Grubhub Inc. (GRUB) 1Q Preview: Expect in-line 1Q Results. 17 April 2017 Americas/United States Equity Research Consumer Internet

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1 Americas/United States Equity Research Consumer Internet Rating OUTPERFORM Price (13-Apr-17, US$) Target price (US$) week price range (US$) Market cap (US$ m) 2, Target price is for 12 months. Research Analysts. Paul Bieber Stephen Ju Vikram Kesavabhotla Christopher Ford Grubhub Inc. (GRUB) PRE RESULTS COMMENT 1Q Preview: Expect in-line 1Q Results Action/Event: We expect GRUB to report rev./adj. EBITDA of $153.2mn/$39.6mn vs. the Street at $153.3mn/$40.1mn. GRUB shares are down approx. 19% (vs. S&P %) since the 4Q16 print primarily due to concerns about adverse weather in 1Q and concerns regarding the competitive landscape. We recognize that weather limits 1Q upside and believe the recent sell-off discounts an in-line to bottom end of guidance range 1Q report. We expect 1Q active diner growth to be a key sentiment driver given a difficult 2Q gross food sales (GFS) y/y comp and the importance of active diner growth in driving GFS in Q weather report: Chicago was warmer and experienced less precipitation in 1Q17 vs. 1Q16, which limits 1Q upside. However, weather fears may be overdone as most of the unfavorable weather trends took place before the company provided guidance on February 8 th so weather headwinds likely diminished after the 4Q call, in our view. Our analysis did not indicate any notable weather differences on a y/y basis for NYC. 1Q Key Metrics: Our model assumes: 1) LTM Active Diners - 8.5mn (+22% y/y); 2) Grubs per Active - 3.4x (-1% y/y); 3) Daily Grubs 327K (+22% y/y); 4) Average order value - $30.71 (+5% y/y); 5) GFS $904.0mn (+27% y/y); 5) Take Rate 16.9%; and 6) EBITDA per Grub -$1.34 (+1% y/y). Maintain Outperform and $48 Target Price: We like the underpenetrated market opportunity, high incremental margins, increasing take rates, and EPS upside option value if tax reform occurs. While valuation is a risk, we are comforted by a three year EPS growth CAGR of 20+%. Our $48 target price is based on an avg. of 17x 2018 EV/EBITDA, 40x 2018 P/E, and our DCF and implies a 36x 2018 P/E (and 1.7 PEG). Financial and valuation metrics Year 12/16A 12/17E 12/18E 12/19E EPS (Excl. ESO) (US$) EPS (CS adj., ) Prev. EPS (CS adj., US$) P/E (CS adj.) (x) P/E rel. (CS adj., %) Revenue (US$ m) EBITDA (US$ m) Net Debt (US$ m) OCFPS (US$) P/OCF (x) Number of shares (m) Price/Sales (x) 5.63 BV/share (Next Qtr., US$) 11.6 P/BVPS (x) 3.0 Net debt (Next Qtr., US$ m) Dividend (current, US$) - Dividend yield (%) - Source: Company data, Thomson Reuters, Credit Suisse estimates DISCLOSURE APPENDIX AT THE BACK OF THIS REPORT CONTAINS IMPORTANT DISCLOSURES, ANALYST CERTIFICATIONS, LEGAL ENTITY DISCLOSURE AND THE STATUS OF NON-US ANALYSTS. US Disclosure: Credit Suisse does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.

2 Grubhub Inc. (GRUB) Price (13 Apr 2017): US$34.87; Rating: OUTPERFORM; Target Price: US$48.00; Analyst: Paul Bieber Income Statement 12/16A 12/17E 12/18E 12/19E Revenue (US$ m) Sales EBITDA Operating profit Recurring profit Cash Flow 12/16A 12/17E 12/18E 12/19E Cash flow from operations CAPEX (37) (27) (33) (38) Free cashflow to the firm Cash flow from investments (46) (27) (33) (38) Net share issue(/repurchase) (1) Dividends paid Issuance (retirement) of debt Other 21 0 (0) (0) Cashflow from financing activities 19 0 (0) (0) Effect of exchange rates (1) Changes in Net Cash/Debt Net debt at end (240) (355) (504) (674) Balance Sheet ($US) 12/16A 12/17E 12/18E 12/19E Assets Other current assets Total current assets Total assets 1,198 1,319 1,474 1,655 Liabilities Short-term debt Total current liabilities Long-term debt Total liabilities Shareholder equity 972 1,069 1,192 1,346 Total liabilities and equity 1,198 1,319 1,474 1,655 Net debt (240) (355) (504) (674) Per share 12/16A 12/17E 12/18E 12/19E No. of shares (wtd avg) CS adj. EPS Prev. EPS (US$) Dividend (US$) Free cash flow per share Earnings 12/16A 12/17E 12/18E 12/19E Sales growth (%) EBIT growth (%) Net profit growth (%) EPS growth (%) EBIT margin (%) Valuation 12/16A 12/17E 12/18E 12/19E EV/Sales (x) EV/EBIT (x) P/E (x) Quarterly EPS 2016A Q Q Q Q E E Company Background GrubHub is an online and mobile food ordering marketplace that enables consumers to efficiently order food for take-out and delivery from local restaurants. Blue/Grey Sky Scenario Our Blue Sky Scenario (US$) Our bull case assumes less revenue deceleration than expected and multiple expansion. Our blue sky scenario represents 50x a higher 2018 EPS. Our Grey Sky Scenario (US$) This scenario assumes lower than expected margin expansion, lower revenue growth due to lower take rate growth and multiple compression on competitive concerns and doubts on investment in delivery. Our grey sky scenario represent 20x a lower 2018 EPS Share price performance Ju l O c t Ja n A p r GRU B.N S& P IN D EX On 13-Apr-2017 the S&P 500 INDEX closed at Daily Apr13, Apr13, 2017, 04/13/16 = US$24.94 Source: Company data, Thomson Reuters, Credit Suisse estimates Grubhub Inc. (GRUB) 2

3 Expect in-line 1Q results We expect Grubhub to report rev./adj. EBITDA of $153.2mn/$39.6mn vs. the Street at $153.3mn/$40.1mn. Grubhub shares are down approximately 19% (vs. S&P %) since the 4Q16 print primarily due to concerns about adverse weather in Chicago and NYC in 1Q and concerns regarding the competitive landscape. While our recent meeting with management increases our confidence that competitive fears may be overdone nearterm (See Takeaways from Management Meeting), we recognize that weather limits 1Q upside and believe the recent sell-off discounts an in-line to bottom end of guidance range 1Q report. We expect 1Q active diner growth to be a key sentiment driver given a difficult 2Q gross food sales (GFS) y/y comp and the importance of active diner growth in driving GFS in Our investment thesis remains unchanged. We like the underpenetrated market opportunity, high incremental margins, increasing take rates, and EPS upside option value if tax reform occurs. While valuation is a risk, we are comforted by a three year EPS growth CAGR of 20+%, assuming a 41% tax rate. Figure 1: Grubhub 1Q17, 2Q17 and 2017 Key Metrics vs. Street 1Q17 1Q17 1Q17 2Q17 2Q CS Estimate Guidance Street Estimate CS Estimate Street Estimate CS Estimate Street Estimate LTM Active Diners 8, ,896-9,809 - Y/Y Growth 22.0% % % - Quarterly Grubs 29, , ,436 - Y/Y Growth 1.2% % - 5.4% - AOV Y/Y Growth 5.0% % - 3.7% - Gross Food Sales 903, ,461-3,723,608 - Y/Y Growth 26.8% % % - Revenue 153,189 $ , , , ,905 Y/Y Growth 36.5% % % - Take Rate 16.9% % % - Adj. EBITDA 39,585 $ ,637 46, , ,545 Adj. EBITDA Margin 25.8% % 29.1% 28.7% 28.0% GAAP EPS $ $ $ Non-GAAP EPS $0.24 NA $0.24 $0.29 $0.28 $1.11 $1.10 Source: Company data, Credit Suisse estimates, Bloomberg For 1Q, our model assumes: LTM Active Diners - 8.5mn (+22% y/y vs. 21.2% y/y in 4Q); Grubs per Active Diner - 3.4x (-1.0% y/y vs. -0.2% y/y in 4Q); Daily Grubs 327K (+22% y/y vs. 21% y/y in 4Q); Average order value - $30.71 (+5% y/y, +5.2% vs. 4Q) Gross Food Sales (GFS) $904.0mn (+27% y/y vs. 27% y/y in 4Q); Take Rate 16.9% (+120bps y/y) vs. 16.8% in 4Q; and EBITDA per Grub - $1.34 (+1% y/y) vs. $1.46 (+21% y/y) in 4Q. We note that Grubhub currently trades at 25x 2018 Non-GAAP EPS, which is modestly higher than the 2015 trough valuation of 22x. The 2015 trough valuation reflects a period of higher uncertainty (i.e. vertical integration of delivery, increased focus on private company competition, declining margins, etc.), and we would argue that fundamentals are better now vs Grubhub Inc. (GRUB) 3

4 Figure 2: Grubhub Forward P/E Multiple 120.0x 100.0x 80.0x 60.0x 40.0x FY2 P/E High Average Low 20.0x 0.0x Source: Thomson Reuters Datastream 1Q weather report We looked at weather trends in Chicago and NYC, which likely represent 50%+ of revenue. In Chicago, average temperature was slightly higher y/y (3 degrees Fahrenheit), and the number of days with bad weather was 47 vs. 69 in 1Q16. We define bad weather as days with temperature below 40 degrees Fahrenheit, or precipitation greater than 0.10 inches. However, we note that GRUB provided guidance on 2/8/2017. After that date, the number of days with bad weather did not change y/y suggesting that most of the negative weather trends (i.e. warm weather) occurred prior to the company reporting 4Q and providing guidance. As a result, we believe weather headwinds likely diminished after Grubhub provided 1Q guidance. Our analysis did not indicate any notable weather differences on a y/y basis for NYC. Grubhub Inc. (GRUB) 4

5 Figure 3: Number of Bad Weather Days in Chicago Note: Bad Weather defined as < 40 degrees Fahrenheit or >.10 inches of precipitation Q16 1Q17 Source: Weather Underground Figure 4: Number of Bad Weather days in Chicago Before and After 2/8 Note: Bad Weather defined as < 40 degrees Fahrenheit or >.10 inches of precipitation Before 2/8 After 2/8 1Q16 1Q17 Source: Weather Underground Grubhub Inc. (GRUB) 5

6 Figure 5: Number of Bad Weather Days in New York City Note: Bad Weather defined as < 40 degrees Fahrenheit or >.10 inches of precipitation Q Q17 Source: Weather Underground Figure 6: Number of Bad Weather Days in New York City Before and After 2/8 Note: Bad Weather defined as < 40 degrees Fahrenheit or >.10 inches of precipitation Before 2/8 After 2/8 1Q16 1Q17 Source: Weather Underground Grubhub Inc. (GRUB) 6

7 Potential Sentiment Swing Factors for Grubhub Competitive Landscape At our recent meeting with Grubhub, management suggested no material change to the competitive landscape and that competition is not impacting its ability to grow. GRUB also highlighted that its mix of restaurants that run their own delivery operations diversifies its business and positions it well vs. competitors in terms of the total addressable market. We expect any commentary or incremental color on the competitive landscape to drive sentiment throughout See (Takeaways from Management Meeting). Active diner additions and marketing execution We expect active diner additions and marketing execution to be key focal points given Grubhub's initiative to expand in Tier 2 and 3 cities. Also, active diner growth is the key driver of GFS in 2017 so active diner growth trends will likely be a big driver of sentiment in Chain Exposure - McDonalds recently indicated that it is experimenting with several food delivery companies including Grubhub. At our recent meeting with Grubhub, management suggested that chains are important as it expands into tier 2 and 3 cities but did not confirm a broad partnership with McDonalds. We think Grubub is testing delivery with McDonalds in several cities as it looks to broaden its chain footprint. On the 1Q call, we will be looking for additional commentary about adding chains as Grubhub expands to tier 2 and tier 3 cities. Delivery Economics Delivery economics continues to be an area of investor debate, and we expect additional questions on delivery economics on the 1Q call. In the past, Grubhub indicated that it has several levers available to drive delivery economics including improving internal efficiencies, pricing, diner fees, AOV, and driver throughput. Grubhub suggested that, through these levers, it could break-even on delivery at 2 deliveries per hour per driver in most cases. We anticipate that GRUB will continue to express confidence around delivery economics, but delivery economics commentary will be closely watched in Figure 7: EBITDA per Order Figure 8: Grubhub EBITDA Margins $1.60 $1.50 $1.40 $1.30 $1.20 $1.34 $1.42 $1.21 $1.33 $1.52 $1.44 $1.46 $ % 31.0% 30.5% 30.0% 29.5% 29.0% 28.5% 31.0% 29.0% 29.3% 28.7% 29.5% $1.10 $ % 27.5% $1.00 1Q15A 2Q15A 3Q15A 4Q15A 1Q16A 2Q16A 3Q16A 4Q16A 1Q17E 27.0% 2014A 2015A 2016A 2017E 2018E Source: Company data, Credit Suisse estimates. Source: Company data, Credit Suisse estimates. Product innovation - We think there is plenty of room for product innovation at Grubhub and will look for commentary on product innovation that could drive higher conversion rates in Grubhub Inc. (GRUB) 7

8 Grubhub: Investment Thesis and Target Price Our positive view is based on: 1) Very large and fragmented market with low online penetration, a view supported by our proprietary consumer survey; 2) attractive marketplace model with high incremental margins; 3) increasing marketplace take rates (commissions); 4) investments in delivery expand the overall market opportunity; and 5) EPS option value driven by a potential lower corporate tax rate (current rate is ~41%). Our target price is $48, which is based on a blended average of 17x 2018 EV/EBITDA, 40x 2017 P/E, and our DCF and implies 36x 2018 P/E. Figure 9: Grubhub Valuation Methodology EPS Multipe Low Mid High Non-GAAP EPS $1.36 $1.36 $1.36 P/E Multiple 35x 40x 45x Equity Value/Share $47 $54 $ EBITDA Multiple Low Mid High EBITDA $225 $225 $225 EBITDA Multiple 16x 17x 18x Enterprise Value $3,603 $3,828 $4,053 Net Cash Equity /Market Value $3,926 $4,152 $4,377 Shares Out Price Target $46 $48 $51 DCF Value Equity Value/Share $42 EPS/EBITDA Multiple and DCF Average Equity Value/Share $48 Price Target Equity Value/Share $48 Implied 2018 P/E 36x Source: Company data, Credit Suisse estimates. Risks include valuation, an intense competitive landscape, negative sentiment on delivery buildout and our model assumes increasing take rates Grubhub Inc. (GRUB) 8

9 Figure 10: Grubhub Quarterly Income Statement (Dollars in Thousands Except per Share Amounts) 2016A 2017E 2018E 1Q16A 2Q16A 3Q16A 4Q16A 1Q17E 2Q17E 3Q17E 4Q17E 1Q18E 2Q18E 3Q18E 4Q18E Gross Food Sales 712, , , , , , , ,713 1,073,240 1,075,310 1,053,146 1,161,960 Take Rate 16% 16% 17% 17% 17% 17% 17% 17% 17% 18% 18% 18% Total Revenues 112, , , , , , , , , , , ,623 Operations and Support 34,987 40,696 44,346 51,727 57,537 57,642 59,021 65,124 70,434 69,351 71,017 78,358 Gross Profit 77,253 79,477 79,115 85,730 95,652 99,961 96, , , , , ,265 Sales and Marketing 28,833 25,355 26,499 29,636 37,225 33,097 34,144 34,273 44,494 38,773 40,031 40,106 Technology 10,192 10,567 11,006 10,689 12,562 12,923 12,882 12,852 14,893 15,057 15,011 14,938 G&A 13,589 12,158 11,754 12,252 12,868 13,081 13,192 13,709 15,266 15,246 15,382 15,961 Depreciation and Amortization 7,308 8,885 9,089 9,911 9,468 9,551 9,506 9,813 10,094 10,133 10,078 10,445 Operating Income 17,331 22,512 20,767 23,242 23,530 31,308 26,456 35,593 30,987 39,658 33,807 44,816 Provision for Income Taxes 7,398 9,707 7,585 9,605 9,530 12,836 10,847 14,593 12,704 16,260 13,861 18,375 Net Income to Common 9,933 12,805 13,182 13,637 14,000 18,472 15,609 21,000 18,282 23,398 19,946 26,441 Basic EPS $0.12 $0.15 $0.15 $0.16 $0.16 $0.22 $0.18 $0.25 $0.21 $0.27 $0.23 $0.31 Shares Outstanding 84, , , , , , , , , , , ,608.0 Diluted EPS $0.12 $0.15 $0.15 $0.16 $0.16 $0.21 $0.18 $0.24 $0.21 $0.27 $0.22 $0.30 Shares Outstanding 85,699 85,749 86,424 85,666 86,094 86,525 86,957 87,392 87,829 88,268 88,710 89,153 EBITDA Reconciliation GAAP Operating Income 17, , , , , , , , , , , ,816.0 Acquisition Restructuring Costs Stock-Based Compensation 6, , , , , , , , , , , ,412.7 Pro-Forma Operating Income 25, , , , , , , , , , , ,228.7 Depreciation and Amortization 7, , , , , , , , , , , ,444.8 Adjusted EBITDA 32, , , , , , , , , , , ,673.6 Adjusted Net Income Reconciliation GAAP Net Income 9, , , , , , , , , , , ,441.5 Stock-Based Compensation 6, , , , , , , , , , , ,412.7 Amortization of Acquired Intangibles 5, , , , , , , , , , , ,801.0 Accelerated Write-Down of Seamless Acquisition Restructuring Income Tax Adjustments 5, , , , , , , , , , , ,827.6 Pro Forma Net Income 16, , , , , , , , , , , ,827.5 Pro Forma Net Income to Common 16, , , , , , , , , , , ,827.5 Adjusted EPS - Diluted $0.20 $0.23 $0.23 $0.23 $0.24 $0.29 $0.26 $0.32 $0.30 $0.36 $0.31 $0.39 Y/Y % Change Gross Food Sales 20.8% 29.1% 32.8% 27.3% 26.8% 25.8% 22.8% 21.8% 18.7% 16.7% 16.7% 16.7% Total Revenues 27.2% 36.6% 44.1% 37.5% 36.5% 31.1% 25.7% 24.7% 21.5% 19.4% 19.4% 19.4% Take Rate 0.8% 0.9% 1.3% 1.3% 1.2% 0.7% 0.4% 0.4% 0.4% 0.4% 0.4% 0.4% Operations and Support 54.1% 65.4% 60.5% 59.2% 64.5% 41.6% 33.1% 25.9% 22.4% 20.3% 20.3% 20.3% Sales and Marketing 19.6% 22.6% 23.6% 18.9% 29.1% 30.5% 28.9% 15.6% 19.5% 17.2% 17.2% 17.0% Technology 33.0% 33.7% 30.8% 21.4% 23.2% 22.3% 17.0% 20.2% 18.6% 16.5% 16.5% 16.2% G&A 49.3% 24.8% 15.2% 6.9% (5.3)% 7.6% 12.2% 11.9% 18.6% 16.5% 16.6% 16.4% Depreciation and Amortization 16.9% 0.6% 44.3% 48.9% 29.6% 7.5% 4.6% (1.0)% 6.6% 6.1% 6.0% 6.4% Operating Income (5.9)% 39.0% 78.0% 48.6% 35.8% 39.1% 27.4% 53.1% 31.7% 26.7% 27.8% 25.9% Net Income to Common (6.0)% 36.9% 92.0% 20.8% 40.9% 44.3% 18.4% 54.0% 30.6% 26.7% 27.8% 25.9% Pro Forma Operating Income 13.9% 46.6% 73.9% 45.2% 20.2% 32.6% 25.6% 46.6% 31.3% 26.9% 27.8% 26.2% Adjusted EBITDA 14.6% 32.3% 65.2% 46.1% 22.3% 26.7% 20.2% 34.6% 25.4% 22.7% 22.9% 22.5% Pro Forma Net Income Attributable to Common 12.6% 30.5% 73.4% 18.8% 23.6% 29.2% 12.3% 42.3% 25.9% 23.9% 24.3% 23.6% Margins Gross Margin 68.8% 66.1% 64.1% 62.4% 62.4% 63.4% 62.0% 62.0% 62.2% 63.2% 61.7% 61.7% GAAP Operating Margin 15.4% 18.7% 16.8% 16.9% 15.4% 19.9% 17.0% 20.8% 16.6% 21.1% 18.2% 21.9% Pro Forma Operating Margin (% of Rev) 22.3% 23.9% 21.4% 21.3% 19.7% 24.2% 21.3% 25.1% 21.2% 25.7% 22.8% 26.5% Adjusted EBITDA Margin (% of Rev) 28.8% 31.3% 28.7% 28.5% 25.8% 30.2% 27.5% 30.8% 26.7% 31.1% 28.3% 31.6% Net Income Margin 8.8% 10.7% 10.7% 9.9% 9.1% 11.7% 10.1% 12.3% 9.8% 12.4% 10.8% 12.9% Adjusted Net Income Margin 15.0% 16.3% 16.1% 14.4% 13.6% 16.1% 14.4% 16.4% 14.1% 16.7% 15.0% 17.0% Source: Company data, Credit Suisse estimates Grubhub Inc. (GRUB) 9

10 Figure 11: Grubhub Annual Income Statement (Dollars in Thousands Except per Share Amounts) CAGR 2016A 2017E 2018E 2019E 2020E 2021E 2022E '17-22 Gross Food Sales 2,998,100 3,723,608 4,363,656 5,018,787 5,669,068 6,281,044 6,855, % Take Rate 16% 17% 18% 18% 18% 19% 19% Total Revenues 493, , , ,138 1,038,270 1,175,438 1,310, % Operations and Support 171, , , , , , , % Gross Profit 321, , , , , , , % Sales and Marketing 110, , , , , , , % Technology 42,454 51,219 59,900 69,560 79,297 88,609 97, % G&A 49,753 52,850 61,854 70,064 77,796 84,552 90, % Depreciation and Amortization 35,193 38,338 40,750 43,312 45,955 48,561 51, % Operating Income 83, , , , , , , % Provision for Income Taxes 34,295 47,806 61,200 77,946 94, , , % Net Income to Common 49,557 69,082 88, , , , , % Basic EPS $0.58 $0.81 $1.03 $1.31 $1.59 $1.89 $ % Shares Outstanding 85,069 85,608 85,608 85,608 85,608 85,608 85, % Diluted EPS $0.58 $0.80 $1.00 $1.24 $1.48 $1.72 $ % Shares Outstanding 85,885 86,742 88,490 90,273 92,092 93,948 95, % EBITDA Reconciliation GAAP Operating Income 83, , , , , , , % Acquisition Restructuring Costs 2, Stock-Based Compensation 23,559 27,406 35,159 42,259 49,837 57,596 65, % Pro-Forma Operating Income 109, , , , , , , % Depreciation and Amortization 35,193 38,338 40,750 43,312 45,955 48,561 51, % Adjusted EBITDA 144, , , , , , , % Adjusted Net Income Reconciliation GAAP Net Income 49,557 69,082 88, , , , , % Stock-Based Compensation 23,559 27,406 35,159 42,259 49,837 57,596 65, % Amortization of Acquired Intangibles 20,871 19,204 19,204 19,204 19,204 19,204 19,204 Accelerated Write-Down of Seamless Acquisition Restructuring 1, Income Tax Adjustments 19,772 19,053 22,289 25,200 28,307 31,488 34, % Pro Forma Net Income 76,123 96, , , , , , % Pro Forma Net Income to Common 76,123 96, , , , , , % Adjusted EPS - Diluted $0.89 $1.11 $1.36 $1.64 $1.92 $2.20 $ % Y/Y % Change Gross Food Sales 27.4% 24.2% 17.2% 15.0% 13.0% 10.8% 9.1% Total Revenues 36.3% 29.2% 19.9% 17.6% 15.5% 13.2% 11.5% Take Rate 1.1% 0.7% 0.4% 0.4% 0.4% 0.4% 0.4% Operations and Support 59.9% 39.3% 20.8% 16.7% 15.8% 13.2% 11.4% Sales and Marketing 21.0% 25.8% 17.8% 15.5% 13.3% 11.1% 9.3% Technology 29.5% 20.6% 16.9% 16.1% 14.0% 11.7% 10.0% G&A 22.8% 6.2% 17.0% 13.3% 11.0% 8.7% 6.8% Depreciation and Amortization 25.5% 8.9% 6.3% 6.3% 6.1% 5.7% 5.3% Operating Income 35.4% 39.4% 27.7% 27.4% 21.4% 18.7% 16.6% Net Income to Common 30.1% 39.4% 27.5% 27.4% 21.4% 18.7% 16.6% Pro Forma Operating Income 42.3% 31.8% 27.8% 26.0% 20.8% 18.2% 16.1% Adjusted EBITDA 37.8% 26.3% 23.3% 22.4% 18.4% 16.4% 14.7% Pro Forma Net Income Attributable to Common 31.0% 27.0% 24.3% 23.5% 19.2% 17.0% 15.2% Margins Gross Margin 65.2% 62.5% 62.2% 62.5% 62.4% 62.4% 62.4% GAAP Operating Margin 17.0% 18.3% 19.5% 21.1% 22.2% 23.3% 24.4% Pro Forma Operating Margin (% of Rev) 22.2% 22.6% 24.1% 25.8% 27.0% 28.2% 29.4% Adjusted EBITDA Margin (% of Rev) 29.3% 28.7% 29.5% 30.7% 31.5% 32.3% 33.3% Net Income Margin 10.0% 10.8% 11.5% 12.5% 13.1% 13.8% 14.4% Adjusted Net Income Margin 15.4% 15.2% 15.7% 16.5% 17.0% 17.6% 18.2% Source: Company data, Credit Suisse estimates. Grubhub Inc. (GRUB) 10

11 Figure 12: Grubhub Balance Sheet (Dollars in Thousands Except per Share Amounts) 2016A 2017E 2018E 2019E 2020E 2021E 2022E ASSETS Cash and Equivalents 239, , , , ,173 1,106,466 1,370,262 Short-Term Investments 84,091 84,091 84,091 84,091 84,091 84,091 84,091 Accounts Receivable 60,550 73,732 86,042 99, , , ,780 Deferred Taxes Prepaid Expenses and Other Current Assets 12,168 15,170 18,114 21,352 24,489 27,563 30,722 Total Current Assets 396, , , ,641 1,093,025 1,340,697 1,618,855 Property and Equipment, Net 46,555 61,852 80, , , , ,608 Other Assets 4,530 4,530 4,530 4,530 4,530 4,530 4,530 Goodwill 436, , , , , , ,455 Acquired Intangible Assets 313, , , , , , ,262 Total Assets 1,197,507 1,318,622 1,474,316 1,655,447 1,866,446 2,112,574 2,390,710 LIABILITIES & STOCKHOLDERS' EQUITY Restaurant Food Liability 83, , , , , , ,152 Accounts Payable 7,590 9,462 20,462 24,121 27,664 34,251 38,176 Accrued Payroll 7,338 9,148 10,924 12,877 14,768 16,622 18,527 Taxes Payable Restructuring Accrual Other Accruals 11,348 14,147 16,893 19,913 22,839 25,706 28,652 Total Current Liabilities 110, , , , , , ,373 Deferred Taxes, Non-Current 108, , , , , , ,022 Other Accruals 6,876 6,876 6,876 6,876 6,876 6,876 6,876 Total Liabilities 225, , , , , , ,271 Stockholders' Equity Common Stock Accumulated Other Comprehensive Income (2,078) (2,078) (2,078) (2,078) (2,078) (2,078) (2,078) Additional Paid In Capital 805, , , , ,393 1,017,990 1,083,504 Retained Earnings 168, , , , , , ,004 Total Shareholder's Equity 972,119 1,068,607 1,191,834 1,346,260 1,532,243 1,751,502 2,005,439 Total Liabilities and Shareholder's Equity 1,197,507 1,318,622 1,474,316 1,655,447 1,866,446 2,112,574 2,390,710 Source: Company data, Credit Suisse estimates. Grubhub Inc. (GRUB) 11

12 Figure 13: Grubhub Cash Flow Statement (Dollars in Thousands Except per Share Amounts) 2016A 2017E 2018E 2019E 2020E 2021E 2022E Cash Flows from Operating Activities: Net Income 49,557 69,082 88, , , , ,423 Depreciation and Amortization 8,921 12,110 14,522 17,084 19,727 22,333 24,896 Provision for Doubtful Accounts 1, Loss on Disposal of Fixed Assets Deferred Taxes 1, Intangible Asset Amortization 26,272 26,228 26,228 26,228 26,228 26,228 26,228 Tenant Allowance Amortization Stock Based Compensation 23,559 27,406 35,159 42,259 49,837 57,596 65,515 Deferred Rent 1, Investment Premium Amortization Other (406) Changes in Operating Assets and Liabilities Accounts Receivable (17,488) (13,182) (12,310) (13,130) (12,099) (11,305) (11,203) Prepaid and Other Assets (8,765) (3,002) (2,944) (3,238) (3,137) (3,074) (3,159) Restaurant Food Liability 16,451 18,145 16,946 18,074 16,655 15,562 15,422 Accounts Payable (3,204) 1,872 11,000 3,658 3,544 6,587 3,925 Accrued Payroll 1,819 1,810 1,776 1,953 1,892 1,854 1,905 Other Accruals (2,453) 2,799 2,746 3,020 2,926 2,867 2,946 Due to a Related Party Net Cash Provided by Operating Activities 97, , , , , , ,897 Cash Flows from Investing Activities: Purchase of Investments (226,694) Proceeds from Maturity of Investments 284, Capitalized Website Development Costs (12,809) (17,846) (21,401) (24,277) (26,995) (29,386) (31,447) Purchase of Property and Equipments (24,087) (9,560) (11,465) (13,487) (15,574) (17,632) (19,654) Cash Acquired in Merger of GrubHub Holdings Acquisition of Businesses, Net of Cash (65,849) Other (742) Net Cash Provided by Investing Activities (45,519) (27,406) (32,866) (37,764) (42,569) (47,018) (51,101) Cash Flows from Financing Activities: Net Proceeds from Issuance of Common Stokc Repurchase of Common Stock (14,774) Proceeds from Exercise of Stock Options 13, Excess Tax Benefit Related to Stock-Based Compensation 24, Taxes Paid Related to Net Settlements of Stock-Based Compensation (2,779) Preferred Stock Tax Distributions Other (1,477) Net Cash Provided by Finance Activities 19, Effect of Exchange Rates (1,268) Net Increase (Decrease) in Cash and Equivalents 70, , , , , , ,796 Cash and Equivalents, Beginning of Period 169, , , , , ,173 1,106,466 Cash and Equivalents, End of Period 239, , , , ,173 1,106,466 1,370,262 Source: Company data, Credit Suisse estimates. Grubhub Inc. (GRUB) 12

13 Companies Mentioned (Price as of 13-Apr-2017) Alphabet (GOOGL.OQ, $842.01) Amazon com Inc. (AMZN.OQ, $886.54) Facebook Inc. (FB.OQ, $139.68) Grubhub Inc. (GRUB.N, $34.87, OUTPERFORM, TP $48.0) McDonald's Corp (MCD.N, $130.69) Yelp (YELP.N, $31.97) Disclosure Appendix Analyst Certification I, Paul Bieber, certify that (1) the views expressed in this report accurately reflect my personal views about all of the subject companies and securities and (2) no part of my compensation was, is or will be directly or indirectly related to the specific recommendations or views expressed in this report. 3-Year Price and Rating History for Grubhub Inc. (GRUB.N) GRUB.N Closing Price Target Price Date (US$) (US$) Rating 10-Jan O * 50 Target Price Closing Price GRUB.N * Asterisk signifies initiation or assumption of coverage Feb Mar Apr O U T PERFO RM The analyst(s) responsible for preparing this research report received Compensation that is based upon various factors including Credit Suisse's total revenues, a portion of which are generated by Credit Suisse's investment banking activities As of December 10, 2012 Analysts stock rating are defined as follows: Outperform (O) : The stock s total return is expected to outperform the relevant benchmark* over the next 12 months. Neutral (N) : The stock s total return is expected to be in line with the relevant benchmark* over the next 12 months. Underperform (U) : The stock s total return is expected to underperform the relevant benchmark* over the next 12 months. *Relevant benchmark by region: As of 10th December 2012, Japanese ratings are based on a stock s total return relative to the analyst's coverage universe which consists of all companies covered by the analyst within the relevant sector, with Outperforms representing the most attractive, Neutrals the less attractive, and Underperforms the least attractive investment opportunities. As of 2nd October 2012, U.S. and Canadian as well as European ratings are based on a stock s total return relative to the analyst's coverage universe which consists of all companies covered by the analyst within the relevant sector, with Outperforms representing the most attractive, Neutrals the less attractive, and Underperforms the least attractive investment opportunities. For Latin American and non-japan Asia stocks, ratings are based on a stock s total return relative to the average total return of the relevant country or regional benchmark; prior to 2nd October 2012 U.S. and Canadian ratings were based on (1) a stock s absolute total return potential to its current share price and (2) the relative attractiveness of a stock s total return potential within an analyst s coverage universe. For Australian and New Zealand stocks, the expected total return (ETR) calculation includes 12-month rolling dividend yield. An Outperform rating is assigned where an ETR is greater than or equal to 7.5%; Underperform where an ETR less than or equal to 5%. A Neutral may be assigned where the ETR is between -5% and 15%. The overlapping rating range allows analysts to assign a rating that puts ETR in the context of associated risks. Prior to 18 May 2015, ETR ranges for Outperform and Underperform ratings did not overlap with Neutral thresholds between 15% and 7.5%, which was in operation from 7 July Restricted (R) : In certain circumstances, Credit Suisse policy and/or applicable law and regulations preclude certain types of communications, including an investment recommendation, during the course of Credit Suisse's engagement in an investment banking transaction and in certain other circumstances. Not Rated (NR) : Credit Suisse Equity Research does not have an investment rating or view on the stock or any other securities related to the company at this time. Not Covered (NC) : Credit Suisse Equity Research does not provide ongoing coverage of the company or offer an investment rating or investment view on the equity security of the company or related products. Volatility Indicator [V] : A stock is defined as volatile if the stock price has moved up or down by 20% or more in a month in at least 8 of the past 24 months or the analyst expects significant volatility going forward. Analysts sector weightings are distinct from analysts stock ratings and are based on the analyst s expectations for the fundamentals and/or valuation of the sector* relative to the group s historic fundamentals and/or valuation: Overweight : The analyst s expectation for the sector s fundamentals and/or valuation is favorable over the next 12 months. Market Weight : The analyst s expectation for the sector s fundamentals and/or valuation is neutral over the next 12 months. Underweight : The analyst s expectation for the sector s fundamentals and/or valuation is cautious over the next 12 months. *An analyst s coverage sector consists of all companies covered by the analyst within the relevant sector. An analyst may cover multiple sectors. Grubhub Inc. (GRUB) 13

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We use the average of these results to arrive at a target price of $48. Risk: Risks to our Outperform rating and $48 target price include: 1) Valuation; 2) competition from Uber, AMZN and numerous private companies; 3) revenue concentration in NYC and Chicago; 4) forward estimates assume take rate increases; and 5) currently not partnered with Facebook to enable food ordering from restaurant's Facebook pages. Please refer to the firm's disclosure website at for the definitions of abbreviations typically used in the target price method and risk sections. See the Companies Mentioned section for full company names The subject company (YELP.N, AMZN.OQ, GOOGL.OQ, FB.OQ, MCD.N) currently is, or was during the 12-month period preceding the date of distribution of this report, a client of Credit Suisse. Credit Suisse provided investment banking services to the subject company (GOOGL.OQ, FB.OQ, MCD.N) within the past 12 months. 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Nothing in this report should be construed as an opinion on the merits or potential outcome of the lawsuits. Grubhub Inc. (GRUB) 14

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