Net Revenues of $5.8 billion, up 20% YoY on
an FX-neutral basis
Record Gross Profit of $1.4 billion, up 36%
YoY
Net Income of $91 million, an increase of
$300 million YoY
Positive Free Cash Flow of $451 million and
Operating Cash Flow of $1.1 billion for trailing twelve
months
Coupang, Inc. (NYSE: CPNG) today announced financial results for
its first quarter ended March 31, 2023.
Q1 2023 Key Financial and Operational Highlights
Consolidated Highlights:
- Net revenues were $5.8 billion, up 13% YoY on a reported basis,
or 20% YoY on an FX-neutral basis.
- Gross profit increased 36% YoY to $1.4 billion.
- Gross profit margin was 24.5%, an improvement of over 400 bps
YoY.
- Net income was $91 million, an improvement of $300 million over
last year.
- Adjusted EBITDA was $241 million with a margin of 4.2%, an
improvement of nearly 600 bps over last year.
- Operating Cash flow for trailing twelve months was positive
$1.1 billion, an increase of $1.4 billion YoY.
- Achieved milestone of positive free cash flow of $451 million
for trailing twelve months, an increase of $1.5 billion YoY.
- Active customers exceeded 19 million, up 5% both YoY and
QoQ.
Segment Highlights:
- Product Commerce segment net revenues was $5.7 billion, up 15%
YoY on a reported basis, or 21% on an FX-neutral basis.
- Product Commerce segment adjusted EBITDA was positive $288
million, up $285 million YoY.
- Product Commerce segment adjusted EBITDA margin was 5.1%, up
over 500 bps YoY.
- Developing Offerings segment (including Coupang Eats,
International, Play and Fintech) adjusted EBITDA was negative $47
million, an improvement of $46 million over last year.
“We have an opportunity to transform the lives of our customers
in the coming years,” said Bom Kim, Founder and CEO of Coupang.
“The overwhelming majority of the retail market is still offline,
where prices are high and selection limited. According to one
study, Korean consumers have access to less than 10% of the retail
space per capita available to their US counterparts. We’ve made
unmatched investments to offer customers something much better:
vast selection, low prices, and exceptional service. And now any
merchant can capture the growth of our end-to-end network through
Fulfillment and Logistics by Coupang, or Rocket Growth, where units
sold are up nearly 90% year over year. This program will expand
selection on Rocket dramatically for customers. We’ve been
delighted by the response from merchants and customers alike and
are excited about the growth ahead. We’ve also started rolling out
new Coupang Eats benefits to all WOW members. These benefits will
generate more savings for customers and make WOW even harder to
resist. Our goal is to keep expanding membership benefits to make
WOW the best deal on the planet.”
“2022 was a year of significant milestones, and we begin 2023
with another major achievement. In Q1, we generated positive free
cash flow of $451M on a trailing twelve-month basis,” added
Coupang’s CFO, Gaurav Anand. “This milestone again demonstrates the
power of our accelerating flywheel and the commitment of our teams
to deliver our goals. Thanks to our sustained focus on operational
excellence, we’ve now achieved a level of financial strength that
positions us well for the future.”
First Quarter 2023 Results
Consolidated Financial Summary
Three Months Ended March
31,
(in thousands, except net revenues per
Active Customer)
2023
2022
% Change
Total net revenues
$
5,800,530
$
5,116,686
13
%
Total net revenues growth, constant
currency(1)
20
%
Active Customers
19,010
18,112
5
%
Total net revenues per Active Customer
$
305
$
283
8
%
Total net revenues per Active Customer,
constant currency(1)
$
323
14
%
Gross profit(2)
$
1,419,927
$
1,043,406
36
%
Net income (loss)
$
90,855
$
(209,294
)
NM(3)
Adjusted EBITDA(1)
$
240,919
$
(90,872
)
NM(3)
Net cash provided by (used in) operating
activities
$
501,303
$
(54,939
)
NM(3)
Free cash flow(1)
$
406,746
$
(289,600
)
NM(3)
Segment Information
Three Months Ended March
31,
(in thousands)
2023
2022
% Change
Product Commerce
Net revenues
$
5,658,349
$
4,936,053
15
%
Net revenues growth, constant
currency(1)
21
%
Segment adjusted EBITDA
$
288,370
$
2,877
NM(3)
Developing Offerings
Net revenues
$
142,181
$
180,633
(21
)%
Net revenues growth, constant
currency(1)
(17
)%
Segment adjusted EBITDA
$
(47,451
)
$
(93,749
)
(49
)%
_________
(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 first
quarter results on May 9, 2023 at 5:30 PM Eastern Daylight Time
(May 10, 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 first quarter
earnings presentation, are also available on that site.
About Coupang
Coupang is one of the largest e-Commerce 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 delivery 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 products, 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 March
31,
(in thousands, except per share
amounts)
2023
2022
Net retail sales
$
5,204,800
$
4,556,107
Net other revenue
595,730
560,579
Total net revenues
5,800,530
5,116,686
Cost of sales
4,380,603
4,073,280
Operating, general and administrative
1,313,152
1,249,111
Total operating cost and expenses
5,693,755
5,322,391
Operating income (loss)
106,775
(205,705
)
Interest income
31,861
3,534
Interest expense
(8,278
)
(7,368
)
Other (expense) income, net
(6,539
)
490
Income (loss) before income taxes
123,819
(209,049
)
Income tax expense
32,964
245
Net income (loss)
90,855
(209,294
)
Net income (loss) attributable to Class A
and Class B common stockholders per share:
Basic and diluted
$
0.05
$
(0.12
)
Weighted-average shares used in computing
net income (loss) per share attributable to Class A and Class B
common stockholders:
Basic
1,774,843
1,756,739
Diluted
1,794,453
1,756,739
COUPANG, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(unaudited)
(in thousands, except par value)
March 31, 2023
December 31, 2022
Assets
Cash and cash equivalents
$
3,792,211
$
3,509,334
Restricted cash
330,188
176,316
Accounts receivable, net
126,892
184,463
Inventories
1,667,156
1,656,851
Prepaids and other current assets
198,235
303,166
Total current assets
6,114,682
5,830,130
Long-term restricted cash
1,536
1,624
Property and equipment, net
1,811,174
1,819,945
Operating lease right-of-use assets
1,341,091
1,405,248
Long-term lease deposits and other
441,822
455,956
Total assets
$
9,710,305
$
9,512,903
Liabilities and stockholders'
equity
Accounts payable
$
3,684,956
$
3,622,332
Accrued expenses
247,098
298,869
Deferred revenue
93,263
92,361
Short-term borrowings
223,446
175,403
Current portion of long-term debt
149,034
128,936
Current portion of long-term operating
lease obligations
319,426
325,924
Other current liabilities
456,907
418,681
Total current liabilities
5,174,130
5,062,506
Long-term debt
522,817
537,880
Long-term operating lease obligations
1,178,124
1,233,680
Defined severance benefits and other
275,204
264,924
Total liabilities
7,150,275
7,098,990
Contingencies
Stockholders' equity
Class A common stock, $0.0001 par value,
10,000,000 shares authorized, 1,602,488 and 1,597,804 shares issued
and outstanding as of March 31, 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
March 31, 2023 and December 31, 2022
178
177
Additional paid-in capital
8,227,469
8,154,076
Accumulated other comprehensive (loss)
income
(15,913
)
2,219
Accumulated deficit
(5,651,704
)
(5,742,559
)
Total stockholders' equity
2,560,030
2,413,913
Total liabilities and stockholders'
equity
$
9,710,305
$
9,512,903
COUPANG, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(unaudited)
Three Months Ended March
31,
(in thousands)
2023
2022
Operating activities
Net income (loss)
$
90,855
$
(209,294
)
Adjustments to reconcile net income (loss)
to net cash provided by (used in) operating activities:
Depreciation and amortization
64,245
59,240
Provision for severance benefits
38,691
44,482
Equity-based compensation
69,899
55,593
Non-cash operating lease expense
83,514
77,223
Other
28,716
16,514
Change in operating assets and
liabilities:
Accounts receivable, net
55,691
266
Inventories
(60,966
)
6,863
Other assets
59,658
(66,512
)
Accounts payable
162,166
28,044
Accrued expenses
(46,905
)
(49,981
)
Other liabilities
(44,261
)
(17,377
)
Net cash provided by (used in) operating
activities
501,303
(54,939
)
Investing activities
Purchases of property and equipment
(95,221
)
(238,906
)
Proceeds from sale of property and
equipment
664
4,245
Other investing activities
11,825
(14,367
)
Net cash used in investing activities
(82,732
)
(249,028
)
Financing activities
Proceeds from issuance of common stock,
equity-based compensation plan
3,495
8,183
Proceeds from short-term borrowings and
long-term debt
31,952
343,975
Repayment of short-term borrowings and
long-term debt
(842
)
(152,029
)
Net short-term borrowings and other
financing activities
43,514
(1,547
)
Net cash provided by financing
activities
78,119
198,582
Effect of exchange rate changes on cash
and cash equivalents, and restricted cash
(60,029
)
(27,404
)
Net increase (decrease) in cash and cash
equivalents, and restricted cash
436,661
(132,789
)
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
$
4,123,935
$
3,677,558
Supplemental Financial Information
Cash Flow and Share Information
(in thousands)
March 31, 2023
March 31, 2022
Purchases of land and buildings - QTD
$
(27,325
)
$
(22,929
)
Purchases of equipment - QTD
(67,896
)
(215,977
)
Total purchases of property and equipment
- QTD
$
(95,221
)
$
(238,906
)
Outstanding common stock
1,777,291
1,761,058
Outstanding equity-based awards
55,540
50,644
Outstanding common stock and equity-based
awards
1,832,831
1,811,702
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 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 March
31,
(in thousands, except net revenues per
Active Customer)
2023
2022
% Change
Active Customers
19,010
18,112
5
%
Total net revenues per Active Customer
$
305
$
283
8
%
Total net revenues per Active Customer,
constant currency (YoY)
$
323
14
%
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 e-commerce 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 e-commerce
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 March
31,
Year over Year Growth
2023
2022
(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
$
5,204,800
$
305,087
$
5,509,887
$
4,556,107
$
371,752
$
4,927,859
14
%
21
%
Net other revenue
595,730
34,920
630,650
560,579
45,740
606,319
6
%
12
%
Total net revenues
$
5,800,530
$
340,007
$
6,140,537
$
5,116,686
$
417,492
$
5,534,178
13
%
20
%
Net Revenues by Segment
Product Commerce
$
5,658,349
$
331,673
$
5,990,022
$
4,936,053
$
402,753
$
5,338,806
15
%
21
%
Developing Offerings
142,181
8,334
150,515
180,633
14,739
195,372
(21
)%
(17
)%
Total net revenues
$
5,800,530
$
340,007
$
6,140,537
$
5,116,686
$
417,492
$
5,534,178
13
%
20
%
Free Cash Flow (QTD)
Three Months Ended March
31,
(in thousands)
2023
2022
Net cash provided by (used in)
operating activities
$
501,303
$
(54,939
)
Adjustments:
Purchases of land and buildings
(27,325
)
(22,929
)
Purchases of equipment
(67,896
)
(215,977
)
Total purchases of property and
equipment
(95,221
)
(238,906
)
Proceeds from sale of property and
equipment
664
4,245
Total adjustments
$
(94,557
)
$
(234,661
)
Free cash flow
$
406,746
$
(289,600
)
Net cash used in investing activities
$
(82,732
)
$
(249,028
)
Net cash provided by financing
activities
$
78,119
$
198,582
Free Cash Flow (TTM)
Trailing Twelve Months
Ended
(in thousands)
March 31,
2023
December 31,
2022
September 30,
2022
June 30,
2022
March 31,
2022
Net cash provided by (used in)
operating activities
$
1,121,681
$
565,439
$
(217,783
)
$
(331,313
)
$
(282,168
)
Adjustments:
Purchases of land and buildings
(230,983
)
(226,587
)
(243,609
)
(134,391
)
(180,313
)
Purchases of equipment
(449,594
)
(597,675
)
(627,574
)
(643,450
)
(585,425
)
Total purchases of property and
equipment
(680,577
)
(824,262
)
(871,183
)
(777,841
)
(765,738
)
Proceeds from sale of property and
equipment
9,601
13,182
11,504
9,549
6,079
Total adjustments
$
(670,976
)
$
(811,080
)
$
(859,679
)
$
(768,292
)
$
(759,659
)
Free cash flow
$
450,705
$
(245,641
)
$
(1,077,462
)
$
(1,099,605
)
$
(1,041,827
)
Net cash used in investing activities
$
(681,958
)
$
(848,254
)
$
(887,166
)
$
(799,642
)
$
(774,071
)
Net cash provided by financing
activities
$
126,889
$
247,352
$
131,148
$
101,160
$
269,748
Adjusted EBITDA and Adjusted EBITDA Margin
Three Months Ended
(in thousands)
March 31,
2023
December 31,
2022
September 30,
2022
June 30,
2022
March 31,
2022
Total net revenues
$
5,800,530
$
5,326,774
$
5,101,334
$
5,037,821
$
5,116,686
Net income (loss)
90,855
102,064
90,679
(75,491
)
(209,294
)
Net income (loss) margin
1.6
%
1.9
%
1.8
%
(1.5
)%
(4.1
)%
Adjustments:
Depreciation and amortization
64,245
56,902
54,424
60,399
59,240
Interest expense
8,278
7,173
6,485
6,143
7,368
Interest income
(31,861
)
(26,497
)
(15,403
)
(7,364
)
(3,534
)
Income tax expense (benefit)
32,964
(8,531
)
6,883
340
245
Other expense (income), net
6,539
9,200
(11,224
)
9,229
(490
)
Equity-based compensation
69,899
70,682
63,075
72,916
55,593
Adjusted EBITDA
$
240,919
$
210,993
$
194,919
$
66,172
$
(90,872
)
Adjusted EBITDA margin
4.2
%
4.0
%
3.8
%
1.3
%
(1.8
)%
Segment Gross Profit and Segment Gross Profit Margin
Three Months Ended March
31,
(in thousands)
2023
2022
Gross profit
$
1,419,927
$
1,043,406
Segment gross profit and gross profit
margin:
Product Commerce
1,398,409
1,065,420
Gross profit margin
24.7
%
21.6
%
Developing Offerings
21,518
(22,014
)
Gross profit margin
15.1
%
(12.2
)%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230509005861/en/
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