Coupang, Inc. (NYSE: CPNG) today announced financial results for its second quarter ended June 30, 2023.
Q2 2023 Key Financial and Operational Highlights
Consolidated Highlights:
- Net revenues were $5.8 billion, up 16% YoY on a reported basis and 21% YoY on an FX-neutral basis.
- The revenue growth rate would have been an estimated 300 bps higher than the 21% growth rate without the accounting change this quarter in FLC revenue, which is now recorded on a net basis starting in Q2 2023.
- Gross profit increased 32% YoY to $1.5 billion.
- Gross profit margin was 26.1%, an improvement of 320 bps YoY. The accounting change in FLC revenue this quarter had a positive 100 bps impact.
- Net income was $145 million, with a margin of 2.5%, an improvement of $221 million over last year.
- Adjusted EBITDA was $300 million with a margin of 5.1%, an improvement of 380 bps over last year.
- EPS was $0.08, an increase of $0.12 YoY.
- Operating cash flow for the trailing twelve months was $2.0 billion, an increase of $2.3 billion YoY.
- Free cash flow was $1.1 billion for the trailing twelve months, an increase of $2.2 billion YoY.
- Active customers growth continues to increase and was 10% YoY with 19.7 million active customers.
Segment Highlights:
- Product Commerce segment net revenues was $5.7 billion, up 16% YoY on a reported basis and 21% on an FX-neutral basis.
- Product Commerce segment adjusted EBITDA was $408 million, up $310 million YoY.
- Product Commerce segment adjusted EBITDA margin was 7.2%, up 520 bps YoY.
- Developing Offerings segment (including International, Coupang Eats, Play and Fintech) adjusted EBITDA was negative $107 million.
“We have only a single-digit share of a massive retail market,” said Coupang’s CFO, Gaurav Anand. “Our Active Customer growth accelerated while we continued to deliver record profitability, highlighted by 7.2% adjusted EBITDA margin in our Product Commerce segment. And over the trailing twelve months, we generated $2 billion of operating cash flow and over $1 billion of free cash flow. We are consistently expanding profitability and generating high growth because of our unmatched investment in technology and infrastructure, and an unwavering focus on wowing the customer.”
Second Quarter 2023 Results
Consolidated Financial Summary
(in thousands, except net revenues per Active Customer and net income/loss per share) | Three Months Ended June 30, | ||||||||
2023 | 2022 | % Change | |||||||
Total net revenues | $ | 5,837,889 | $ | 5,037,821 | 16 | % | |||
Total net revenues growth, constant currency(1) | 21 | % | |||||||
Active Customers | 19,713 | 17,885 | 10 | % | |||||
Total net revenues per Active Customer | $ | 296 | $ | 282 | 5 | % | |||
Total net revenues per Active Customer, constant currency(1) | $ | 309 | 10 | % | |||||
Gross profit(2) | $ | 1,523,788 | $ | 1,153,793 | 32 | % | |||
Net income (loss) | $ | 145,192 | $ | (75,491 | ) | NM(3) | |||
Adjusted EBITDA(1) | $ | 300,224 | $ | 66,172 | 354 | % | |||
Net income (loss) attributable to Class A and Class B common stockholders per share, basic and diluted | $ | 0.08 | $ | (0.04 | ) | NM(3) | |||
Net cash provided by (used in) operating activities | $ | 819,751 | $ | (18,262 | ) | NM(3) | |||
Free cash flow(1) | $ | 449,898 | $ | (195,465 | ) | NM(3) | |||
Segment Information
Three Months Ended June 30, | ||||||||||
(in thousands) | 2023 | 2022 | % Change | |||||||
Product Commerce | ||||||||||
Net revenues | $ | 5,681,590 | $ | 4,877,531 | 16 | % | ||||
Net revenues growth, constant currency(1) | 21 | % | ||||||||
Segment adjusted EBITDA | $ | 407,597 | $ | 97,840 | 317 | % | ||||
Developing Offerings | ||||||||||
Net revenues | $ | 156,299 | $ | 160,290 | (2 | )% | ||||
Net revenues growth, constant currency(1) | 2 | % | ||||||||
Segment adjusted EBITDA | $ | (107,373 | ) | $ | (31,668 | ) | 239 | % | ||
| _________ | ||
| (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 second quarter results on August 8, 2023 at 5:30 PM Eastern Daylight Time (August 9, 2023 at 6:30 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 second 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, and China.
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 June 30, | Six Months Ended June 30, | ||||||||||||||
(in thousands, except per share amounts) | 2023 | 2022 | 2023 | 2022 | |||||||||||
Net retail sales | $ | 5,140,346 | $ | 4,481,165 | $ | 10,345,146 | $ | 9,037,272 | |||||||
Net other revenue | 697,543 | 556,656 | 1,293,273 | 1,117,235 | |||||||||||
Total net revenues | 5,837,889 | 5,037,821 | 11,638,419 | 10,154,507 | |||||||||||
Cost of sales | 4,314,101 | 3,884,028 | 8,694,704 | 7,957,308 | |||||||||||
Operating, general and administrative | 1,376,146 | 1,220,936 | 2,689,298 | 2,470,047 | |||||||||||
Total operating cost and expenses | 5,690,247 | 5,104,964 | 11,384,002 | 10,427,355 | |||||||||||
Operating income (loss) | 147,642 | (67,143 | ) | 254,417 | (272,848 | ) | |||||||||
Interest income | 41,630 | 7,364 | 73,491 | 10,898 | |||||||||||
Interest expense | (12,813 | ) | (6,143 | ) | (21,091 | ) | (13,511 | ) | |||||||
Other expense, net | (5,241 | ) | (9,229 | ) | (11,780 | ) | (8,739 | ) | |||||||
Income (loss) before income taxes | 171,218 | (75,151 | ) | 295,037 | (284,200 | ) | |||||||||
Income tax expense | 26,026 | 340 | 58,990 | 585 | |||||||||||
Net income (loss) | 145,192 | (75,491 | ) | 236,047 | (284,785 | ) | |||||||||
Net income (loss) attributable to Class A and Class B common stockholders per share: | |||||||||||||||
Basic and diluted | $ | 0.08 | $ | (0.04 | ) | $ | 0.13 | $ | (0.16 | ) | |||||
Weighted-average shares used in computing net income (loss) per share attributable to Class A and Class B common stockholders: | |||||||||||||||
Basic | 1,779,508 | 1,763,264 | 1,777,188 | 1,760,019 | |||||||||||
Diluted | 1,800,102 | 1,763,264 | 1,797,293 | 1,760,019 | |||||||||||
COUPANG, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands, except par value) | June 30, 2023 | December 31, 2022 | |||||
Assets | |||||||
Cash and cash equivalents | $ | 4,473,193 | $ | 3,509,334 | |||
Restricted cash | 268,975 | 176,316 | |||||
Accounts receivable, net | 138,855 | 184,463 | |||||
Inventories | 1,565,373 | 1,656,851 | |||||
Prepaids and other current assets | 270,382 | 303,166 | |||||
Total current assets | 6,716,778 | 5,830,130 | |||||
Long-term restricted cash | 1,523 | 1,624 | |||||
Property and equipment, net | 2,119,340 | 1,819,945 | |||||
Operating lease right-of-use assets | 1,427,407 | 1,405,248 | |||||
Long-term lease deposits and other | 421,965 | 455,956 | |||||
Total assets | $ | 10,687,013 | $ | 9,512,903 | |||
Liabilities and stockholders' equity | |||||||
Accounts payable | |||||||
