WTRH - Earnings call transcript Q3 2020

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Operator

Good afternoon, and welcome to the Waitr Holdings Third Quarter 2020 Conference Call. With us today are Waitr's Chief Executive Officer, Carl Grimstad; and Chief Financial Officer, Leo Bogdanov. By now, you should have access to our earnings press release. If not, it may be found at sec.gov or our Investor Relations website at investors.waitrapp.com.

Before I turn the call over to management, I would like to remind you that certain statements and projections in this call about our future business and financial results constitute forward-looking statements. on results business those could the statements. based and market projected are forward-looking actual our differ statements management's and current expectations, in These materially from on factors for XX-Qs discussion statements. to of cause our Please vary our may a contained that actual the and in risk annual see report our Form risks from XX-K Form forward-looking in results these

over earnings Waitr's non-GAAP on for XXXX Finally, management the a financial provide GAAP Please call, an of now call of reconciliation Leo the that third full and to the give will non-GAAP quarter release will business to call Bogdanov, Carl would He like to today's who the of for an measure financial who financial please third refer will then of to the results. note refer will measure. measure. over the XXXX. to Waitr's to turn overview activities operating I turn quarter company's comparable a CEO, Grimstad, financial overview company's and most development

will for please ahead. Q&A. call then open go Carl, We the

Carl Grimstad

everyone, Hello, today. joining our you. Thank thank you and for call

flow. continued We and marking a of with this positive generated quarter, are consecutive quarter operating our pleased second results we cash profitability

pandemic. with efficiencies, on service eye results as Our service battle increased return and all a deployed profitable our profitability. of faces result restaurant fundamental impacts The around many to the during recent Despite sustainability these pandemic, times. from and uphill key business and the cost maintaining of unit a capital. of our of a results on continue implementation prove markets our expanded model strategic ongoing difficult continue even hurricanes sector COVID-XX the structure while economics, to and the an our an reflect to duration hospitality and We've initiatives offerings

business term. a bring Our grow shareholders to model long the on sustainable focus continuing to over operate and to and is value

takeout of service this example our diversify product a of combining technology them the our and our protocols, restaurant. improve delivery, launch restaurants with offers walls service tableside now both outside and of our Our integrated offering can safety tableside efforts help beyond that sales the technology is prime delivery Waitr payment and inside By ordering recent X strengthening presence. solution restaurant to efficiency, services, their market an

restaurants As of have today, service signed to we tableside already utilize have many the agreements who technology.

have offering into we while new as verticals, groceries delivery. no expansion continued our delivery such same-day alcohol, and contact Additionally, all

our also I Cronin, leaders. Thomas David of General third the the the these our Mark appointment Sales Officer; immediate impacts of areas business of leaders: Engagement announced expertise, we and David Chief respective Officer; D’Ambrosio, in made Thomas quarter look have Counsel. During Chief to XXXX, and with and their Mark, X forward growing key our Pritchard,

a over our it turn I'll for Now Officer, Chief of to third Financial recap quarter results. Leo,

Leo Bogdanov

turn share Thank you, quarter share $X.XX compared in third quarter Net on a of million for focus results. last or was or to the million quarter income was per diluted $XX.X of XXXX. XXXX compared in million $X.X of Carl. I'd like third loss third year. the per to the for $XXX.X third some $X.XX quarter the our of financial now $XX.X third million quarter to Revenue XXXX

Adjusted as approximately around implementation XXXX. the of September $XX.X million, quarter $XXX.X was million profitability. as adjustments Active initiatives include reflecting of Third quarter orders to intangible XXXX, quarter our XX,XXX $XX third for approximately considered increase XX, XXXX asset the within and of the loss net X noncash EBITDA impairment million both a loss in compared net an EBITDA. charges, quarter. were Average were and million of service daily the of $XX.X goodwill adjusted for million third diners

increase of asset from market and an had we $XX.X operating primarily June the XXXX, of XXXX, XX, driven XX, September July of $XX.X positive on in from our As million offerings by million, of cash cash completion debt primarily term of our approximately of a long-term convertible loans $XX.X and flows, notes. million of partially was $XX.X prepayment million, made outstanding of offset $XX to consisting long-term lender. debt million Total hand

Carl Grimstad

Thank go a With Leo. question-and-answer short you, session. that, will we into

Operator

we'll from Instructions] our And [Operator take Van Sinderen B. question Riley. first with Jeff

Jeff Van Sinderen

Maybe the for have you the have quantification your that around you of on P&L could start that? if you with any QX, impact hurricanes

Carl Grimstad

volume It's know think it's we've at you running up discussed, at last and point. and -- count, and impact X during as most has order markets been storms, Jeff, quarter. an definitely had back named are Well, and this storms, on I the X

larger to around One the do struggling you it's also yet. part specifics periods that the not One on October markets, those really any back hard back nothing XXX% business feet. caveat bounce to still an The of to our denigration but during very just manner, tell get of of COVID-XX any strong is economics would providing I in order Lake that its could though. unforeseen impact event also played a Charles, distinguish about. We're a in continues kind we time, is

the at hopefully, season. So we're the tail storm end of

Jeff Van Sinderen

follow-up Okay. And a to that. then as

maybe into was there trying in restaurants look that the the some of restaurants we the you've get sense additions, maybe as maybe if of could -- transaction on -- restaurant regions touch and know I much you transaction it count added was count. hurricanes, if as at imagine you have were trends stronger. the QX. new you adding new kind continued of then overall speak difference that similar more just And far what not guess would a the about If to you the there I by impacted can your experienced versus

Carl Grimstad

Right.

what's been been how the business from first, going of I've observations So explaining with consistent on.

is of subsidies And have and macro We the over saw this the leveled the of when second we order water then at pandemic it level think in first off massive work. base. in I upswing, experienced certain this how denigration hit. higher it a And time to of explained lot obviously, went a I quarter. up overhang then people level and come a And out we have

I markets, third of you of COVID-XX which in up cities, the leveled unemployment you our know, tier and it's sword it's have Our about have business on we've than second validation, been because off. a markets, often been have of opened third-party respect, impact which, talked us what bigger some that as one lot think how you as And issues the a and a you if great double-edged and in which are for delivery. will, earlier have

headwind naysayer, this is that if to as what You think replicated I cannot have the over results to an a that say, But nature's bigger. strong of macroeconomic Waitr, time. it's in unit a then business the you're perform somewhat you gotten be the well, also only the economic anomaly very a having universe these the not us no third the conditions, but relates base diner of at the it pun level. continued and intended, headwind, turnaround has And quarter show storms, story, of

around more restrictions I'm starting infer sales call, from proud lot gone can in and on of cities larger a Still activating touch a is and we Mark it in touch count our of on the seeing we feel revenue. potential our but actually your compensation of strategy And restaurants early that now seem that like in focused from it sales benefited your are create -- and was to the to its you had because that past, restaurants that I team. D'Ambrosio on more pretty under not of sales haven't dynamics there's But feel his lot increase then remained but almost come big is completely strategy on new package question. we we're in And the you, than to reshuffling that has lot market upside cap. we in platform. revenue. The really this the sales a numerically, a activating what a our So out when subsidies And was have sales to infancy. may stick

strategy, in. of that fully into very or proud -- the a of months X really couple direction new going So we're the implemented I'm

Jeff Van Sinderen

congratulations growing so despite hit I'll your and consider Well, what adjusted storms. just say, getting I delivering Good. Okay. EBITDA business would many on to strong be still by

of luck forward. So best going

Carl Grimstad

Thank Thank you. you.

Operator

our Craig-Hallum Capital Fuhrman Group. take with question Alex we'll And from next

Alex Fuhrman

there down and of in Great. your of of year, Would quarters and the yet wanted was and basket orders. revenue your seeing quarter to more number that what this been It of driven was about Has up economics or by the components first third nicely. the been looks orders the be X of revenue you've I ask unlike the fourth. into heading some curious rate the not take size? like

Carl Grimstad

are I similar. the economics, to think Well, QX, pretty unit QX

-- about talked a we've in way this the behind QX, first of mean get in The industry quarter the service I a a prices slightly charge, people sauce the service It's Drivers that XX% charge. up their delivery and lot teaser keep of of they charge pays here. take think as the if markets. to competition rate. discussed There's the customer similar you different pays XX%. the be no right? general I it's a because rate a we've Alex, a and the tips. It past. And could QX restaurant fashion, in our offering paid past, delivery very all certain was use the the number in to special compare a in

it's however teaser whether you about I initially same across a bundled, of level. it in industry, pricing, the it's moderates the rate, think look all kind to be if the

think don't from basket that to industry QX, more have with of price on a typically in have the a basket in independent slightly little But we than highest the general, that more running hypothesis. point shift think restaurants have I bit be that a size, because might I being would QSR. QX basket be that change from of we sizes actual QX fiscally people the slight one out, the we QX, to saw a and subsidies focus decrease a might size, have responsible I on in higher

Alex Fuhrman

just dollars what then you've sales less marketing able they than Okay. It looks be been ask that generate effort. were and if last year are track marketing on that. like sales quarter could helpful. And That's to your growth and of about on a I revenue and to

in to towards next do reinvest and the a order little move or of you to side As levels? bit COVID other over stronger the we revenue the sales continue in going to year hopefully think drive to marketing you're have so,

Carl Grimstad

business. our obviously, we've would that can tell look is, you you I margins, profitable What we run if at a documented

play We ads to and have on of a what millions of can't lot also we've dollars, money, television spending of hundreds spend room about, game we not the tens, you. as if talked of there have right? But

spend to efficient strategies monies on on as don't to possibly our as you. with that have So not focused being that capital But what we misinterpret or we're wanting marketing mean promotions different very or we're can.

We been have its company is it's ever than from -- a the perspective. probably in strongest position cash

margin have going We with, it lot do we're responsibly. and to very of to a play

Operator

take we'll question Dan Company. with next our And The Kurnos from Benchmark

Dan Kurnos

Carl, just of a couple questions.

can that impacts. we comments if go general a just economic point landscape And maybe is the outcome then to around how at First, relative there of to just election, and and this further the back mobility stimulus the obviously, vaccine.

of that as on Does I that landscape Sort sort share the other starts that. place? kind it and bit a the sort obviously go taking of to how things, as also of -- about relates that how And been does ride source that's to There's -- back drivers of drivers. to broad-brush, probably a if people as of of complexion well. you that to your huge start think mean a thoughts seeing start

Carl Grimstad

Yes.

couple there. So of a things

new get is comes need end that there's election year or us, the people to guess. I in, anyone's that of think it's help. the subsidy consensus in whether some to we past for a before wait the the now big general have And the a package form of that administration

this From businesses I think that major reflected for generally by the guess at model, little a in challenged open. I bit I lot have lot rate. markets The it around can't markets, business closed, I economically that been unique They've equities where you smaller But term, that folks. that's the and earlier, bit southern today. class will sure. some is said home" These been like these the a got our cities. lot knocked you got -- working not right? inflated things in have of business third base in a upside was positive. tier, have "stay and and of our been a We're the and of I we that Like Day, of second business, pandemic. think creates think And in A Market are kind within several of little at I headwind, see our say space a the are today. of -- very short what we we're an this

the get particular back was I So Refresh a think part, lot get as business then tailwind last guys. of of I a partners get as subsidies, think restaurant we online and versus independent economy big our rebounds and national our on quite and there's me. X their to That feet, bit the part. back the one promising

You were asking about...

Dan Kurnos

About if to drivers there's an impact and drivers.

Carl Grimstad

Yes. think in nationwide. more even Waitr, was tone California, the in for Well, outcome though right? that election than we're the the think not sets outcome I look, that's I I Prop XX presidential any important -- think

work to it's as contractors. I have for big that independent love that think win a workers --

have mean, I mean, have I to last -- that's going time think we don't driver We looked, talked I think about We've it. now drivers. XX,XXX levels -- I I and away. Right? have close that right we

We just bit might have services. working our crazy of do. sound money they people in And what that as you, love delivering quite making our a have it people network, we to

is don't going think that I So away.

Dan Kurnos

really And one quick then no, one helpful. just No, if I it squeeze okay. then -- could that's And in.

speed as get Penetration more grocery between you, look, with into about activation, other yield. fund required area you as probably unit and new investment of not the as there -- your new what on have the ancillary categories, Is there? Just market has it'll sort will have? we'll if economics profitable, be is how of of ancillary sales do you that sales opportunities table. you in getting or some margin for any much we know opportunity you material I But think mix? an been a see just always but some expansion

Carl Grimstad

can our least No. margins business that that long-term I are EBITDA maintain said candidly I at XX%. think

verticals I pure stronger think in unit the are the economics actually these margins. some other delivery than of food

us think you I technology why past, really our it product there that a critical right? of delivery, some thing Overnight, some one dine-in us a the there. any be or States. now advance deploy the sell city was well platform. market pivot critical it. that in product, integrated just but revenue without, to if something business may allows there's with in in This dine-in And in the network ever markets have the an independent we allows delivery and we mass, network business. capital, it any from develop because beyond can bunch may to a us beyond the It's to not level to restaurants. having United try great allows to get this seeing is of So of We an of were expand mean be market, for any payments say, important markets with And can are customers a opportunity this viable further you, us I'll to driver the level across now to currently you we And operate the utilize sales have restaurant to this the market also product. in it's different in mass

the So leverage, product the business it us our and allows other current to our to footprint. helps us sales helps beyond leverage and obviously, dine-in revenue also expand organization opportunities to

Operator

from Deutsche Kunal question next Bank. our take we'll And Madhukar with

Kunal Madhukar

this public that doing call. you've a on spoken call. time Congratulations been a It's long at

regard a competitive your terms the questions. is of So markets? competitive you intensity One in intensity. number What are seeing I have of with to in

Carl Grimstad

markets. know, least Uber, which. Postmates. of have X in all loyalty our been local DoorDash, our have they're stay. They here markets. to in think in Postmates our We they're to in of have Grub in a presence the Top of and core markets markets, brand we our Well, you probably continue competitors as markets competition. have all advantage a But our

advertising. a I do national bit think quite of television, watch if you see they that you

also we're points and nor have a have local, we're But being to further business. profitable space. they're in to So go in than the continue not ways folks we that we. in meantime, going compete. and said, That I these further this to consolidation think we grow different it the are compete to away on ground, to

Kunal Madhukar

makes absolutely That sense.

how the trended Now market one shares, the of especially market the two past did in X quarter, shares shares like third you past In market has see the terms quarters, the over maybe quarter? trending? quarter, what

Carl Grimstad

level. generally It's

driven has some our top on up heavy focus. have strong us, a picked We QSR XX really position by of a DoorDash think have But continue that share markets markets. we in I to couple a market

Kunal Madhukar

multi-vertical then great. reported delivery. of Okay. kind that GFS? at How meaningful That's Is the That in And volumes? that Is all? one on that is benefited great. has

Carl Grimstad

Sorry. assume talking about would I I -- didn't you hear you're you. grocery? asked

Kunal Madhukar

Asking about yes. grocery,

Carl Grimstad

Yes.

not with to I and So just out. to verticals potentially it's -- yet, meaning we're continue grocery, not that continue grocery. alcohol you'll think committed to but build going It's we're only material not some other with

Kunal Madhukar

Okay. it. Got

XXX,XXX was the you And I things drivers the at that last if of you mentioned had One that count. [Indiscernible]

Carl Grimstad

Not XXX,XXX.

have We XX,XXX.

Kunal Madhukar

XX,XXX.

Okay.

XX,XXX. Sorry.

So I number total orders, driver that basically the if X.X about and I orders day. means per divide XX,XXX by that use of per

Carl Grimstad

remember, independent That's They're independent they yes, -- right. they're contractors. If contractors.

working gives of ranks of drivers every we in So amount is not have us you, just that big a one of day. currently those drivers a our every a of is telling the I'm lot flexibility. number, lot which flexibility drivers those even and

Kunal Madhukar

Of course.

one to further one you the in And on M&A pointed course. space. last consolidation Of front, the and

with there going you the like did and now the kind you DoorDash see thought. the the Grub you've -- see and -- fit? you do not out Uber how sorry, in it an do would tried space? consolidation have with Postmates, Is urgency? But increased of past in takeaway like and You've Where that definitely quite way work

Carl Grimstad

clear, the to was regime. past would be say, what hadn't Well, tried I past I in that

as think place. industry a year I different business different is place today it was than the last well a as in in was the

I think the right, the players in U.S., future. X be public you're in not-too-distant that we probably that X a have participant will main

fit X a solution, we perfect companies integrated are nicely also our Candidly, any ratably. The with very that to continue expand other universe X fit of the them. expands we for completing payment we're transactions. of would as I think

Kunal Madhukar

with I have more, One that you Got don't mind. is the it. ATM you to X program if had. regard

plan a near any the in $X selling basically to of of kind Is there term? ATM are have similar at program an shares You share. a kind

Carl Grimstad

completed I was ago. to sit on that now, And something pretty in are Well, the time here position. as any some we're we comments want not they're strong right we're And -- don't -- today, that it's future, we make a but as cash contemplating.

Kunal Madhukar

one And it. one. Got Carl, last

a like look we the do you XQ, haven't but ground, -- understand given to very we space like How you you the feet think think As guidance. on you about should well. have

how lockdowns, versus within think one and projections the puts about as of How So of context about the but the the hurricane we maybe think takes should XQ prospect continuing all in versus we XQ COVID should a from kind potential like bring vaccine? Waitr? impact of

Carl Grimstad

unit business quarter, had, of being headwind the balancing Well, what you had to But of it change. not been That out consistent, Even any the headwind pressure. markets things of for not being of saying being act you're have of results and very going I of hurricanes We've you, now, right. like the open. is which we make our a months third people economics in I've are closed, is being restaurants here. the under would in statements work. lot tell saw I what want what the and the to We've had we've the don't very the face stable. had independent is forward-looking you, said, actually of

advent economy with we're today. think subsidies that from I So and/or of bodes recovering a baseline well the the at

-- I So think over. hurricane and season is

too. So good that's thing, a

those read how feel. from So think you can comments, I into I

Operator

turn Carl, remarks. or back conference to closing concludes at time, the And will that this any you session. I for question-and-answer today's additional

Carl Grimstad

at say can thank We've story. much patience most I all Waitr Well, everyone's for been of very hard the work is the year for now. you with

is doing supporters team us, good do and the responded job. We've to a next had job a of has talk all And number thrown we'll for much. very of great that at continue and our the the a to think again quarter. shareholders, I hope curveballs we after and Thanks team well. very

Operator

call. for concludes this And Thank you participation. your today's

disconnect. may You now

Waitr (ASAPQ) 11 Nov 202020 Q3 Earnings call transcript