Coupang Announces Results for Second Quarter 2024
Coupang, Inc. (NYSE: CPNG) today announced financial results for its second quarter ended June 30, 2024. Consolidated Highlights: Net revenues were $7.3 billion, up 25% YoY on a reported basis and 30...
Net Revenues of $7.3 billion, up 25% YoY and 30% on an FX-neutral basis
Gross Profit of $2.1 billion, up 41% YoY
Product Commerce segment adjusted EBITDA of $530 million, up $122 million YoY, with a margin of 8.2%
SEATTLE: Coupang, Inc. (NYSE: CPNG) today announced financial results for its second quarter ended June 30, 2024.
Consolidated Highlights:
- Net revenues were $7.3 billion, up 25% YoY on a reported basis and 30% YoY on an FX-neutral basis. Excluding Farfetch, the growth was 18% YoY on a reported basis and 23% YoY on an FX-neutral basis.
- Excluding Farfetch, net revenues growth rate would have been an estimated 660 bps higher than the 23% FX-neutral growth rate without the accounting change in FLC revenue, which we began recording on a net basis starting in Q2 last year.
- Gross profit increased 41% YoY to $2.1 billion. Gross profit margin was 29.3%, an improvement of 310 bps YoY. Excluding Farfetch, gross profit was $1.9 billion, growing 27% YoY, and gross profit margin was 28.3%.
- Net loss was $105 million and net loss attributable to Coupang stockholders was $77 million, a decrease of $222 million from last year. This is primarily due to the inclusion of the operating losses incurred at Farfetch and $121 million relating to the estimated KFTC administrative fine.
- Excluding the Farfetch loss and the administrative fine, net income attributable to Coupang stockholders was approximately $124 million.
- Diluted EPS was negative $0.04, a decline of $0.12 over last year, primarily driven by the operating losses incurred at Farfetch and the administrative fine. Excluding the Farfetch loss and the administrative fine, diluted EPS was $0.07.
- Adjusted EBITDA for the quarter was $330 million with a margin of 4.5%, down 60 bps from last year. Excluding Farfetch, adjusted EBITDA was $361 million with a margin of 5.3%.
- Operating cash flow for the trailing twelve months was $2.2 billion, an increase of $250 million YoY.
- Free cash flow was $1.5 billion for the trailing twelve months, an increase of $420 million YoY.
Segment Highlights:
- Product Commerce segment net revenues was $6.4 billion, up 13% YoY on a reported basis and 18% on an FX-neutral basis. These growth rates would have been an estimated 650 and 680 bps higher, respectively, without the accounting change in FLC revenue.
- Product Commerce Active Customers reached 21.7 million, growing 12% YoY.
- Product Commerce segment adjusted EBITDA was $530 million, up $122 million YoY, with a margin of 8.2%, up 110 bps YoY.
- Developing Offerings segment (including International, Coupang Eats, Play, Fintech and Farfetch) net revenues was $892 million, up 472% YoY on a reported basis and 483% on an FX-neutral basis. Excluding Farfetch, the growth was 177% YoY on a reported basis and 188% YoY on an FX-neutral basis.
- Developing Offerings segment adjusted EBITDA was negative $200 million, which includes a negative $31 million impact from the consolidation of Farfetch.
“This quarter we continued to see deeper levels of engagement from our customers, powered by our relentless focus on providing even greater levels of selection, service, and savings for customers,” said Gaurav Anand, CFO of Coupang. “We remain focused on creating moments of WOW for our customers every day, while driving continuous improvement across our operations by leveraging our investments in infrastructure, technology, and automation.”
Second Quarter 2024 Results
Consolidated Financial Summary | ||||||||||
(in millions, except net revenues per Product Commerce Active Customer and earnings per share) | Three Months Ended June 30, |
|
| |||||||
2024(3) |
| 2023 |
| % Change | ||||||
Total net revenues | $ | 7,323 |
|
| $ | 5,838 |
| 25 | % | |
Total net revenues growth, constant currency(1) |
|
|
|
| 30 | % | ||||
Net revenues per Product Commerce Active Customer | $ | 296 |
|
| $ | 293 |
| 1 | % | |
Net revenues per Product Commerce Active Customer, constant currency(1) | $ | 309 |
|
|
|
| 5 | % | ||
Product Commerce Active Customers |
| 21.7 |
|
|
| 19.4 |
| 12 | % | |
Gross profit(2) | $ | 2,142 |
|
| $ | 1,524 |
| 41 | % | |
Net (loss) income | $ | (105 | ) |
| $ | 145 |
| (172 | )% | |
Net (loss) income attributable to Coupang stockholders | $ | (77 | ) |
| $ | 145 |
| (153 | )% | |
Adjusted EBITDA(1) | $ | 330 |
|
| $ | 300 |
| 10 | % | |
Earnings per share, basic and diluted | $ | (0.04 | ) |
| $ | 0.08 |
| (150 | )% | |
Adjusted diluted earnings per share(1) | $ | 0.07 |
|
| $ | 0.08 |
| (13 | )% | |
Net cash provided by operating activities | $ | 664 |
|
| $ | 820 |
| (19 | )% | |
Free cash flow(1) | $ | 488 |
|
| $ | 450 |
| 8 | % | |
The following summarizes the impact Farfetch had on our results for the three and six months ended June 30, 2024:
| Impact from Farfetch(3) | |||||||
| Three Months |
| Six Months | |||||
(in millions, except earnings per share) | 2024 | |||||||
Consolidated |
|
|
| |||||
Total net revenues | $ | 460 |
|
| $ | 748 |
| |
Gross profit(2) | $ | 203 |
|
| $ | 325 |
| |
Net loss | $ | (108 | ) |
| $ | (230 | ) | |
Net loss attributable to Coupang stockholders | $ | (80 | ) |
| $ | (173 | ) | |
Diluted earnings per share | $ | (0.04 | ) |
| $ | (0.10 | ) | |
Adjusted EBITDA(1) | $ | (31 | ) |
| $ | (62 | ) | |
|
|
|
| |||||
Developing Offerings |
|
|
| |||||
Net revenues | $ | 460 |
|
| $ | 748 |
| |
Segment adjusted EBITDA | $ | (31 | ) |
| $ | (62 | ) | |
Segment Information | |||||||||||
| Three Months Ended June 30, |
|
| ||||||||
(in millions) | 2024(3) |
| 2023 |
| % Change | ||||||
Product Commerce |
|
|
|
|
| ||||||
Net revenues | $ | 6,431 |
|
| $ | 5,682 |
|
| 13 | % | |
Net revenues growth, constant currency(1) |
|
|
|
| 18 | % | |||||
Segment adjusted EBITDA | $ | 530 |
|
| $ | 408 |
|
| 30 | % | |
Developing Offerings |
|
|
|
|
| ||||||
Net revenues | $ | 892 |
|
| $ | 156 |
|
| 472 | % | |
Net revenues growth, constant currency(1) |
|
|
|
| 483 | % | |||||
Segment adjusted EBITDA | $ | (200 | ) |
| $ | (107 | ) |
| 87 | % | |
_________ | ||
(1) | Total net revenues growth, constant currency, net revenues per Product Commerce Active Customer, constant currency, adjusted EBITDA, adjusted diluted earnings per share and free cash flow 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) | We completed the acquisition of the assets of Farfetch at the end of January in Q1 2024. For the six months ended June 30, 2024, the operating results of Farfetch from February 2024 are included in our consolidated results and in our Developing Offerings segment. For the three months ended June 30, 2024, the operating results of Farfetch are included in our consolidated results and in our Developing Offerings segment. | |
Webcast and Conference Call
Coupang, Inc. will host a conference call to discuss second quarter results on August 6, 2024 at 5:30 PM Eastern 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 a Fortune 200 technology company listed on the NYSE, that provides retail, restaurant delivery, video streaming and fintech services to customers around the world. Coupang’s mission is to revolutionize the everyday lives of its customers and create a world where people wonder, “How did I ever live without Coupang?” Headquartered in the United States, Coupang has operations and support services in geographies including South Korea, Taiwan, Singapore, China, India and Europe.
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, risks associated with current and future acquisitions, mergers, dispositions, joint ventures or investments, our financial performance, to the extent to which we owe income or other taxes, our ability to retain existing suppliers and to add new suppliers, our market position, our operation and management of our fulfillment and delivery infrastructure, legal and regulatory developments, and the impact of the global economy including inflation, foreign currency exchange rates and other geopolitical events. 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 millions, except per share amounts) | 2024 |
| 2023 |
| 2024 |
| 2023 | |||||||||
Net retail sales | $ | 5,779 |
|
| $ | 5,140 |
|
| $ | 11,674 |
|
| $ | 10,345 |
| |
Net other revenue |
| 1,544 |
|
|
| 698 |
|
|
| 2,763 |
|
|
| 1,293 |
| |
Total net revenues |
| 7,323 |
|
|
| 5,838 |
|
|
| 14,437 |
|
|
| 11,638 |
| |
|
|
|
|
|
|
|
| |||||||||
Cost of sales |
| 5,181 |
|
|
| 4,314 |
|
|
| 10,366 |
|
|
| 8,695 |
| |
Operating, general and administrative |
| 2,167 |
|
|
| 1,376 |
|
|
| 4,056 |
|
|
| 2,689 |
| |
Total operating cost and expenses |
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