Net Revenues of $6.2 billion, up 21%
YoY and 18% on an FX-neutral basis
Gross Profit of $1.6 billion, up 27%
YoY
Operating Cash Flow of $2.6 billion and Free
Cash Flow of $1.9 billion for the trailing twelve months
Coupang, Inc. (NYSE: CPNG) today announced financial results for
its third quarter ended September 30, 2023.
Q3 2023 Key Financial and Operational Highlights
Consolidated Highlights:
- Net revenues were $6.2 billion, up 21% YoY on a reported basis
and 18% YoY on an FX-neutral basis.
- The revenue growth rate would have been an estimated 635 bps
higher than the 18% growth without the accounting change in FLC
revenue, which we began recording on a net basis starting in Q2
2023.
- Gross profit increased 27% YoY to $1.6 billion.
- Gross profit margin was 25.3%, an improvement of 113 bps YoY.
The accounting change in FLC revenue this quarter had a positive
140 bps impact.
- Net income was $91 million with a margin of 1.5%, an
improvement of $1 million over last year.
- EPS was $0.05, consistent with the prior year.
- Adjusted EBITDA for the quarter was $239 million with a margin
of 3.9%, an improvement of 10 bps over last year.
- Adjusted EBITDA for the trailing twelve months was $991 million
with a margin of 4.3%, a YoY improvement of 490 bps.
- Operating cash flow for the trailing twelve months was $2.6
billion, an increase of $2.8 billion YoY.
- Free cash flow was $1.9 billion for the trailing twelve months,
an increase of $2.9 billion YoY.
- Active customers surpassed 20.4 million, growing at 14%
YoY.
Segment Highlights:
- Product Commerce segment net revenues was $6.0 billion, up 21%
YoY on a reported basis and 18% on an FX-neutral basis.
- Product Commerce segment adjusted EBITDA was $399 million, up
$160 million YoY.
- Product Commerce segment adjusted EBITDA margin was 6.7%, up
190 bps YoY.
- Developing Offerings segment (including International, Coupang
Eats, Play and Fintech) net revenues was $218 million, up 41% YoY
on a reported basis and 40% on an FX-neutral basis.
- Developing Offerings segment adjusted EBITDA was negative $161
million.
“Our unrelenting focus on the customer experience and
operational excellence drove record results again this quarter,”
said Bom Kim, Founder and CEO of Coupang. “Our revenue and active
customers growth accelerated for the third consecutive quarter. Our
Developing Offerings also generated over 40% revenue growth this
quarter. In Taiwan, we’ve expanded Rocket Delivery and helped
12,000 small business export their products to a new market over
the past year.”
“Over the past twelve months, we’ve generated a record $991
million in adjusted EBITDA, increasing margins by 490 basis
points,” said Coupang’s CFO, Gaurav Anand. “We’ve expanded
profitability while making investments in Developing Offerings, and
we expect our consolidated margin to continue its march upwards on
an annual basis.”
Third Quarter 2023 Results
Consolidated Financial Summary
Three Months Ended September
30,
(in thousands, except net revenues per Active Customer and net
income per share)
2023
2022
% Change
Total net revenues
$
6,183,555
$
5,101,334
21
%
Total net revenues growth, constant
currency(1)
18
%
Active Customers
20,421
17,992
14
%
Total net revenues per Active Customer
$
303
$
284
7
%
Total net revenues per Active Customer,
constant currency(1)
$
296
4
%
Gross profit(2)
$
1,565,787
$
1,233,888
27
%
Net income
$
91,300
$
90,679
1
%
Adjusted EBITDA(1)
$
238,672
$
194,919
22
%
Net income attributable to Class A and
Class B common stockholders per share, basic and diluted
$
0.05
$
0.05
—
%
Net cash provided by operating
activities
$
721,639
$
58,164
NM(3)
Free cash flow(1)
$
536,237
$
(222,446
)
NM(3)
Segment Information
Three Months Ended September
30,
(in thousands)
2023
2022
% Change
Product Commerce
Net revenues
$
5,966,027
$
4,947,174
21
%
Net revenues growth, constant
currency(1)
18
%
Segment adjusted EBITDA
$
399,494
$
239,222
67
%
Developing Offerings
Net revenues
$
217,528
$
154,160
41
%
Net revenues growth, constant
currency(1)
40
%
Segment adjusted EBITDA
$
(160,822
)
$
(44,303
)
NM(3)
_________
(1)
Total net revenues growth, constant
currency, total net revenues per Active Customer, constant
currency, and adjusted EBITDA are non-GAAP financial measures as
defined by the Securities and Exchange Commission (the “SEC”). See
the “Non-GAAP Financial Measures” and “Reconciliations of Non-GAAP
Measures” sections herein for more information regarding our use of
these measures and reconciliations to the most directly comparable
financial measures calculated in accordance with accounting
principles generally accepted in the United States of America
(“U.S. GAAP”).
(2)
Gross profit is calculated as total net
revenues minus cost of sales.
(3)
Non-meaningful
Webcast and Conference Call
Coupang, Inc. will host a conference call to discuss third
quarter results on November 7, 2023 at 5:30 PM Eastern Time
(November 8, 2023 at 7:30 AM Korea Standard Time). A live webcast
of the conference call will be available on our Investor Relations
website, ir.aboutcoupang.com, and a replay of the conference call
will be available for at least three months. This press release,
including the reconciliations of certain non-GAAP measures to their
nearest comparable U.S. GAAP measures, as well as our third quarter
earnings presentation, are also available on that site.
About Coupang
Coupang is one of the largest retailers in Asia, with a mission
to revolutionize the everyday lives of its customers and create a
world where people wonder, “How did we ever live without Coupang?”
Coupang offers a variety of services, including same-day and
next-morning delivery of general merchandise and groceries,
delivery of prepared foods through Coupang Eats, and video
streaming through Coupang Play. Coupang is headquartered in the
United States, with operations and support services performed in
markets including South Korea, Taiwan, Singapore, China, and
India.
FORWARD-LOOKING STATEMENTS
This earnings release or related management commentary may
contain statements that may be deemed to be "forward-looking
statements” within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended (the “Act”), that are intended to
enjoy the protection of the safe harbor for forward-looking
statements provided by the Act as well as protections afforded by
other federal securities laws.
We have based the forward-looking statements contained in this
report on our current expectations and projections about future
events and trends that we believe may affect our industry,
business, financial condition, and results of operations. Actual
results and outcomes could differ materially for a variety of
reasons, including, among others: the continued growth of the
retail market and the increased acceptance of online transactions
by potential customers, competition in our industry, managing our
growth and expansion into new markets and offerings, our financial
performance, our ability to retain existing suppliers and to add
new suppliers, our market position, our operation and management of
our fulfillment and logistics infrastructure, other legal and
regulatory developments, and the impact of the global economy
including inflation and foreign currency exchange rates. For
additional information on other potential risks and uncertainties
that could cause actual results to differ from the results
predicted, please see our most recent Annual Report on Form 10-K
and subsequent filings. All forward-looking statements in this
earnings release or related management commentary are based on
information available to Coupang and assumptions and beliefs as of
the date hereof, and we disclaim any obligation to update any
forward-looking statements, except as required by law. We may not
actually achieve the plans, intentions, or expectations disclosed
in our forward-looking statements, and you should not place undue
reliance on our forward-looking statements.
Investors and others should note that we may announce material
business and financial information to our investors using our
investor relations website (ir.aboutcoupang.com), our filings with
the SEC, webcasts, press releases, and conference calls. We use
these mediums, including our website, to communicate with investors
and the general public about our company, our offerings, and other
issues. It is possible that the information that we make available
on our website may be deemed to be material information. We
therefore encourage investors and others interested in our company
to review the information that we make available on our
website.
COUPANG, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
(in thousands, except per share
amounts)
2023
2022
2023
2022
Net retail sales
$
5,314,683
$
4,540,393
$
15,659,829
$
13,577,665
Net other revenue
868,872
560,941
2,162,145
1,678,176
Total net revenues
6,183,555
5,101,334
17,821,974
15,255,841
Cost of sales
4,617,768
3,867,446
13,312,472
11,824,754
Operating, general and administrative
1,478,303
1,156,468
4,167,601
3,626,515
Total operating cost and expenses
6,096,071
5,023,914
17,480,073
15,451,269
Operating income (loss)
87,484
77,420
341,901
(195,428
)
Interest income
50,237
15,403
123,728
26,301
Interest expense
(13,295
)
(6,485
)
(34,386
)
(19,996
)
Other (expense) income, net
(7,776
)
11,224
(19,556
)
2,485
Income (loss) before income taxes
116,650
97,562
411,687
(186,638
)
Income tax expense
25,350
6,883
84,340
7,468
Net income (loss)
91,300
90,679
327,347
(194,106
)
Net income (loss) attributable to Class A
and Class B common stockholders per share:
Basic and diluted
$
0.05
$
0.05
$
0.18
$
(0.11
)
Weighted-average shares used in computing
net income (loss) per share attributable to Class A and Class B
common stockholders:
Basic
1,784,363
1,767,275
1,779,606
1,762,465
Diluted
1,808,311
1,790,941
1,801,006
1,762,465
COUPANG, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(unaudited)
(in thousands, except par value)
September 30, 2023
December 31, 2022
Assets
Cash and cash equivalents
$
4,857,920
$
3,509,334
Restricted cash
400,255
176,316
Accounts receivable, net
285,081
184,463
Inventories
1,640,567
1,656,851
Prepaids and other current assets
245,868
303,166
Total current assets
7,429,691
5,830,130
Long-term restricted cash
2,435
1,624
Property and equipment, net
2,200,638
1,819,945
Operating lease right-of-use assets
1,484,273
1,405,248
Long-term lease deposits and other
445,732
455,956
Total assets
$
11,562,769
$
9,512,903
Liabilities and stockholders'
equity
Accounts payable
$
4,616,045
$
3,622,332
Accrued expenses
311,886
298,869
Deferred revenue
85,529
92,361
Short-term borrowings
232,094
175,403
Current portion of long-term debt
382,430
128,936
Current portion of long-term operating
lease obligations
351,025
325,924
Other current liabilities
526,765
418,681
Total current liabilities
6,505,774
5,062,506
Long-term debt
527,711
537,880
Long-term operating lease obligations
1,295,117
1,233,680
Defined severance benefits and other
305,790
264,924
Total liabilities
8,634,392
7,098,990
Contingencies
Stockholders' equity
Class A common stock, $0.0001 par value,
10,000,000 shares authorized, 1,611,084 and 1,597,804 shares issued
and outstanding as of September 30, 2023 and December 31, 2022,
respectively; Class B common stock, $0.0001 par value, 250,000
shares authorized, 174,803 shares issued and outstanding as of
September 30, 2023 and December 31, 2022
179
177
Additional paid-in capital
8,401,998
8,154,076
Accumulated other comprehensive (loss)
income
(58,588
)
2,219
Accumulated deficit
(5,415,212
)
(5,742,559
)
Total stockholders' equity
2,928,377
2,413,913
Total liabilities and stockholders'
equity
$
11,562,769
$
9,512,903
COUPANG, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(unaudited)
Nine Months Ended September
30,
(in thousands)
2023
2022
Operating activities
Net income (loss)
$
327,347
$
(194,106
)
Adjustments to reconcile net income (loss)
to net cash provided by (used in) operating activities:
Depreciation and amortization
197,816
174,063
Provision for severance benefits
117,243
124,056
Equity-based compensation
240,098
191,584
Non-cash operating lease expense
247,938
231,333
Other
99,594
56,536
Change in operating assets and
liabilities:
Accounts receivable, net
(114,032
)
(39,325
)
Inventories
(86,692
)
(288,761
)
Other assets
(65,268
)
(273,554
)
Accounts payable
1,235,365
163,508
Accrued expenses
15,400
(6,359
)
Other liabilities
(172,116
)
(154,012
)
Net cash provided by (used in) operating
activities
2,042,693
(15,037
)
Investing activities
Purchases of property and equipment
(662,273
)
(703,074
)
Proceeds from sale of property and
equipment
12,461
10,600
Other investing activities
(13,898
)
(25,979
)
Net cash used in investing activities
(663,710
)
(718,453
)
Financing activities
Proceeds from issuance of common stock,
equity-based compensation plan
7,826
14,998
Proceeds from short-term borrowings and
long-term debt
416,508
543,185
Repayment of short-term borrowings and
long-term debt
(63,654
)
(337,071
)
Net short-term borrowings and other
financing activities
1,222
5,377
Net cash provided by financing
activities
361,902
226,489
Effect of exchange rate changes on cash
and cash equivalents, and restricted cash
(167,549
)
(243,132
)
Net increase (decrease) in cash and cash
equivalents, and restricted cash
1,573,336
(750,133
)
Cash and cash equivalents, and restricted
cash, as of beginning of period
3,687,274
3,810,347
Cash and cash equivalents, and
restricted cash, as of end of period
$
5,260,610
$
3,060,214
Supplemental Financial Information
Share Information
As of September 30,
(in thousands)
2023
2022
Outstanding common stock
1,785,887
1,768,943
Outstanding equity-based awards
63,594
58,259
Outstanding common stock and equity-based
awards
1,849,481
1,827,202
Key Business Metrics and Non-GAAP Financial Measures
We review the key business and financial metrics discussed
below. We use these measures to evaluate our business, measure our
performance, identify trends affecting our business, formulate
business plans, and make strategic decisions.
Key Business Metrics
Active Customers
As of the last date of each reported period, we determine our
number of Active Customers by counting the total number of
individual customers who have ordered at least once directly from
our apps or websites in Korea during the relevant period. A
customer is anyone who has created an account on our apps or
websites, identified by a unique email address. The change in
Active Customers in a reported period captures both the inflow of
new customers as well as the outflow of existing customers who have
not made a purchase in the period. We view the number of Active
Customers as a key indicator of our potential for growth in total
net revenues, the reach of our network, the awareness of our brand,
and the engagement of our customers.
Total Net Revenues per Active Customer
Total net revenues per Active Customer is the total net revenues
generated in a period divided by the total number of Active
Customers in that period. A key driver of growth is increasing the
frequency and the level of spend of Active Customers who are
shopping on our apps or websites. We therefore view total net
revenues per Active Customer as a key indicator of engagement and
retention of our customers and our success in increasing the share
of wallet.
Three Months Ended September
30,
(in thousands, except net revenues per
Active Customer)
2023
2022
% Change
Active Customers
20,421
17,992
14
%
Total net revenues per Active Customer
$
303
$
284
7
%
Total net revenues per Active Customer,
constant currency (YoY)
$
296
4
%
Non-GAAP Financial Measures
We report our financial results in accordance with U.S. GAAP.
However, management believes that certain non-GAAP financial
measures provide investors with additional useful information in
evaluating our performance. These non-GAAP financial measures may
be different than similarly titled measures used by other
companies.
Our non-GAAP financial measures should not be considered in
isolation from, or as substitutes for, financial information
prepared in accordance with U.S. GAAP. Non-GAAP measures have
limitations in that they do not reflect all the amounts associated
with our results of operations as determined in accordance with
U.S. GAAP. These measures should only be used to evaluate our
results of operations in conjunction with the corresponding U.S.
GAAP measures.
Non-GAAP Measure
Definition
How We Use The Measure
Adjusted EBITDA
- Net income (loss), excluding the effects of:
- depreciation and amortization,
- interest expense,
- interest income,
- other income (expense), net,
- income tax expense (benefit),
- equity-based compensation,
- impairments, and
- other items not reflective of our ongoing
operations.
- Provides information to management to
evaluate and assess our performance and allocate internal
resources.
- We believe Adjusted EBITDA and Adjusted
EBITDA Margin are frequently used by investors and other interested
parties in evaluating companies in the retail industry for
period-to-period comparisons as they remove the impact of certain
items that are not representative of our ongoing business, such as
material non-cash items and certain variable charges.
Adjusted EBITDA Margin
- Adjusted EBITDA as a percentage of total net revenues.
Constant Currency Revenue
- Constant currency information compares
results between periods as if exchange rates had remained
constant.
- We define constant currency revenue as
total revenue excluding the effect of foreign exchange rate
movements, and use it to determine the constant currency revenue
growth on a comparative basis.
- Constant currency revenue is calculated
by translating current period revenues using the prior period
exchange rate.
- The effect of currency exchange rates on
our business is an important factor in understanding
period-to-period comparisons. Our financial reporting currency is
the U.S. dollar (“USD”) and changes in foreign exchange rates can
significantly affect our reported results and consolidated trends.
For example, our business generates sales predominantly in Korean
Won (“KRW”), which are favorably affected as the USD weakens
relative to the KRW, and unfavorably affected as the USD
strengthens relative to the KRW.
- We use constant currency revenue and
constant currency revenue growth for financial and operational
decision-making and as a means to evaluate comparisons between
periods. We believe the presentation of our results on a constant
currency basis in addition to U.S. GAAP results helps improve the
ability to understand our performance because they exclude the
effects of foreign currency volatility that are not indicative of
our actual results of operations.
Constant Currency Revenue Growth
- Constant currency revenue growth (as a percentage) is
calculated by determining the increase in current period revenue
over prior period revenue, where current period foreign currency
revenue is translated using prior period exchange rates.
Free Cash Flow
- Cash flow from operations
Less: purchases of property and
equipment,
Plus: proceeds from sale of property and
equipment.
- Provides information to management and investors about the
amount of cash generated from our ongoing operations that, after
purchases and sales of property and equipment, can be used for
strategic initiatives, including investing in our business and
strengthening our balance sheet, including paying down debt, and
paying dividends to stockholders.
Segment Gross Profit
- Gross profit for a period attributable to each respective
reportable segment.
- We believe segment gross profit and segment gross profit margin
are frequently used by investors and other interested parties in
evaluating companies in the retail industry for period-to-period
comparisons. However, other companies may calculate segment gross
profit and segment gross profit margin in a manner different from
ours and therefore they may not be directly comparable to similar
terms used by other companies.
Segment Gross Profit Margin
- Segment gross profit as a percentage of segment net
revenues.
Reconciliations of Non-GAAP Measures
A reconciliation of non-GAAP guidance measures to corresponding
GAAP measures is not available on a forward-looking basis without
unreasonable effort due to the uncertainty of expenses that may be
incurred in the future. Although, it is important to note that
these factors could be material to Coupang’s results computed in
accordance with GAAP.
The following tables present the reconciliations from each U.S.
GAAP measure to its corresponding non-GAAP measure for the periods
noted:
Constant Currency Revenue and Constant Currency Revenue Growth
(YoY)
Three Months Ended September
30,
2023
2022
Year over Year Growth
(in thousands)
As Reported
Exchange Rate Effect
Constant Currency
Basis
As Reported
Exchange Rate Effect
Constant Currency
Basis
As
Reported
Constant Currency
Basis
Consolidated
Net retail sales
$
5,314,683
$
(132,709
)
$
5,181,974
$
4,540,393
$
723,839
$
5,264,232
17
%
14
%
Net other revenue
868,872
(11,527
)
857,345
560,941
89,440
650,381
55
%
53
%
Total net revenues
$
6,183,555
$
(144,236
)
$
6,039,319
$
5,101,334
$
813,279
$
5,914,613
21
%
18
%
Net Revenues by Segment
Product Commerce
$
5,966,027
$
(141,996
)
$
5,824,031
$
4,947,174
$
788,061
$
5,735,235
21
%
18
%
Developing Offerings
217,528
(2,240
)
215,288
154,160
25,218
179,378
41
%
40
%
Total net revenues
$
6,183,555
$
(144,236
)
$
6,039,319
$
5,101,334
$
813,279
$
5,914,613
21
%
18
%
Nine Months Ended September
30,
2023
2022
Year over Year Growth
(in thousands)
As Reported
Exchange Rate Effect
Constant Currency
Basis
As Reported
Exchange Rate Effect
Constant Currency
Basis
As
Reported
Constant Currency
Basis
Consolidated
Net retail sales
$
15,659,829
$
387,762
$
16,047,591
$
13,577,665
$
1,655,356
$
15,233,021
15
%
18
%
Net other revenue
2,162,145
53,539
2,215,684
1,678,176
204,599
1,882,775
29
%
32
%
Total net revenues
$
17,821,974
$
441,301
$
18,263,275
$
15,255,841
$
1,859,955
$
17,115,796
17
%
20
%
Net Revenues by Segment
Product Commerce
$
17,305,966
$
428,524
$
17,734,490
$
14,760,758
$
1,799,596
$
16,560,354
17
%
20
%
Developing Offerings
516,008
12,777
528,785
495,083
60,359
555,442
4
%
7
%
Total net revenues
$
17,821,974
$
441,301
$
18,263,275
$
15,255,841
$
1,859,955
$
17,115,796
17
%
20
%
Free Cash Flow
Three Months Ended
September 30,
Nine Months Ended
September 30,
Trailing Twelve Months
Ended
September 30,
(in thousands)
2023
2022
2023
2022
2023
2022
Net cash provided by (used in)
operating activities
$
721,639
$
58,164
$
2,042,693
$
(15,037
)
$
2,623,169
$
(217,783
)
Adjustments:
Purchases of land and buildings
(32,670
)
(156,782
)
(331,281
)
(205,274
)
(352,594
)
(243,609
)
Purchases of equipment
(157,980
)
(126,618
)
(330,992
)
(497,800
)
(430,867
)
(627,574
)
Total purchases of property and
equipment
(190,650
)
(283,400
)
(662,273
)
(703,074
)
(783,461
)
(871,183
)
Proceeds from sale of property and
equipment
5,248
2,790
12,461
10,600
15,043
11,504
Total adjustments
$
(185,402
)
$
(280,610
)
$
(649,812
)
$
(692,474
)
$
(768,418
)
$
(859,679
)
Free cash flow
$
536,237
$
(222,446
)
$
1,392,881
$
(707,511
)
$
1,854,751
$
(1,077,462
)
Net cash used in investing activities
$
(151,590
)
$
(288,755
)
$
(663,710
)
$
(718,453
)
$
(793,511
)
$
(887,166
)
Net cash provided by financing
activities
$
33,222
$
145,821
$
361,902
$
226,489
$
382,765
$
131,148
Adjusted EBITDA and Adjusted EBITDA Margin
Three Months Ended
September 30,
Nine Months Ended
September 30,
Trailing Twelve Months
Ended
September 30,
(in thousands)
2023
2022
2023
2022
2023
2022
Total net revenues
$
6,183,555
$
5,101,334
$
17,821,974
$
15,255,841
$
23,148,748
$
20,332,534
Net income (loss)
91,300
90,679
327,347
(194,106
)
429,411
(599,085
)
Net income (loss) margin
1.5
%
1.8
%
1.8
%
(1.3
)%
1.9
%
(2.9
)%
Adjustments:
Depreciation and amortization
67,393
54,424
197,816
174,063
254,718
229,677
Interest expense
13,295
6,485
34,386
19,996
41,559
27,307
Interest income
(50,237
)
(15,403
)
(123,728
)
(26,301
)
(150,225
)
(29,496
)
Income tax expense
25,350
6,883
84,340
7,468
75,809
8,299
Other expense (income), net
7,776
(11,224
)
19,556
(2,485
)
28,756
949
Equity-based compensation
83,795
63,075
240,098
191,584
310,780
247,479
Adjusted EBITDA
$
238,672
$
194,919
$
779,815
$
170,219
$
990,808
$
(114,870
)
Adjusted EBITDA margin
3.9
%
3.8
%
4.4
%
1.1
%
4.3
%
(0.6
)%
Segment Gross Profit and Segment Gross Profit Margin
Three Months Ended September
30,
Nine Months Ended September
30,
(in thousands)
2023
2022
2023
2022
Gross profit
$
1,565,787
$
1,233,888
$
4,509,502
$
3,431,087
Segment gross profit and gross profit
margin:
Product Commerce
$
1,619,339
$
1,217,593
4,564,390
3,410,027
Gross profit margin
27.1
%
24.6
%
26.4
%
23.1
%
Developing Offerings
(53,552
)
16,295
(54,888
)
21,060
Gross profit margin
(24.6
)%
10.6
%
(10.6
)%
4.3
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231107604451/en/
Investor Contact: Coupang IR ir@coupang.com
Media Contact: Coupang PR press@coupang.com
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