CPNG Q1 2024 Earnings

Call Details

• Call Title: Coupang Q1 2024 Earnings Call
• Date: May 7, 2024 at 9:30 PM UTC
• Management Team:
  • Bom Kim (Chief Executive Officer)
  • Gaurav Anand (Chief Financial Officer)
  • Mike Parker (Vice President of Investor Relations)

Call Summary

Financial Performance

• Total net revenues grew 28% year over year in constant currency and 23% excluding Farfetch for Q1 2024.
• Adjusted for the FLC revenue accounting change, reported constant currency revenue growth would have been about 10 percentage points higher than stated rates.
• Product commerce segment revenues grew 15% year over year on a reported basis and 20% in constant currency for Q1.
• Q1 gross profit was $1.9B with a gross margin of 27.1% excluding Farfetch, and consolidated gross profit was $1.8B with a margin of 26.5%, a 200 basis point year-over-year improvement.
• Coupang generated $59M of income before income taxes and $5M in net income attributable to Coupang stockholders, resulting in diluted EPS of $0.00; excluding Farfetch, net income was $98M and diluted EPS would have been $0.05.
• Consolidated adjusted EBITDA was $281M for the quarter with a margin of 3.9%, and trailing 12-month adjusted EBITDA was $1.1B with a 4.3% margin.

Guidance

• Developing offerings adjusted EBITDA loss guidance for 2024 was increased to approximately $750M including Farfetch, versus prior guidance of about $650M excluding Farfetch.
• Farfetch is expected to achieve close to positive adjusted EBITDA on a run-rate basis by the end of the calendar year.
• The company expects a temporarily high book tax rate between 95% and 100% in 2024 driven by consolidation of pre-tax losses in Farfetch, while cash tax obligations are expected to be closer to 20% to 25% excluding Farfetch losses.
• Long-term normalized effective tax rate is expected to be roughly 27%.
• Company expects to continue expanding consolidated margins on an annual basis in 2024 while investing in developing offerings that remain loss-making in the near term.