Total net revenues of $5.1 billion, up 27%
year over year on an FX-neutral basis Net income of $91
million, representing record net profit Adjusted EBITDA of
$195 million, an improvement of $129 million quarter over
quarter
Coupang, Inc. (NYSE: CPNG) today announced financial results for
the third quarter ended September 30, 2022.
Q3 2022 Key Financial Highlights
- Total net revenues of $5.1 billion, up 10% YoY on a reported
basis, or 27% YoY on an FX-neutral basis.
- Total gross profit was $1.2 billion, an increase of 64% YoY,
and gross profit margin was 24.2%, an improvement of nearly 800 bps
YoY.
- The company achieved a major milestone in the third quarter,
hitting record net income of $91 million. Adjusted EBITDA was a
record $195 million or 3.8% of total net revenue, a QoQ improvement
of $129 million.
- Product Commerce net revenues was $4.9 billion, up 10% YoY on a
reported basis, or 28% on an FX-neutral basis, nearly four times
the growth rate of the Korean product e-commerce segment.
- Product Commerce adjusted EBITDA margin marked a record 4.8%,
which represents a QoQ improvement of 280 bps.
- Developing Offerings recorded an adjusted EBITDA loss of $44
million.
“Our continued progress is a reflection of billions of dollars
invested over the past seven years to build an unrivaled network
that integrates technology, fulfillment and last-mile logistics,”
said Bom Kim, founder and CEO of Coupang. “We will continue
investing in process optimization and automation, including machine
learning and robotics, to deliver even richer experiences and lower
prices for our customers.”
“We achieved another milestone this quarter, delivering record
net income of $91 million across the entire business,” said
Coupang’s CFO, Gaurav Anand. “Much of the recent improvement has
been the result of investments in technology, infrastructure,
supply chain optimization, and process innovation. We are proud of
our teams and the operational excellence that they continue to
demonstrate while creating new moments of wow for our
customers.”
Third Quarter 2022 Results
- Consolidated Financial Summary
Three Months Ended September
30,
(in thousands, except net revenues per
Active Customer)
2022
2021
% Change
Total net revenues
$
5,101,334
$
4,644,705
10
%
Total net revenues growth, constant
currency(1)
27
%
Active Customers
17,992
16,823
7
%
Total net revenues per Active Customer
$
284
$
276
3
%
Total net revenues per Active Customer,
constant currency(1)
$
329
19
%
Gross profit(2)
1,233,888
754,527
64
%
Net income (loss)
90,679
(323,977
)
NM(3)
Adjusted EBITDA(1)
194,919
(207,434
)
NM(3)
Three Months Ended September
30,
(in thousands)
2022
2021
% Change
Product Commerce
Net revenues
$
4,947,174
$
4,481,525
10
%
Net revenues growth, constant
currency(1)
28
%
Segment adjusted EBITDA
$
239,222
$
(118,235
)
NM(3)
Developing Offerings
Net revenues
$
154,160
$
163,180
(6
) %
Net revenues growth, constant
currency(1)
10
%
Segment adjusted EBITDA
$
(44,303
)
$
(89,199
)
(50
) %
_____________
(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 9, 2022 at 5:30 PM Eastern Standard
Time (November 10, 2022 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, is also
available on that site.
About Coupang
Coupang is one of the largest e-Commerce companies 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 groceries and general merchandise,
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, Japan, 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. These statements about us and our
industry generally relate to future events or our financial or
operating performance, business strategy and plans, and objectives
of management for future operations and involve substantial risks
and uncertainties. In some cases, you can identify forward-looking
statements because they contain words such as “anticipate,”
“believe,” “contemplate,” “continue,” “could,” “estimate,”
“expect,” “intend,” “may,” “plan,” “potential,” “predict,”
“project,” “should,” “target,” “toward,” “will,” or “would,” or the
negative of these words or other similar terms or expressions that
conveys uncertainty of future events or outcomes.
You should not rely on forward-looking statements as predictions
of future events. 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. The outcome of the events described in these
forward-looking statements is subject to risks, uncertainties, and
other factors that could cause actual results to differ from the
results predicted, including those more fully described in our
filings with the SEC, including our Annual Report on Form 10-K for
the year ended December 31, 2021 and our quarterly reports on Form
10-Q. 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
BALANCE SHEETS (in thousands, except shares)
(unaudited)
September 30,
2022
December 31,
2021
Assets
Current assets:
Cash and cash equivalents
$
2,903,052
$
3,487,708
Restricted cash
156,970
319,800
Accounts receivable, net
169,424
175,350
Inventories
1,406,380
1,421,501
Other current assets
292,215
232,447
Total current assets
4,928,041
5,636,806
Long-term restricted cash
192
2,839
Property and equipment, net
1,540,088
1,347,531
Operating lease right-of-use assets
1,292,486
1,374,629
Goodwill
10,121
9,739
Long-term lease deposits and other
355,733
270,290
Total assets
$
8,126,661
$
8,641,834
Liabilities and stockholders'
equity
Current liabilities:
Accounts payable
$
2,940,540
$
3,442,720
Accrued expenses
248,794
304,293
Deferred revenue
129,235
93,972
Short-term borrowings
159,640
7,811
Current portion of long-term debt
2,719
341,717
Current portion of long-term operating
lease obligations
278,030
287,066
Other current liabilities
270,295
266,709
Total current liabilities
4,029,253
4,744,288
Long-term debt
561,069
283,190
Long-term operating lease obligations
1,142,179
1,201,277
Defined severance benefits and other
222,194
237,122
Total liabilities
5,954,695
6,465,877
Commitments and contingencies
Stockholders' equity
Class A common stock, $0.0001 par value,
10,000,000,000 shares authorized, 1,594,140,393 and 1,579,399,667
shares issued and outstanding as of September 30, 2022 and December
31, 2021, respectively; Class B common stock, $0.0001 par value,
250,000,000 shares authorized, 174,802,990 shares issued and
outstanding as of September 30, 2022 and December 31, 2021
177
175
Additional paid-in capital
8,080,618
7,874,038
Accumulated other comprehensive loss
(64,206
)
(47,739
)
Accumulated deficit
(5,844,623
)
(5,650,517
)
Total stockholders' equity
2,171,966
2,175,957
Total liabilities and stockholders'
equity
$
8,126,661
$
8,641,834
COUPANG, INC. CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (in thousands, except per share
amounts) (unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
2022
2021
2022
2021
Net retail sales
$
4,540,393
$
4,137,136
$
13,577,665
$
11,938,685
Net other revenue
560,941
507,569
1,678,176
1,390,994
Total net revenues
5,101,334
4,644,705
15,255,841
13,329,679
Cost of sales
3,867,446
3,890,178
11,824,754
11,184,152
Operating, general and administrative
1,156,468
1,069,639
3,626,515
3,242,891
Total operating cost and expenses
5,023,914
4,959,817
15,451,269
14,427,043
Operating income (loss)
77,420
(315,112
)
(195,428
)
(1,097,364
)
Interest income
15,403
2,603
26,301
5,450
Interest expense
(6,485
)
(7,376
)
(19,996
)
(38,047
)
Other income (expense), net
11,224
(4,026
)
2,485
(7,479
)
Income (loss) before income taxes
97,562
(323,911
)
(186,638
)
(1,137,440
)
Income tax expense
6,883
66
7,468
171
Net income (loss)
90,679
(323,977
)
(194,106
)
(1,137,611
)
Net income (loss) attributable to Class A
and Class B common stockholders per share:
Basic and diluted
$
0.05
$
(0.19
)
$
(0.11
)
$
(0.87
)
Weighted-average shares used in computing
net income (loss) per share attributable to Class A and Class B
common stockholders:
Basic
1,767,275
1,747,255
1,762,465
1,313,234
Diluted
1,790,941
1,747,255
1,762,465
1,313,234
COUPANG, INC. CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (in thousands)
(unaudited)
Nine Months Ended September
30,
2022
2021
Operating activities:
Net loss
$
(194,106
)
$
(1,137,611
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization
174,063
145,866
Provision for severance benefits
124,056
100,649
Equity-based compensation
191,584
193,450
Paid-in-kind interest and accretion of
discount on convertible notes
—
20,148
Inventory and fixed asset losses due to
fulfillment center fire
—
284,825
Non-cash operating lease expense
231,333
187,926
Non-cash others
56,536
32,786
Change in operating assets and
liabilities:
Accounts receivable, net
(39,325
)
(75,958
)
Inventories
(288,761
)
(308,559
)
Other assets
(273,554
)
(182,375
)
Accounts payable
163,508
561,528
Accrued expenses
(6,359
)
50,604
Deferred revenue
57,993
13,015
Other liabilities
(212,005
)
(94,126
)
Net cash used in operating activities
(15,037
)
(207,832
)
Investing activities:
Purchases of property and equipment
(703,074
)
(505,554
)
Proceeds from sale of property and
equipment
10,600
960
Other investing activities
(25,979
)
(2,218
)
Net cash used in investing activities
(718,453
)
(506,812
)
Financing activities:
Proceeds from issuance of Class A common
stock upon initial public offering, net of underwriting
discounts
—
3,431,277
Deferred offering costs paid
—
(11,618
)
Proceeds from issuance of common
stock/units, equity-based compensation plan
14,998
57,521
Proceeds from short-term borrowings and
long-term debt
543,185
308,772
Repayment of short-term borrowings and
long-term debt
(337,071
)
(111,472
)
Net short-term borrowings and other
financing activities
5,377
(2,289
)
Net cash provided by financing
activities
226,489
3,672,191
Effect of exchange rate changes on cash
and cash equivalents, and restricted cash
(243,132
)
(88,842
)
Net (decrease) increase in cash and cash
equivalents, and restricted cash
(750,133
)
2,868,705
Cash and cash equivalents, and restricted
cash, as of beginning of period
3,810,347
1,401,302
Cash and cash equivalents, and restricted
cash, as of end of period
$
3,060,214
$
4,270,007
Supplemental Financial Information
Purchases of property and equipment
Nine Months Ended September
30,
(in thousands)
2022
2021
Purchases of land and buildings
(205,274)
(176,727)
Purchases of equipment
(497,800)
(328,827)
Total purchases of property and
equipment
(703,074)
(505,554)
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 September
30,
(in thousands, except net revenues per
Active Customer)
2022
2021
% Change
Active Customers
17,992
16,823
7
%
Total net revenues per Active Customer
$
284
$
276
3
%
Total net revenues per Active Customer,
constant currency (YoY)
$
329
19
%
Total net revenues per Active Customer,
constant currency (QoQ)
$
301
7
%
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.
Constant Currency Revenue and Constant Currency Revenue
Growth
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 or FX-neutral 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 information compares results between periods
as if exchange rates had remained constant, or FX-neutral. 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. 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.
These results should be considered in addition to, not as a
substitute for, results reported in accordance with U.S. GAAP.
Results on a constant currency basis, as we present them, may not
be comparable to similarly titled measures used by other companies
and are not a measure of performance presented in accordance with
U.S. GAAP.
Adjusted EBITDA and Adjusted EBITDA Margin
Adjusted EBITDA is defined as net income/(loss) for a period
before depreciation and amortization, interest expense, interest
income, income tax expense (benefit), other income (expense), net,
equity-based compensation, impairments, and other items that we do
not believe are reflective of our ongoing operations. Adjusted
EBITDA margin is defined as adjusted EBITDA as a percentage of
total net revenues. We use adjusted EBITDA and adjusted EBITDA
margin as key measures 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 core business,
such as material non-cash items and certain variable charges.
However, other companies may calculate adjusted EBITDA and adjusted
EBITDA margin in a manner different from ours and therefore they
may not be directly comparable to similar terms used by other
companies. Adjusted EBITDA and adjusted EBITDA margin are not
measures of financial performance under U.S. GAAP and should not be
considered as alternatives to cash flow from operating activities
or as measures of liquidity or alternatives to net income/(loss) as
indicators of operating performance or any other measures of
performance derived in accordance with U.S. GAAP. Adjusted EBITDA
and adjusted EBITDA margin have limitations as analytical tools,
and you should consider them in addition to, and not in isolation
or as substitutes, for analysis of our results as reported under
U.S. GAAP.
Segment Gross Profit and Segment Gross Profit Margin
During the first quarter of 2022, with our change in reporting
segments, we began providing segment gross profit and segment gross
profit margin. Segment gross profit is defined as gross profit for
a period attributable to each respective reportable segment.
Segment gross profit margin is defined as segment gross profit as a
percentage of segment net revenues. 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 and segment gross profit margin are
not measures of financial performance under U.S. GAAP and should
not be considered as alternatives to cash flow from operating
activities or as measures of liquidity or alternatives to
consolidated gross profit as indicators of operating performance or
any other measures of performance derived in accordance with U.S.
GAAP. Segment gross profit and segment gross profit margin have
limitations as analytical tools, and you should consider them in
addition to, and not in isolation or as substitutes for analysis of
our results as reported under U.S. GAAP.
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,
Nine Months Ended September
30,
(in thousands)
2022
2021
2022
2021
Consolidated
Total net revenues
$
5,101,334
$
4,644,705
$
15,255,841
$
13,329,679
Total net revenues growth
10
%
48
%
14
%
63
%
Adjustment:
Exchange rate effect
813,279
(131,079
)
1,859,955
(774,088
)
Total net revenues, constant currency
$
5,914,613
$
4,513,626
$
17,115,796
$
12,555,591
Total net revenues growth, constant
currency
27
%
44
%
28
%
54
%
Product Commerce
Net revenues
$
4,947,174
$
4,481,525
$
14,760,758
$
12,911,901
Net revenues growth
10
%
44
%
14
%
59
%
Adjustment:
Exchange rate effect
788,061
(125,667
)
1,799,596
(749,827
)
Net revenues, constant currency
$
5,735,235
$
4,355,858
$
16,560,354
$
12,162,074
Net revenues growth, constant currency
28
%
40
%
28
%
50
%
Constant Currency Revenue and Constant Currency Revenue Growth
(QoQ)
Three Months Ended September
30,
(in thousands)
2022
2021
Consolidated
Total net revenues
$
5,101,334
$
4,644,705
Total net revenues growth (QoQ)
1
%
4
%
Adjustment:
Exchange rate effect
319,953
143,563
Total net revenues, constant currency
$
5,421,287
$
4,788,268
Total net revenues growth, constant
currency (QoQ)
8
%
7
%
Adjusted EBITDA and Adjusted EBITDA Margin
Three Months Ended September
30,
Nine Months Ended September
30,
(in thousands)
2022
2021
2022
2021
Total net revenues
$
5,101,334
$
4,644,705
$
15,255,841
$
13,329,679
Net income (loss)
90,679
(323,977
)
(194,106
)
(1,137,611
)
Net income (loss) margin
1.8
%
(7.0
) %
(1.3
) %
(8.5
) %
Adjustments:
Depreciation and amortization(1)
54,424
51,540
174,063
145,866
Interest expense
6,485
7,376
19,996
38,047
Interest income
(15,403
)
(2,603
)
(26,301
)
(5,450
)
Income tax expense
6,883
66
7,468
171
Other (income) expense, net
(11,224
)
4,026
(2,485
)
7,479
Equity-based compensation(2)
63,075
56,138
191,584
193,450
FC Fire losses
—
—
—
295,501
Adjusted EBITDA
$
194,919
$
(207,434
)
$
170,219
$
(462,547
)
Adjusted EBITDA margin
3.8
%
(4.5
) %
1.1
%
(3.5
) %
_____________
(1)
Depreciation and amortization includes
amounts in cost of sales of $10 million and $12 million for the
three months ended September 30, 2022 and 2021, respectively,
and amounts in operating, general and administrative of $45 million
and $39 million for the three months ended September 30, 2022
and 2021, respectively. Some amounts may not reconcile due to
rounding.
Depreciation and amortization includes
amounts in cost of sales of $35 million and $35 million for the
nine months ended September 30, 2022 and 2021, respectively,
and amounts in operating, general and administrative of $139
million and $111 million for the nine months ended
September 30, 2022 and 2021, respectively.
(2)
Equity-based compensation includes amounts
in cost of sales of $4 million and $3 million for the three months
ended September 30, 2022 and 2021, respectively, and amounts
in operating, general and administrative of $59 million and $53
million for the three months ended September 30, 2022 and
2021, respectively.
Equity-based compensation includes amounts
in cost of sales of $12 million and $7 million for the nine months
ended September 30, 2022 and 2021, respectively, and amounts
in operating, general and administrative of $180 million and $186
million for the nine months ended September 30, 2022 and 2021,
respectively.
Segment Gross Profit and Segment Gross Profit Margin
Three Months Ended September
30,
Nine Months Ended September
30,
(in thousands)
2022
2021
2022
2021
Gross profit
$
1,233,888
$
754,527
$
3,431,087
$
2,145,527
Segment gross profit and gross profit
margin:
Product Commerce
$
1,217,593
$
780,221
3,410,027
2,207,271
Gross profit margin
24.6
%
17.4
%
23.1
%
17.1
%
Developing Offerings
16,295
(25,694
)
21,060
(61,744
)
Gross profit margin
10.6
%
(15.7
) %
4.3
%
(14.8
) %
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221109005588/en/
Investor Contact: Coupang IR ir@coupang.com
Media Contact: Coupang PR press@coupang.com
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