GrubHub Inc. (Form: 10-Q, Received: 05/09/2016 17:21:18)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 31, 2016

¨	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 x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes x No ¨

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

Large Accelerated filer	x		Accelerated filer	¨

Non-Accelerated filer	¨	(Do not check if a smaller reporting company)	Smaller reporting company	¨

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

As of May 6, 2016, 84,717,401 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 March 31, 2016 and December 31, 2015	3
	Condensed Consolidated Statements of Operations for the three months ended March 31, 2016 and 2015	4
	Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31, 2016 and 2015	5
	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2016 and 2015	6
	Notes to Condensed Consolidated Financial Statements (unaudited)	7

Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3:	Quantitative and Qualitative Disclosures About Market Risk	28
Item 4:	Controls and Procedures	28
PART II

OTHER INFORMATION
Item 1:	Legal Proceedings	28
Item 1A:	Risk Factors	28
Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	29
Item 3:	Defaults Upon Senior Securities	29
Item 4:	Mine Safety Disclosures	29
Item 5:	Other Information	29
Item 6:	Exhibits	30
Signatures		31

Part I. F INANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

GRUBHUB INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

(UNAUDITED)

	March 31, 2016			December 31, 2015
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	203,312		$	169,293
Short term investments		121,129			141,448
Accounts receivable, less allowances for doubtful accounts		51,414			42,051
Prepaid expenses		3,578			3,482
Total current assets		379,433			356,274
PROPERTY AND EQUIPMENT:
Property and equipment, net of depreciation and amortization		24,226			19,082
OTHER ASSETS:
Other assets		3,383			3,105
Goodwill		396,220			396,220
Acquired intangible assets, net of amortization		280,772			285,567
Total other assets		680,375			684,892
TOTAL ASSETS	$	1,084,034		$	1,060,248
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Restaurant food liability	$	74,375		$	64,326
Accounts payable		4,176			8,189
Accrued payroll		3,805			4,841
Taxes payable		423			426
Other accruals		15,699			11,830
Total current liabilities		98,478			89,612
LONG TERM LIABILITIES:
Deferred taxes, non-current		84,262			87,584
Other accruals		5,523			5,456
Total long term liabilities		89,785			93,040
Commitments and contingencies
STOCKHOLDERS’ EQUITY:
Series A Convertible Preferred Stock, $0.0001 par value. Authorized: 25,000,000 shares as of March 31, 2016 and December 31, 2015; issued and outstanding: no shares as of March 31, 2016 and December 31, 2015.		—			—
Common stock, $0.0001 par value. Authorized: 500,000,000 shares at March 31, 2016 and December 31, 2015; issued and outstanding: 84,623,138 and 84,979,869 shares as of March 31, 2016 and December 31, 2015, respectively		8			8
Accumulated other comprehensive loss		(826	)		(604	)
Additional paid-in capital		767,756			759,292
Retained earnings		128,833			118,900
Total Stockholders’ Equity	$	895,771		$	877,596
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,084,034		$	1,060,248

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

GRUBHUB INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(UNAUDITED)

	Three Months Ended March 31,
	2016		2015
Revenues	$	112,240	$	88,249
Costs and expenses:
Sales and marketing		28,833		24,107
Operations and support		34,987		22,701
Technology (exclusive of amortization)		10,192		7,666
General and administrative		13,589		9,101
Depreciation and amortization		7,308		6,249
Total costs and expenses		94,909		69,824
Income before provision for income taxes		17,331		18,425
Provision for income taxes		7,398		7,855
Net income attributable to common stockholders	$	9,933	$	10,570
Net income per share attributable to common stockholders:
Basic	$	0.12	$	0.13
Diluted	$	0.12	$	0.12
Weighted-average shares used to compute net income per share attributable to common stockholders:
Basic		84,710		82,783
Diluted		85,699		85,098

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

GRUBHUB INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

(UNAUDITED)

	Three Months Ended March 31,
	2016			2015
Net income	$	9,933		$	10,570
OTHER COMPREHENSIVE LOSS
Foreign currency translation adjustments		(222	)		(293	)
COMPREHENSIVE INCOME	$	9,711		$	10,277

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

GRUBHUB INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(UNAUDITED)

	Three Months Ended March 31,
	2016			2015
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	9,933		$	10,570
Adjustments to reconcile net income to net cash from operating activities:
Depreciation		1,344			1,215
Provision for doubtful accounts		443			93
Deferred taxes		(3,321	)		1,219
Amortization of intangible assets		5,964			5,034
Stock-based compensation		6,901			3,007
Other		26			239
Change in assets and liabilities, net of the effects of business acquisitions:
Accounts receivable		(9,956	)		(11,862	)
Prepaid expenses and other assets		(136	)		255
Restaurant food liability		10,081			24,376
Accounts payable		(5,434	)		(1,826	)
Accrued payroll		(1,034	)		(3,146	)
Other accruals		3,855			1,248
Net cash provided by operating activities		18,666			30,422
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of investments		(56,227	)		(37,068	)
Proceeds from maturity of investments		76,615			38,060
Capitalized website and development costs		(2,331	)		(1,213	)
Purchases of property and equipment		(3,259	)		(441	)
Acquisitions of businesses, net of cash acquired		—			(55,506	)
Acquisition of other intangible assets		(250	)		—
Other cash flows from investing activities		(173	)		—
Net cash provided by (used in) investing activities		14,375			(56,168	)
CASH FLOWS FROM FINANCING ACTIVITIES
Repurchases of common stock		(9,771	)		—
Proceeds from exercise of stock options		1,012			5,823
Excess tax benefits related to stock-based compensation		10,610			6,492
Taxes paid related to net settlement of stock-based compensation awards		(682	)		—
Net cash provided by financing activities		1,169			12,315
Net change in cash and cash equivalents		34,210			(13,431	)
Effect of exchange rates on cash		(191	)		(210	)
Cash and cash equivalents at beginning of year		169,293			201,796
Cash and cash equivalents at end of the period	$	203,312		$	188,155
SUPPLEMENTAL DISCLOSURE OF NON CASH ITEMS
Fair value of common stock issued for acquisitions	$	—		$	15,980
Capitalized property, equipment and website and development costs in accounts payable at period end		1,423			308

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

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

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, 2015 filed with the SEC on February 26, 2016 (the “2015 Form 10-K”). All significant intercompany transactions have been eliminated in consolidation. Operating results for the three months ended March 31, 2016 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2016.

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.

There have been no material changes to the Company’s significant accounting policies described in the 2015 Form 10-K.

Recently Issued Accounting Pronouncements

In April 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2016-09, “ Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”) , which simplifies several aspects of the accounting for share-based payment transactions, including adjustments to how excess tax benefits and payments for tax withholdings should be classified and accounting for forfeitures. Under ASU 2016-09, excess tax benefits and tax deficiencies are recognized as income tax expense or benefit in the income statement. ASU 2016-09 also provides entities with the option to elect an accounting policy to continue to estimate forfeitures of stock-based awards over the service period (current GAAP) or account for forfeitures when they occur . ASU 2016-09 is effective beginning in the first quarter of 2017 with early adoption permitted. ASU 2016-09 will be applied on a modified retrospective basis with a cumulative-effect adjustment to retained earnings as of the date of adoption. The Company is currently in the process of evaluating the impact of adoption of ASU 2016-09 on its consolidated financial statements and whether it will elect early adoption.

In February 2016, the FASB issued ASU 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 (the lease liability) 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. The Company will be required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The Company is currently evaluating

GRUBHUB INC.

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

the impact of adoption of ASU 2016 -02 on its consolidated financial statements, but anticipates that it will result in a significant increase in its long-term assets and liabilities and minimal impact to its results of operations and cash flows.

In November 2015, the FASB issued Accounting Standards Update No. 2015-17, “Income Taxes – Balance Sheet Classification of Deferred Taxes” (“ASU 2015-17”). The purpose of the standard is to simplify the presentation of deferred taxes on a classified balance sheet. Under current GAAP, deferred income tax assets and liabilities are separated into current and noncurrent amounts in the balance sheet. The amendments in ASU 2015-17 require that all deferred tax assets and liabilities be classified as noncurrent in the balance sheet. The Company elected to early adopt ASU 2015-17 on a retrospective basis effective in the fourth quarter of 2015. The adoption of ASU 2015-17 impacted the presentation of the Company’s deferred tax assets and liabilities in the consolidated balance sheets and certain disclosures, but did not have an impact on results of operations or cash flows.

In September 2015, the FASB issued Accounting Standards Update No. 2015-16, “Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments” (“ASU 2015-16”), which eliminates the requirement to account for adjustments identified during the measurement-period in a business combination retrospectively. Instead, the acquirer must recognize measurement-period adjustments during the period in which they are identified, including the effect on earnings of any amounts that would have been recorded in previous periods had the purchase accounting been completed at the acquisition date. ASU 2015-16 was effective for and adopted by the Company in the first quarter of 2016. The adoption of ASU 2015- eliminates costs related to retrospective application of any measurement-period adjustments that may be identified, but has not had a material impact on the Company’s consolidated financial position, results of operations or cash flows.

In April 2015, the FASB issued Accounting Standards Update 2015-05, “Intangibles -Goodwill and Other – Internal Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement” (“ASU 2015-05”), which provides guidance on accounting for fees paid in a cloud computing arrangement. Under ASU 2015-05, if a cloud computing arrangement includes a software license, the software license element should be accounted for consistent with the purchase of other software licenses. If the cloud computing arrangement does not include a software license, it should be accounted for as a service contract. ASU 2015-05 was effective for and adopted by the Company in the first quarter of 2016. The Company elected to apply ASU 2015-05 prospectively; however, its adoption did not have a material impact on the Company’s consolidated financial position, results of operations or cash flows.

In April 2015, the FASB issued ASU No. 2015-03, “Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs” (“ASU 2015-03”). ASU 2015-03 simplifies the presentation of debt issuance costs by requiring that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. Under the previous practice, debt issuance costs were recognized as a deferred charge (that is, an asset). The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this ASU. In August 2015, the FASB issued ASU 2015-15 “Interest - Imputed Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Li ne-of-Credit Arrangements” (“ASU 2015-15”), which clarifies that the guidance in ASU 2015-03 does not apply to line-of-credit arrangements. According to ASU 2015-15, debt issuance costs related to line-of-credit arrangements will continue to be deferred and presented as an asset and subsequently amortized ratably over the term of the arrangement. The amendments in ASU 2015-03 and clarifications of ASU 2015-15 are effective for the Company in the first quarter of 2016. The Company entered into a credit agreement on April 29, 2016 (see Note 13, Subsequent Events , for additional details). The adoption of the ASUs will not have a material impact on the Company’s consolidated financial position, results of operations or cash flows.

In May 2014, the FASB issued Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”) , which supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, including most industry-specific requirements. ASU 2014-09 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. ASU 2014-09 also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenues and cash flows from contracts with customers. In August 2015, the FASB issued Accounting Standards Update 2015-14, “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date”, which defers the effective date of ASU 2014-09 by one year. In March 2016, the FASB issued ASU 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)” (“ASU 2016-08”), which clarifies the implementation guidance on principal versus agent considerations in the new revenue recognition standard. ASU 2016-08 clarifies how an entity should identify the unit of accounting (i.e. the specified good or service) for the principal versus agent evaluation and how it should apply the control principle to certain types of arrangements. In April 2016, the FASB issued ASU 2016-10, “ Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing” (“ASU 2016-10”) , which clarifies the implementation guidance on identifying performance obligations and licensing. ASU 2016-10 reduces the

GRUBHUB INC.

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

cost and complexity of identifying promised goods or services and improves the guidance for determining whether promises are separately identifiable. ASU 2014-09, ASU 2016-08 and ASU 2016-10 will be effective for the Company in the first quarter of 2018. Management is currently evaluating the impac t the adoption of these ASUs will have on the Company’s consolidated financial position, results of operations or cash flows. The Company currently anticipates applying the modified retrospective approach when adopting these ASUs .

3. Acquisitions

2015 Acquisitions

On February 4, 2015, the Company acquired assets of DiningIn.com, Inc. and certain of its affiliates (collectively, “DiningIn”), and, on February 27, 2015, the Company acquired the membership units of Restaurants on the Run, LLC (“Restaurants on the Run”) and on December 4, 2015, the Company acquired the membership units of Mealport USA, LLC (“Delivered Dish”). Aggregate consideration for the three acquisitions was approximately $73.9 million in cash and 407,812 restricted shares of the Company’s common stock, or an estimated total transaction value of approximately $89.9 million based on the Company’s closing share price on the respective closing dates, net of cash acquired of $0.7 million. DiningIn, Restaurants on the Run and Delivered Dish provide delivery options for individual diners, group orders and corporate catering. The acquisitions have expanded and enhanced the Company’s service offerings for its customers, particularly in the delivery space.

The results of operations of DiningIn, Restaurants on the Run and Delivered Dish have been included in the Company’s financial statements since February 4, 2015, February 27, 2015 and December 4, 2015, respectively.

The excess of the consideration transferred in the acquisitions over the net amounts assigned to the fair value of the assets acquired was recorded as goodwill, which represents the opportunity to expand restaurant delivery services and enhance the breadth and depth of the Company’s restaurant networks. The goodwill related to these acquisitions of $43.4 million is expected to be deductible for income tax purposes.

D uring the three months ended March 31, 2016 and 2015, the Company incurred certain expenses directly and indirectly related to acquisitions of $0.8 million and $0.6 million, respectively, which were recognized in general and administrative expenses within the condensed consolidated statements of operations.

The assets acquired and liabilities assumed of DiningIn, Restaurants on the Run and Delivered Dish were recorded at their estimated fair values as of the closing dates of February 4, 2015, February 27, 2015 and December 4, 2015, respectively. The following table summarizes the final purchase price allocation acquisition-date fair values of the assets and liabilities acquired in connection with the DiningIn, Restaurants on the Run and Delivered Dish acquisitions:

	(in thousands)
Cash and cash equivalents	$	698
Accounts receivable		2,331
Prepaid expenses and other assets		325
Customer and vendor relationships		44,259
Property and equipment		161
Developed technology		4,676
Goodwill		43,432
Trademarks		529
Accounts payable and accrued expenses		(5,826	)
Total purchase price plus cash acquired		90,585
Cash acquired		(698	)
Fair value of common stock issued		(15,980	)
Net cash paid	$	73,907

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 customer (restaurant) relationships, developed technology and trademarks. The fair value of the trademarks was measured based on the relief from royalty method. The cost approach, specifically the cost to recreate method, was used to value the developed technology. The income approach, specifically the multi-period excess earnings method, was

GRUBHUB INC.

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

used to value the customer (restaurant) relationships. 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 following unaudited pro forma information presents a summary of the operating results of the Company for the three months ended March 31, 2015 as if the acquisitions had occurred on January 1, 2014:

	Three Months Ended March 31, 2015
	(in thousands)
Revenues	$	93,529
Net income		11,237

The pro forma adjustments reflect the amortization that would have been recognized for intangible assets, elimination of transaction costs incurred and pro forma tax adjustments for the three months ended March 31, 2015 as follows:

	Three Months Ended March 31, 2015
	(in thousands)
Depreciation and amortization	$	428
Transaction costs		(566	)
Income tax expense		59

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 the periods presented and should not be taken as indicative of the Company’s future consolidated results of operations or financial condition.

4. Marketable Securities

The amortized cost, unrealized gains and losses and estimated fair value of the Company’s held-to-maturity marketable securities as of March 31, 2016 and December 31, 2015 were as follows:

	March 31, 2016
	Amortized Cost		Unrealized Gains		Unrealized Losses			Estimated Fair Value
	(in thousands)
Cash and cash equivalents
Commercial paper	$	44,338	$	—	$	(20	)	$	44,318
Short term investments
Commercial paper		87,046		—		(133	)		86,913
Corporate bonds		25,088		5		(7	)		25,086
U.S. government agency bonds		8,995		20		—			9,015
Total	$	165,467	$	25	$	(160	)	$	165,332

	December 31, 2015
	Amortized Cost		Unrealized Gains		Unrealized Losses			Estimated Fair Value
	(in thousands)
Cash and cash equivalents
Commercial paper	$	22,744	$	—	$	(5	)	$	22,739
Short term investments
Commercial paper		90,949		—		(102	)		90,847
Corporate bonds		41,503		9		(39	)		41,473
U.S. government agency bonds		8,996		8		—			9,004
Total	$	164,192	$	17	$	(146	)	$	164,063

GRUBHUB INC.

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

All of the Company’ s marketable securities were classified as held-to-maturity investments and have maturities within one year of March 31, 2016.

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 March 31, 2016 and December 31, 2015 were as follows:

	March 31, 2016
	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	$	131,231	$	(153	)	$	—	$	—	$	131,231	$	(153	)
Corporate bonds		15,600		(7	)		—		—		15,600		(7	)
Total	$	146,831	$	(160	)	$	—	$	—	$	146,831	$	(160	)

	December 31, 2015
	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	$	113,586	$	(107	)	$	—	$	—	$	113,586	$	(107	)
Corporate bonds		31,952		(39	)		—		—		31,952		(39	)
Total	$	145,538	$	(146	)	$	—	$	—	$	145,538	$	(146	)

During the three months ended March 31, 2016 and 2015, 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 12, Fair Value Measurement, for further details).

5. Goodwill and Acquired Intangible Assets

The components of acquired intangible assets as of March 31, 2016 and December 31, 2015 were as follows:

	March 31, 2016							December 31, 2015
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Value		Gross Carrying Amount		Accumulated Amortization			Net Carrying Value
	(in thousands)
Developed technology	$	9,819	$	(7,578	)	$	2,241	$	9,819	$	(6,288	)	$	3,531
Customer and vendor relationships, databases		236,238		(47,886	)		188,352		236,238		(44,192	)		192,046
Trademarks		529		(276	)		253		529		(215	)		314
Other		250		—			250		—		—			—
Total amortizable intangible assets		246,836		(55,740	)		191,096		246,586		(50,695	)		195,891
Indefinite-lived trademarks		89,676		—			89,676		89,676		—			89,676
Total acquired intangible assets	$	336,512	$	(55,740	)	$	280,772	$	336,262	$	(50,695	)	$	285,567

Amortization expense for acquired intangible assets was $5.0 million and $4.1 million for the three months ended March 31, 2016 and 2015, respectively.

There were no changes in the carrying amount of goodwill during the three months ended March 31, 2016.

GRUBHUB INC.

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

Estimated future amortization expense of acquired intangible assets as of March 31, 2016 was as follows:

	(in thousands)
The remainder of 2016	$	13,463
2017		14,632
2018		14,538
2019		13,064
2020		12,661
Thereafter		122,738
Total	$	191,096

6. Property and Equipment

The components of the Company’s property and equipment as of March 31, 2016 and December 31, 2015 were as follows:

	March 31, 2016			December 31, 2015
	(in thousands)
Computer equipment	$	11,647		$	10,080
Delivery equipment		813			555
Furniture and fixtures		2,163			2,092
Developed software		14,141			11,129
Purchased software and digital assets		523			361
Leasehold improvements		8,387			6,050
Property and equipment		37,674			30,267
Accumulated amortization and depreciation		(13,448	)		(11,185	)
Property and equipment, net	$	24,226		$	19,082

The Company recorded depreciation and amortization expense for property and equipment other than developed software of $1.4 million for each of the three months ended March 31, 2016 and 2015.

The Company capitalized developed software costs of $3.0 million and $1.5 million for the three months ended March 31, 2016 and 2015, respectively. Amortization expense for developed software costs, recognized in depreciation and amortization in the condensed consolidated statements of operations, for the three months ended March 31, 2016 and 2015 was $0.9 million and $0.7 million, respectively.

7. 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 September 2011, Ameranth amended its complaint in the ’1810 action to also allege patent infringement against Seamless North America, LLC. Ameranth alleged that the Grubhub Holdings Inc. and Seamless North America, LLC ordering systems, products and services infringe claims 12 through 15 of U.S. Patent No. 6,384,850 (“’850 patent”) and claims 11 and 15 of U.S. Patent No. 6,871,325 (“’325 patent”).

In March 2012, Ameranth initiated eight additional actions for infringement of a third, 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.

GRUBHUB INC.

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

No trial date has been set for this case and the consolidated district court case re mains stayed. 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 March 31, 2016, as it does not believe a material loss is probable. It is a reasonable possi bility that a loss may be incurred; however, the possible range of loss is not estimable given the early stage of the dispute and the uncertainty as to whether the claims at issue are with or without merit, will be settled out of court, or will be determin ed 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.

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 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.

8. Stock-Based Compensation

The Company has granted 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 $6.9 million and $3.0 million during the three months ended March 31, 2016 and 2015, respectively. During the three months ended March 31, 2016 and 2015 , the Company reported excess tax benefits as a decrease in cash flows from operations and an increase in cash flows from financing activities of $10.6 million and $6.5 million, respectively. Excess tax benefits reflect the total of the individual stock option exercise transactions and vesting of restricted stock awards and restricted stock units in which the reduction to the Company’s income tax liability is greater than the deferred tax assets that were previously recorded. During the three months ended March 31, 2016 and 2015 , the Company capitalized $0.4 million and $0.1 million, respectively, of stock-based compensation expense as website and software development costs. As of March 31, 2016, $46.1 million of total unrecognized stock-based compensation expense is expected to be recognized over a weighted-average period of 3.3 years. The total unrecognized stock-based compensation expense to be recognized in future periods as of March 31, 2016 does not consider the effect of stock-based awards that may be granted in subsequent periods.

GRUBHUB INC.

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

Stock Options

The Company granted 82,912 and 1,239,410 stock options during the three months ended March 31, 2016 and 2015, 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. Expected volatilities are 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. 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 of the award is estimated using a simplified method. 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 three months ended March 31, 2016 and 2015 were as follows:

	Three Months Ended March 31,
	2016			2015
Weighted-average fair value options granted	$	10.28		$	16.35
Average risk-free interest rate		1.55	%		1.39	%
Expected stock price volatilities		50.8	%		47.3	%
Dividend yield	None			None
Expected stock option life (years)		6.08			6.08

Stock option awards as of December 31, 2015 and March 31, 2016, and changes during the three months ended March 31, 2016 , were as follows :

	Options			Weighted-Average Exercise Price		Aggregate Intrinsic Value (thousands)		Weighted-Average Exercise Term (years)
Outstanding at December 31, 2015		5,078,297		$	19.66	$	41,107		8.21
Granted		82,912			20.63
Forfeited		(566,683	)		22.94
Exercised		(174,868	)		5.74
Outstanding at March 31, 2016		4,419,658			19.81		38,042		8.01
Vested and expected to vest at March 31, 2016		3,299,398			18.34		31,936		7.84
Exercisable at March 31, 2016		1,591,036		$	12.89	$	23,284		6.91

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. 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 awards exercised during the three months ended March 31, 2016 and 2015 was $2.8 million and $49.8 million, respectively.

The Company recorded compensation expense for stock options of $3.7 million and $2.8 million for the three months ended March 31, 2016 and 2015 , respectively. As of March 31, 2016, total unrecognized compensation cost, adjusted for estimated forfeitures, related to non-vested stock options was $22.3 million and is expected to be recognized over a weighted-average period of 2.9 years.

GRUBHUB INC.

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

Restricted Stock Units and Restricted Stock Awards

Non-vested restricted stock units and restricted stock awards as of December 31, 2015 and March 31, 2016 , and changes during the three months ended March 31, 2016 were as follows:

	Restricted Stock Units					Restricted Stock Awards
	Shares			Weighted-Average Grant Date Fair Value		Shares			Weighted-Average Grant Date Fair Value
Outstanding at December 31, 2015		888,483		$	27.85		67,744		$	42.01
Granted		591,618			25.01		—			—
Forfeited		(36,289	)		28.31		—			—
Vested		(2,729	)		37.62		(67,744	)		42.01
Outstanding at March 31, 2016		1,441,083		$	26.66		—		$	—

During the three months ended March 31, 2016 and 2015 , compensation expense recognized related to restricted stock awards was $1.7 million and $0.2 million, respectively. During the three months ended March 31, 2016 , compensation expense recognized related to restricted stock units was $1.5 million. Compensation expense related to restricted stock units was nominal during the three months ended March 31, 2015. The aggregate grant-date fair value of restricted stock awards and restricted stock units that vested during the three months ended March 31, 2016 was $2.9 million. As of March 31, 2016 , $23.8 million of total unrecognized compensation cost, adjusted for estimated forfeitures, related to 1,441,083 non-vested restricted stock units with weighted-average grant date fair values of $26.66 is expected to be recognized over a weighted-average period of 3.6 years. As of March 31, 2016 , there were no remaining non-vested restricted stock awards or related unrecognized compensation cost. 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.

9. Income Taxes

During the three months ended March 31, 2016 , the Illinois Department of Revenue completed an audit, subject to quality review, of the Company’s corporate income tax returns for the tax years ended December 31, 2013 and 2012 and proposed no changes. The Company does not expect any additional tax liabilities, penalties and/or interest as a result of the audit .

10. Stockholders’ Equity

As of March 31, 2016 and December 31, 2015 , the Company was authorized to issue two classes of stock: common stock and Series A 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 March 31, 2016 and December 31, 2015 , there were 500,000,000 shares of common stock authorized. At March 31, 2016 and December 31, 2015 , there were 84,623,138 and 84,979,869 shares issued and outstanding, respectively. The Company did not hold any shares as treasury shares as of March 31, 2016 or December 31, 2015 .

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 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 three months ended March 31, 2016, the Company repurchased and retired 506,673 shares of its common stock at a weighted-average share price of $19.26, or an aggregate of $9.8 million.

GRUBHUB INC.

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

Series A 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 March 31, 2016 or December 31, 2015 .

The Company’s equity as of December 31, 2015 and March 31, 2016 , and changes during the three months ended March 31, 2016 , were as follows:

	(in thousands)
Balance at December 31, 2015	$	877,596
Net income		9,933
Currency translation		(222	)
Stock-based compensation		7,295
Repurchases of common stock		(9,771	)
Shares repurchased to satisfy tax withholding upon vesting and retired		(682	)
Tax benefit related to stock-based compensation		10,610
Stock option exercises, net of withholdings and other		1,012
Balance at March 31, 2016	$	895,771

11. 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, restricted stock units and restricted stock awards, 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 and restricted stock awards using the treasury stock method.

The following table presents the calculation of basic and diluted net income per share attributable to common stockholders for the three months ended March 31, 2016 and 2015 :

	Three Months Ended March 31, 2016						Three Months Ended March 31, 2015
	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	$	9,933		84,710	$	0.12	$	10,570		82,783	$	0.13
Effect of Dilutive Securities
Stock options		—		900				—		2,314
Restricted stock units and restricted stock awards		—		89				—		1
Diluted EPS
Net income attributable to common stockholders	$	9,933		85,699	$	0.12	$	10,570		85,098	$	0.12

During the three months ended March 31, 2016, the Company repurchased and retired 506,673 shares of its common stock. The repurchases resulted in a reduction of the outstanding shares used to calculate the weighted-average common shares outstanding for basic and diluted net earnings per share from the dates of the repurchases. See Note 10, Stockholders’ Equity, for additional details.

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 antidil utive for the three months ended March 31, 2016 and 2015 were as follows:

	Three Months Ended March 31,
	2016		2015
Anti-dilutive shares underlying stock-based awards:
Stock options		2,272,040		1,519,805
Restricted stock awards		—		4,790
Restricted stock units		1,280,982		101,616

12. 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 and U.S. government agency 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. Accounts receivable and accounts payable approximate fair value due to their generally short-term maturities.

The following table presents the balances of assets measured at fair value on a recurring basis as of March 31, 2016 and December 31, 2015 :

	March 31, 2016						December 31, 2015
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
	(in thousands)
Money market funds	$	—	$	117	$	—	$	—	$	1,083	$	—
Commercial paper		—		131,231		—		—		113,586		—
Corporate bonds		—		25,086		—		—		41,473		—
U.S. government agency bonds		—		9,015		—		—		9,004		—
Total	$	—	$	165,449	$	—	$	—	$	165,146	$	—

In addition to assets and liabilities that are recorded at fair value on a recurring basis, 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 3, Acquisitions , for further discussion of the fair value of assets and liabilities associated with acquisitions.

GRUBHUB INC.

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

13. Subsequent Events

On April 29, 2016, the Company entered into a secured revolving credit facility (the “Credit Agreement”), which provides for aggregate revolving loans up to $185.0 million, subject to an increase of up to an additional $30 million under certain conditions. The credit facility will be available to the Company until April 28, 2021. The Credit Agreement will be used for general corporate purposes, including funding working capital and acquisitions. The Company’s obligations under the Credit Agreement are secured by a lien on substantially all of the tangible and intangible property of the Company and by a pledge of all of the equity interests of the Company’s domestic subsidiaries.

The Company incurred origination fees at closing of the Credit Agreement of $1.2 million, which will be deferred and amortized over the term of the facility. There were no borrowings outstanding under the Credit Agreement as of the filing of this Quarterly Report on Form 10-Q.

On May 5, 2016, the Company acquired all of the issued and outstanding stock of KMLEE Investments Inc. and LABite.Com, Inc. (collectively, “LABite”). The purchase price for LABite was $66.5 million in cash, net of cash acquired of $3.2 million. LABite provides online, mobile and on-demand ordering and delivery services for restaurants in west coast and southwest cities of the United States. The acquisition is expected to expand and enhance the Company’s service offerings for its customers, particularly in the delivery space.

I tem 2. Management’s Discussion and Analysis of Financ ial 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, 2015 (“2015 Form 10-K”) filed with the United States Securities and Exchange Commission (the “SEC”) on February 26, 2016. 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 44,000 local restaurants with hungry diners in more than 1,000 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 March 31, 2016, the Company was providing delivery services in approximately 50 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 two-sided network 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 minimum rate, to affect their relative priority in the Company’s sorting algorithms, with restaurants paying higher commission rates generally appearing higher in the search order than restaurants paying lower commission rates. Additionally, restaurants that use the Company’s delivery services pay an additional commission on the transaction for the use of those services.

Acquisitions

On May 5, 2016, the Company acquired all of the issued and outstanding capital stock of KMLEE Investments Inc. and LABite.Com, Inc. (collectively, “LABite”), a restaurant delivery service, see Note 13, Subsequent Events, for additional details.

In February 2015, the Company acquired the assets of DiningIn.com, Inc. and certain of its affiliates (collectively, “DiningIn”) and the membership units of Restaurants on the Run, LLC (“Restaurants on the Run”), and, in December 2015, the Company acquired the membership units of Mealport USA, LLC d/b/a Delivered Dish (“Delivered Dish”). For a description of the Company’s acquisition of these restaurant delivery services, see Note 3, 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.

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 only recognized 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 March 31,
	2016		2015		% Change
Active Diners		6,970,000		5,604,000		24	%
Daily Average Grubs		267,800		234,700		14	%
Gross Food Sales (in millions)	$	712.8	$	589.9		21	%

The Company experienced significant growth across all of its key business metrics, Active Diners, Daily Average Grubs and Gross Food Sales, during the three months ended March 31, 2016 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, as well as, to a lesser extent, an increase from the inclusion of results from 2015 acquisitions.

Results of Operations

Three Months Ended March 31, 2016 and 2015

The following table sets forth the Company’s results of operations for the three months ended March 31, 2016 as compared to the same period in the prior year presented in dollars and as a percentage of revenues:

	Three Months Ended March 31,
	2016					2015
	Amount		% of revenue			Amount		% of revenue			$ Change			% Change
	(in thousands, except percentages)
Revenues	$	112,240		100	%	$	88,249		100	%	$	23,991			27	%
Costs and expenses:
Sales and marketing		28,833		26	%		24,107		27	%		4,726			20	%
Operations and support		34,987		31	%		22,701		26	%		12,286			54	%
Technology (exclusive of amortization)		10,192		9	%		7,666		9	%		2,526			33	%
General and administrative		13,589		12	%		9,101		10	%		4,488			49	%
Depreciation and amortization		7,308		7	%		6,249		7	%		1,059			17	%
Total costs and expenses _(a)		94,909		85	%		69,824		79	%		25,085			36	%
Income before provision for income taxes		17,331		15	%		18,425		21	%		(1,094	)		(6	%)
Provision for income taxes		7,398		7	%		7,855		9	%		(457	)		(6	%)
Net income attributable to common stockholders	$	9,933		9	%	$	10,570		12	%	$	(637	)		(6	%)

NON-GAAP FINANCIAL MEASURES:
Adjusted EBITDA _(b)	$	32,371		29	%	$	28,250		32	%	$	4,121			15	%

(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 $24.0 million, or 27%, for the three months ended March 31, 2016 compared to the same period in 2015. The increase was primarily related to growth in Active Diners, which increased from 5.6 million to 7.0 million at the end of each period, driving an increase in Daily Average Grubs to 267,800 during the three months ended March 31, 2016 from 234,700 Daily Average Grubs during the same peri od in 2015. The growth in Active Diners and Daily Average Grubs was due primarily to marketing efforts, investments in the Company’s platform to drive more orders, and organic growth from word-of-mouth referrals. In addition, revenue increased during the three months ended March 31, 2016 compared to the same period in 2015 due to the inclusion of results from the Company’s recent acquisitions (see Note 3, Acquisitions ), as well as an increase in the Company’s average commission rates driven by higher commission rates on delivery services and a higher average order size.

Sales and Marketing

Sales and marketing expense increased by $4.7 million, or 20%, for the three months ended March 31, 2016 compared to the same period in 2015. The increase was primarily attributable to an increase of $2.8 million in the Company’s advertising campaigns across most channels in the first quarter of 2016. The increase in sales and marketing expense was also due to growth in the Company’s sales and marketing teams including related salaries, benefits, payroll taxes, stock-based compensation expense and bonuses.

Operations and Support

Operations and support expense increased by $12.3 million, or 54%, for the three months ended March 31, 2016 compared to the same period in 2015. This increase was primarily attributable to an increase in expenses related to delivery services, higher customer service and operations personnel costs to support higher order volume, and higher payment processing costs related to the growth in orders. Delivery expenses increased during the three months ended March 31, 2016 compared to the prior year due to organic growth of our delivery network and the acquisitions of DiningIn, Restaurants on the Run and Delivered Dish. In addition, payment processing costs increased $1.5 million, or 14%, for the three months ended March 31, 2016 compared to the same period in the prior year due to the 21% growth in Gross Food Sales.

Technology (exclusive of amortization)

Technology expense increased by $2.5 million, or 33%, for the three months ended March 31, 2016 compared to the same period in 2015. The increase was primarily attributable to growth in the Company’s technology team, including salaries, benefits, payroll taxes, stock-based compensation expense and bonuses, as well as higher consulting costs to support the growth and development of the Seamless and Grubhub platforms .

General and Administrative

General and administrative expense increased by $4.5 million, or 49%, for the three months ended March 31, 2016 compared to the same period in 2015. The increase was primarily attributable to higher stock-based compensation expense including the impact of the accelerated vesting of restricted stock awards to certain terminated employees in the first quarter of 2016, the inclusion of general and administrative expenses from the Company’s recent acquisitions, acquisition-related expenses and an increase in other miscellaneous expenses required to support growth in the business.

Depreciation and Amortization

Depreciation and amortization expense increased by $1.1 million, or 17%, for the three months ended March 31, 2016 compared to the same period in 2015. The increase was primarily attributable to the amortization of intangible assets acquired in the recent acquisitions.

Provision for Income Taxes

Income tax expense decreased by $0.5 million for the three months ended March 31, 2016 compared to the same period in 2015. The decrease was primarily due to the decrease in income before provision for income taxes due to the factors described above. The Company has provided income tax expense for the periods presented based on the expected annual effective tax rate.

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 and restructuring costs, income taxes, 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 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 becaus e 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. In addition, management believes Adjusted EBITDA and similar measures are widely used by investors, securities analysts, ratings agencies and oth er 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 March 31,
	2016		2015
	(in thousands)
Net income	$	9,933	$	10,570
Income taxes		7,398		7,855
Depreciation and amortization		7,308		6,249
EBITDA		24,639		24,674
Acquisition and restructuring costs _(a)		831		569
Stock-based compensation		6,901		3,007
Adjusted EBITDA	$	32,371	$	28,250

(a)	Acquisition and restructuring costs include transaction and integration-related costs, such as legal and accounting costs, associated with the acquisitions and restructuring initiatives.

LIQUIDITY AND CAPITAL RESOURCES

As of March 31, 2016, the Company had cash and cash equivalents of $203.3 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 $121.1 consisting of commercial paper and U.S. and non-U.S.-issued corporate and U.S. government agency 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.

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 and short term investments will be sufficient to meet its working capital requirements fo r 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 ade quacy 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 our 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 January 22, 2016, the Company’s Board of Directors approved a program that authorizes the repurchase of up to $100 million of our 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 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 three months ended March 31, 2016, the Company repurchased and retired 506,673 shares of our common stock at a weighted-average share price of $19.26, or an aggregate of $9.8 million.

Under the Credit Agreement, borrowings bear interest, at the Company’s option, based on LIBOR or an alternate a base rate plus a margin. In the case of LIBOR loans the margin ranges between 1.25% and 2.00% and, in the case of alternate base rate loans, between 0.25% and 1.0%, in each case, based upon the Company’s consolidated leverage ratio (as defined in the Credit Agreement). The Company is also required to pay a commitment fee on the undrawn portion available under the revolving loan facility of between 0.20% and 0.30% per annum, based upon the Company’s consolidated leverage ratio.

The Credit Agreement will be used for general corporate purposes, including funding working capital and acquisitions. The Company’s obligations under the Credit Agreement are secured by a lien on substantially all of the tangible and intangible property of the Company and by a pledge of all of the equity interests of the Company’s domestic subsidiaries.

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 could result in the amounts outstanding, if any, under the Credit Agreement becoming immediately due and payable and termination of the commitments.

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

	Three Months Ended March 31,
	2016		2015
	(in thousands)
Net cash provided by operating activities	$	18,666	$	30,422
Net cash provided by (used in) investing activities		14,375		(56,168	)
Net cash provided by financing activities		1,169		12,315

Cash Flows Provided by Operating Activities

For the three months ended March 31, 2016, net cash provided by operating activities was $18.7 million compared to $30.4 million for the same period in 2015. The decrease in cash flows from operations was driven primarily by changes in the Company’s operating assets and liabilities and a decrease in net income of $0.6 million, partially offset by an increase in non-cash expenses. The increase in non-cash expenses primarily related to and an increase of $3.9 million related to stock-based compensation and an increase in depreciation and amortization of $1.1 million, partially offset by the change in deferred taxes of $4.5 million. In addition, during the three months ended March 31, 2016 and 2015, significant changes in the Company’s operating assets and liabilities, net of the effects of business acquisitions, resulted from the following:

an increase in the restaurant food liability of $10.1 million due to growth in our business for the three months ended March 31, 2016 compared to an increase of $24.4 million for the three months ended March 31, 2015;

an increase in accrued expenses of $2.8 million during the three months ended March 31, 2016 primarily related to an increase in advertising bills payable, partially offset by a decrease in accrued payroll related to the payment of 2015 annual bonuses in the first quarter of 2016 compared to a decrease of $1.9 million during the three months ended March 31, 2015;

a decrease in accounts payable of $5.4 million for the three months ended March 31, 2016 due to timing of payments compared to a decrease of $1.8 million for the three months ended March 31, 2015; and

an increase in accounts receivable of $10.0 million primarily due to the timing of processor payments to the Company at quarter-end for the three months ended March 31, 2016 compared to an increase of $11.9 million for the three months ended March 31, 2015.

Cash Flows Provided by (Used in) Investing Activities

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

For the three months ended March 31, 2016, net cash provided by investing activities was $14.4 million compared to net cash used in investing activities $56.2 million for the same period in the prior year. The increase in net cash provided by investing activities during the three months ended March 31, 2016 was primarily due to acquisitions of businesses of $55.5 million during the three months ended March 31, 2015 and an increase in proceeds from maturities of short-term investments of $38.6 million, partially offset by an increase in purchases of short-term investments of $19.2 million.

Cash Flows Provided by Financing Activities

The Company’s financing activities during the periods presented consisted primarily of excess tax benefits related to stock-based compensation, repurchases of the Company’s common stock and proceeds from the exercise of stock options.

For the three months ended March 31, 2016, net cash provided by financing activities was $1.2 million compared to $12.3 million for the three months ended March 31, 2015 . The decrease in cash provided by financing activities during the three months ended March 31, 2016 as compared to the same period in the prior year primarily resulted from repurchases of the Company’s common stock of $9.8 million during the three months ended March 31, 2016 and a decrease in proceeds from stock option exercises of $4.8 million, partially offset by an increase in excess tax benefits related to stock-based compensation of $4.1 million.

Acquisitions

On May 5, 2016, the Company acquired LABite for $66.5 million in cash, net of cash acquired of $3.2 million.

On February 4, 2015, February 27, 2015 and December 4, 2015, the Company completed the acquisitions of restaurant delivery services, DiningIn, Restaurants on the Run and Delivered Dish, respectively. Aggregate consideration for the three acquisitions was a total of approximately $73.9 million in cash and 407,812 restricted shar es of our common stock, or an estimated total transaction value of approximately $89.9 million, net of cash acquired of $0.7 million, based on our closing share price on the respective closing dates.

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

The Company did not have any long-term borrowings as of March 31, 2016. The Company will be exposed to interest rate risk on its variable-rate debt under the Credit Agreement described above. 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 and U.S. government agency 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 4, Marketable 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 tests 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, si gnificant 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 part of our interim review for indicators of impairment, management analyzed potential changes in value based on operating results for the three months ended March 31, 2016 compared to expected results. Management also considered how our market capitalization, business growth and other factors used in the September 30, 2015 impairment analysis, could be impacted by changes in market conditions and economic events. Since September 30, 2015, the fair market value of our stock has increased slightly. Management considered these trends in performing its assessment of whether an interim impairment review was required. Based on this interim assessment, management concluded that as of March 31, 2016 , there were no events or changes in circumstances that indicated it was more likely than not that our fair value was below our carrying value. 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. As of March 31, 2016 , the Company had $396.2 million in goodwill.

OTHER INFORMATION

Off-Balance Sheet Arrangements

The Company did not have any off-balance sheet arrangements as of March 31, 2016.

Contractual Obligations

There were no material changes to the Company’s commitments under contractual obligations as compared to the contractual obligations disclosed in the Company’s 2015 Form 10-K.

Contingencies

For a discussion of certain litigation involving the Company, see Note 7, 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 three months ended March 31, 2016.

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 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 taxes have the greatest potential impact on the condensed consolidated financial statements. Therefore, these are considered to be the Company’s critical accounting policies and estimates.

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 Company’s 2015 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 i n this Quarterly Report on Form 10-Q and in Part I, Item 1A, Risk Factors , of the Company’s 2015 Form 10-K, that could affect the future results of the Company and could cause those results or other outcomes to differ materially from those expressed or imp lied 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 two-sided network;

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;

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 requi red 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(e) 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 March 31, 2016 , 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 March 31, 2016 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 March 31, 2016 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II— OTHER INFORMATION

Item 1. Legal Proceedings

For a description of the Company’s material pending legal proceedings, see Note 7, 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 2015 Form 10-K, which was filed with the Securities and Exchange Commission on February 26, 2016, other than as set forth below. However, you should carefully consider the factors discussed in the 2015 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.

Our credit agreement contains operating and financial covenants that may restrict our business and financing activities.

We are party to a credit agreement in connection with our secured, revolving credit facility. The obligations under the credit agreement are guaranteed by the Company and its domestic subsidiaries and secured by a lien on substantially all of the tangible and intangible property of the Company, and by a pledge of all of the equity interests of the Company’s domestic subsidiaries.

The credit agreement contains customary covenants that, among other things, require the Company to satisfy certain financial covenants and restrict the Company’s and its subsidiaries’ ability to, among other things, incur additional debt, create liens, make certain investments and acquisitions, pay dividends and make distributions, transfer and sell material assets and merge or consolidate. As a result, we are limited in the manner in which we conduct our business, and we may be unable to engage in favorable business activities. These restrictions could place us at a competitive disadvantage to competitors.

Our ability to compl y with these covenants may be affected by events beyond our control, and we may not be able to meet these covenants. From time to time, we may be required to seek waivers or amendments to the credit agreement to maintain compliance with these covenants, a nd there can be no certainty that any such waiver or amendment will be available, or what the cost of such waiver or amendment, if obtained, would be. Non-compliance with one or more of these covenants could result in any amounts outstanding under the cre dit agreement becoming immediately due and payable and termination of the commitments.

If we are unable to generate sufficient cash available to repay our debt obligations, if any, when they become due and payable, either when they mature or in the event of a default, we may not be able to obtain additional debt or equity financing on favorable terms, if at all.

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

Use of Proceeds

On April 3, 2014, the Company’s registration statement on Form S-1 (File No. 333-194219) was declared effective by the SEC for an initial public offering pursuant to which the Company issued and sold 4,000,000 shares of common stock at a public offering price of $26.00 per share. The offering resulted in net proceeds of $94.9 million after deducting underwriting discounts and commissions of $6.5 million and other offering expenses of approximately $2.6 million. There have been no material changes in the planned use of proceeds from the initial public offering from that described in the Company’s final prospectus filed with the SEC pursuant to Rule 424(b) under the Securities Act of 1933, as amended (the “Securities Act”) on April 7, 2014.

Unregistered Sales of Equity Securities

There were no sales of unregistered equity securities during the three months ended March 31, 2016.

Issuer Purchases of Equity Securities

On January 22, 2016, the Board of Directors of the Company 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 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. 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 three months ended March 31, 2016, the Company repurchased and retired $9.8 million of its common stock as follows:

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs (in thousands)
January 1, 2016 - January 31, 2016		148,073	$	18.67		148,073	$	97,235
February 1, 2016 - February 29, 2016		358,600	$	19.51		358,600	$	90,239
March 1, 2016 - March 31, 2016		—	$	—		—	$	90,239
Total		506,673	$	19.26		506,673

Item 3. Defaults Upon Senior Securities

Not applicable

Item 4. Mine Safety Disclosures

Not applicable

Item 5. Other Information

None

I tem 6: Exhibits

Incorporated by Reference

Exhibit

No.

Description

Form

File No.

Exhibit

Filing Date

Filed

Herewith

10.1

Stock Option Grant Notice and Stock Option Agreement between Grubhub Inc. (f/k/a Grubhub Seamless Inc.) and Margo Drucker, granted in substitution of options originally granted on July 9, 2012.

10.2

Stock Option Grant Notice and Stock Option Agreement between Grubhub Inc. (f/k/a Grubhub Seamless Inc.) and Margo Drucker relating to options granted on January 28, 2014.

10.3

Credit Agreement, dated as of April 29, 2016, by and among the Company, Grubhub Holdings Inc., Citibank, N.A. and BMO Capital Markets Corp., as co-lead arrangers and joint bookrunners, the other lenders party thereto, and Citibank, N.A., as administrative agent.

8-K

001-36389

10.1

May 3, 2016

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.

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.

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.

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.

101.INS

XBRL Instance Document.

101.SCH

XBRL Taxonomy Extension Schema Document.

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB

XBRL Taxonomy Extension Labels Linkbase Document.

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document.

S IGNATURES

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
		Chief Financial Officer and Treasurer (Principal Financial Officer and Principal Accounting Officer)

Date: May 9, 2016

Exhibit 10.1

GRUBHUB SEAMLESS INC.

2013 OMNIBUS INCENTIVE PLAN

STOCK OPTION GRANT NOTICE

In connection with the closing of the transactions contemplated by that Reorganization and Contribution Agreement by and among Seamless North America, LLC, GrubHub, Inc. and the other parties thereto dated May 19, 2013, (the “Reorganization Agreement”), and pursuant to its 2013 Omnibus Incentive Plan, as amended from time to time (the “ Plan ”), GrubHub Seamless Inc., a Delaware corporation (the “ Company” ), hereby assumes and substitutes the option to purchase common units of Seamless North America LLC granted as of the Date of Grant to the individual listed below (the “ Optionee” ), with an option to purchase the number of shares of the Company’s Common Stock (“ Shares” ) set forth below (the “ Option ”), subject to the terms and conditions set forth herein, in the Plan, and in the certain Stock Option Agreement attached hereto as Exhibit A (the “ Option Agreement ”), each of which is incorporated herein by reference. Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Stock Option Grant Notice (the “ Grant Notice ”) and the Option Agreement.

NOTICE OF STOCK OPTION GRANT

Optionee:

Margo Drucker

Grant Number:

10,312

Date of Grant:

July 9, 2012

Vesting Start Date:

July 1, 2012

Exercise Price per Share:

$2.60

Total Number of Shares Granted:

250,000

Term/Expiration Date:

July 9, 2022


Type of Option:	o Incentive Stock Option	ü Non-Qualified Stock Option

Vesting Schedule:	The Shares subject to this Option shall vest according to the following schedule, subject to any acceleration provided in Optionee’s employment agreement with the Company, or in Optionee’s letter agreement with the Company dated May 13, 2013 (together, the “Supporting Agreements”):

Number of Shares Subject to Options

Vesting Date

62,500 (representing 25% of total number of shares covered by the Option)

5,208.33 (representing 1/48 of the total number of shares covered by the Option)

July1, 2013

The first calendar day of each month for 36 consecutive months beginning on August 1, 2013

Optionee’s Supporting Agreements are incorporated herein and in the Option Agreement by reference. In the event of any conflict between the Supporting Agreements and this Grant Notice, the Option Agreement or the Plan, the terms of the Supporting Agreements shall control. By his or her signature below, Optionee agrees to be bound by the terms and conditions of the Plan, the Option Agreement, and this Grant Notice. Optionee has reviewed the Plan (including Sections 10(j) (“Non-competition”), 11(h) (“Lock-Up Period”), 11(i) (“Right of First Refusal”) and 11(j) (“Take-Along Rights”) thereof), the Option Agreement, and this Grant Notice in their entirety and fully understands the provisions of this Grant Notice, the Option Agreement, and the Plan. Optionee hereby agrees to accept as binding, conclusive, and final all decisions or interpretations of the Administrator of the Plan upon any questions arising under the Plan, the Option Agreement, and this Grant Notice. Optionee hereby acknowledges and agrees that the Plan, this Grant Notice and the Option Agreement replace in their entirety any prior plan, grant notice or option agreement relating to the original option.

GRUBHUB SEAMLESS INC.:		OPTIONEE.:

By:	/s/ Adam DeWitt	By:	/s/ Margo Drucker
Name:	Adam DeWitt	Name:	Margo Drucker
Title:	CFO	Address:
Address:	1065 Avenue of the Americas	Email Address:	mdrucker@seamless.com
	15 ^th Floor
	New York, NY 10018

STOCK OPTION AGREEMENT

Pursuant to the Stock Option Grant Notice (the “ Grant Notice ”) to which this Stock Option Agreement (the “ Agreement ”) is attached, GrubHub Seamless Inc., a Delaware corporation (the “ Company ”), has granted to Optionee (as set forth in the Grant Notice) an option to purchase the number of shares of Common Stock (“ Shares ”) under the GrubHub Seamless Inc. 2013 Omnibus Incentive Plan (the “ Plan ”) indicated in the Grant Notice, at the exercise price per share set forth in the Grant Notice (the “ Exercise Price ”).

1. Plan and Supporting Agreements Incorporated By Reference . Notwithstanding anything to the contrary in this Option Agreement, this grant of an Option is subject to the terms, definitions, and provisions of the Plan, which is incorporated herein by reference. In addition, the Supporting Agreements (as defined in the Grant Notice) are incorporated herein by reference. In the event of any conflict between the Supporting Agreements and the Grant Notice, this Option Agreement or the Plan, the terms of the Supporting Agreements shall control.

2. Option Type . If designated in the Grant Notice as an Incentive Stock Option, this Option is intended to qualify as an Incentive Stock Option as defined in Section 422 of the Code; provided , however , that to the extent that the aggregate Fair Market Value of the Common Stock with respect to which Incentive Stock Options (within the meaning of Code Section 422, but without regard to Code Section 422(d)), including the Option, are exercisable for the first time by Optionee during any calendar year (under the Plan and all other incentive stock option plans of the Company (or any “parent corporation” or “subsidiary corporation” thereof within the meaning of Code Sections 424(e) or 424(f), respectively)) exceeds one hundred thousand dollars ($100,000), such options shall be treated as not qualifying under Code Section 422, but rather shall be treated as Non-Qualified Stock Options to the extent required by Code Section 422. The rule set forth in the preceding sentence shall be applied by taking options into account in the order in which they were granted. For purposes of these rules, the Fair Market Value of the Common Stock shall be determined as of the time the Option with respect to such Common Stock is granted.

3. Exercise of Option . This Option is exercisable as follows:

a. Right to Exercise .

i. This Option shall be exercisable cumulatively according to the vesting schedule set out in the Grant Notice. For purposes of this Option Agreement, the Shares subject to this Option shall vest based on Optionee’s continued status as a Service Provider, unless otherwise determined by the Administrator.

ii. This Option may not be exercised for a fraction of a Share.

iii. In the event of Optionee’s death, Disability, or other termination of Optionee’s status as a Service Provider, the exercisability of the Option shall be governed by Sections 7, 8, 9 and 10 hereof, subject to the limitations in this Section 3.

iv. In the event the exercise of the Option following the termination of Optionee’s status as a Service Provider would be prohibited at any time solely because the issuance of shares would violate the registration requirements under the Securities Act, then the Option shall terminate on the earlier of (i) the Term/Expiration Date of the Option as set forth in the Grant Notice or (ii) the expiration of a period of three (3) months after the termination of Optionee’s status as a Service Provider during which the exercise of the Option would not be in violation of such registration requirements.

v. In no event may this Option be exercised after the Term/Expiration Date of this Option as set forth in the Grant Notice.

b. Method of Exercise . This Option shall be exercisable by written notice to the Company (the “ Exercise Notice” ). The Exercise Notice shall state the number of Shares for which the Option is being exercised, and such other representations and agreements with respect to such Shares of Common Stock as may be required by the Company pursuant to the provisions of the Plan. The Exercise Notice shall be signed by Optionee and shall be delivered in person or by certified mail to the Secretary of the Company or such other authorized representative of the Company. The Exercise Notice shall be accompanied by payment of the Exercise Price, including payment of any applicable withholding tax. No Shares shall be issued pursuant to the exercise of an Option unless the requirements of Section 10(g) of the Plan (“Conditions on Delivery of Stock”) have been satisfied.

4. Optionee’s Representations . If the Shares purchasable pursuant to the exercise of this Option have not been registered under the Securities Act, at the time this Option is exercised, Optionee shall, if required by the Company, concurrently with the exercise of all or any portion of this Option, deliver to the Company his or her Investment Representation Statement in the form attached hereto as Schedule 1 .

5. Method of Payment . Payment of the Exercise Price shall be by any of the following at the election of Optionee:

a. cash ;

b. check;

c. with the consent of the Administrator, delivery of an irrevocable and unconditional undertaking by a broker acceptable to the Company to deliver promptly to the Company sufficient funds to pay the exercise price and any required tax withholding, or delivery by Optionee to the Company of a copy of irrevocable and unconditional instructions to a broker acceptable to the Company to deliver promptly to the Company cash or a check sufficient to pay the exercise price and any required tax withholding.

d. with the consent of the Administrator, delivery (either by actual delivery or attestation) of Shares owned by Optionee valued at their Fair Market Value, provided (A) such method of payment is then permitted under Applicable Laws, (B) such Shares, if acquired directly from the Company, were owned by Optionee for such minimum period of time, if any, as may be established by the Company at any time, and (C) such Shares are not subject to any repurchase, forfeiture, unfulfilled vesting or other similar requirements;

e. with the consent of the Administrator, surrender of Shares then issuable upon exercise of the Option valued at their Fair Market Value on the date of exercise;

f. with the consent of the Administrator, delivery of a promissory note of Optionee to the Company on terms determined by the Administrator;

g. with the consent of the Administrator, property of any kind which constitutes good and valuable consideration as determined by the Administrator;

h. with the consent of the Administrator, any combination of the foregoing methods of payment.

6. Restrictions on Exercise . This Option may not be exercised until the Plan has been approved by the stockholders of the Company. If the issuance of Shares upon such exercise or if the method of payment for such Shares would constitute a violation of any applicable federal or state securities or other law or regulation, then the Option may also not be exercised. The Company may require Optionee to make any representation and warranty to the Company as may be required by any applicable law or regulation before allowing the Option to be exercised.

7. Termination of Relationship . If Optionee ceases to be a Service Provider (other than by reason of Optionee’s death or Disability), Optionee may exercise this Option during the three (3) month period immediately following the date Optionee ceases to be a Service Provider to the extent the Option was vested on such date (and in no event later than the expiration date of the term of this Option as set forth in the Grant Notice). To the extent that Optionee does not exercise this Option within the time specified herein, the Option shall terminate.

8. Disability of Optionee . If Optionee ceases to be a Service Provider as a result of his or her Disability, Optionee may exercise the Option to the extent the Option is vested on the date of exercise, but only within twelve (12) months from the date Optionee ceases to be a Service Provider (and in no event later than the expiration date of the term of this Option as set forth in the Grant Notice). To the extent that Optionee does not exercise this Option within the time specified herein, the Option shall terminate.

9. Death of Optionee . If Optionee ceases to be a Service Provider as a result of the death of Optionee, the vested portion of the Option may be exercised at any time within twelve (12) months following the date of death (and in no event later than the expiration date of the term of this Option as set forth in the Grant Notice) by Optionee’s estate or by a person who acquires the right to exercise the Option by bequest or inheritance. To the extent that the Option is not exercised within the time specified herein, the Option shall terminate.

10. Change of Control . In the event of a Change of Control, fifty percent (50%) of the then unvested portion of the Option (which has not theretofore been terminated pursuant to the Sections 7, 8, 9, or 11 hereof), shall vest concurrently with the consummation of such event and the remaining portion of the Option shall remain eligible to vest on the scheduled Vesting Dates as set forth in the Grant Notice. Additionally, in the event that the Optionee’s employment with the Company is terminated without cause or the Optionee resigns due to a Material Diminution, each within six months following a Change of Control, the remaining unvested portion of the Option shall immediately vest in full. For purposes of this Section 10, “Material Diminution” shall mean: (a) a material reduction in the Optionee’s assigned duties, which is not cured within 30 days of written notice by the Optionee to the Company of the facts which constitute the Optionee’s contention of a material reduction in her duties, such written notice to be given no later than 30 days after the occurrence of facts constituting such material reduction; (b) a relocation of the headquarters location of the Company to a location greater than 50 miles from New York City; or (c) a material reduction in the Optionee’s base salary or target annual bonus.

11 . Early Termination of Option . Notwithstanding anything herein to the contrary, the Administrator may determine in its sole discretion that the Option is terminated as of the date Optionee ceases to be a Service Provider for any reason with regard to any portion of the Option that is not vested as of such date.

12. Non-Transferability of Option . This Option may not be transferred in any manner except by will or by the laws of descent or distribution. It may be exercised during the lifetime of Optionee only by Optionee. The terms of this Option shall be binding upon the executors, administrators, heirs, successors, and assigns of Optionee.

13. Term of Option . This Option may be exercised only within the term set out in the Grant Notice.

14. Restrictions on Shares; Stockholders’ Agreement . Optionee hereby agrees that any Shares purchased upon the exercise of the Option shall be subject to such terms and conditions as the Administrator shall determine in its sole discretion, including, without limitation, restrictions on the transferability of Shares, the right of the Company to require that Shares be transferred in the event of certain transactions, call rights, tag-along rights, bring-along rights, redemption and co-sale rights and voting requirements. Such terms and conditions may, in the Administrator’s sole discretion, be contained in the Exercise Notice with respect to the Option or in such other agreement as the Administrator shall determine and which Optionee hereby agrees to enter into at the request of the Company. Optionee hereby agrees that, if requested by the Administrator, Optionee shall execute and deliver to the Company a joinder to the Stockholders’ Agreement upon the exercise (in whole or in part) of the Option.

15. Incorporation of Certain Plan Provisions . Without limiting the generality of any provision of this Agreement, Sections 10(j) (“Non-competition”), 11(h) (“Lock-Up Period”), 11(i) (“Right of First Refusal”) and 11(j) (“Take-Along Rights”) of the Plan are hereby incorporated herein by this reference.

16. Rules Particular To Specific Countries .

a. Generally . Optionee shall, if required by the Administrator, enter into an election with the Company or a Subsidiary (in a form approved by the Company) under which any liability to the Company’s (or a Subsidiary’s) Tax Liability, including, but not limited to, National Insurance Contributions (“ NICs ”) and the Fringe Benefit Tax (“ FBT ”), is transferred to and met by Optionee. For purposes of this Section 15, Tax Liability shall mean any and all liability under applicable non-U.S. laws, rules, or regulations from any income tax, the Company’s (or a Subsidiary’s) NICs, FBT, or similar liability under non-U.S. laws, and Optionee’s NICs, FBT, or similar liability that are attributable to: (A) the grant or exercise of, or any other benefit derived by Optionee from the Option; (B) the acquisition by Optionee of the Shares on exercise of the Option; or (C) the disposal of any Shares acquired upon exercise of the Option.

b. Tax Indemnity . Optionee shall indemnify and keep indemnified the Company and any of its Subsidiaries from and against any Tax Liability.

17. Not a Contract or Guarantee of Employment . Subject to applicable law, nothing in this Option Agreement, in the Grant Notice or in the Plan shall confer upon Optionee any right to continue to serve as a Service Provider, nor shall it interfere in any way with the Company’s right to terminate Optionee’s Service Provider relationship at any time, with or without cause and with or without prior notice.

18. Optionee Acknowledgement . Optionee represents that he or she has read this Agreement and is familiar with its terms and provisions. Optionee hereby agrees to accept as binding, conclusive, and final all decisions or interpretations of the Board or other administrator of the Plan upon any questions arising under this Agreement.

* * * * *

SCHEDULE 1

INVESTMENT REPRESENTATION STATEMENT


OPTIONEE	:	Margo Drucker
COMPANY	:	GrubHub Seamless Inc.
SECURITY	:	Common Stock
AMOUNT	:
DATE	:

In connection with the purchase of the above-listed shares of Common Stock (the “ Securities ”) of GrubHub Seamless Inc., a Delaware corporation (the “ Company ”), the undersigned (the “ Optionee ”) represents to the Company the following:

1. Optionee is aware of the Company’s business affairs and financial condition and has acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire the Securities. Optionee is acquiring these Securities for investment for Optionee’s own account only and not with a view to, or for resale in connection with, any “distribution” thereof within the meaning of the Securities Act of 1933, as amended (the “ Securities Act ”).

2. Optionee acknowledges and understands that the Securities constitute “restricted securities” under the Securities Act and have not been registered under the Securities Act in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of Optionee’s investment intent as expressed herein. Optionee understands that, in the view of the Securities and Exchange Commission, the statutory basis for such exemption may be unavailable if Optionee’s representation was predicated solely upon a present intention to hold these Securities for the minimum capital gains period specified under tax statutes, for a deferred sale, for or until an increase or decrease in the market price of the Securities, or for a period of one (1) year or any other fixed period in the future. Optionee further understands that the Securities must be held indefinitely unless they are subsequently registered under the Securities Act or an exemption from such registration is available. Optionee further acknowledges and understands that the Company is under no obligation to register the Securities. Optionee understands that the certificate evidencing the Securities will be imprinted with a legend which prohibits the transfer of the Securities unless they are registered or such registration is not required in the opinion of counsel satisfactory to the Company and any other legend required under applicable securities laws or agreements.

3. Optionee is familiar with the provisions of Rule 701 and Rule 144, each promulgated under the Securities Act, which, in substance, permit limited public resale of “restricted securities” acquired, directly or indirectly, from the issuer thereof, in a non-public offering subject to the satisfaction of certain conditions. Rule 701 provides that if the issuer qualifies under Rule 701 at the time of the grant of the Option to Optionee, the exercise will be exempt from registration under the Securities Act. In the event the Company becomes subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the “ Exchange Act” ), ninety (90) days thereafter (or such longer period as any market stand-off agreement may require) the Securities exempt under Rule 701 may under present law be resold, subject to the satisfaction of certain of the conditions specified by Rule 144, including: (1) the resale being made through a broker in an unsolicited “broker’s transaction” or in transactions directly with a market maker (as this term is defined under the Exchange Act); and, in the case of an affiliate, (2) the availability of certain public information about the Company, (3) the amount of Securities being sold during any three (3) month period not exceeding the limitations specified in Rule 144(e), and (4) the timely filing of a Form 144, if applicable.

In the event that the Company does not qualify under Rule 701 at the time of grant of the Option to Optionee, then the Securities may be resold in certain limited circumstances subject to the provisions of Rule 144, which requires the resale to occur not less than six (6) months, or, in the event the Company is not subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, not less than one (1) year, after the later of the date the Securities were sold by the Company or the date the Securities were sold by an affiliate of the Company, within the meaning of Rule 144; and, in the case of acquisition of the Securities by an affiliate, the satisfaction of the conditions set forth in Sections 1, 2, 3, and 4 of the paragraph immediately above or, in the case of a non-affiliate who subsequently holds the Securities less than one year, the satisfaction of the conditions set forth in Section 2 of the paragraph immediately above.

4. Optionee further understands that in the event all of the applicable requirements of Rule 70 1 or 144 are not satisfied, registration under the Securities Act, compliance with Regulation A, or some other registration exemption will be required; and that, notwith standing the fact that Rules 701 and 144 are not exclusive, the Staff of the Securities and Exchange Commission has expressed its opinion that persons proposing to sell private placement securities other than in a registered offering and otherwise than pursuant to Rules 70 1 or 144 wi ll have a substantial burden of proof in establishing that an exemption from registration is available for such offers or sales, and that such persons and their respective brokers who participate in such transactions do so at their own risk. Optionee understands that no assurances can be given that any such other registration exemption will be available in such event.


Signature of Optionee:

Margo Drucker

Date:

Exhibit 10.2

GRUBHUB SEAMLESS INC.

2013 OMNIBUS INCENTIVE PLAN

STOCK OPTION GRANT NOTICE

Pursuant to its 2013 Omnibus Incentive Plan, as amended from time to time (the “ Plan ”), GrubHub Seamless Inc., a Delaware corporation (the “ Company ”), hereby grants to the individual listed below (the “ Optionee ”), an option to purchase the number of shares of the Company’s Common Stock (“ Shares ”) set forth below (the “ Option ”), subject to the terms and conditions set forth herein, in the Plan, and in the certain Stock Option Agreement attached hereto as Exhibit A (the “ Option Agreement ”), each of which is incorporated herein by reference. Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Stock Option Grant Notice (the “ Grant Notice ”) and the Option Agreement.

NOTICE OF STOCK OPTION GRANT

Optionee:

Margo Drucker

Grant Number:

30060

Date of Grant:

January 28, 2014

Vesting Start Date:

February 1, 2014

Exercise Price per Share:

$6.85

Total Number of Shares Granted:

101,200

Term/Expiration Date:

January 27, 2024


Type of Option:	o Incentive Stock Option	x Non-Qualified Stock Option

Vesting Schedule:	The Shares subject to this Option shall vest according to the following schedule:

Number of Shares Subject to Options

Vesting Date

25,300 (representing 25% of total number of shares covered by the Option)

2,108.33 (representing 1/48 of the total number of shares covered by the Option)

February 1, 2016

The first calendar day of each month for 36 consecutive months beginning on March 1, 2016

By his or her signature below, Optionee agrees to be bound by the terms and conditions of the Plan, the Option Agreement, and this Grant Notice. Optionee has reviewed the Plan (including Sections 10(j) (“Non-competition”), 11(h) (“Lock-Up Period”), 11(i) (“Right of First Refusal”) and 11(j) (“Take-Along Rights”) thereof), the Option Agreement, and this Grant Notice in their entirety and fully understands the provisions of this Grant Notice, the Option Agreement, and the Plan. Optionee hereby agrees to accept as binding, conclusive, and final all decisions or interpretations of the Administrator of the Plan upon any questions arising under the Plan, the Option Agreement, and this Grant Notice.

GRUBHUB SEAMLESS INC.:		OPTIONEE.

By:	/s/ Matthew Maloney	By:	/s/ Maggie Drucker
Name:	Matthew Maloney	Name:	Maggie Drucker
Title:	CEO	Address:
Address:	111 W. Washington St., Ste. 2100 Chicago, IL 60602	Email Address:		mdrucker@grubhub.com

STOCK OPTION AGREEMENT

Pursuant to the Stock Option Grant Notice (the “ Grant Notice” ) to which this Stock Option Agreement (the “ Agreement ”) is attached, GrubHub Seamless Inc., a Delaware corporation (the “ Company” ), has granted to Optionee (as set forth in the Grant Notice) an option to purchase the number of shares of Common Stock (“ Shares” ) under the GrubHub Seamless Inc. 2013 Omnibus Incentive Plan (the “ Plan” ) indicated in the Grant Notice, at the exercise price per share set forth in the Grant Notice (the “ Exercise Price” ).

1. Plan Incorporated By Reference. Notwithstanding anything to the contra1y in this Option Agreement, this grant of an Option is subject to the terms, definitions, and provisions of the Plan, which is incorporated herein by reference.

2. Option Type . If designated in the Grant Notice as an Incentive Stock Option, this Option is intended to qualify as an Incentive Stock Option as defined in Section 422 of the Code; provided , however, that to the extent that the aggregate Fair Market Value of the Common Stock with respect to which Incentive Stock Options (within the meaning of Code Section 422, but without regard to Code Section 422(d)), including the Option, are exercisable for the first time by Optionee during any calendar year (under the Plan and all other incentive stock option plans of the Company (or any “parent corporation” or “subsidiary corporation” thereof within the meaning of Code Sections 424(e) or 424(f), respectively)) exceeds one hundred thousand dollars ($100,000), such options shall be treated as not qualifying under Code Section 422, but rather shall be treated as Non-Qualified Stock Options to the extent required by Code Section 422. The rule set forth in the preceding sentence shall be applied by taking options into account in the order in which they were granted. For purposes of these rules, the Fair Market Value of the Common Stock shall be determined as of the time the Option with respect to such Common Stock is granted.

3. Exercise of Option . This Option is exercisable as follows:

a. Right to Exercise.

ii. This Option may not be exercised for a fraction of a Share.

iv. In the event the exercise of the Option following the termination of Optionee ‘s status as a Service Provider would be prohibited at any time solely because the issuance of shares would violate the registration requirements under the Securities Act, then the Option shall terminate on the earlier of (i) the Term /Expiration Date of the Option as set forth in the Grant Notice or (ii) the expiration of a period of three (3) months after the termination of Optionee’s status as a Service Provider during which the exercise of the Option would not be in violation of such registration requirements.

v. In no event may this Option be exercised after the Term/Expiration Date of this Option as set forth in the Grant Notice.

4. Optionee’s Representations . If the Shares purchasable pursuant to the exercise of this Option have not been registered under the Securities Act, at the time this Option is exercised , Optionee shall, if required by the Company, concurrently with the exercise of all or any portion of this Option, deliver to the Company his or her Investment Representation Statement in the form attached hereto as Schedule I.

5. Method of Payment . Payment of the Exercise Price shall be by any of the following at the election of Optionee:

a. cash ;

b. check;

e. with the consent of the Administrator, surrender of Shares then issuable upon exercise of the Option valued at their Fair Market Value on the date of exercise;

f. with the consent of the Administrator, delivery of a promissory note of Optionee to the Company on terms determined by the Administrator;

g. with the consent of the Administrator, property of any kind which constitutes good and valuable consideration as determined by the Administrator;

h. with the consent of the Administrator, any combination of the foregoing methods of payment.

10. Change in Control . If within the period beginning 45 days prior to and ending 12 months after the occurrence of a Change in Control, Optionee’s employment is terminated by the Company without Cause, or Optionee terminates his/her employment for Good Reason, then 100% of any then-unvested options granted hereunder shall immediately accelerate and become fully vested and exercisable, and shall continue to be fully exercisable for no less than three months following the date of such termination, provided that in no event will Optionee be entitled to exercise any such option following the expiration of the original term set forth in the Stock Option Grant Notice.

“Cause” shall mean: (i) the Optionee’s willful unauthorized use or disclosure of the confidential information or trade secrets of the Company or its affiliates; (ii) the Optionee’s material breach of this Agreement or any other agreement between the Optionee and the Company or its affiliates; (iii) the Optionee’s material failure to comply with the written policies or rules of the Company or its affiliates; (iv) the Optionee’s commission of, conviction for, or plea of “guilty” or “no contest” to, any felony or a misdemeanor involving moral turpitude under the laws of the United States or any State; (v) the Optionee’s gross misconduct in the performance of his/her duties hereunder; (vi) the Optionee’s continuing failure to perform assigned duties consistent with his/her title and position; (vii) the Optionee’s failure to cooperate in good faith with a governmental or internal investigation of the Company or its affiliates or their respective managers, directors, officers or employees, if the Company has requested the Optionee’s cooperation therewith; or

(viii) the Optionee’s commission of any act offensive to the reasonable conscience that results in material reputational harm to the Company.

“without Cause” shall mean any termination by the Company of the Optionee’s employment which does not constitute a termination for Cause, as defined above, and does not result from the death or disability of the Optionee.

“Good Reason” shall mean that the Optionee has complied with the Good Reason Process (hereinafter defined) following the occurrence of any one or more of the following events without the consent of the Optionee: (i) a diminution in the Optionee’s cash compensation (other than in connection with a diminution in cash compensation that is proportionately applied to all senior executives of the Company), unless the Company is a publicly-traded company on the date of such diminution, in which case such diminution in the Optionee’s cash compensation must be more than ten percent (10%) (other than in connection with a diminution in cash compensation that is proportionately applied to all senior executives of the Company); (ii) a change in the geographic location at which the Optionee currently provides services to the Company by more than fifty (50) miles (provided that moving the Company’s corporate headquarters shall not constitute a change in geographic location, so long as the Optionee continues to be able to provide services to the Company from a location not more than fifty (50) miles from the location where the Optionee currently provides services); or (iii) a material change in the Optionee’s authority, duties or responsibilities at the Company (including any successor company) at any time following the Closing. “Good Reason Process” shall mean that (1) the Optionee reasonably determines in good faith that a “Good Reason” condition has occurred; (2) the Optionee notifies the Company in writing of the first occurrence of the Good Reason condition within thirty (30) days after the first occurrence of such condition; (3) the Optionee cooperates in good faith with the Company’s efforts, for a period of thirty (30) days following such notice (the “Cure Period”) to remedy the condition; (4) the Good Reason condition continues to exist following the Cure Period; and (5) the Optionee terminates employment with the Company within thirty (30) days after the end of the Cure Period. If the Company cures the Good Reason condition during the Cure Period, Good Reason will be deemed not to have occurred.

11. Early Termination of Option . Notwithstanding anything herein to the contrary, the Administrator may determine in its sole discretion that the Option is terminated as of the date Optionee ceases to be a Service Provider for any reason with regard to any portion of the Option that is not vested as of such date.

13. Term of Option . This Option may be exercised only within the term set out in the Grant Notice.

16. Rules Particular To Specific Countries .

a. Generally . Optionee shall, if required by the Administrator, enter into an election with the Company or a Subsidiary (in a form approved by the Company) under which any liability to the Company’s (or a Subsidiary’s) Tax Liability, including, but not limited to, National Insurance Contributions (“ NICs” ) and the Fringe Benefit Tax (“FBT”), is transferred to and met by Optionee. For purposes of this Section 15, Tax Liability shall mean any and all liability under applicable non-U.S. laws, rules, or regulations from any income tax, the Company’s (or a Subsidiary’s) NICs, FBT, or similar liability under non-U.S. laws, and Optionee’s NICs, FBT, or similar liability that are attributable to: (A) the grant or exercise of, or any other benefit derived by Optionee from the Option; (B) the acquisition by Optionee of the Shares on exercise of the Option; or (C) the disposal of any Shares acquired upon exercise of the Option.

b. Tax Indemnity . Optionee shall indemnify and keep indemnified the Company and any of its Subsidiaries from and against any Tax Liability.

17. Not a Contract or Guarantee of Employment . Subject to applicable law, nothing in this Option Agreement, in the Grant Notice or in the Plan shall confer upon Optionee any right to continue to serve as a Service Provider, nor shall it interfere in any way with the Company ‘ s right to terminate Optionee ’ s Service Provider relationship at any time, with or without cause and with or without prior notice.

* * * * *

SCHEDULE 1

INVESTMENT REPRESENTATION STATEMENT


OPTIONEE	:
COMPANY	:	GrubHub Seamless Inc.
SECURITY	:	Common Stock
AMOUNT	:
DATE	:

In connection with the purchase of the above-listed shares of Common Stock (the “ Securities ”) of GrubHub Seamless Inc., a Delaware corporation (the “Company”), the undersigned (the “ Optionee ”) represents to the Company the following:

2. Optionee acknowledges and understands that the Securities constitute “restricted securities” under the Securities Act and have not been registered under the Securities Act in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of Optionee’s investment intent as expressed herein. Optionee understands that, in the view of the Securities and Exchange Commission, the statutory basis for such exemption may be unavailable if Optionee’s representation was predicated solely upon a present intention to hold these Securities for the minimum capital gains period specified under tax statutes, for a deferred sale, for or until an increase or decrease in the market price of the Securities, or for a period of one (I) year or any other fixed period in the future. Optionee further understands that the Securities must be held indefinitely unless they are subsequently registered under the Securities Act or an exemption from such registration is available. Optionee further acknowledges and understands that the Company is under no obligation to register the Securities. Optionee understands that the certificate evidencing the Securities will be imprinted with a legend which prohibits the transfer of the Securities unless they are registered or such registration is not required in the opinion of counsel satisfactory to the Company and any other legend required under applicable securities laws or agreements.


Signature of Optionee:

[OPTIONEE]

Date:

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 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: May 9, 2016

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.;

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
		Chief Financial Officer and Treasurer

Date: May 9, 2016

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 March 31, 2016 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:

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

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: May 9, 2016

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 March 31, 2016 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:

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

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
		Chief Financial Officer and Treasurer

Date: May 9, 2016