CPNG Q2 2023 Earnings

Call Details

• Call Title: Coupang Q2 2023 Earnings Call
• Date: August 8, 2023 at 9:30 PM UTC
• Management Team:
  • Mike Parker (Vice President of Investor Relations)
  • Bom Kim (Chief Executive Officer)
  • Gaurav Anand (Chief Financial Officer)

Call Summary

Financial Performance

• Total net revenues grew 16% year over year on a reported basis and 21% in constant currency in Q2.
• Active customers reached 19.7 million in Q2, representing 10% year-over-year growth and a 1.8 million net addition over the past year.
• Gross profit was a record $1.5B in Q2, representing 32% year-over-year growth and a 26.1% gross profit margin, up 320 basis points year-over-year.
• Net income was $145M in Q2 and earnings per share figures were not disclosed on the call.
• Adjusted EBITDA for Q2 was $300M with a consolidated adjusted EBITDA margin of 5.1%, representing a 380 basis point improvement year-over-year and a 100 basis point improvement quarter-over-quarter.
• Trailing 12-month results included $2.0B of operating cash flow and $1.1B of free cash flow, and free cash flow has converged with adjusted EBITDA on a trailing 12-month basis.

Guidance

• Company reiterated a long-term target of adjusted EBITDA margins higher than 10% as an objective, while noting quarter-to-quarter variability is expected.
• Adjusted EBITDA losses for the developing offerings segment are expected to be around $400M in 2023.
• The company expects the FLC accounting change to be fully reflected in reporting by Q4 2023 as merchants transition to new contracts.
• Investment in developing offerings, including Taiwan, Play, and Eats, was updated to approximately $400M for 2023.
• The company expects to continue generating meaningful consolidated free cash flow while investing in developing offerings.
• No explicit top-line or quarterly revenue guidance was provided on the call.