth Amendment and the 17,608 rentable square feet comprising the Fourth Amendment Expansion Space (as defined in the Fourth Amendment”).

C. Landlord and Tenant desire to amend the Existing Lease to include those certain premises located on the sixteenth (16^th) floor of the Building and containing approximately 2,378 rentable square feet as shown on Exhibit A attached hereto (the “16^th Floor Expansion Space”), and those certain premises located on the nineteenth (19^th) floor of the Building and containing approximately 15,609 rentable square feet as shown on Exhibit B attached hereto (the “19^th Floor Expansion Space”) as part of the Premises and make certain other changes to the Existing Lease on the terms and conditions set forth herein.

NOW, THEREFORE, for good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, it is hereby agreed as follows:

1. DEFINITIONS.  Each capitalized term used in this Amendment shall have the same meaning as is ascribed to such capitalized term in the Lease, unless otherwise provided for herein.

2. 16^TH FLOOR EXPANSION SPACE.  

(a) Lease of 16^th Floor Expansion Space.  Landlord leases to Tenant and Tenant leases from Landlord the 16^th Floor Expansion Space.  The 16^th Floor Expansion Space is leased to Tenant subject to all of the same terms and provisions as are contained in the Lease, except as otherwise set forth herein.  The 16^th Floor Expansion Space is leased for a lease term commencing on September 26, 2018 (the “16^th Floor Expansion Commencement Date”) and expiring coterminous with the Existing Premises on March 31,

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2028.  From and after the 16^th Floor Expansion Commencement Date, the term “Premises” as used and defined in the Lease, as amended hereby, shall be deemed to mean and refer to the Existing Premises and the 16^th Floor Expansion Space, and shall be deemed to consist of 148,463 rentable square feet.  The parties agree that notwithstanding anything in the Existing Lease to the contrary, such square footage shall be deemed correct for all purposes.

(b) Delivery of 16^th Floor Expansion Space.  Landlord shall deliver possession of the 16^th Floor Expansion Space to Tenant upon full execution of this Amendment in an “AS-IS” condition, provided that at Tenant’s option, Landlord shall remove the existing furniture in the 16^th Floor Expansion Space.  

(c) Base Rent for 16^th Floor Expansion Space.  Commencing on the 16^th Floor Expansion Commencement Date (subject to Paragraph (d) below), Tenant shall pay Base Rent for the 16^th Floor Expansion Space pursuant to the following schedule:

Period	Annual Base Rent per square foot	Rate of Annual Base Rent	Monthly Base Rent
9/26/18 – 10/31/18	$32.00	$76,096.00	$6,341.33
11/1/18 – 10/31/19	$32.50	$77,285.00	$6,440.42
11/1/19 – 10/31/20	$33.00	$78,474.00	$6,539.50
11/1/20 – 10/31/21	$33.50	$79,663.00	$6,638.58
11/1/21 – 10/31/22	$34.00	$80,852.00	$6,737.67
11/1/22 – 10/31/23	$34.50	$82,041.00	$6,836.75
11/1/23 – 10/31/24	$35.00	$83,230.00	$6,935.83
11/1/24 – 10/31/25	$35.50	$84,419.00	$7,034.92
11/1/25 – 10/31/26	$36.00	$85,608.00	$7,134.00
11/1/26 – 10/31/27	$36.50	$86,797.00	$7,233.08
11/1/27 – 3/31/28	$37.00	$87,986.00	$7,332.17

(d)Rent Abatement for 16^th Floor Expansion Space.  Notwithstanding anything in this Amendment to the contrary, provided that Tenant is not then in an uncured monetary default under the Lease for non-payment of Base Rent or Additional Rent in excess of $10,000 (a “Material Monetary Rent Default”), the Monthly Base Rent for the 16^th Floor Expansion Space shall abate for the first ten (10) full calendar months following the 16^th Floor Expansion Commencement Date (“16^th Floor Expansion Abated Rent”); provided, however, that the entire amount of 16^th Floor Expansion Abated Rent otherwise due and payable multiplied by a fraction the numerator of which is the number of months until the Expiration Date and the denominator of which is the total number of months pursuant to which the 16^th Floor Expansion Space is leased (without reference to any renewal option period) pursuant to this Lease shall be reinstated and become immediately due and payable upon the occurrence of a Material Monetary Rent Default by Tenant under the Lease beyond all applicable notice and cure periods, which reinstatement shall be as a result of the failure to satisfy a condition subsequent and shall not be deemed liquidated damages or a penalty.  Any obligation by Tenant to pay a portion of the 16^th Floor Expansion Abated

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Rent shall terminate on the Expiration Date, without reference to any renewal option period.

(e)16^th Floor Expansion Space Common Expenses.  In addition to Base Rent, commencing on the 16^th Floor Expansion Commencement Date, Tenant shall pay Tenant’s Prorata Share of Common Expenses for the 16^th Floor Expansion Space pursuant to the terms of the Lease.  For purposes of this Paragraph, (i) the Base Year for the 16^th Floor Expansion Space shall be 2019, and (ii) Tenant’s Prorata Share of the Building for the 16^th Floor Expansion Space shall be 0.41%.  Tenant shall continue to pay Additional Rent pursuant to the Existing Lease.

(f)16^th Floor Expansion Base Rent Reduction.  Notwithstanding anything in this Amendment to the contrary, and in consideration of Tenant’s construction of improvements to the 16^th Floor Expansion Space, commencing on the 16^th Floor Expansion Commencement Date and continuing through March 31, 2028, the Base Rent for the 16^th Floor Expansion Space shall be abated by $2,931.31 per annum for a total of $28,091.69 (the “16^th Floor Expansion Base Rent Reduction”), which Expansion Base Rent Reduction shall be applied toward each installment of Monthly Base Rent in the amount of $244.28.  Upon a sale or refinancing of the Building or the Land on which the Building is located, Landlord may, at its sole option, pay to Tenant the total amount of remaining 16^th Floor Expansion Base Rent Reduction as a lump sum payment (the “16^th Floor Expansion Base Rent Reduction Payment”) in which event, Tenant’s right to further 16^th Floor Expansion Base Rent Reduction as set forth in this paragraph shall be void and of no further effect.  Landlord shall provide Tenant with at least thirty (30) days’ prior written notice of Landlord’s intention to make a 16^th Floor Expansion Base Rent Reduction Payment.  The giving of such notice shall not obligate Landlord to make the 16^th Floor Expansion Base Rent Reduction Payment, which shall be conditioned upon the closing of any such sale or refinancing of the Building or the Land on which the Building is located.  The amount of the 16^th Floor Expansion Base Rent Reduction Payment shall be calculated as of the date of such closing and actual payment to Tenant.  Any such 16^th Floor Expansion Base Rent Reduction Payment shall be made at the closing of any such sale, or refinancing of the Building or the Land on which the Building is located and the 16^th Floor Expansion Base Rent Reduction shall terminate effective as of the monthly installment of Base Rent that is due as of, or immediately following, receipt by Tenant of the 16^th Floor Expansion Base Rent Reduction Payment by wire transfer of immediately available funds.  As an example and not as a limitation, if Landlord sells the Building as of the fifty-fifty (55^th) calendar month following the 16^th Floor Expansion Commencement Date, such that Tenant would be entitled to 60 more months of 16^th Floor Expansion Base Rent Reduction, Landlord may pay Tenant the remaining 16^th Floor Expansion Base Rent Reduction Payment in the amount of $14,656.80 ($244.28 x 60) at the closing of such sale and thereafter Tenant will have no further right to application of the 16^th Floor Expansion Base Rent Reduction toward each installment of Monthly Base Rent for the 16^th Floor Expansion Space.

3. 19^TH FLOOR EXPANSION SPACE.  

(a) Lease of 19^th Floor Expansion Space.  Landlord leases to Tenant and Tenant leases from Landlord the 19^th Floor Expansion Space.  The 19^th Floor Expansion Space is

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leased to Tenant subject to all of the same terms and provisions as are contained in the Lease, except as otherwise set forth herein.  The 19^th Floor Expansion Space is leased for a lease term commencing on April 1, 2019 (the “19^th Floor Expansion Commencement Date”) and expiring coterminous with the Existing Premises and 16^th Floor Expansion Space on March 31, 2028.  From and after the 19^thFloor Expansion Commencement Date, the term “Premises” as used and defined in the Lease, as amended hereby, shall be deemed to mean and refer to the Existing Premises and the 19^th Floor Expansion Space, and shall be deemed to consist of 164,072 rentable square feet.  The parties agree that notwithstanding anything in the Existing Lease to the contrary, such square footage shall be deemed correct for all purposes.  

(b) Delivery of 19^th Floor Expansion Space.  Landlord shall deliver possession of the 19^th Floor Expansion Space to Tenant on or before December 1, 2018 in an “AS-IS” condition. Landlord and Tenant agree that, except for the obligation to pay Base Rent or Additional Rent, all of the terms and conditions of the Lease, as otherwise amended by this Amendment, shall apply to the 19^th Floor Expansion Space as of the date that Landlord delivers possession thereof. Landlord and Tenant acknowledge that the commencement of the payment of Base Rent and Additional Rent is set forth elsewhere in this Amendment.

(c) Base Rent for 19^th Floor Expansion Space.  Commencing on the 19^th Floor Expansion Commencement Date (subject to Paragraph (d) below), Tenant shall pay Base Rent for the 19^th Floor Expansion Space pursuant to the following schedule:

Period	Annual Base Rent per square foot	Rate of Annual Base Rent	Monthly Base Rent
4/1/19 – 10/31/19	$32.50	$507,292.50	$42,274.38
11/1/19 – 10/31/20	$33.00	$515,097.00	$42,924.75
11/1/20 – 10/31/21	$33.50	$522,901.50	$43,575.13
11/1/21 – 10/31/22	$34.00	$530,706.00	$44,225.50
11/1/22 – 10/31/23	$34.50	$538,510.50	$44,875.88
11/1/23 – 10/31/24	$35.00	$546,315.00	$45,526.25
11/1/24 – 10/31/25	$35.50	$554,119.50	$46,176.63
11/1/25 – 10/31/26	$36.00	$561,924.00	$46,827.00
11/1/26 – 10/31/27	$36.50	$569,728.50	$47,477.38
11/1/27 – 3/31/28	$37.00	$577,533.00	$48,127.75

(d)Rent Abatement for 19^th Floor Expansion Space.  Notwithstanding anything in this Amendment to the contrary, provided that Tenant is not then in a Material Monetary Rent Default, the Monthly Base Rent for the 19^th Floor Expansion Space shall abate for the first nine (9) full calendar months following the 19^th Floor Expansion Commencement Date (“19^th Floor Expansion Abated Rent”); provided, however, that the entire amount of 19^th Floor Expansion Abated Rent otherwise due and payable multiplied by a fraction the numerator of which is the number of months until the Expiration Date and the denominator of which is the total number of months pursuant to which the 19^th Floor Expansion Space is leased (without reference to any renewal option period) pursuant to this Lease shall be reinstated and become immediately due and payable upon the occurrence of a Material

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Monetary Rent Default by Tenant under the Lease beyond all applicable notice and cure periods, which reinstatement shall be as a result of the failure to satisfy a condition subsequent and shall not be deemed liquidated damages or a penalty.  Any obligation by Tenant to pay a portion of the 19^th Floor Expansion Abated Rent shall terminate on the Expiration Date, without reference to any renewal option period.

(e)19^th Floor Expansion Space Common Expenses.  In addition to Base Rent, commencing on the 19^th Floor Expansion Commencement Date, Tenant shall pay Tenant’s Prorata Share of Common Expenses for the 19^th Floor Expansion Space pursuant to the terms of the Lease.  For purposes of this Paragraph, (i) the Base Year for the 19^th Floor Expansion Space shall be 2019, and (ii) Tenant’s Prorata Share of the Building for the 19^th Floor Expansion Space shall be 2.72%.  Tenant shall continue to pay Additional Rent pursuant to the Existing Lease.

(f)19^th Floor Expansion Base Rent Reduction.  Notwithstanding anything in this Amendment to the contrary, and in consideration of Tenant’s demolition of the existing improvements in the 19^th Floor Expansion Space and construction of improvements in the 19^th Floor Expansion Space, commencing on the 19^th Floor Expansion Commencement Date and continuing through March 31, 2028, the Base Rent for the 19^th Floor Expansion Space shall be abated by $157,509.74 per annum for a total of $1,211,798.94 (the “19^th Floor Expansion Base Rent Reduction”), which Expansion Base Rent Reduction shall be applied toward each installment of Monthly Base Rent in the amount of $13,125.81.  Upon a sale or refinancing of the Building or the Land on which the Building is located, Landlord may, at its sole option, pay to Tenant the total amount of remaining 19^th Floor Expansion Base Rent Reduction as a lump sum payment (the “19^th Floor Expansion Base Rent Reduction Payment”) in which event, Tenant’s right to further 19^th Floor Expansion Base Rent Reduction as set forth in this paragraph shall be void and of no further effect.  Landlord shall provide Tenant with at least thirty (30) days’ prior written notice of Landlord’s intention to make a 19^th Floor Expansion Base Rent Reduction Payment.  The giving of such notice shall not obligate Landlord to make the 19^th Floor Expansion Base Rent Reduction Payment, which shall be conditioned upon the closing of any such sale or refinancing of the Building or the Land on which the Building is located.  The amount of the 19^th Floor Expansion Base Rent Reduction Payment shall be calculated as of the date of such closing and actual payment to Tenant.  Any such 19^th Floor Expansion Base Rent Reduction Payment shall be made at the closing of any such sale, or refinancing of the Building or the Land on which the Building is located and the 19^th Floor Expansion Base Rent Reduction shall terminate effective as of the monthly installment of Base Rent that is due as of, or immediately following, receipt by Tenant of the 19^th Floor Expansion Base Rent Reduction Payment by wire transfer of immediately available funds.  As an example and not as a limitation, if Landlord sells the Building as of the forty-eighth (48^th) calendar month following the 19^th Floor Expansion Commencement Date, such that Tenant would be entitled to 60 more months of 19^th Floor Expansion Base Rent Reduction, Landlord may pay Tenant the remaining 19^th Floor Expansion Base Rent Reduction Payment in the amount of $787,548.60 ($13,125.81 x 60) at the closing of such sale and thereafter Tenant will have no further right to application of the 19^th Floor Expansion Base Rent Reduction toward each installment of Monthly Base Rent for the 19^th Floor Expansion Space.

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4.UPFIT ALLOWANCE.

(a)2022 Upfit Allowance.  Section 6 of the Fourth Amendment is deleted in its entirety.  Commencing on October 1, 2022, Landlord shall provide an allowance of up to $449,669.50 ($3.50 per rentable square foot of the Fourth Amendment Existing Premises) (the “2022 Upfit Allowance”) toward the cost of Tenant’s improvements to the Premises (the “2022 Improvements”).  The 2022 Improvements shall be performed pursuant to the terms and conditions of the Lease pertaining to alterations.  Landlord shall pay portions of the 2022 Upfit Allowance to Tenant from time to time, but not more than one (1) time per thirty (30) days, within thirty (30) days following Landlord’s receipt of (a) paid invoices for the 2022 Improvements, if applicable, (b) partial or final lien waivers from the contractor and all subcontractors and suppliers for such 2022 Improvements, if applicable (provided that Landlord shall not be required to release the final 10% of the 2022 Upfit Allowance until final lien waivers are received for all 2022 Improvements), and (c) written request for disbursement from Tenant.  Tenant may apply up to $321,192.50 ($2.50 per rentable square foot of the Fourth Amendment Existing Premises) to the cost of furniture, fixtures, and equipment to be used within the Premises.  Any portion of the 2022 Upfit Allowance not used toward the cost of the 2022 Improvements within calendar year 2022 shall be deemed forfeited.  

(b)2025 Upfit Allowance.  Provided Tenant has not exercised the Early Termination Option, commencing November 1, 2025, Landlord shall provide an allowance of up to $449,669.50 ($3.50 per rentable square foot of the Fourth Amendment Existing Premises) (the “2025 Upfit Allowance”) toward the cost of Tenant’s improvements to the Premises (the “2025 Improvements”).  The 2025 Improvements shall be performed pursuant to the terms and conditions of the Lease pertaining to alterations.  Landlord shall pay portions of the 2025 Upfit Allowance to Tenant from time to time, but not more than one (1) time per thirty (30) days, within thirty (30) days following Landlord’s receipt of (a) paid invoices for the 2025 Improvements, if applicable, (b) partial or final lien waivers from the contractor and all subcontractors and suppliers for such 2025 Improvements, if applicable (provided that Landlord shall not be required to release the final 10% of the 2025 Upfit Allowance until final lien waivers are received for all 2025 Improvements), and (c) written request for disbursement from Tenant.  Tenant may apply up to $321,192.50 ($2.50 per rentable square foot of the Fourth Amendment Existing Premises) to the cost of furniture, fixtures, and equipment to be used within the Premises.  Any portion of the Upfit Allowance not used toward the cost of the 2025 Improvements within calendar year 2025 shall be deemed forfeited.  

5. TERMINATION OPTION.  Tenant’s Early Termination Option set forth in Section 18 of the Second Amendment, as amended by Section 9 of the Fourth Amendment, shall remain in effect, subject to the following:

(a) Early Termination Date.  The Early Termination Date shall be September 30, 2025.

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(b) Early Termination Notice.  The Early Termination Notice must be given no earlier than June 30, 2024 and no later than September 30, 2024.

(c) Termination Fee.  The Termination Fee shall be revised as follows:

(i)Termination Fee if Landlord has not made the Remaining Base Rent Reduction Payment, Expansion Base Rent Reduction Payment, 16^th Floor Expansion Base Rent Reduction Payment and 19^th Floor Expansion Base Rent Reduction Payment.  If Landlord has not made the Remaining Base Rent Reduction Payment (as defined in the Second Amendment), Expansion Base Rent Reduction Payment (as defined in the Fourth Amendment), 16^th Floor Expansion Base Rent Reduction Payment, and 19^th Floor Expansion Base Rent Reduction Payment as of the date of the Early Termination Notice, the Termination Fee shall be equal to $2,500,000.00.

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(ii)Termination Fee if Landlord has made any of the the Remaining Base Rent Reduction Payment, Expansion Base Rent Reduction Payment, 16^th Floor Expansion Base Rent Reduction Payment and 19^th Floor Expansion Base Rent Reduction Payment.  If Landlord has made any of the Remaining Base Rent Reduction Payment, Expansion Base Rent Reduction Payment, 16^th Floor Expansion Base Rent Reduction Payment, and 19^th Floor Expansion Base Rent Reduction Payment as of the date of the Early Termination Notice, the Termination Fee shall be equal to the sum of (A) $2,500,000.00, plus (B) the unamortized Remaining Base Rent Reduction Payment made by Landlord, if applicable, amortized on a straight-line basis over the period commencing on the date that Landlord made the Remaining Base Rent Reduction Payment to Tenant and ending on March 31, 2026 at an interest rate of eight percent (8%) per annum, plus (C) the unamortized Expansion Base Rent Reduction Payment, 16^th Floor Expansion Base Rent Reduction Payment, and 19^th Floor Expansion Base Rent Reduction Payment made by Landlord, if applicable, amortized on a straight-line basis over the period commencing on the date that Landlord made the Expansion Base Rent Reduction Payment, 16^th Floor Expansion Base Rent Reduction Payment, and 19^th Floor Expansion Base Rent Reduction Payment to Tenant and ending on the March 31, 2028 at an interest rate of eight percent (8%) per annum

(d)Termination Fee Timing.  Tenant shall pay fifty percent (50%) of the Termination Fee at the time that Tenant provides the Early Termination Notice and fifty percent (50%) of the Termination Fee at least thirty (30) days prior to the Early Termination Date.

(e)Abatement of Existing Premises Rent.  The abatement of Monthly Base Rent and Additional Rent set forth in Section 18 of the Second Amendment if Tenant does not exercise the Early Termination Option shall apply only to the Existing Premises and not to the Fourth Amendment Expansion Space, 16^th Floor Expansion Space, and 19^th Floor Expansion Space.  If such abatement is applicable, it shall occur during the months of October 2024, November 2024, October 2025, and November 2025.  

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(f) No Further Modifications.  Except as modified above, the Early Termination Option shall remain in full force and effect.

6. EXPANSION OPTION.  Tenant’s Second Expansion Option set forth in Section 16(b) of the Second Amendment shall remain in effect, subject to the following:

(a) Tenant’s Second Expansion Option Notice.  Tenant’s written notice exercising the Second Expansion Option shall be given prior to September 1, 2021, and the term for the Second Expansion Space (as defined in the Second Amendment) shall commence on September 1, 2022.

(b) Landlord’s Schedule of Second Expansion Space.  Landlord’s delivery of a schedule of then-available space in the Building shall be delivered to Tenant no earlier than June 1, 2020 and no later than August 1, 2020.

(c) Substitution of Second Expansion Space.  Landlord shall have the right to substitute alternative Second Expansion Space at any time before September 1, 2021.

7. RIGHT OF FIRST OFFER. Tenant’s ROFO set forth in Section 17 of the Second Amendment shall remain in effect, subject to the following:

(a) ROFO Floors.  The floors applicable to the ROFO are the 3^rd, 4^th, 5^th, 6^th, 16^th, 17^th, and 18^th floors of the Building.

(b) ROFO Minimum Rentable Square Footage.  The minimum area that becomes available to trigger the ROFO and Landlord’s obligation to provide the ROFO Availability Notice is 5,000 contiguous rentable square feet.  

8. SECOND FLOOR SIGNAGE.  At Tenant’s sole cost and expense, and subject to applicable laws and municipal approval and Landlord’s review and reasonable approval of location, size, and design, Tenant may install second floor signage in the window line of the Premises that faces the Building’s lower level lobby.

9.ASBESTOS.  The last sentence of Section 30(d) of the Existing Lease is deleted and replaced with the following:

“Except as otherwise provided in the previous two (2) sentences, Landlord shall be responsible for encapsulating and/or remediating, prior to the 16^th Floor Expansion Commencement Date and the 19^th Floor Expansion Commencement Date in accordance with applicable Environmental Laws any ACM encountered by Landlord or Tenant in the performance of Landlord’s construction activities or Tenant’s construction activities.”

10. BROKERs or finders.  Tenant represents and warrants to Landlord that except for Bradford Allen Realty Services (“Bradford”), it has engaged no broker or finder and that no claims for brokerage commissions or finders’ fees arising from any act of Tenant will arise in connection with the execution of this Amendment.  Landlord represents and warrants to Tenant that except for Jones Lang LaSalle Midwest LLC (“JLL” and together with Bradford, the “Broker”), it has engaged no broker or finder and that no claims for brokerage commissions or

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finders’ fees arising from any act of Landlord will arise in connection with the execution of this Amendment.  Tenant shall indemnify, defend and hold harmless Landlord from and against any liabilities and claims for commissions and fees arising out of a breach of the foregoing representation and warranty made by Tenant.  Landlord shall pay any commission owing to the Broker pursuant to one or more separate written agreements between Landlord and Broker.

11. BINDING EFFECT.  The Existing Lease, as amended hereby, shall continue in full force and effect, subject to the terms and provisions thereof and hereof. In the event of any conflict between the terms of the Lease and the terms of this Amendment, the terms of this Amendment shall control. This Amendment shall be binding upon and inure to the benefit of Landlord, Tenant and their respective successors and permitted assigns.

12. SUBMISSION.  Submission of this Amendment by Landlord to Tenant for examination and/or execution shall not constitute a reservation of or option for the Premises or in any manner bind Landlord and no obligations on Landlord shall arise under this Amendment unless and until this Amendment is fully signed and delivered by Landlord and Tenant.

13.COUNTERPARTS.  This Amendment may be executed in counterparts, each of which shall be an original and all of which counterparts taken together shall constitute one and the same agreement.  To facilitate the execution and delivery of this Amendment, the parties may execute and exchange counterparts of the signature pages by fax of electronic mail, and the signature of either party to any counterpart may be appended to any other counterpart.  

14.CONFIDENTIALITY.  Landlord and Tenant acknowledge and agree that the terms of this Amendment and the Existing Lease are confidential and constitute proprietary information of Landlord and Tenant.  Disclosure of the terms could adversely affect the ability of the parties to negotiate other leases and impair the parties’ relationship with other tenants.  Accordingly, except as provided in this Section, the parties agree that they shall not intentionally and voluntarily disclose the terms and conditions of this Amendment or the Lease to any other tenant or apparent prospective tenant of the Building, either directly or indirectly, without the prior written consent of the other party; provided, however, that Tenant may disclose the terms to prospective subtenants or assignees under the Lease, to its accountants, attorneys and other professional advisers and as required by applicable law.  Landlord acknowledges that Tenant is a publically traded company and is required to disclose the terms of material contracts, including the terms of the Lease, in accordance with applicable law.  Landlord may disclose the terms to prospective lenders and entities interested in purchasing the Building from Landlord.  In addition, except as required by law, neither party shall make a press release or other public announcement with respect to the Lease, without the prior written consent of the other party.

[Signatures are on the following page]

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IN WITNESS WHEREOF, this Amendment is executed as of the day and year aforesaid.

LANDLORD: BURNHAM CENTER-111 WEST WASHINGTON, LLC, a Delaware limited liability company By:111 West Washington Holdings, LLC, a Delaware limited liability company, its sole member     By:/s/ Brett Hamilton Name:  Brett Hamilton Title: Vice President and Secretary TENANT:   GRUBHUB HOLDINGS, INC., a Delaware corporation   By:/s/ Adam DeWitt Name:Adam DeWitt Title:President and CFO

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EXHIBIT A

16^th floor EXPANSION SPACE

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A-1

EXHIBIT B

19^th floor EXPANSION SPACE

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B-1

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO RULES 13a-14(a) AND 15d-14(a) OF THE SECURITIES

EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Matthew Maloney, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of GrubHub Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

By:	/S/ Matthew Maloney
	Matthew Maloney
	Chief Executive Officer and Director

Date: November 6, 2018

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO RULES 13a-14(a) AND 15d-14(a) OF THE SECURITIES

EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Adam DeWitt, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of GrubHub Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

By:	/S/ Adam DeWitt
	Adam DeWitt
	President and Chief Financial Officer

Date: November 6, 2018

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. 1350,

AS ADOPTED PURSUANT TOSECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of GrubHub Inc. (the “Company”) on Form 10-Q for the fiscal quarter ended September 30, 2018 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Matthew Maloney, Chief Executive Officer and Director of the Company, certify, as of the date hereof and solely for purposes of and pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge: 

1. The Report fully complies with the requirements of section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated.

By:	/S/ Matthew Maloney
	Matthew Maloney
	Chief Executive Officer and Director

Date: November 6, 2018

EX-32.2

EXHIBIT 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. 1350,

AS ADOPTED PURSUANT TOSECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of GrubHub Inc. (the “Company”) on Form 10-Q for the fiscal quarter ended September 30, 2018 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Adam DeWitt, Chief Financial Officer and Treasurer of the Company, certify, as of the date hereof and solely for purposes of and pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge: 

1. The Report fully complies with the requirements of section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated.

By:	/S/ Adam DeWitt
	Adam DeWitt
	President and Chief Financial Officer

Date: November 6, 2018

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2018	Nov. 02, 2018
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q3
Trading Symbol	GRUB
Entity Registrant Name	GRUBHUB INC.
Entity Central Index Key	0001594109
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		90,701,489

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
CURRENT ASSETS:
Cash and cash equivalents	$ 294,550	$ 234,090
Short-term investments	16,687	23,605
Accounts receivable, less allowances for doubtful accounts	120,306	87,377
Income tax receivable	14,125	8,593
Prepaid expenses and other current assets	17,024	6,818
Total current assets	462,692	360,483
PROPERTY AND EQUIPMENT:
Property and equipment, net of depreciation and amortization	105,434	71,384
OTHER ASSETS:
Other assets	11,666	6,487
Goodwill	885,350	589,862
Acquired intangible assets, net of amortization	520,867	515,553
Total other assets	1,417,883	1,111,902
TOTAL ASSETS	1,986,009	1,543,769
CURRENT LIABILITIES:
Restaurant food liability	122,900	119,922
Accounts payable	17,184	7,607
Accrued payroll	19,036	13,186
Taxes payable	1,566	3,109
Short-term debt	6,250	3,906
Other accruals	33,186	26,818
Total current liabilities	200,122	174,548
LONG-TERM LIABILITIES:
Deferred taxes, non-current	44,073	74,292
Other accruals	19,683	7,468
Long-term debt	290,073	169,645
Total long-term liabilities	353,829	251,405
Commitments and contingencies
STOCKHOLDERS’ EQUITY:
Preferred Stock, $0.0001 par value. Authorized: 25,000,000 shares as of September 30, 2018 and December 31, 2017; issued and outstanding: no shares as of September 30, 2018 and December 31, 2017.
Common stock, $0.0001 par value. Authorized: 500,000,000 shares at September 30, 2018 and December 31, 2017; issued and outstanding: 90,598,259 and 86,790,624 shares as of September 30, 2018 and December 31, 2017, respectively	9	9
Accumulated other comprehensive loss	(1,620)	(1,228)
Additional paid-in capital	1,079,165	849,043
Retained earnings	354,504	269,992
Total Stockholders’ Equity	1,432,058	1,117,816
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$ 1,986,009	$ 1,543,769

XML

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2018	Dec. 31, 2017
Statement Of Financial Position [Abstract]
Preferred Stock, par value	$ 0.0001	$ 0.0001
Preferred Stock, shares authorized	25,000,000	25,000,000
Preferred Stock, shares issued	0	0
Preferred Stock, shares outstanding	0	0
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	500,000,000	500,000,000
Common stock, shares issued	90,598,259	86,790,624
Common stock, shares outstanding	90,598,259	86,790,624

XML

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Income Statement [Abstract]
Revenues	$ 247,225	$ 163,059	$ 719,536	$ 477,987
Costs and expenses:
Operations and support	111,511	65,352	310,239	187,795
Sales and marketing	49,426	35,138	144,413	105,346
Technology (exclusive of amortization)	21,258	14,292	57,306	41,560
General and administrative	22,195	18,617	58,072	46,627
Depreciation and amortization	20,987	12,613	61,787	33,067
Total costs and expenses	225,377	146,012	631,817	414,395
Income from operations	21,848	17,047	87,719	63,592
Interest (income) expense - net	337	(373)	1,367	(908)
Income before provision for income taxes	21,511	17,420	86,352	64,500
Income tax (benefit) expense	(1,234)	4,432	2,721	19,043
Net income attributable to common stockholders	$ 22,745	$ 12,988	$ 83,631	$ 45,457
Net income per share attributable to common stockholders:
Basic	$ 0.25	$ 0.15	$ 0.94	$ 0.53
Diluted	$ 0.24	$ 0.15	$ 0.91	$ 0.52
Weighted-average shares used to compute net income per share attributable to common stockholders:
Basic	90,494	86,449	89,027	86,162
Diluted	93,678	88,543	92,091	87,788

XML

Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Statement Of Income And Comprehensive Income [Abstract]
Net income	$ 22,745	$ 12,988	$ 83,631	$ 45,457
OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation adjustments	(92)	299	(392)	749
COMPREHENSIVE INCOME	$ 22,653	$ 13,287	$ 83,239	$ 46,206

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 83,631	$ 45,457
Adjustments to reconcile net income to net cash from operating activities:
Depreciation	16,189	7,949
Provision for doubtful accounts	741	338
Deferred taxes	2,048	(2,162)
Amortization of intangible assets	45,598	25,118
Stock-based compensation	36,445	23,913
Deferred rent	3,975	130
Amortization of deferred loan costs	588	349
Other	(732)	(823)
Change in assets and liabilities, net of the effects of business acquisitions:
Accounts receivable	(17,969)	(15,903)
Income taxes receivable	(5,533)	3,795
Prepaid expenses and other assets	(15,455)	4,193
Restaurant food liability	1,608	4,591
Accounts payable	5,265	2,965
Accrued payroll	5,311	1,575
Other accruals	3,752	6,351
Net cash provided by operating activities	165,462	107,836
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions of businesses, net of cash acquired	(366,856)	(51,859)
Purchases of investments	(47,642)	(145,667)
Proceeds from maturity of investments	54,916	164,733
Capitalized website and development costs	(21,471)	(15,281)
Purchases of property and equipment	(31,984)	(12,549)
Acquisition of other intangible assets		(25,147)
Other cash flows from investing activities	38	589
Net cash used in investing activities	(412,999)	(85,181)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of common stock	200,000
Proceeds from borrowings under the Credit Agreement	175,000
Repayments of borrowings under the Credit Agreement	(52,344)
Proceeds from exercise of stock options	13,010	12,505
Taxes paid related to net settlement of stock-based compensation awards	(28,238)	(7,696)
Payments for debt issuance costs		(285)
Net cash provided by financing activities	307,428	4,524
Net change in cash, cash equivalents, and restricted cash	59,891	27,179
Effect of exchange rates on cash, cash equivalents and restricted cash	(406)	709
Cash, cash equivalents, and restricted cash at beginning of year	238,239	242,214
Cash, cash equivalents, and restricted cash at end of the period	297,724	270,102
SUPPLEMENTAL DISCLOSURE OF NON-CASH ITEMS
Cash paid for income taxes	7,508	16,340
Capitalized property, equipment and website and development costs in accounts payable at period end	4,069	1,048
Net working capital adjustment receivable	530	887
Fair value of equity awards assumed on acquisition	2,594
RECONCILIATION OF CASH, CASH EQUIVALENTS, AND RESTRICTED CASH
Cash and cash equivalents	$ 294,550	265,958
Restricted cash included in prepaid expenses and other current assets		$ 1,500
Restricted Cash, Current, Asset, Statement of Financial Position [Extensible List]	us-gaap:PrepaidExpenseAndOtherAssetsCurrent	us-gaap:PrepaidExpenseAndOtherAssetsCurrent
Restricted cash included in other assets	$ 3,174	$ 2,644
Restricted Cash, Noncurrent, Asset, Statement of Financial Position [Extensible List]	us-gaap:OtherAssetsNoncurrent	us-gaap:OtherAssetsNoncurrent
Total cash, cash equivalents, and restricted cash	$ 297,724	$ 270,102

XML

Organization

9 Months Ended

Sep. 30, 2018

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Organization

1. Organization

Grubhub Inc., a Delaware corporation, and its wholly-owned subsidiaries (collectively referred to as the “Company”) provide an online and mobile platform for restaurant pick-up and delivery orders. Diners enter their delivery address or use geo-location within the mobile applications and the Company displays the menus and other relevant information for restaurants in its network. Orders may be placed directly online, via mobile applications or over the phone at no cost to the diner. The Company charges the restaurant a per order commission that is largely fee based. In certain markets, the Company also provides delivery services to restaurants on its platform that do not have their own delivery operations.

XML

Significant Accounting Policies

9 Months Ended

Sep. 30, 2018

Accounting Policies [Abstract]

Significant Accounting Policies

2. Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The accompanying unaudited condensed consolidated interim financial statements include the accounts of Grubhub Inc. and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. These unaudited condensed consolidated interim financial statements include all wholly-owned subsidiaries and reflect all normal and recurring adjustments, as well as any other than normal adjustments, that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods and should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017 filed with the SEC on February 28, 2018 (the “2017 Form 10-K”). All significant intercompany transactions have been eliminated in consolidation. Operating results for the three and nine months ended September 30, 2018 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2018.

On January 1, 2018, the Company adopted Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“ASC Topic 606”) using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning on or after January 1, 2018 are presented under ASC Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with historic accounting guidance under ASC Topic 605. See Recently Issued Accounting Pronouncements and Note 3, Revenue, below for additional details.

Use of Estimates

The preparation of condensed consolidated financial statements in accordance with GAAP requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and the related disclosures at the date of the financial statements, as well as the reported amounts of revenue and expenses during the periods presented. Estimates include revenue recognition, the allowance for doubtful accounts, website and internal-use software development costs, goodwill, depreciable lives of property and equipment, recoverability of intangible assets with definite lives and other long-lived assets, stock-based compensation and income taxes. Actual results could differ from these estimates.

Changes in Accounting Principle

See “Recently Issued Accounting Pronouncements” below for a description of accounting principle changes adopted during the nine months ended September 30, 2018 related to revenue and the statement of cash flows. There have been no other material changes to the Company’s significant accounting policies described in the 2017 Form 10-K.

Recently Issued Accounting Pronouncements

In August 2018, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update No. 2018-15, “Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract” (“ASU 2018-15”). ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in hosting arrangements that are service contracts and that include an internal-use software license with the requirement for capitalizing implementation costs incurred to develop or obtain internal-use software. The capitalized implementation costs are required to be expensed over the term of the hosting arrangement. The guidance also clarifies the presentation requirements for reporting such costs in the entity’s financial statements. The Company has elected to early adopt ASU 2018-15. The amendments will be applied prospectively to all implementation costs incurred after the date of adoption. The adoption of ASU 2018-15 is not expected to have a material impact on the Company’s consolidated financial position, results of operations or cash flows.

In May 2017, the FASB issued Accounting Standards Update No. 2017-09, “Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting” (“ASU 2017-09”). ASU 2017-09 provides clarification on when modification accounting should be used for changes to the terms or conditions of a share-based payment award. This ASU does not change the accounting for modifications but clarifies that modification accounting guidance should only be applied if there is a change to the value, vesting conditions, or award classification and would not be required if the changes are considered non-substantive. ASU 2017-09 is effective for the Company beginning in the first quarter of 2018 on a prospective basis. The adoption of ASU 2017-09 has not had and is not expected to have a material impact on the Company’s consolidated financial position, results of operations or cash flows.

In August 2016, the FASB issued Accounting Standards Update No. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments” (“ASU 2016-15”). ASU2016-15 adds or clarifies guidance on the classification of certain cash receipts and payments in the statement of cash flows with the intent of reducing diversity in practice related to eight types of cash flows including, among others, debt prepayment or debt extinguishment costs, contingent consideration payments made after a business combination, and separately identifiable cash flows and application of the predominance principle. In addition, in November 2016, the FASB issued Accounting Standards Update No. 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash” (“ASU 2016-18”). ASU 2016-18 requires companies to include amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the statement of cash flow. ASU 2016-15 and ASU 2016-18 were effective for and adopted by the Company beginning in the first quarter of 2018. The amendments were applied using a retrospective transition method to each period presented and impacted the Company’s presentation of the consolidated statements of cash flows. The adoption of ASU 2016-15 and ASU 2016-18 had no material impact on the Company’s consolidated financial position, results of operations or cash flows as the Company’s restricted cash balances are immaterial.

In June 2016, the FASB issued Accounting Standards Update No. 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). ASU 2016-13 introduces a new forward-looking approach, based on expected losses, to estimate credit losses on certain types of financial instruments, including trade receivables and held-to-maturity debt securities, which will require entities to incorporate considerations of historical information, current information and reasonable and supportable forecasts. This ASU also expands disclosure requirements. ASU 2016-13 is effective for the Company beginning in the first quarter of 2020 and early adoption is permitted. The guidance will be applied using the modified-retrospective approach. The adoption of ASU 2016-13 is not expected to have a material impact on the Company’s consolidated financial position, results of operations or cash flows.

In February 2016, the FASB issued Accounting Standards Update No. 2016-02, “Leases (Topic 842)” (“ASU 2016-02”). Under ASU 2016-02, a lessee will recognize in the statement of financial position a liability to make lease payments and a right-of-use asset for all leases (with the exception of short-term leases) at the commencement date. The recognition, measurement, and presentation of expenses and cash flows arising from a lease under ASU 2016-02 will not significantly change from current GAAP. ASU 2016-02 is effective beginning in the first quarter of 2019 with early adoption permitted. In July 2018, the FASB issued Accounting Standards Update No. 2018-11 “Leases (Topic 842): Targeted Improvements” (“ASU 2018-11”), which provides for the election of transition methods between the modified retrospective method and the optional transition relief method. The modified retrospective method is applied to all prior reporting periods presented with a cumulative-effect adjustment recorded in the earliest comparative period while the optional transition relief method is applied beginning in the period of adoption with a cumulative-effect adjustment recorded in the first quarter of 2019.The Company will apply the optional transition relief method and has elected the optional practical expedient package, which includes retaining the current classification of leases.The Company is currently evaluating the impact of adoption of ASU 2016-02 on its consolidated financial statements under ASU 2018-11. Management anticipates that it will result in a significant increase in the Company’s long-term assets and liabilities but will have no material impact to its results of operations or cash flows.

In May 2014, and in subsequent updates, the FASB issued ASC Topic 606, Revenue from Contracts with Customers, which supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, including most industry-specific requirements. ASC Topic 606 establishes a five-step revenue recognition process in which an entity will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. ASC Topic 606 also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenues and cash flows from contracts with customers. ASC Topic 606 was effective for and adopted by the Company in the first quarter of 2018. The Company applied the modified retrospective approach to contracts which were not completed as of January 1, 2018. The adoption of these ASUs did not have and is not expected to have a material impact on the Company’s consolidated financial position, results of operations or cash flows or its business processes, systems and controls.

The adoption of ASC Topic 606 resulted in an increase in revenues of $0.1 million and $0.9 million for the three and nine months ended September 30, 2018, respectively, and primarily had the following impact on the Company’s financial statements:

• Beginning in January 1, 2018, the Company defers the incremental costs of obtaining contracts as contract acquisition assets resulting in a net decrease of $2.0 million and $6.6 million in sales and marketing expense in the condensed consolidated statements of operations for the three and nine months ended September 30, 2018, respectively, and corresponding increase in other assets on the condensed consolidated balance sheets. Contract acquisition assets are amortized to sales and marketing expense in the consolidated statements of operations over the period in which services are expected to be provided to the customer, which is estimated to be approximately 4 years. Prior to the adoption of ASC Topic 606, the cost of obtaining a contract was recognized as it was incurred.

• Beginning in the first quarter of 2018, the Company recognizes revenue from estimated unredeemed gift cards that are not subject to unclaimed property laws over the expected customer redemption period, rather than when the likelihood of redemption became remote. The Company recorded a cumulative-effect adjustment to opening retained earnings as of January 1, 2018 of $0.9 million related to unredeemed gift cards, breakage income of $0.3 million and $0.9 million in revenues in the condensed consolidated statements of operations during the three and nine months ended September 30, 2018, respectively, and a corresponding decrease in other accruals of $2.0 million on the condensed consolidated balance sheets.

• Changes in the timing of revenue recognition under ASC Topic 606 related to incentives, refunds and adjustments resulted in a $0.1 million decrease and $0.1 million increase in revenues in the condensed consolidated statements of operations during the three and nine months ended September 30, 2018, respectively.

• The adoption of ASC Topic 606 had no impact to the Company’s total net cash provided by or used in operations, investing or financing activities within the Company’s condensed consolidated statement of cash flows for the nine months ended September 30, 2018.

See Note 3, Revenue, for additional details.

XML

Revenue

9 Months Ended

Sep. 30, 2018

Revenue From Contract With Customer [Abstract]

Revenue

3. Revenue

Revenues are recognized when control of the promised goods or services is transferred to the customer, in the amount that reflects the consideration the Company expects to receive in exchange for those good or services.

The Company generates revenues primarily when diners place an order on the platform through its mobile applications, its websites, or through third-party websites that incorporate the Company’s API or one of the Company’s listed phone numbers. Restaurants pay a commission, typically a percentage of the transaction, on orders that are processed through the platform. Most of the restaurants on the Company’s platform can choose their level of commission rate, at or above a base rate. A restaurant can choose to pay a higher rate that affects its prominence and exposure to diners on the platform. Additionally, restaurants that use the Company’s delivery services pay an additional commission for the use of those services. The Company may also charge a delivery fee directly to the diner.

Revenues from online and phone pick-up and delivery orders are recognized when the orders are transmitted to the restaurants, including revenues for managed delivery services due to the simultaneous nature of the Company’s delivery operations. The amount of revenue recognized by the Company is based on the arrangement with the related restaurant and is adjusted for any expected refunds or adjustments based on historical experience and any cash credits related to the transaction, including incentive offers provided to restaurants and diners. The Company also recognizes as revenue any fees charged to the diner for delivery services provided by the Company. Although the Company processes and collects the entire amount of the transaction with the diner, it records revenue for transmitting orders to restaurants on a net basis because the Company is acting as an agent for takeout orders, which are prepared by the restaurants. The Company is the principal in the transaction with respect to credit card processing and managed delivery services because it controls the respective services. As a result, costs incurred for processing the credit card transactions and providing delivery services are included in operations and support expense in the consolidated statements of operations.

The Company periodically provides incentive offers to restaurants and diners to use our platform. These promotions are generally cash credits to be applied against purchases. These incentive offers are recorded as a reduction in revenues, generally on the date the corresponding order revenue is recognized. For those incentives related to current orders that create an obligation to discount future orders, the Company allocates the incentives that are expected to be redeemed proportionally to current and future orders based on their relative expected transaction prices.  

For most orders, diners use a credit card to pay for their meal when the order is placed. For these transactions, the Company collects the total amount of the diner’s order net of payment processing fees from the payment processor and remits the net proceeds to the restaurant less commission. The Company generally accumulates funds and remits the net proceeds to the restaurants on at least a monthly basis, depending on the payment terms with the restaurant. The Company also accepts payment for orders via gift cards offered on its platform. For gift cards that are not subject to unclaimed property laws, the Company recognizes revenue from estimated unredeemed gift cards, based on its historical breakage experience, over the expected customer redemption period.

Certain governmental taxes are imposed on the products and services provided through the Company’s platform and are included in the order fees charged to the diner and collected by the Company. Sales taxes are either remitted to the restaurant for payment or are paid directly to certain states. These fees are recorded on a net basis, and, as a result, are excluded from revenues.

The Company also generates a small amount of revenues directly from companies that participate in our corporate ordering program and by selling advertising to third parties on our allmenus.com website. The Company does not anticipate that the foregoing will generate a material portion of our revenues in the foreseeable future.

During the three months ended September 30, 2018, the Company recognized a small amount of revenues from software and professional services, which are generally recognized ratably over the subscription period beginning on the date the software is available. Revenues for certain professional services may be recognized in full once the services are performed if they are distinct and separately identifiable.  

Accounts Receivable

Accounts receivable primarily represent the net cash due from the Company’s payment processor for cleared transactions and amounts owed from corporate customers, which are generally invoiced on a monthly basis. The carrying amount of the Company’s receivables is reduced by an allowance for doubtful accounts that reflects management’s best estimate of amounts that will not be collected based on historical loss experience and any current or forecasted specific risks.

Deferred Revenues

The Company’s deferred revenues consist primarily of gift card liabilities and certain incentive liabilities. These amounts are included within other accruals on the consolidated balance sheets and are not material to the Company’s consolidated financial position. The majority of gift cards and incentives issued by the Company are redeemed within a year.

Contract Acquisition Costs

The Company defers the incremental costs of obtaining contracts including certain commissions and bonuses and related payroll taxes as contract acquisition assets within other assets on the consolidated balance sheets. Contract acquisition assets are amortized using the straight-line method to sales and marketing expense in the consolidated statements of operations over the useful life of the contract, which is estimated to be approximately 4 years. During the three and nine months ended September 30, 2018, the Company deferred $2.4 million and $7.3 million, respectively, of contract acquisitions costs. During the three and nine months ended September 30, 2018, the Company amortized $0.4 million and $0.7 million, respectively, of related expense.

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Acquisitions

9 Months Ended

Sep. 30, 2018

Business Combinations [Abstract]

Acquisitions

4. Acquisitions

2018 Acquisitions

On September 13, 2018, the Company acquired SCVNGR, Inc. d/b/a LevelUp (“LevelUp”) for approximately $369.7 million, including $367.6 million of cash paid (net of cash acquired of $6.0 million), $2.6 million of other non-cash consideration and a net working capital adjustment receivable of $0.5 million. LevelUp is a leading provider of mobile diner engagement and payment solutions for national and regional restaurant brands. The acquisition of LevelUp is expected to simplify the Company’s integrations with restaurants’ systems, increase diner engagement and accelerate product development.

The Company assumed LevelUp employees’ unvested incentive stock option (“ISO”) awards as of the closing date. Approximately $2.6 million of the fair value of the assumed ISO awards granted to acquired LevelUp employees was attributable to the pre-combination services of the LevelUp awardees and was included in the $369.7 million purchase price. This amount is reflected within goodwill in the purchase price allocation. As of the acquisition date, post-combination expense of approximately $17.0 million is expected to be recognized related to the assumed ISO awards over the remaining post-combination service period.

The results of operations of LevelUp have been included in the Company’s financial statements since September 13, 2018 but did not have a material impact on the Company’s condensed consolidated results of operations for the three and nine months ended September 30, 2018.

The excess of the consideration transferred in the acquisition over the net amounts assigned to the fair value of the assets was recorded as goodwill, which represents the value of LevelUp’s technology team and the ability to simplify integrations with restaurants on the Company’s platform. The goodwill related to this acquisition of $295.5 million is not deductible for income tax purposes.

The assets acquired and liabilities assumed of LevelUp were recorded at their estimated fair values as of the closing date of September 13, 2018.

The following table summarizes the preliminary purchase price allocation acquisition-date fair values of the asset and liabilities acquired in connection with the LevelUp acquisition:

	LevelUp
	(in thousands)
Accounts receivable	$	6,201
Prepaid expenses and other current assets		1,396
Property and equipment		895
Restaurant relationships		10,217
Diner acquisition		3,912
Below-market lease intangible		2,205
Developed technology		20,107
Goodwill		295,488
Net deferred tax asset		32,267
Accounts payable and accrued expenses		(3,031	)
Total purchase price net of cash acquired	$	369,657
Net working capital adjustment receivable		530
Fair value of assumed ISOs attributable to pre-combination service		(2,594	)
Net cash paid	$	367,593

2017 Acquisitions

On October 10, 2017, the Company acquired all of the issued and outstanding equity interests of Eat24, LLC (“Eat24”), a wholly owned subsidiary of Yelp Inc., for approximately $281.8 million, including $281.4 million in net cash paid and $0.3 million of other non-cash consideration. Of such amount, $28.8 million will be held in escrow for an 18-month period after closing to secure the Company’s indemnification rights under the purchase agreement. Eat24 provides online and mobile food ordering for restaurants and diners across the United States. The acquisition expanded the breadth and depth of the Company’s national network of restaurant partners and active diners.

The Company granted RSU awards to acquired Eat24 employees in replacement of their unvested equity awards as of the closing date. Approximately $0.3 million of the fair value of the replacement RSU awards granted to acquired Eat24 employees was attributable to the pre-combination services of the Eat24 awardees and was included in the $281.8 million purchase price. This amount is reflected within goodwill in the purchase price allocation. As of the acquisition date, post-combination expense of approximately $4.1 million is expected to be recognized related to the replacement awards over the remaining post-combination service period.

On August 23, 2017, the Company acquired substantially all of the assets and certain expressly specified liabilities of A&D Network Solutions, Inc. and Dashed, Inc. (collectively, “Foodler”). The purchase price for Foodler was $51.2 million in cash, net of cash acquired of $0.1 million. Foodler is an independent online food-ordering company with an established diner base in the Northeast United States. The acquisition expanded the breadth and depth of the Company’s restaurant network, active diners and delivery network.

The results of operations of Eat24 and Foodler have been included in the Company’s financial statements since October 10, 2017 and August 23, 2017, respectively.

The excess of the consideration transferred in the acquisitions over the net amounts assigned to the fair value of the assets were recorded as goodwill, which represents the value of increasing the breadth and depth of the Company’s network of restaurants and diners. The total goodwill related to the acquisitions of Eat24 and Foodler of $153.4 million is expected to be deductible for income tax purposes.

The assets acquired and liabilities assumed of Eat24 and Foodler were recorded at their estimated fair values as of the respective closing dates of October 10, 2017 and August 23, 2017. The following table summarizes the final purchase price allocation acquisition-date fair values of the assets and liabilities acquired in connection with the Eat24 and Foodler acquisitions:

	Eat24			Foodler			Total
	(in thousands)
Cash	$	40		$	86		$	126
Accounts receivable		8,267			307			8,574
Prepaid expenses and other current assets		221			—			221
Property and equipment		1,113			—			1,113
Restaurant relationships		126,232			35,217			161,449
Diner acquisition		35,226			1,354			36,580
Trademarks		2,225			74			2,299
Developed technology		2,559			1,955			4,514
Goodwill		135,955			17,452			153,407
Accounts payable and accrued expenses		(30,082	)		(5,237	)		(35,319	)
Total purchase price plus cash acquired		281,756			51,208			332,964
Fair value of replacement RSUs attributable to pre-combination service		(274	)		—			(274	)
Cash acquired		(40	)		(86	)		(126	)
Net cash paid	$	281,442		$	51,122		$	332,564

Additional Information

The estimated fair values of the intangible assets acquired were determined based on a combination of the income, cost, and market approaches to measure the fair value of the restaurant relationships, diner acquisition, developed technology and trademarks as follows:

	Valuation Method
	LevelUp	Foodler	Eat24
Restaurant relationships	With or without comparative business valuation	Multi-period excess earnings	Multi-period excess earnings
Diner acquisition	Cost to recreate	Cost to recreate	Cost to recreate
Developed technology	Multi-period excess earnings	Cost to recreate	Cost to recreate
Trademark	n/a	Relief  from royalty	Relief  from royalty

The fair value of the below market lease was measured based on the present value of the difference between the contractual amounts to be paid pursuant to the lease and an estimate of current fair market lease rates measured over the non-cancelable remaining term of the lease. These fair value measurements were based on significant inputs not observable in the market and thus represent Level 3 measurements within the fair value hierarchy.

The Company incurred certain expenses directly and indirectly related to acquisitions which were recognized in general and administrative expenses within the condensed consolidated statements of operations for the three months ended September 30, 2018 and 2017 of $2.6 million and $1.7 million, respectively, and for the nine months ended September 30, 2018 and 2017 of $5.1 million and $3.6 million, respectively.

Pro Forma

The following unaudited pro forma information presents a summary of the operating results of the Company for the three and nine months ended September 30, 2018 and 2017 as if the acquisitions of LevelUp, Eat24 and Foodler had occurred as of January 1 of the year prior to acquisition:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
	(in thousands, except per share data)
Revenues	$	255,777	$	190,833	$	746,545	$	562,364
Net income		22,352		5,084		75,348		15,869
Net income per share attributable to common shareholders:
Basic	$	0.25	$	0.06	$	0.85	$	0.18
Diluted	$	0.24	$	0.06	$	0.82	$	0.18

The pro forma adjustments that reflect the amortization that would have been recognized for intangible assets, elimination of transaction costs incurred, stock-based compensation expense for replacement awards, interest expense for transaction financings and other adjustments, as well as the pro forma tax impact of such adjustments for the three and nine months ended September 30, 2018 and 2017 were as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
	(in thousands)
Depreciation and amortization	$	(186	)	$	2,085		$	(248	)	$	9,488
Transaction costs		(2,646	)		(1,799	)		(5,010	)		846
Stock-based compensation		(458	)		728			2,325			3,748
Interest expense		33			1,128			244			3,547
Other		—			1,571			—			4,401
Income tax (benefit) expense		964			(1,546	)		796			(9,367	)

The unaudited pro forma revenues and net income are not intended to represent or be indicative of the Company’s condensed consolidated results of operations or financial condition that would have been reported had the acquisitions been completed as of the beginning of theperiods presented and should not be taken as indicative of the Company’s future consolidated results of operations or financial condition.

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Marketable Securities

9 Months Ended

Sep. 30, 2018

Investments Debt And Equity Securities [Abstract]

Marketable Securities

5. Marketable Securities

The amortized cost, unrealized gains and losses and estimated fair value of the Company’s held-to-maturity marketable securities as of September 30, 2018 and December 31, 2017 were as follows:

	September 30, 2018
	Amortized Cost		Unrealized Gains		Unrealized Losses			Estimated Fair Value
	(in thousands)
Cash and cash equivalents
Commercial paper	$	10,231	$	—	$	(12	)	$	10,219
Short-term investments
Commercial paper		14,938		—		(112	)		14,826
Corporate bonds		1,749		—		—			1,749
Total	$	26,918	$	—	$	(124	)	$	26,794

	December 31, 2017
	Amortized Cost		Unrealized Gains		Unrealized Losses			Estimated Fair Value
	(in thousands)
Cash and cash equivalents
Commercial paper	$	39,979	$	—	$	(43	)	$	39,936
Corporate bonds		1,250		—		—			1,250
Short-term investments
Commercial paper		21,480		—		(99	)		21,381
Corporate bonds		2,125		—		(1	)		2,124
Total	$	64,834	$	—	$	(143	)	$	64,691

All of the Company’s marketable securities were classified as held-to-maturity investments and have maturities within one year of September 30, 2018. Approximately $40 million of the Company’s marketable securities matured during the nine months ended September 30, 2018, which was invested in other interest-bearing accounts upon maturity.

The gross unrealized losses, estimated fair value and length of time the individual marketable securities were in a continuous loss position for those marketable securities in an unrealized loss position as of September 30, 2018 and December 31, 2017 were as follows:

	September 30, 2018
	Less Than 12 Months					12 Months or Greater				Total
	Estimated Fair Value		Unrealized Loss			Estimated Fair Value		Unrealized  Loss		Estimated Fair Value		Unrealized Loss
	(in thousands)
Commercial paper	$	25,045	$	(124	)	$	—	$	—	$	25,045	$	(124	)
Total	$	25,045	$	(124	)	$	—	$	—	$	25,045	$	(124	)

	December 31, 2017
	Less Than 12 Months					12 Months or Greater				Total
	Estimated Fair Value		Unrealized Loss			Estimated Fair Value		Unrealized  Loss		Estimated Fair Value		Unrealized Loss
	(in thousands)
Commercial paper	$	61,317	$	(142	)	$	—	$	—	$	61,317	$	(142	)
Corporate bonds		3,374		(1	)		—		—		3,374		(1	)
Total	$	64,691	$	(143	)	$	—	$	—	$	64,691	$	(143	)

The Company recognized interest income during the three months ended September 30, 2018 and 2017 of $1.3 million and $0.5 million, respectively, and for the nine months ended September 30, 2018 and 2017 of $3.2 million and $1.5 million, respectively, within net interest (income) expense on the condensed consolidated statements of operations. During the three and nine months ended September 30, 2018 and 2017, the Company did not recognize any other-than-temporary impairment losses related to its marketable securities.

The Company’s marketable securities are classified within Level 2 of the fair value hierarchy (see Note 14, Fair Value Measurement, for further details).

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Goodwill and Acquired Intangible Assets

9 Months Ended

Sep. 30, 2018

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill and Acquired Intangible Assets

6. Goodwill and Acquired Intangible Assets

The components of acquired intangible assets as of September 30, 2018 and December 31, 2017 were as follows:

	September 30, 2018							December 31, 2017
	Gross Carrying Amount		Accumulated Amortization			NetCarrying Value		GrossCarrying Amount		Accumulated Amortization			NetCarrying Value
	(in thousands)
Restaurant relationships	$	467,797	$	(96,321	)	$	371,476	$	457,580	$	(76,852	)	$	380,728
Diner acquisition		44,159		(7,982	)		36,177		40,247		(1,906	)		38,341
Developed technology		28,630		(8,591	)		20,039		8,523		(6,418	)		2,105
Trademarks		2,225		(2,225	)		—		2,225		(402	)		1,823
Below-market lease intangible		2,206		(21	)		2,185		—		—			—
Other		3,676		(2,362	)		1,314		6,888		(4,008	)		2,880
Total amortizable intangible assets		548,693		(117,502	)		431,191		515,463		(89,586	)		425,877
Indefinite-lived trademarks		89,676		—			89,676		89,676		—			89,676
Total acquired intangible assets	$	638,369	$	(117,502	)	$	520,867	$	605,139	$	(89,586	)	$	515,553

The gross carrying amount and accumulated amortization of the Company’s other intangible assets as of September 30, 2018 were adjusted by $3.2 million and $2.5 million, respectively, for certain assets that were no longer in use. Amortization expense for acquired intangible assets was $10.0 million and $6.4 million for the three months ended September 30, 2018 and 2017, respectively, and $31.1 million and $16.8 million for the nine monthsended September 30, 2018 and 2017, respectively. Amortization of the acquired below-market lease intangible is recognized as rent expense within the condensed consolidated statements of operations.

The changes in the carrying amount of goodwill during the nine months ended September 30, 2018 were as follows:

	Goodwill		Accumulated Impairment Losses		Net Book Value
	(in thousands)
Balance as of December 31, 2017	$	589,862	$	—	$	589,862
Acquisition of LevelUp		295,488		—		295,488
Balance as of September 30, 2018	$	885,350	$	—	$	885,350

During the nine monthsended September 30, 2018, the Company recorded additions to acquired intangible assets of $36.4 million as a result of the acquisition of LevelUp. The components of the acquired intangible assets added during the nine monthsended September 30, 2018 were as follows:

	Nine Months Ended September 30, 2018
	Amount		Weighted-Average Amortization Period
	(in thousands)		(years)
Developed technology	$	20,107		6.0
Restaurant relationships		10,217		19.0
Diner acquisition		3,912		5.0
Below-market lease intangible		2,205		5.8
Total	$	36,441

Estimated future amortization expense of acquired intangible assets as of September 30, 2018 was as follows:

	(in thousands)
The remainder of 2018	$	10,117
2019		38,485
2020		37,315
2021		37,304
2022		35,334
Thereafter		272,636
Total	$	431,191

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Property and Equipment

9 Months Ended

Sep. 30, 2018

Property Plant And Equipment [Abstract]

Property and Equipment

7. Property and Equipment

The components of the Company’s property and equipment as of September 30, 2018 and December 31, 2017 were as follows:

	September 30, 2018			December 31, 2017
	(in thousands)
Developed software	$	78,332		$	52,041
Computer equipment		44,896			31,601
Leasehold improvements		31,809			23,400
Furniture and fixtures		8,704			6,857
Purchased software and digital assets		3,581			2,881
Construction in progress		5,559			—
Property and equipment		172,881			116,780
Accumulated depreciation and amortization		(67,447	)		(45,396	)
Property and equipment, net	$	105,434		$	71,384

The Company recorded depreciation and amortization expense for property and equipment other than developed software of $5.7 million and $2.9 million for the three months ended September 30, 2018 and 2017, respectively, and $16.2 million and $8.0 million for the nine monthsended September 30, 2018 and 2017, respectively.

The gross carrying amount and accumulated amortization of the Company’s leasehold improvements, developed software, furniture and fixtures and purchased software and digital assets as of September 30, 2018 were adjusted in aggregate by $8.6 million and $8.2 million, respectively, for certain assets that were no longer in use. The Company capitalized developed software costs of $10.8 million and $6.8 million for the three months ended September 30, 2018 and 2017, respectively, and $28.1 million and $18.9 million for the nine monthsended September 30, 2018 and 2017, respectively. Amortization expense for developed software costs, recognized in depreciation and amortization in the condensed consolidated statements of operations, for the three months ended September 30, 2018 and 2017 was $5.3 million and $3.3 million, respectively, and $14.5 million and $8.3 million for the nine monthsended September 30, 2018 and 2017, respectively.

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2018

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

8. Commitments and Contingencies

Legal

In August 2011, Ameranth, Inc. (“Ameranth”) filed a patent infringement action against a number of defendants, including Grubhub Holdings Inc., in the U.S. District Court for the Southern District of California (the “Court”), Case No. 3:11-cv-1810 (“’1810 action”).

In March 2012, Ameranth initiated eight additional actions for infringement of a related patent, U.S. Patent No. 8,146,077 (“’077 patent”), in the same forum, including separate actions against Grubhub Holdings Inc., Case No. 3:12-cv-739 (“’739 action”), and Seamless North America, LLC, Case No. 3:12-cv-737 (“’737 action”). In August 2012, the Court severed the claims against Grubhub Holdings Inc. and Seamless North America, LLC in the ’1810 action and consolidated them with the ’739 action and the ’737 action, respectively. Later, the Court consolidated these separate cases against Grubhub Holdings Inc. and Seamless North America, LLC, along with the approximately 40 other cases Ameranth filed in the same district, with the original ’1810 action. In their answers, Grubhub Holdings Inc. and Seamless North America, LLC denied infringement and interposed various defenses, including non-infringement, invalidity, unenforceability and inequitable conduct.

The consolidated district court case was stayed until January 2017, when Ameranth’s motion to lift the stay and proceed on only the ‘077 patent was granted. In September 2018, the court granted summary judgment of unpatentability on the ‘077 patent and vacated the December 3, 2018 jury trial date for the claims against Grubhub Holdings Inc. and Seamless North America, LLC. The Company believes this case lacks merit and that it has strong defenses to all of the infringement claims. The Company intends to defend the suit vigorously. However, the Company is unable to predict the likelihood of success of Ameranth’s infringement claims and is unable to predict the likelihood of success of its counterclaims. The Company has not recorded an accrual related to this lawsuit as of September 30, 2018, as it does not believe a material loss is probable. It is a reasonable possibility that a loss may be incurred; however, the possible range of loss is not estimable given the status of the case and the uncertainty as to whether the claims at issue are with or without merit, will be settled out of court, or will be determined in the Company’s favor, whether the Company may be required to expend significant management time and financial resources on the defense of such claims, and whether the Company will be able to recover any losses under its insurance policies.

In addition to the matter described above, from time to time, the Company is involved in various other legal proceedings arising from the normal course of business activities, including labor and employment claims, some of which relate to the alleged misclassification of independent contractors. In September 2015, a claim was brought in the United States District Court for the Northern District of California under the Private Attorneys General Act by an individual plaintiff on behalf of himself and seeking to represent other drivers and the State of California. The claim sought monetary penalties and injunctive relief for alleged violations of the California Labor Code based on the alleged misclassification of drivers as independent contractors. A decision was issued on February 8, 2018, and the court ruled in favor of the Company, finding that plaintiff was properly classified as an independent contractor. In March 2018, the plaintiff appealed this decision to the Ninth Circuit. The Company does not believe any of the foregoing claims will have a material impact on its consolidated financial statements. However, there is no assurance that any claim will not be combined into a collective or class action.

Indemnification

In connection with the merger of Seamless North America, LLC, Seamless Holdings Corporation and Grubhub Holdings Inc. in August 2013, the Company agreed to indemnify Aramark Holdings Corporation for negative income tax consequences associated with the October 2012 spin-off of Seamless Holdings Corporation that were the result of certain actions taken by the Company through October 29, 2014, in certain instances subject to a $15.0 million limitation. Management is not aware of any actions that would impact the indemnification obligation.

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Debt

9 Months Ended

Sep. 30, 2018

Debt Disclosure [Abstract]

Debt

9. Debt

The following table summarizes the carrying value of the Company’s debt as of September 30, 2018 and December 31, 2017:

	September 30, 2018			December 31, 2017
	(in thousands)
Term loan	$	121,875		$	124,219
Revolving loan		175,000			50,000
Total debt		296,875			174,219
Less current portion		(6,250	)		(3,906	)
Less unamortized deferred debt issuance costs		(552	)		(668	)
Long-term debt	$	290,073		$	169,645

On October 10, 2017, the Company entered into a credit agreement which provides, among other things, for aggregate revolving loans up to $225 million and term loans in an aggregate principal amount of $125 million (the “Credit Agreement”). In addition, the Company may incur up to $150 million of incremental revolving loans or incremental revolving term loans pursuant to the terms and conditions of the Credit Agreement. The credit facility will be available to the Company until October 9, 2022. There have been no changes in the terms of the Credit Agreement during the nine months ended September 30, 2018.

During the nine months ended September 30, 2018, the Company borrowed $175.0 million of revolving loans under the Credit Agreement. The Company utilized the revolving loan proceeds to finance a portion of the purchase price and transaction costs in connection with the acquisition of LevelUp. During the nine months ended September 30, 2018, the Company made principal payments of $52.3 million from cash on hand. As of September 30, 2018, outstanding borrowings under the Credit Agreement were $296.9 million.  The fair value of the Company’s outstanding debt approximates its carrying value as of September 30, 2018 (see Note 14, Fair Value Measurement, for additional details). The Company was in compliance with the covenants of the Credit Agreement as of September 30, 2018. Additional capacity under the Credit Agreement may be used for general corporate purposes, including funding working capital and future acquisitions.

As of September 30, 2018, total unamortized debt issuance costs of $2.0 million were recorded as other assets and as a reduction of long-term debt on the condensed consolidated balance sheets in proportion to the borrowing capacities of the revolving and term loans.

Interest expense includes interest on outstanding borrowings, amortization of debt issuance costs and commitment fees on the undrawn portion available under the Credit Agreement. The Company recognized interest expense of $1.7 million and $0.2 million, during the three months ended September 30, 2018 and 2017, respectively, and $4.6 million and $0.6 million during the nine months ended September 30, 2018 and 2017, respectively.

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Stock-Based Compensation

9 Months Ended

Sep. 30, 2018

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock-Based Compensation

10. Stock-Based Compensation

The Company has granted non-qualified and incentive stock options, restricted stock units and restricted stock awards under its incentive plans.The Company recognizes compensation expense based on estimated grant date fair values for all stock-based awards issued to employees and directors, including stock options, restricted stock awards and restricted stock units.

Stock-based Compensation Expense

The total stock-based compensation expense related to all stock-based awards was $14.2 million and $8.5 million during the three months ended September 30, 2018 and 2017, respectively, and $36.4 million and $23.9 million during the nine monthsended September 30, 2018 and 2017, respectively. As of September 30, 2018, $175.7 million of total unrecognized stock-based compensation expense is expected to be recognized over a weighted-average period of 3.0 years.

Excess tax benefits reflect the total realized value of the Company’s tax deductions from individual stock option exercise transactions and the vesting of restricted stock units in excess of the deferred tax assets that were previously recorded. During the three months ended September 30, 2018 and 2017, the Company recognized excess tax benefits from stock-based compensation of $7.6 million and $2.2 million, respectively, and$21.5 million and $5.7 million during the nine months ended September 30, 2018 and 2017, respectively, within income tax (benefit) expense on the condensed consolidated statements of operations and within cash flows from operating activities on the condensed consolidated statements of cash flows.

The Company capitalized stock-based compensation expense as website and software development costs of $2.6 million and $1.2 million during the three months ended September 30, 2018 and 2017, respectively, and $6.3 million and $3.3 million during the nine monthsended September 30, 2018 and 2017, respectively.

Stock Options

The Company granted 584,305, including unvested ISOs assumed with the acquisition of LevelUp, and 618,899 stock options during the nine months ended September 30, 2018 and 2017, respectively. The fair value of each stock option award was estimated based on the assumptions below as of the grant date using the Black-Scholes-Merton option pricing model. Beginning in the first quarter of 2018, expected volatility is based on the historical and implied volatilities of the Company’s own common stock. The Company uses historical data to estimate option exercises and employee terminations within the valuation model. Separate groups of employees that have similar historical exercise behavior are considered separately for valuation purposes. The expected term calculation for option awards considers a combination of the Company’s historical and estimated future exercise behavior. The risk-free rate for the period within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The assumptions used to determine the fair value of the stock options granted during the nine months ended September 30, 2018 and 2017 were as follows:

	Nine Months Ended September 30,
	2018			2017
Weighted-average fair value options granted	$	65.86		$	15.19
Average risk-free interest rate		2.55	%		1.65	%
Expected stock price volatility (a)		46.1	%		48.7	%
Dividend yield	None			None
Expected stock option life (years) (b)		3.64			4.00

(a) Prior to the first quarter of 2018, the expected stock price volatility was based on a combination of the historical and implied volatilities of comparable publicly-traded companies and the historical volatility of the Company’s own common stock due to its limited trading history as there was no active external or internal market for the Company’s common stock prior to the Company’s initial public offering in April 2014.

(b) The expected term for the LevelUp assumed ISO awards was calculated based on their respective remaining vesting periods as of the acquisition date.

Stock option awards as of December 31, 2017 and September 30, 2018, and changes during the nine months ended September 30, 2018, were as follows: 

	Options			Weighted-Average Exercise Price		Aggregate Intrinsic Value (thousands)		Weighted-Average Exercise Term (years)
Outstanding at December 31, 2017		2,705,849		$	25.53	$	125,197		7.28
Granted		584,305			68.74
Forfeited		(115,035	)		34.21
Exercised		(487,317	)		26.70
Outstanding at September 30, 2018		2,687,802			34.34		280,279		7.11
Vested and expected to vest at September 30, 2018		2,682,769			34.28		279,912		7.10
Exercisable at September 30, 2018		1,415,269		$	21.73	$	165,427		6.10

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the fair value of the common stock and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their in-the-money options on each date. The aggregate intrinsic value of assumed LevelUp ISOs as of September 30, 2018 was approximately $23.0 million. This amount will change in future periods based on the fair value of the Company’s stock and the number of options outstanding. The aggregate intrinsic value of stock options exercised during the three months ended September 30, 2018 and 2017 was $13.6 million and $5.6 million, respectively. The aggregate intrinsic value of awards exercised during the nine months ended September 30, 2018 and 2017 was $36.1 million and $13.7 million, respectively.

The Company recorded compensation expense for stock options of $4.5million and $3.0 million for the three months ended September 30, 2018 and 2017, respectively, and $9.4 million and $8.9 million for the nine months ended September 30, 2018 and 2017, respectively. As of September 30, 2018, total unrecognized compensation cost, adjusted for estimated forfeitures, related to non-vested stock options was $40.1 million and is expected to be recognized over a weighted-average period of 2.7 years, including post-combination expense of approximately $14.5 million expected to be recognized related to the assumed LevelUp ISO awards.

Restricted Stock Units

Non-vested restricted stock units as of December 31, 2017 and September 30, 2018, and changes during the nine months ended September 30, 2018 were as follows:

	Restricted Stock Units
	Shares			Weighted-Average Grant Date Fair Value
Outstanding at December 31, 2017		2,454,801		$	37.56
Granted		1,107,806			94.35
Forfeited		(292,409	)		51.67
Vested		(796,579	)		35.94
Outstanding at September 30, 2018		2,473,619		$	61.84

Compensation expense related to restricted stock units was $9.7 million and $5.5 million during the three months ended September 30, 2018 and 2017, respectively, and $27.0 million and $15.0 million during the nine months ended September 30, 2018 and 2017, respectively. The aggregate fair value as of the vest date of restricted stock units that vested during the three months ended September 30, 2018 and 2017 was $26.3 million and $5.7 million, respectively, and $76.3 million and $19.9 million during the nine months ended September 30, 2018 and 2017, respectively. As of September 30, 2018, $135.6 million of total unrecognized compensation cost, adjusted for estimated forfeitures, related to 2,458,380 non-vested restricted stock units expected to vest with weighted-average grant date fair values of $61.60 is expected to be recognized over a weighted-average period of 3.0 years. The fair value of these awards was determined based on the Company’s stock price at the grant date and assumes no expected dividend payments through the vesting period.

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Income Taxes

9 Months Ended

Sep. 30, 2018

Income Tax Disclosure [Abstract]

Income Taxes

11. Income Taxes

The Company’s effective tax rate was negative 5.7% and 25.4% during the three months ended September 30, 2018 and 2017, respectively, and 3.2% and 29.5% during the nine months ended September 30, 2018 and 2017, respectively. The income tax expense included the net impact of excess tax benefits for stock-based compensation of $7.6 million and $2.2 million for the three months ended September 30, 2018 and 2017, respectively, and $21.5 million and $5.7 million for the nine months ended September 30, 2018 and 2017, respectively (see Note 10, Stock-based Compensation, for additional details). Additionally, the federal corporate income tax rate decreased from 35% to 21% during the same periods as a result of the Tax Cuts and Jobs Act.

In July 2018, the examination in New York for corporate income tax returns for the tax years ended December 31, 2014, 2015 and 2016 was completed with no material findings. The Company does not expect any material additional tax liabilities, penalties and/or interest as a result of the audit.

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Stockholders' Equity

9 Months Ended

Sep. 30, 2018

Equity [Abstract]

Stockholders' Equity

12. Stockholders’ Equity

As of September 30, 2018 and December 31, 2017, the Company was authorized to issue two classes of stock: common stock and preferred stock.

Common Stock

Each holder of common stock has one vote per share of common stock held on all matters that are submitted for stockholder vote. At September 30, 2018 and December 31, 2017, there were 500,000,000 shares of common stock authorized. At September 30, 2018 and December 31, 2017, there were 90,598,259 and 86,790,624 shares issued and outstanding, respectively. The Company did not hold any shares as treasury shares as of September 30, 2018 or December 31, 2017.

On April 25, 2018, the Company issued and sold 2,820,464 shares of the Company’s common stock to Yum Restaurant Services Group, LLC (the “Investor”), a wholly owned subsidiary of Yum! Brands, Inc., for an aggregate purchase price of $200 million pursuant to an investment agreement dated February 7, 2018, by and between the Company and the Investor. The Company has used and expects to use the proceeds for general corporate purposes.

On January 22, 2016, the Company’s Board of Directors approved a program that authorizes the repurchase of up to $100 million of the Company’s common stock exclusive of any fees, commissions or other expenses relating to such repurchases through open market purchases or privately negotiated transactions at the prevailing market price at the time of purchase. The repurchase program was announced on January 25, 2016. The repurchased stock may be retired or held as authorized but unissued treasury shares. The repurchase authorizations do not obligate the Company to acquire any particular amount of common stock or adopt any particular method of repurchase and may be modified, suspended or terminated at any time at management’s discretion. Repurchased and retired shares will result in an immediate reduction of the outstanding shares used to calculate the weighted-average common shares outstanding for basic and diluted net income per share at the time of the transaction. During the nine months ended September 30, 2018, the Company did not repurchase any shares of its common stock.

Preferred Stock

The Company was authorized to issue 25,000,000 shares of preferred stock. There were no issued or outstanding shares of preferred stock as of September 30, 2018 or December 31, 2017.

The Company’s equity as of December 31, 2017 and September 30, 2018, and changes during the nine months ended September 30, 2018, were as follows:

	(in thousands)
Balance at December 31, 2017	$	1,117,816
Net income		83,631
Cumulative effect of change in accounting principle(a)		882
Currency translation		(392	)
Stock-based compensation		42,755
Shares repurchased and retired to satisfy tax withholding upon vesting		(28,238	)
Stock option exercises, net of withholdings and other		13,010
Stock-based compensation, assumed ISO awards		2,594
Issuance of common stock		200,000
Balance at September 30, 2018	$	1,432,058

(a) See Note 2, Significant Accounting Policies, for additional details related to the impact of the adoption of ASC Topic 606 during the nine months ended September 30, 2018.

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Earnings Per Share Attributable to Common Stockholders

9 Months Ended

Sep. 30, 2018

Earnings Per Share [Abstract]

Earnings Per Share Attributable to Common Stockholders

13. Earnings Per Share Attributable to Common Stockholders

Basic earnings per share is computed by dividing net income attributable to common stockholders by the weighted-average number of common shares outstanding during the period without consideration for common stock equivalents. Diluted net income per share attributable to common stockholders is computed by dividing net income by the weighted-average number of common shares outstanding during the period and potentially dilutive common stock equivalents, including stock options and restricted stock units, except in cases where the effect of the common stock equivalent would be antidilutive. Potential common stock equivalents consist of common stock issuable upon exercise of stock options and vesting of restricted stock units using the treasury stock method.

The sale of 2,820,464 shares of the Company’s common stock to the Investor on April 25, 2018 resulted in an immediate increase in the outstanding shares used to calculate the weighted-average common shares outstanding for the nine months ended September 30, 2018 (see Note 12, Stockholders’ Equity).

The following tables present the calculation of basic and diluted net income per share attributable to common stockholders for the three and nine months ended September 30, 2018 and 2017:

	Three Months Ended September 30, 2018						Three Months Ended September 30, 2017
	Income (Numerator)		Shares (Denominator)		Per  Share Amount		Income (Numerator)		Shares (Denominator)		Per  Share Amount
	(in thousands, except per share data)
Basic EPS
Net income attributable to common stockholders	$	22,745		90,494	$	0.25	$	12,988		86,449	$	0.15
Effect of Dilutive Securities
Stock options		—		1,704				—		1,105
Restricted stock units		—		1,480				—		989
Diluted EPS
Net income attributable to common stockholders	$	22,745		93,678	$	0.24	$	12,988		88,543	$	0.15

	Nine Months Ended September 30, 2018						Nine Months Ended September 30, 2017
	Income (Numerator)		Shares (Denominator)		Per  Share Amount		Income (Numerator)		Shares (Denominator)		Per  Share Amount
	(in thousands, except per share data)
Basic EPS
Net income attributable to common stockholders	$	83,631		89,027	$	0.94	$	45,457		86,162	$	0.53
Effect of Dilutive Securities
Stock options		—		1,649				—		951
Restricted stock units		—		1,415				—		675
Diluted EPS
Net income attributable to common stockholders	$	83,631		92,091	$	0.91	$	45,457		87,788	$	0.52

The number of shares of common stock underlying stock-based awards excluded from the calculation of diluted net income per share attributable to common stockholders because their effect would have been antidilutive for the three and nine months ended September 30, 2018 and 2017 were as follows:  

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Anti-dilutive shares underlying stock-based awards:
Stock options		251,582		685,671		251,582		685,671
Restricted stock units		84,668		84,358		84,668		84,358

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Fair Value Measurement

9 Months Ended

Sep. 30, 2018

Fair Value Disclosures [Abstract]

Fair Value Measurement

14. Fair Value Measurement

Certain assets and liabilities are required to be recorded at fair value on a recurring basis. Accounting standards define fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. The standards also establish a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

The accounting guidance for fair value measurements prioritizes valuation methodologies based on the reliability of the inputs in the following three-tier value hierarchy:

Level 1 Quoted prices in active markets for identical assets or liabilities.

Level 2 Assets and liabilities valued based on observable market data for similar instruments, such as quoted prices for similar assets or liabilities.

Level 3 Unobservable inputs that are supported by little or no market activity; instruments valued based on the best available data, some of which is internally developed, and considers risk premiums that a market participant would require.

The Company applied the following methods and assumptions in estimating its fair value measurements. The Company’s commercial paper, investments in corporate bonds and certain money market funds are classified as Level 2 within the fair value hierarchy because they are valued using inputs other than quoted prices in active markets that are observable directly or indirectly. The Company’s long-term debt is classified as Level 3 within the fair value hierarchy because it is valued using an income approach, which utilizes a discounted cash flow technique that considers the credit profile of the Company. Accounts receivable, restaurant food liability and accounts payable approximate fair value due to their generally short-term maturities.

The following table presents the fair value, for disclosure purposes only, and carrying value of the Company’s assets and liabilities that are recorded at other than fair value as of September 30, 2018 and December 31, 2017:

	September 30, 2018						December 31, 2017
	Level 2		Level 3		Carrying Value		Level 2		Level 3		Carrying Value
	(in thousands)
Assets
Money market funds	$	18	$	—	$	18	$	93	$	—	$	93
Commercial paper		25,045		—		25,169		61,317		—		61,459
Corporate bonds		1,749		—		1,749		3,374		—		3,375
Total assets	$	26,812	$	—	$	26,936	$	64,784	$	—	$	64,927
Liabilities
Long-term debt, including current maturities		—		303,001		296,875		—		175,700		174,219
Total liabilities	$	—	$	303,001	$	296,875	$	—	$	175,700	$	174,219

The Company is required to record certain assets and liabilities at fair value on a nonrecurring basis, generally as a result of acquisitions. See Note 4, Acquisitions, for further discussion of the fair value of assets and liabilities associated with acquisitions.

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Subsequent Events

9 Months Ended

Sep. 30, 2018

Subsequent Events [Abstract]

Subsequent Events

On September 25, 2018, the Company entered into a share purchase agreement by and among the Company, Grubhub Holdings Inc., Tapingo Ltd. (“Tapingo”), Shareholder Representative Services LLC, solely in its capacity as representative of the securityholders, and other parties signatory thereto, to acquire all of the issued and outstanding shares of Tapingo. Tapingo is a leading platform for campus food ordering with direct integration into college meal plans and point of sale systems. The acquisition is expected to enhance the Company’s diner network on college campuses.

On September 12, 2018, the Company entered into a definitive agreement to complete the acquisition of substantially all of the restaurant and diner network assets of OrderUp, Inc. (“OrderUp”), a wholly-owned subsidiary of Groupon, Inc. The Company previously completed the acquisition of certain assets of OrderUp on September 14, 2017.

Pursuant to the purchase agreements, the Company will acquire Tapingo and certain additional assets of OrderUp for total aggregate consideration of approximately $170 million, subject to customary adjustments and closing conditions. The purchase price is currently expected to be funded through a combination of cash on hand and proceeds from borrowings under the Company’s existing Credit Agreement.

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Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2018

Accounting Policies [Abstract]

Basis of Presentation and Principles of Consolidation

Basis of Presentation and Principles of Consolidation

The accompanying unaudited condensed consolidated interim financial statements include the accounts of Grubhub Inc. and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. These unaudited condensed consolidated interim financial statements include all wholly-owned subsidiaries and reflect all normal and recurring adjustments, as well as any other than normal adjustments, that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods and should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017 filed with the SEC on February 28, 2018 (the “2017 Form 10-K”). All significant intercompany transactions have been eliminated in consolidation. Operating results for the three and nine months ended September 30, 2018 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2018.

On January 1, 2018, the Company adopted Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“ASC Topic 606”) using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning on or after January 1, 2018 are presented under ASC Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with historic accounting guidance under ASC Topic 605. See Recently Issued Accounting Pronouncements and Note 3, Revenue, below for additional details.

Use of Estimates

Use of Estimates

The preparation of condensed consolidated financial statements in accordance with GAAP requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and the related disclosures at the date of the financial statements, as well as the reported amounts of revenue and expenses during the periods presented. Estimates include revenue recognition, the allowance for doubtful accounts, website and internal-use software development costs, goodwill, depreciable lives of property and equipment, recoverability of intangible assets with definite lives and other long-lived assets, stock-based compensation and income taxes. Actual results could differ from these estimates.

Changes in Accounting Principle

Changes in Accounting Principle

See “Recently Issued Accounting Pronouncements” below for a description of accounting principle changes adopted during the nine months ended September 30, 2018 related to revenue and the statement of cash flows. There have been no other material changes to the Company’s significant accounting policies described in the 2017 Form 10-K.

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

In August 2018, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update No. 2018-15, “Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract” (“ASU 2018-15”). ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in hosting arrangements that are service contracts and that include an internal-use software license with the requirement for capitalizing implementation costs incurred to develop or obtain internal-use software. The capitalized implementation costs are required to be expensed over the term of the hosting arrangement. The guidance also clarifies the presentation requirements for reporting such costs in the entity’s financial statements. The Company has elected to early adopt ASU 2018-15. The amendments will be applied prospectively to all implementation costs incurred after the date of adoption. The adoption of ASU 2018-15 is not expected to have a material impact on the Company’s consolidated financial position, results of operations or cash flows.

In May 2017, the FASB issued Accounting Standards Update No. 2017-09, “Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting” (“ASU 2017-09”). ASU 2017-09 provides clarification on when modification accounting should be used for changes to the terms or conditions of a share-based payment award. This ASU does not change the accounting for modifications but clarifies that modification accounting guidance should only be applied if there is a change to the value, vesting conditions, or award classification and would not be required if the changes are considered non-substantive. ASU 2017-09 is effective for the Company beginning in the first quarter of 2018 on a prospective basis. The adoption of ASU 2017-09 has not had and is not expected to have a material impact on the Company’s consolidated financial position, results of operations or cash flows.

In August 2016, the FASB issued Accounting Standards Update No. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments” (“ASU 2016-15”). ASU2016-15 adds or clarifies guidance on the classification of certain cash receipts and payments in the statement of cash flows with the intent of reducing diversity in practice related to eight types of cash flows including, among others, debt prepayment or debt extinguishment costs, contingent consideration payments made after a business combination, and separately identifiable cash flows and application of the predominance principle. In addition, in November 2016, the FASB issued Accounting Standards Update No. 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash” (“ASU 2016-18”). ASU 2016-18 requires companies to include amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the statement of cash flow. ASU 2016-15 and ASU 2016-18 were effective for and adopted by the Company beginning in the first quarter of 2018. The amendments were applied using a retrospective transition method to each period presented and impacted the Company’s presentation of the consolidated statements of cash flows. The adoption of ASU 2016-15 and ASU 2016-18 had no material impact on the Company’s consolidated financial position, results of operations or cash flows as the Company’s restricted cash balances are immaterial.

In June 2016, the FASB issued Accounting Standards Update No. 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). ASU 2016-13 introduces a new forward-looking approach, based on expected losses, to estimate credit losses on certain types of financial instruments, including trade receivables and held-to-maturity debt securities, which will require entities to incorporate considerations of historical information, current information and reasonable and supportable forecasts. This ASU also expands disclosure requirements. ASU 2016-13 is effective for the Company beginning in the first quarter of 2020 and early adoption is permitted. The guidance will be applied using the modified-retrospective approach. The adoption of ASU 2016-13 is not expected to have a material impact on the Company’s consolidated financial position, results of operations or cash flows.

In February 2016, the FASB issued Accounting Standards Update No. 2016-02, “Leases (Topic 842)” (“ASU 2016-02”). Under ASU 2016-02, a lessee will recognize in the statement of financial position a liability to make lease payments and a right-of-use asset for all leases (with the exception of short-term leases) at the commencement date. The recognition, measurement, and presentation of expenses and cash flows arising from a lease under ASU 2016-02 will not significantly change from current GAAP. ASU 2016-02 is effective beginning in the first quarter of 2019 with early adoption permitted. In July 2018, the FASB issued Accounting Standards Update No. 2018-11 “Leases (Topic 842): Targeted Improvements” (“ASU 2018-11”), which provides for the election of transition methods between the modified retrospective method and the optional transition relief method. The modified retrospective method is applied to all prior reporting periods presented with a cumulative-effect adjustment recorded in the earliest comparative period while the optional transition relief method is applied beginning in the period of adoption with a cumulative-effect adjustment recorded in the first quarter of 2019.The Company will apply the optional transition relief method and has elected the optional practical expedient package, which includes retaining the current classification of leases.The Company is currently evaluating the impact of adoption of ASU 2016-02 on its consolidated financial statements under ASU 2018-11. Management anticipates that it will result in a significant increase in the Company’s long-term assets and liabilities but will have no material impact to its results of operations or cash flows.

In May 2014, and in subsequent updates, the FASB issued ASC Topic 606, Revenue from Contracts with Customers, which supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, including most industry-specific requirements. ASC Topic 606 establishes a five-step revenue recognition process in which an entity will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. ASC Topic 606 also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenues and cash flows from contracts with customers. ASC Topic 606 was effective for and adopted by the Company in the first quarter of 2018. The Company applied the modified retrospective approach to contracts which were not completed as of January 1, 2018. The adoption of these ASUs did not have and is not expected to have a material impact on the Company’s consolidated financial position, results of operations or cash flows or its business processes, systems and controls.

The adoption of ASC Topic 606 resulted in an increase in revenues of $0.1 million and $0.9 million for the three and nine months ended September 30, 2018, respectively, and primarily had the following impact on the Company’s financial statements:

• Beginning in January 1, 2018, the Company defers the incremental costs of obtaining contracts as contract acquisition assets resulting in a net decrease of $2.0 million and $6.6 million in sales and marketing expense in the condensed consolidated statements of operations for the three and nine months ended September 30, 2018, respectively, and corresponding increase in other assets on the condensed consolidated balance sheets. Contract acquisition assets are amortized to sales and marketing expense in the consolidated statements of operations over the period in which services are expected to be provided to the customer, which is estimated to be approximately 4 years. Prior to the adoption of ASC Topic 606, the cost of obtaining a contract was recognized as it was incurred.

• Beginning in the first quarter of 2018, the Company recognizes revenue from estimated unredeemed gift cards that are not subject to unclaimed property laws over the expected customer redemption period, rather than when the likelihood of redemption became remote. The Company recorded a cumulative-effect adjustment to opening retained earnings as of January 1, 2018 of $0.9 million related to unredeemed gift cards, breakage income of $0.3 million and $0.9 million in revenues in the condensed consolidated statements of operations during the three and nine months ended September 30, 2018, respectively, and a corresponding decrease in other accruals of $2.0 million on the condensed consolidated balance sheets.

• Changes in the timing of revenue recognition under ASC Topic 606 related to incentives, refunds and adjustments resulted in a $0.1 million decrease and $0.1 million increase in revenues in the condensed consolidated statements of operations during the three and nine months ended September 30, 2018, respectively.

• The adoption of ASC Topic 606 had no impact to the Company’s total net cash provided by or used in operations, investing or financing activities within the Company’s condensed consolidated statement of cash flows for the nine months ended September 30, 2018.

See Note 3, Revenue, for additional details.

Accounts Receivable

Accounts Receivable

Accounts receivable primarily represent the net cash due from the Company’s payment processor for cleared transactions and amounts owed from corporate customers, which are generally invoiced on a monthly basis. The carrying amount of the Company’s receivables is reduced by an allowance for doubtful accounts that reflects management’s best estimate of amounts that will not be collected based on historical loss experience and any current or forecasted specific risks.

Deferred Revenues

Deferred Revenues

The Company’s deferred revenues consist primarily of gift card liabilities and certain incentive liabilities. These amounts are included within other accruals on the consolidated balance sheets and are not material to the Company’s consolidated financial position. The majority of gift cards and incentives issued by the Company are redeemed within a year.

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Acquisitions (Tables)

9 Months Ended

Sep. 30, 2018

LevelUp

Business Acquisition [Line Items]

Schedule of Acquisition Date Fair Value of Assets and Liabilities

The following table summarizes the preliminary purchase price allocation acquisition-date fair values of the asset and liabilities acquired in connection with the LevelUp acquisition:

	LevelUp
	(in thousands)
Accounts receivable	$	6,201
Prepaid expenses and other current assets		1,396
Property and equipment		895
Restaurant relationships		10,217
Diner acquisition		3,912
Below-market lease intangible		2,205
Developed technology		20,107
Goodwill		295,488
Net deferred tax asset		32,267
Accounts payable and accrued expenses		(3,031	)
Total purchase price net of cash acquired	$	369,657
Net working capital adjustment receivable		530
Fair value of assumed ISOs attributable to pre-combination service		(2,594	)
Net cash paid	$	367,593

Eat24 and Foodler

Business Acquisition [Line Items]

Schedule of Acquisition Date Fair Value of Assets and Liabilities

The following table summarizes the final purchase price allocation acquisition-date fair values of the assets and liabilities acquired in connection with the Eat24 and Foodler acquisitions:

	Eat24			Foodler			Total
	(in thousands)
Cash	$	40		$	86		$	126
Accounts receivable		8,267			307			8,574
Prepaid expenses and other current assets		221			—			221
Property and equipment		1,113			—			1,113
Restaurant relationships		126,232			35,217			161,449
Diner acquisition		35,226			1,354			36,580
Trademarks		2,225			74			2,299
Developed technology		2,559			1,955			4,514
Goodwill		135,955			17,452			153,407
Accounts payable and accrued expenses		(30,082	)		(5,237	)		(35,319	)
Total purchase price plus cash acquired		281,756			51,208			332,964
Fair value of replacement RSUs attributable to pre-combination service		(274	)		—			(274	)
Cash acquired		(40	)		(86	)		(126	)
Net cash paid	$	281,442		$	51,122		$	332,564

LevelUp,Eat24 and Foodler

Business Acquisition [Line Items]

Valuation Methods for Intangible Assets Acquired

The estimated fair values of the intangible assets acquired were determined based on a combination of the income, cost, and market approaches to measure the fair value of the restaurant relationships, diner acquisition, developed technology and trademarks as follows:

	Valuation Method
	LevelUp	Foodler	Eat24
Restaurant relationships	With or without comparative business valuation	Multi-period excess earnings	Multi-period excess earnings
Diner acquisition	Cost to recreate	Cost to recreate	Cost to recreate
Developed technology	Multi-period excess earnings	Cost to recreate	Cost to recreate
Trademark	n/a	Relief  from royalty	Relief  from royalty

Pro Forma Summary of Operation

The following unaudited pro forma information presents a summary of the operating results of the Company for the three and nine months ended September 30, 2018 and 2017 as if the acquisitions of LevelUp, Eat24 and Foodler had occurred as of January 1 of the year prior to acquisition:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
	(in thousands, except per share data)
Revenues	$	255,777	$	190,833	$	746,545	$	562,364
Net income		22,352		5,084		75,348		15,869
Net income per share attributable to common shareholders:
Basic	$	0.25	$	0.06	$	0.85	$	0.18
Diluted	$	0.24	$	0.06	$	0.82	$	0.18

Pro Forma Adjustments

The pro forma adjustments that reflect the amortization that would have been recognized for intangible assets, elimination of transaction costs incurred, stock-based compensation expense for replacement awards, interest expense for transaction financings and other adjustments, as well as the pro forma tax impact of such adjustments for the three and nine months ended September 30, 2018 and 2017 were as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
	(in thousands)
Depreciation and amortization	$	(186	)	$	2,085		$	(248	)	$	9,488
Transaction costs		(2,646	)		(1,799	)		(5,010	)		846
Stock-based compensation		(458	)		728			2,325			3,748
Interest expense		33			1,128			244			3,547
Other		—			1,571			—			4,401
Income tax (benefit) expense		964			(1,546	)		796			(9,367	)

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Marketable Securities (Tables)

9 Months Ended

Sep. 30, 2018

Investments Debt And Equity Securities [Abstract]

Summary of Held-to-Maturity Marketable Securities

The amortized cost, unrealized gains and losses and estimated fair value of the Company’s held-to-maturity marketable securities as of September 30, 2018 and December 31, 2017 were as follows:

	September 30, 2018
	Amortized Cost		Unrealized Gains		Unrealized Losses			Estimated Fair Value
	(in thousands)
Cash and cash equivalents
Commercial paper	$	10,231	$	—	$	(12	)	$	10,219
Short-term investments
Commercial paper		14,938		—		(112	)		14,826
Corporate bonds		1,749		—		—			1,749
Total	$	26,918	$	—	$	(124	)	$	26,794

	December 31, 2017
	Amortized Cost		Unrealized Gains		Unrealized Losses			Estimated Fair Value
	(in thousands)
Cash and cash equivalents
Commercial paper	$	39,979	$	—	$	(43	)	$	39,936
Corporate bonds		1,250		—		—			1,250
Short-term investments
Commercial paper		21,480		—		(99	)		21,381
Corporate bonds		2,125		—		(1	)		2,124
Total	$	64,834	$	—	$	(143	)	$	64,691

Summary of Continuous Unrealized Loss on Marketable Securities

The gross unrealized losses, estimated fair value and length of time the individual marketable securities were in a continuous loss position for those marketable securities in an unrealized loss position as of September 30, 2018 and December 31, 2017 were as follows:

	September 30, 2018
	Less Than 12 Months					12 Months or Greater				Total
	Estimated Fair Value		Unrealized Loss			Estimated Fair Value		Unrealized  Loss		Estimated Fair Value		Unrealized Loss
	(in thousands)
Commercial paper	$	25,045	$	(124	)	$	—	$	—	$	25,045	$	(124	)
Total	$	25,045	$	(124	)	$	—	$	—	$	25,045	$	(124	)

	December 31, 2017
	Less Than 12 Months					12 Months or Greater				Total
	Estimated Fair Value		Unrealized Loss			Estimated Fair Value		Unrealized  Loss		Estimated Fair Value		Unrealized Loss
	(in thousands)
Commercial paper	$	61,317	$	(142	)	$	—	$	—	$	61,317	$	(142	)
Corporate bonds		3,374		(1	)		—		—		3,374		(1	)
Total	$	64,691	$	(143	)	$	—	$	—	$	64,691	$	(143	)

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Goodwill and Acquired Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2018

Goodwill And Intangible Assets Disclosure [Abstract]

Components of Acquired Intangible Assets (Finite Lived)

The components of acquired intangible assets as of September 30, 2018 and December 31, 2017 were as follows:

	September 30, 2018							December 31, 2017
	Gross Carrying Amount		Accumulated Amortization			NetCarrying Value		GrossCarrying Amount		Accumulated Amortization			NetCarrying Value
	(in thousands)
Restaurant relationships	$	467,797	$	(96,321	)	$	371,476	$	457,580	$	(76,852	)	$	380,728
Diner acquisition		44,159		(7,982	)		36,177		40,247		(1,906	)		38,341
Developed technology		28,630		(8,591	)		20,039		8,523		(6,418	)		2,105
Trademarks		2,225		(2,225	)		—		2,225		(402	)		1,823
Below-market lease intangible		2,206		(21	)		2,185		—		—			—
Other		3,676		(2,362	)		1,314		6,888		(4,008	)		2,880
Total amortizable intangible assets		548,693		(117,502	)		431,191		515,463		(89,586	)		425,877
Indefinite-lived trademarks		89,676		—			89,676		89,676		—			89,676
Total acquired intangible assets	$	638,369	$	(117,502	)	$	520,867	$	605,139	$	(89,586	)	$	515,553

Components of Acquired Intangible Assets (Infinite Lived)

The components of acquired intangible assets as of September 30, 2018 and December 31, 2017 were as follows:

	September 30, 2018							December 31, 2017
	Gross Carrying Amount		Accumulated Amortization			NetCarrying Value		GrossCarrying Amount		Accumulated Amortization			NetCarrying Value
	(in thousands)
Restaurant relationships	$	467,797	$	(96,321	)	$	371,476	$	457,580	$	(76,852	)	$	380,728
Diner acquisition		44,159		(7,982	)		36,177		40,247		(1,906	)		38,341
Developed technology		28,630		(8,591	)		20,039		8,523		(6,418	)		2,105
Trademarks		2,225		(2,225	)		—		2,225		(402	)		1,823
Below-market lease intangible		2,206		(21	)		2,185		—		—			—
Other		3,676		(2,362	)		1,314		6,888		(4,008	)		2,880
Total amortizable intangible assets		548,693		(117,502	)		431,191		515,463		(89,586	)		425,877
Indefinite-lived trademarks		89,676		—			89,676		89,676		—			89,676
Total acquired intangible assets	$	638,369	$	(117,502	)	$	520,867	$	605,139	$	(89,586	)	$	515,553

Changes in Carrying Amount of Goodwill

The changes in the carrying amount of goodwill during the nine months ended September 30, 2018 were as follows:

	Goodwill		Accumulated Impairment Losses		Net Book Value
	(in thousands)
Balance as of December 31, 2017	$	589,862	$	—	$	589,862
Acquisition of LevelUp		295,488		—		295,488
Balance as of September 30, 2018	$	885,350	$	—	$	885,350

Components of Acquired Intangibles Assets Added During the Period (Finite Lived)

The components of the acquired intangible assets added during the nine monthsended September 30, 2018 were as follows:

	Nine Months Ended September 30, 2018
	Amount		Weighted-Average Amortization Period
	(in thousands)		(years)
Developed technology	$	20,107		6.0
Restaurant relationships		10,217		19.0
Diner acquisition		3,912		5.0
Below-market lease intangible		2,205		5.8
Total	$	36,441

Estimated Future Amortization of Acquired Intangible Assets

Estimated future amortization expense of acquired intangible assets as of September 30, 2018 was as follows:

	(in thousands)
The remainder of 2018	$	10,117
2019		38,485
2020		37,315
2021		37,304
2022		35,334
Thereafter		272,636
Total	$	431,191

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Property and Equipment (Tables)

9 Months Ended

Sep. 30, 2018

Property Plant And Equipment [Abstract]

Components of Property and Equipment

The components of the Company’s property and equipment as of September 30, 2018 and December 31, 2017 were as follows:

	September 30, 2018			December 31, 2017
	(in thousands)
Developed software	$	78,332		$	52,041
Computer equipment		44,896			31,601
Leasehold improvements		31,809			23,400
Furniture and fixtures		8,704			6,857
Purchased software and digital assets		3,581			2,881
Construction in progress		5,559			—
Property and equipment		172,881			116,780
Accumulated depreciation and amortization		(67,447	)		(45,396	)
Property and equipment, net	$	105,434		$	71,384

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Debt (Tables)

9 Months Ended

Sep. 30, 2018

Debt Disclosure [Abstract]

Schedule of Debt

The following table summarizes the carrying value of the Company’s debt as of September 30, 2018 and December 31, 2017:

	September 30, 2018			December 31, 2017
	(in thousands)
Term loan	$	121,875		$	124,219
Revolving loan		175,000			50,000
Total debt		296,875			174,219
Less current portion		(6,250	)		(3,906	)
Less unamortized deferred debt issuance costs		(552	)		(668	)
Long-term debt	$	290,073		$	169,645

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Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2018

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Assumptions Used to Determine Fair Value of Stock Options Granted

The assumptions used to determine the fair value of the stock options granted during the nine months ended September 30, 2018 and 2017 were as follows:

	Nine Months Ended September 30,
	2018			2017
Weighted-average fair value options granted	$	65.86		$	15.19
Average risk-free interest rate		2.55	%		1.65	%
Expected stock price volatility (a)		46.1	%		48.7	%
Dividend yield	None			None
Expected stock option life (years) (b)		3.64			4.00

(a) Prior to the first quarter of 2018, the expected stock price volatility was based on a combination of the historical and implied volatilities of comparable publicly-traded companies and the historical volatility of the Company’s own common stock due to its limited trading history as there was no active external or internal market for the Company’s common stock prior to the Company’s initial public offering in April 2014.

(b) The expected term for the LevelUp assumed ISO awards was calculated based on their respective remaining vesting periods as of the acquisition date.

Summary of Stock Option Activity

Stock option awards as of December 31, 2017 and September 30, 2018, and changes during the nine months ended September 30, 2018, were as follows: 

	Options			Weighted-Average Exercise Price		Aggregate Intrinsic Value (thousands)		Weighted-Average Exercise Term (years)
Outstanding at December 31, 2017		2,705,849		$	25.53	$	125,197		7.28
Granted		584,305			68.74
Forfeited		(115,035	)		34.21
Exercised		(487,317	)		26.70
Outstanding at September 30, 2018		2,687,802			34.34		280,279		7.11
Vested and expected to vest at September 30, 2018		2,682,769			34.28		279,912		7.10
Exercisable at September 30, 2018		1,415,269		$	21.73	$	165,427		6.10

Non-vested Restricted Stock Units

Non-vested restricted stock units as of December 31, 2017 and September 30, 2018, and changes during the nine months ended September 30, 2018 were as follows:

	Restricted Stock Units
	Shares			Weighted-Average Grant Date Fair Value
Outstanding at December 31, 2017		2,454,801		$	37.56
Granted		1,107,806			94.35
Forfeited		(292,409	)		51.67
Vested		(796,579	)		35.94
Outstanding at September 30, 2018		2,473,619		$	61.84

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Stockholders' Equity (Tables)

9 Months Ended

Sep. 30, 2018

Equity [Abstract]

Equity and Changes in Equity During Period

The Company’s equity as of December 31, 2017 and September 30, 2018, and changes during the nine months ended September 30, 2018, were as follows:

	(in thousands)
Balance at December 31, 2017	$	1,117,816
Net income		83,631
Cumulative effect of change in accounting principle(a)		882
Currency translation		(392	)
Stock-based compensation		42,755
Shares repurchased and retired to satisfy tax withholding upon vesting		(28,238	)
Stock option exercises, net of withholdings and other		13,010
Stock-based compensation, assumed ISO awards		2,594
Issuance of common stock		200,000
Balance at September 30, 2018	$	1,432,058

(a) See Note 2, Significant Accounting Policies, for additional details related to the impact of the adoption of ASC Topic 606 during the nine months ended September 30, 2018.

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Earnings Per Share Attributable to Common Stockholders (Tables)

9 Months Ended

Sep. 30, 2018

Earnings Per Share [Abstract]

Computation of Basic and Diluted Net Income Per Share

The following tables present the calculation of basic and diluted net income per share attributable to common stockholders for the three and nine months ended September 30, 2018 and 2017:

	Three Months Ended September 30, 2018						Three Months Ended September 30, 2017
	Income (Numerator)		Shares (Denominator)		Per  Share Amount		Income (Numerator)		Shares (Denominator)		Per  Share Amount
	(in thousands, except per share data)
Basic EPS
Net income attributable to common stockholders	$	22,745		90,494	$	0.25	$	12,988		86,449	$	0.15
Effect of Dilutive Securities
Stock options		—		1,704				—		1,105
Restricted stock units		—		1,480				—		989
Diluted EPS
Net income attributable to common stockholders	$	22,745		93,678	$	0.24	$	12,988		88,543	$	0.15

	Nine Months Ended September 30, 2018						Nine Months Ended September 30, 2017
	Income (Numerator)		Shares (Denominator)		Per  Share Amount		Income (Numerator)		Shares (Denominator)		Per  Share Amount
	(in thousands, except per share data)
Basic EPS
Net income attributable to common stockholders	$	83,631		89,027	$	0.94	$	45,457		86,162	$	0.53
Effect of Dilutive Securities
Stock options		—		1,649				—		951
Restricted stock units		—		1,415				—		675
Diluted EPS
Net income attributable to common stockholders	$	83,631		92,091	$	0.91	$	45,457		87,788	$	0.52

Anti-dilutive Securities Excluded from Calculation of Diluted Net Income Per Share

The number of shares of common stock underlying stock-based awards excluded from the calculation of diluted net income per share attributable to common stockholders because their effect would have been antidilutive for the three and nine months ended September 30, 2018 and 2017 were as follows:  

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Anti-dilutive shares underlying stock-based awards:
Stock options		251,582		685,671		251,582		685,671
Restricted stock units		84,668		84,358		84,668		84,358

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Fair Value Measurement (Tables)

9 Months Ended

Sep. 30, 2018

Fair Value Disclosures [Abstract]

Schedule of Fair Value and Carrying Value of Assets and Liabilities Recorded at Other Than Fair Value

The following table presents the fair value, for disclosure purposes only, and carrying value of the Company’s assets and liabilities that are recorded at other than fair value as of September 30, 2018 and December 31, 2017:

	September 30, 2018						December 31, 2017
	Level 2		Level 3		Carrying Value		Level 2		Level 3		Carrying Value
	(in thousands)
Assets
Money market funds	$	18	$	—	$	18	$	93	$	—	$	93
Commercial paper		25,045		—		25,169		61,317		—		61,459
Corporate bonds		1,749		—		1,749		3,374		—		3,375
Total assets	$	26,812	$	—	$	26,936	$	64,784	$	—	$	64,927
Liabilities
Long-term debt, including current maturities		—		303,001		296,875		—		175,700		174,219
Total liabilities	$	—	$	303,001	$	296,875	$	—	$	175,700	$	174,219

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Significant Accounting Policies - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Jan. 01, 2018	Dec. 31, 2017
Significant Accounting Policies [Line Items]
Revenues	$ 247,225	$ 163,059	$ 719,536	$ 477,987
Effect on sales and marketing	49,426	$ 35,138	144,413	$ 105,346
Retained earnings	354,504		354,504			$ 269,992
Other accruals	33,186		$ 33,186			$ 26,818
Capitalized Contract Cost
Significant Accounting Policies [Line Items]
Contract acquisition assets, estimated service period			4 years
Adjustments | ASC Topic 606
Significant Accounting Policies [Line Items]
Revenues	100		$ 900
Adjustments | ASC Topic 606 | Adjustment, Unredeemed Gift Card Breakage Income
Significant Accounting Policies [Line Items]
Revenues	300		900
Retained earnings					$ 900
Other accruals	(2,000)		(2,000)
Adjustments | ASC Topic 606 | Incentives, Refunds and Adjustments
Significant Accounting Policies [Line Items]
Revenues	(100)		100
Adjustments | ASC Topic 606 | Capitalized Contract Cost
Significant Accounting Policies [Line Items]
Effect on sales and marketing	(2,000)		(6,600)
Effect on other assets	$ 2,000		$ 6,600
Contract acquisition assets, estimated service period			4 years

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Revenue - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2018
Capitalized Contract Cost [Line Items]
Capitalized contract acquisition costs	$ 2.4	$ 7.3
Contract acquisition assets amortization	$ 0.4	$ 0.7
Capitalized Contract Cost
Capitalized Contract Cost [Line Items]
Contract acquisition assets, estimated service period		4 years

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Acquisitions - Additional Information (Detail) - USD ($) $ in Thousands				3 Months Ended		9 Months Ended
	Sep. 13, 2018	Oct. 10, 2017	Aug. 23, 2017	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Business Acquisition [Line Items]
Net cash payments to acquire businesses						$ 366,856	$ 51,859
Fair value of replacement awards granted to acquired business employees						2,594
Net working capital adjustment receivable						530	887
Goodwill				$ 885,350		885,350		$ 589,862
General and administrative expenses
Business Acquisition [Line Items]
Direct and indirect expense incurred related to acquisitions				$ 2,600	$ 1,700	$ 5,100	$ 3,600
LevelUp
Business Acquisition [Line Items]
Acquisition date	Sep. 13, 2018
Total purchase price net of cash acquired	$ 369,657
Net cash payments to acquire businesses	367,593
Cash acquired in business acquisition	6,000
Net working capital adjustment receivable	530
Goodwill	295,488
LevelUp | ISO
Business Acquisition [Line Items]
Fair value of replacement awards granted to acquired business employees	2,594
Post combination expense expected to be recognized related to replacement awards	$ 17,000
Eat24
Business Acquisition [Line Items]
Acquisition date		Oct. 10, 2017
Net cash payments to acquire businesses		$ 281,442
Cash acquired in business acquisition		40
Goodwill		135,955
Total purchase price plus cash acquired		281,756
Escrow related to indemnification rights under purchase agreement		$ 28,800
Period of escrow		18 months
Eat24 | Restricted Stock Units
Business Acquisition [Line Items]
Fair value of replacement awards granted to acquired business employees		$ 274
Post combination expense expected to be recognized related to replacement awards		4,100
Foodler
Business Acquisition [Line Items]
Acquisition date			Aug. 23, 2017
Net cash payments to acquire businesses			$ 51,122
Cash acquired in business acquisition			86
Goodwill			17,452
Total purchase price plus cash acquired			51,208
Eat24 and Foodler
Business Acquisition [Line Items]
Net cash payments to acquire businesses		332,564
Cash acquired in business acquisition		126
Goodwill		153,407
Total purchase price plus cash acquired		332,964
Goodwill expected to be deductible for income tax purposes			$ 153,400
Eat24 and Foodler | Restricted Stock Units
Business Acquisition [Line Items]
Fair value of replacement awards granted to acquired business employees		$ 274

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Schedule of Acquisition-Date Fair Value of Assets and Liabilities (Detail) - USD ($) $ in Thousands				9 Months Ended
	Sep. 13, 2018	Oct. 10, 2017	Aug. 23, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Business Acquisition [Line Items]
Goodwill				$ 885,350		$ 589,862
Net working capital adjustment receivable				530	$ 887
Fair value of assumed equity awards attributable to pre-combination service				(2,594)
Net cash paid				366,856	$ 51,859
LevelUp
Business Acquisition [Line Items]
Accounts receivable	$ 6,201
Prepaid expenses and other current assets	1,396
Property and equipment	895
Intangible assets				36,441
Goodwill	295,488
Net deferred tax asset	32,267
Accounts payable and accrued expenses	(3,031)
Total purchase price net of cash acquired	369,657
Net working capital adjustment receivable	530
Cash acquired	(6,000)
Net cash paid	367,593
LevelUp | ISO
Business Acquisition [Line Items]
Fair value of assumed equity awards attributable to pre-combination service	(2,594)
LevelUp | Restaurant relationships
Business Acquisition [Line Items]
Intangible assets	10,217			10,217
LevelUp | Diner acquisition
Business Acquisition [Line Items]
Intangible assets	3,912			3,912
LevelUp | Below-market lease intangible
Business Acquisition [Line Items]
Intangible assets	2,205			2,205
LevelUp | Developed technology
Business Acquisition [Line Items]
Intangible assets	$ 20,107			$ 20,107
Eat24
Business Acquisition [Line Items]
Cash		$ 40
Accounts receivable		8,267
Prepaid expenses and other current assets		221
Property and equipment		1,113
Goodwill		135,955
Accounts payable and accrued expenses		(30,082)
Total purchase price plus cash acquired		281,756
Cash acquired		(40)
Net cash paid		281,442
Eat24 | Restricted Stock Units
Business Acquisition [Line Items]
Fair value of assumed equity awards attributable to pre-combination service		(274)
Eat24 | Restaurant relationships
Business Acquisition [Line Items]
Intangible assets		126,232
Eat24 | Diner acquisition
Business Acquisition [Line Items]
Intangible assets		35,226
Eat24 | Developed technology
Business Acquisition [Line Items]
Intangible assets		2,559
Eat24 | Trademarks
Business Acquisition [Line Items]
Intangible assets		2,225
Foodler
Business Acquisition [Line Items]
Cash			$ 86
Accounts receivable			307
Goodwill			17,452
Accounts payable and accrued expenses			(5,237)
Total purchase price plus cash acquired			51,208
Cash acquired			(86)
Net cash paid			51,122
Foodler | Restaurant relationships
Business Acquisition [Line Items]
Intangible assets			35,217
Foodler | Diner acquisition
Business Acquisition [Line Items]
Intangible assets			1,354
Foodler | Developed technology
Business Acquisition [Line Items]
Intangible assets			1,955
Foodler | Trademarks
Business Acquisition [Line Items]
Intangible assets			$ 74
Eat24 and Foodler
Business Acquisition [Line Items]
Cash		126
Accounts receivable		8,574
Prepaid expenses and other current assets		221
Property and equipment		1,113
Goodwill		153,407
Accounts payable and accrued expenses		(35,319)
Total purchase price plus cash acquired		332,964
Cash acquired		(126)
Net cash paid		332,564
Eat24 and Foodler | Restricted Stock Units
Business Acquisition [Line Items]
Fair value of assumed equity awards attributable to pre-combination service		(274)
Eat24 and Foodler | Restaurant relationships
Business Acquisition [Line Items]
Intangible assets		161,449
Eat24 and Foodler | Diner acquisition
Business Acquisition [Line Items]
Intangible assets		36,580
Eat24 and Foodler | Developed technology
Business Acquisition [Line Items]
Intangible assets		4,514
Eat24 and Foodler | Trademarks
Business Acquisition [Line Items]
Intangible assets		$ 2,299

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Acquisitions - Valuation Methods for Intangible Assets Acquired (Detail)	9 Months Ended
	Sep. 30, 2018
Restaurant relationships | LevelUp
Business Acquisition [Line Items]
Valuation Method	With or without comparative business valuation
Restaurant relationships | Foodler
Business Acquisition [Line Items]
Valuation Method	Multi-period excess earnings
Restaurant relationships | Eat24
Business Acquisition [Line Items]
Valuation Method	Multi-period excess earnings
Diner acquisition | LevelUp
Business Acquisition [Line Items]
Valuation Method	Cost to recreate
Diner acquisition | Foodler
Business Acquisition [Line Items]
Valuation Method	Cost to recreate
Diner acquisition | Eat24
Business Acquisition [Line Items]
Valuation Method	Cost to recreate
Developed technology | LevelUp
Business Acquisition [Line Items]
Valuation Method	Multi-period excess earnings
Developed technology | Foodler
Business Acquisition [Line Items]
Valuation Method	Cost to recreate
Developed technology | Eat24
Business Acquisition [Line Items]
Valuation Method	Cost to recreate
Trademarks | Foodler
Business Acquisition [Line Items]
Valuation Method	Relief from royalty
Trademarks | Eat24
Business Acquisition [Line Items]
Valuation Method	Relief from royalty

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Pro forma Summary of Operation (Detail) - LevelUp,Eat24 and Foodler - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Business Acquisition [Line Items]
Revenues	$ 255,777	$ 190,833	$ 746,545	$ 562,364
Net income	$ 22,352	$ 5,084	$ 75,348	$ 15,869
Net income per share attributable to common shareholders:
Basic	$ 0.25	$ 0.06	$ 0.85	$ 0.18
Diluted	$ 0.24	$ 0.06	$ 0.82	$ 0.18

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Pro Forma Adjustments for Additional Amortization of That Would Have Been Recognized on the Intangible Assets (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Business Acquisition Pro Forma Information Nonrecurring Adjustment [Line Items]
Interest expense	$ 1,700	$ 200	$ 4,600	$ 600
Income tax (benefit) expense	(1,234)	4,432	2,721	19,043
LevelUp,Eat24 and Foodler | Pro Forma
Business Acquisition Pro Forma Information Nonrecurring Adjustment [Line Items]
Depreciation and amortization	(186)	2,085	(248)	9,488
Transaction costs	(2,646)	(1,799)	(5,010)	846
Stock-based compensation	(458)	728	2,325	3,748
Interest expense	33	1,128	244	3,547
Other		1,571		4,401
Income tax (benefit) expense	$ 964	$ (1,546)	$ 796	$ (9,367)

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Summary of Held-to-Maturity Marketable Securities (Detail) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Schedule Of Held To Maturity Securities [Line Items]
Amortized Cost	$ 26,918	$ 64,834
Unrealized Losses	(124)	(143)
Estimated Fair Value	26,794	64,691
Commercial Paper | Cash and Cash Equivalents
Schedule Of Held To Maturity Securities [Line Items]
Amortized Cost	10,231	39,979
Unrealized Losses	(12)	(43)
Estimated Fair Value	10,219	39,936
Commercial Paper | Short Term Investments
Schedule Of Held To Maturity Securities [Line Items]
Amortized Cost	14,938	21,480
Unrealized Losses	(112)	(99)
Estimated Fair Value	14,826	21,381
Corporate Bonds | Cash and Cash Equivalents
Schedule Of Held To Maturity Securities [Line Items]
Amortized Cost		1,250
Estimated Fair Value		1,250
Corporate Bonds | Short Term Investments
Schedule Of Held To Maturity Securities [Line Items]
Amortized Cost	1,749	2,125
Unrealized Losses		(1)
Estimated Fair Value	$ 1,749	$ 2,124

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Marketable Securities - Additional Information (Detail) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Schedule Of Held To Maturity Securities [Line Items]
Marketable securities matured during the period and held in other interest-bearing accounts	$ 40,000,000		$ 40,000,000
Other-than-temporary impairment losses related to marketable securities	0	$ 0	0	$ 0
Net Interest (Income) Expense
Schedule Of Held To Maturity Securities [Line Items]
Interest income	$ 1,300,000	$ 500,000	$ 3,200,000	$ 1,500,000

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Summary of Continuous Unrealized Loss on Marketable Securities (Detail) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Schedule Of Held To Maturity Securities [Line Items]
Estimated Fair Value, Less Than 12 Months	$ 25,045	$ 64,691
Unrealized Loss, Less Than 12 Months	(124)	(143)
Estimated Fair Value, 12 Months or Greater	0	0
Unrealized Loss, 12 Months or Greater	0	0
Estimated Fair Value, Total	25,045	64,691
Unrealized Loss, Total	(124)	(143)
Commercial Paper
Schedule Of Held To Maturity Securities [Line Items]
Estimated Fair Value, Less Than 12 Months	25,045	61,317
Unrealized Loss, Less Than 12 Months	(124)	(142)
Estimated Fair Value, 12 Months or Greater	0	0
Unrealized Loss, 12 Months or Greater	0	0
Estimated Fair Value, Total	25,045	61,317
Unrealized Loss, Total	$ (124)	(142)
Corporate Bonds
Schedule Of Held To Maturity Securities [Line Items]
Estimated Fair Value, Less Than 12 Months		3,374
Unrealized Loss, Less Than 12 Months		(1)
Estimated Fair Value, 12 Months or Greater		0
Unrealized Loss, 12 Months or Greater		0
Estimated Fair Value, Total		3,374
Unrealized Loss, Total		$ (1)

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Components of Acquired Intangible Assets (Detail) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Schedule Of Finite And Indefinite Lived Intangible Assets [Line Items]
Amortizable intangible assets, Gross Carrying Amount	$ 548,693	$ 515,463
Amortizable intangible assets, Accumulated Amortization	(117,502)	(89,586)
Amortizable intangible assets, Net Carrying Value	431,191	425,877
Indefinite-lived trademarks	89,676	89,676
Total acquired intangible assets, Gross Carrying Amount	638,369	605,139
Total acquired intangible assets, Net Carrying Value	520,867	515,553
Restaurant relationships
Schedule Of Finite And Indefinite Lived Intangible Assets [Line Items]
Amortizable intangible assets, Gross Carrying Amount	467,797	457,580
Amortizable intangible assets, Accumulated Amortization	(96,321)	(76,852)
Amortizable intangible assets, Net Carrying Value	371,476	380,728
Diner acquisition
Schedule Of Finite And Indefinite Lived Intangible Assets [Line Items]
Amortizable intangible assets, Gross Carrying Amount	44,159	40,247
Amortizable intangible assets, Accumulated Amortization	(7,982)	(1,906)
Amortizable intangible assets, Net Carrying Value	36,177	38,341
Developed technology
Schedule Of Finite And Indefinite Lived Intangible Assets [Line Items]
Amortizable intangible assets, Gross Carrying Amount	28,630	8,523
Amortizable intangible assets, Accumulated Amortization	(8,591)	(6,418)
Amortizable intangible assets, Net Carrying Value	20,039	2,105
Trademarks
Schedule Of Finite And Indefinite Lived Intangible Assets [Line Items]
Amortizable intangible assets, Gross Carrying Amount	2,225	2,225
Amortizable intangible assets, Accumulated Amortization	(2,225)	(402)
Amortizable intangible assets, Net Carrying Value		1,823
Below-market lease intangible
Schedule Of Finite And Indefinite Lived Intangible Assets [Line Items]
Amortizable intangible assets, Gross Carrying Amount	2,206
Amortizable intangible assets, Accumulated Amortization	(21)
Amortizable intangible assets, Net Carrying Value	2,185
Other
Schedule Of Finite And Indefinite Lived Intangible Assets [Line Items]
Amortizable intangible assets, Gross Carrying Amount	3,676	6,888
Amortizable intangible assets, Accumulated Amortization	(2,362)	(4,008)
Amortizable intangible assets, Net Carrying Value	$ 1,314	$ 2,880

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Goodwill and Acquired Intangible Assets - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Finite Lived Intangible Assets [Line Items]
Intangible assets amortization expense	$ 10,000	$ 6,400	$ 31,100	$ 16,800
LevelUp
Finite Lived Intangible Assets [Line Items]
Acquired other intangible assets	36,441		36,441
Other intangible assets
Finite Lived Intangible Assets [Line Items]
Gross carrying amount of intangible assets no longer in use	3,200		3,200
Accumulated amortization of intangible assets no longer in use	$ 2,500		$ 2,500

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Schedule of Carrying Amount of Goodwill (Detail) $ in Thousands	9 Months Ended
	Sep. 30, 2018 USD ($)
Goodwill And Intangible Assets Disclosure [Abstract]
Goodwill, Begining Balance	$ 589,862
Goodwill, Acquisition	295,488
Goodwill, Ending Balance	885,350
Net Book Value, Beginning Balance	589,862
Net Book Value, Acquisition	295,488
Net Book Value, Ending Balance	$ 885,350

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Components of Acquired Intangibles Assets Added During the Period (Detail) - LevelUp - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Sep. 13, 2018
Finite Lived Intangible Assets [Line Items]
Acquired other intangible assets	$ 36,441
Developed technology
Finite Lived Intangible Assets [Line Items]
Acquired other intangible assets	$ 20,107	$ 20,107
Weighted-Average Amortization Period	6 years
Restaurant relationships
Finite Lived Intangible Assets [Line Items]
Acquired other intangible assets	$ 10,217	10,217
Weighted-Average Amortization Period	19 years
Diner acquisition
Finite Lived Intangible Assets [Line Items]
Acquired other intangible assets	$ 3,912	3,912
Weighted-Average Amortization Period	5 years
Below-market lease intangible
Finite Lived Intangible Assets [Line Items]
Acquired other intangible assets	$ 2,205	$ 2,205
Weighted-Average Amortization Period	5 years 9 months 18 days

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Estimated Future Amortization of Acquired Intangible Assets (Detail) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Goodwill And Intangible Assets Disclosure [Abstract]
The remainder of 2018	$ 10,117
2019	38,485
2020	37,315
2021	37,304
2022	35,334
Thereafter	272,636
Amortizable intangible assets, Net Carrying Value	$ 431,191	$ 425,877

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Components of Property and Equipment (Detail) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Property Plant And Equipment [Line Items]
Property and equipment	$ 172,881	$ 116,780
Accumulated depreciation and amortization	(67,447)	(45,396)
Property and equipment, net	105,434	71,384
Developed software
Property Plant And Equipment [Line Items]
Property and equipment	78,332	52,041
Computer equipment
Property Plant And Equipment [Line Items]
Property and equipment	44,896	31,601
Leasehold improvements
Property Plant And Equipment [Line Items]
Property and equipment	31,809	23,400
Furniture and fixtures
Property Plant And Equipment [Line Items]
Property and equipment	8,704	6,857
Purchased Software and Digital Assets
Property Plant And Equipment [Line Items]
Property and equipment	3,581	$ 2,881
Construction in progress
Property Plant And Equipment [Line Items]
Property and equipment	$ 5,559

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Property and Equipment - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Property Plant And Equipment [Line Items]
Depreciation and amortization	$ 20,987	$ 12,613	$ 61,787	$ 33,067
Capitalized developed software costs	10,800	6,800	28,100	18,900
Property And Equipment Excluding Developed Software
Property Plant And Equipment [Line Items]
Depreciation and amortization	5,700	2,900	16,200	8,000
Leasehold Improvements, Developed Software, Furniture and Fixtures and Purchased Software and Digital Assets
Property Plant And Equipment [Line Items]
Gross carrying amount of property and equipment no longer in use	8,600		8,600
Accumulated amortization of property and equipment no longer in use	8,200		8,200
Developed software
Property Plant And Equipment [Line Items]
Depreciation and amortization	$ 5,300	$ 3,300	$ 14,500	$ 8,300

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Commitments and Contingencies - Additional Information (Detail) $ in Millions	Sep. 30, 2018 USD ($)
Maximum | Merger Income Tax Consequences
Loss Contingencies [Line Items]
Indemnification related to business combination	$ 15.0

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Schedule of Debt (Detail) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Total debt	$ 296,875	$ 174,219
Less current portion	(6,250)	(3,906)
Less unamortized deferred debt issuance costs	(552)	(668)
Long-term debt	290,073	169,645
Term loan
Debt Instrument [Line Items]
Total debt	121,875	124,219
Revolving loan
Debt Instrument [Line Items]
Total debt	$ 175,000	$ 50,000

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Debt - Additional Information (Detail) - USD ($)		3 Months Ended		9 Months Ended
	Oct. 10, 2017	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Debt Instrument [Line Items]
Long-term debt		$ 296,875,000		$ 296,875,000		$ 174,219,000
Proceeds from borrowings				175,000,000
Repayment of borrowings				52,344,000
Unamortized Debt Issuance Expense		2,000,000		2,000,000
Interest expense		1,700,000	$ 200,000	4,600,000	$ 600,000
Revolving Loans
Debt Instrument [Line Items]
Long-term debt		175,000,000		175,000,000		50,000,000
Term Loans
Debt Instrument [Line Items]
Long-term debt		$ 121,875,000		121,875,000		$ 124,219,000
Credit Agreement
Debt Instrument [Line Items]
Credit facility, additional borrowing capacity	$ 150,000,000
Credit facility, expiration date	Oct. 09, 2022
Credit Agreement | Revolving Loans
Debt Instrument [Line Items]
Credit facility, maximum borrowing capacity	$ 225,000,000
Proceeds from borrowings				$ 175,000,000
Credit Agreement | Term Loans
Debt Instrument [Line Items]
Long-term debt	$ 125,000,000

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Stock-Based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation	$ 14,200	$ 8,500	$ 36,445	$ 23,913
Total unrecognized stock-based compensation expense	$ 175,700		175,700
Unrecognized compensation expense recognition period	3 years
Stock-based compensation capitalized as website and software development cost	$ 2,600	1,200	$ 6,300	$ 3,300
Options, Granted			584,305	618,899
Aggregate intrinsic value of awards exercised	13,600	5,600	$ 36,100	$ 13,700
Aggregate intrinsic value	165,427		165,427
Stock Options
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation	$ 4,500	3,000	9,400	8,900
Unrecognized compensation expense recognition period	2 years 8 months 12 days
Unrecognized stock-based compensation expense	$ 40,100		40,100
Restricted Stock Units
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation	$ 9,700	5,500	27,000	15,000
Unrecognized compensation expense recognition period	3 years
Fair value of awards vested during the period	$ 26,300	5,700	76,300	19,900
Unrecognized compensation expense related to share based awards other than options	$ 135,600		$ 135,600
Non-vested restricted stock units or awards expected to vest	2,458,380		2,458,380
Weighted average grant date fair value	$ 61.60		$ 61.60
LevelUp
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Aggregate intrinsic value	$ 23,000		$ 23,000
LevelUp | Stock Options
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unrecognized stock-based compensation expense	14,500		14,500
Income Tax Expense
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Recognized excess tax benefits from stock-based compensation	7,600	2,200	21,500	5,700
Excess tax benefits from stock-based compensation	$ 7,600	$ 2,200	$ 21,500	$ 5,700

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Assumptions Used to Determine Fair Value of Stock Options Granted (Detail) - $ / shares		9 Months Ended
		Sep. 30, 2018	Sep. 30, 2017
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Weighted-average fair value options granted		$ 65.86	$ 15.19
Average risk-free interest rate		2.55%	1.65%
Expected stock price volatility	[1]	46.10%	48.70%
Dividend yield		0.00%	0.00%
Expected stock option life (years)	[2]	3 years 7 months 20 days	4 years

[1] Prior to the first quarter of 2018, the expected stock price volatility was based on a combination of the historical and implied volatilities of comparable publicly-traded companies and the historical volatility of the Company’s own common stock due to its limited trading history as there was no active external or internal market for the Company’s common stock prior to the Company’s initial public offering in April 2014.

[2] The expected term for the LevelUp assumed ISO awards was calculated based on their respective remaining vesting periods as of the acquisition date.

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Stock Option Activity (Detail) - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended		12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Options
Options, Beginning Balance	2,705,849
Options, Granted	584,305	618,899
Options, Forfeited	(115,035)
Options, Exercised	(487,317)
Options, Ending Balance	2,687,802		2,705,849
Options, Vested and expected to vest	2,682,769
Options, Exercisable	1,415,269
Weighted-Average Exercise Price
Weighted-Average Exercise Price, Beginning Balance	$ 25.53
Weighted-Average Exercise Price, Granted	68.74
Weighted-Average Exercise Price, Forfeited	34.21
Weighted-Average Exercise Price, Exercised	26.70
Weighted-Average Exercise Price, Ending Balance	34.34		$ 25.53
Weighted-Average Exercise Price, Vested and expected to vest	34.28
Weighted-Average Exercise Price, Exercisable	$ 21.73
Aggregate Intrinsic Value/Weighted-Average Exercise Term
Aggregate Intrinsic Value	$ 280,279		$ 125,197
Aggregate Intrinsic Value, Vested and expected to vest	279,912
Aggregate Intrinsic Value, Exercisable	$ 165,427
Weighted-Average Exercise Term, Outstanding Balance	7 years 1 month 9 days		7 years 3 months 10 days
Weighted-Average Exercise Term, Vested and expected to vest	7 years 1 month 6 days
Weighted-Average Exercise Term, Exercisable	6 years 1 month 6 days

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Non-vested Restricted Stock Units (Detail) - Restricted Stock Units	9 Months Ended
	Sep. 30, 2018 $ / shares shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares, Beginning Balance | shares	2,454,801
Shares, Granted | shares	1,107,806
Shares, Forfeited | shares	(292,409)
Shares, Vested | shares	(796,579)
Shares, Ending Balance | shares	2,473,619
Weighted-Average Grant Date Fair Value, Beginning Balance | $ / shares	$ 37.56
Weighted-Average Grant Date Fair Value, Granted | $ / shares	94.35
Weighted-Average Grant Date Fair Value, Forfeited | $ / shares	51.67
Weighted-Average Grant Date Fair Value, Vested | $ / shares	35.94
Weighted-Average Grant Date Fair Value, Ending Balance | $ / shares	$ 61.84

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Income Taxes - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Income Tax Disclosure [Abstract]
Effective income tax rate	(5.70%)	25.40%	3.20%	29.50%
Excess tax benefits from stock-based compensation	$ 7.6	$ 2.2	$ 21.5	$ 5.7
Corporate income tax rate	21.00%	35.00%	21.00%	35.00%
Income tax examination description			In July 2018, the examination in New York for corporate income tax returns for the tax years ended December 31, 2014, 2015 and 2016 was completed with no material findings. The Company does not expect any material additional tax liabilities, penalties and/or interest as a result of the audit.

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Stockholders' Equity - Additional Information (Detail) - USD ($)		9 Months Ended
	Apr. 25, 2018	Sep. 30, 2018	Dec. 31, 2017	Jan. 22, 2016
Class Of Stock [Line Items]
Number of votes per share		one vote per share
Common stock, shares authorized		500,000,000	500,000,000
Common stock, shares issued		90,598,259	86,790,624
Common stock, shares outstanding		90,598,259	86,790,624
Treasury stock, shares		0	0
Preferred Stock, shares authorized		25,000,000	25,000,000
Preferred Stock, shares issued		0	0
Preferred Stock, shares outstanding		0	0
Common stock | Stock Repurchase Program
Class Of Stock [Line Items]
Stock repurchase program, announced date		Jan. 25, 2016
Common stock repurchased, Shares		0
Common stock | Maximum | Stock Repurchase Program
Class Of Stock [Line Items]
Authorized to repurchase of common stock				$ 100,000,000
Common stock | Accredited Investor
Class Of Stock [Line Items]
Aggregate purchase price		$ 200,000,000
Investment Agreement | Common stock | Accredited Investor
Class Of Stock [Line Items]
Shares issued and sold	2,820,464
Aggregate purchase price	$ 200,000,000

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Equity and Changes in Equity During Period (Detail) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Class Of Stock [Line Items]
Balance at beginning of period				$ 1,117,816
Net income		$ 22,745	$ 12,988	83,631	$ 45,457
Currency translation		(92)	$ 299	(392)	$ 749
Stock-based compensation				42,755
Shares repurchased and retired to satisfy tax withholding upon vesting				(28,238)
Stock option exercises, net of withholdings and other				13,010
Stock-based compensation, assumed ISO awards				2,594
Balance at end of period		1,432,058		1,432,058
Common stock | Accredited Investor
Class Of Stock [Line Items]
Issuance of common stock				200,000
ASC Topic 606
Class Of Stock [Line Items]
Cumulative effect of change in accounting principle	[1]	$ 882		$ 882

[1] See Note 2, Significant Accounting Policies, for additional details related to the impact of the adoption of ASC Topic 606 during the nine months ended September 30, 2018

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Earnings Per Share Attributable to Common Stockholders - Additional Information (Detail)	Apr. 25, 2018 shares
Investment Agreement | Common stock | Accredited Investor
Class Of Stock [Line Items]
Shares issued and sold	2,820,464

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Computation of Basic and Diluted Net Income Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Schedule Of Earnings Per Share Basic And Diluted By Common Class [Line Items]
Net income attributable to common stockholders	$ 22,745	$ 12,988	$ 83,631	$ 45,457
Basic EPS, Shares
Weighted average number of shares outstanding, basic	90,494	86,449	89,027	86,162
Diluted EPS, shares
Weighted average number of shares outstanding, diluted	93,678	88,543	92,091	87,788
Basic EPS, per share amount
Net income attributable to common stockholders, per share amount	$ 0.25	$ 0.15	$ 0.94	$ 0.53
Diluted EPS, per share amount
Net income attributable to common stockholders plus assumed conversions, per share amount	$ 0.24	$ 0.15	$ 0.91	$ 0.52
Stock Options
Effect of Dilutive Securities, shares
Stock options and Restricted stock units, shares	1,704	1,105	1,649	951
Restricted Stock Units
Effect of Dilutive Securities, shares
Stock options and Restricted stock units, shares	1,480	989	1,415	675

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Anti-dilutive Securities Excluded from Calculation of Diluted Net Income Per Share (Detail) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Stock Options
Anti-dilutive shares underlying stock-based awards:
Anti-dilutive shares underlying stock-based awards	251,582	685,671	251,582	685,671
Restricted Stock Units
Anti-dilutive shares underlying stock-based awards:
Anti-dilutive shares underlying stock-based awards	84,668	84,358	84,668	84,358

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Schedule of Fair Value and Carrying Value of Assets and Liabilities Recorded at Other Than Fair Value (Detail) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Fair Value | Level 2
Assets
Assets, fair value disclosure	$ 26,812	$ 64,784
Fair Value | Level 3
Liabilities
Long-term debt, including current maturities	303,001	175,700
Total liabilities	303,001	175,700
Carrying Value
Assets
Assets, fair value disclosure	26,936	64,927
Liabilities
Long-term debt, including current maturities	296,875	174,219
Total liabilities	296,875	174,219
Money Market Funds | Fair Value | Level 2
Assets
Assets, fair value disclosure	18	93
Money Market Funds | Carrying Value
Assets
Assets, fair value disclosure	18	93
Commercial Paper | Fair Value | Level 2
Assets
Assets, fair value disclosure	25,045	61,317
Commercial Paper | Carrying Value
Assets
Assets, fair value disclosure	25,169	61,459
Corporate Bonds | Fair Value | Level 2
Assets
Assets, fair value disclosure	1,749	3,374
Corporate Bonds | Carrying Value
Assets
Assets, fair value disclosure	$ 1,749	$ 3,375

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Subsequent Events - Additional Information (Detail) $ in Millions	Sep. 25, 2018 USD ($)
Tapingo and Certain Additinal Assets of OrderUp
Subsequent Event [Line Items]
Total aggregate consideration	$ 170