CPNG Q2 2024 Earnings

Call Details

• Call Title: Coupang Q2 2024 Earnings Call
• Date: August 6, 2024 at 9:30 PM UTC
• Management Team:
  • Mike Parker (Vice President of Investor Relations)
  • Bom Kim (Founder and Chief Executive Officer)
  • Gaurav Anand (Chief Financial Officer)

Call Summary

Financial Performance

• Total net revenues grew 25% year-over-year in Q2, or 18% excluding Farfetch, and grew 30% in constant currency or 23% excluding Farfetch.
• Company gross profit reached over $2.1B, growing over 40% year-over-year, with a consolidated gross margin of 29.3%.
• Excluding Farfetch, gross profit was $1.9B, growing 27% year-over-year with a margin of 28.3%.
• Product commerce gross profit increased 26% year-over-year to over $1.9B with a record gross margin of 30.3%, improving 310 basis points year-over-year.
• Consolidated adjusted EBITDA was $330M for the quarter, representing a 4.5% adjusted EBITDA margin, and trailing 12-month adjusted EBITDA was $1.1B with a 4.2% margin.
• Excluding Farfetch, adjusted EBITDA was $361M in the quarter and $1.2B TTM with a 4.6% trailing 12-month adjusted EBITDA margin.
• The company reported $3M of income before income taxes and a net loss attributable to Coupang stockholders of $77M, resulting in diluted loss per share of $0.04 for the quarter.
• Excluding Farfetch and the estimated accrued administrative fine, net income attributable to Coupang stockholders was approximately $124M and diluted EPS was $0.07.

Guidance

• The company reiterated a long-term corporate target of over 10% adjusted EBITDA on an annual basis while noting quarter-to-quarter unevenness in margins.
• Farfetch is on track to approach positive adjusted EBITDA on a run-rate basis by the end of the calendar year, consistent with prior commentary.
• The company reaffirmed full-year guidance for developing offerings adjusted EBITDA losses of roughly $750M including Farfetch, while noting timing may fluctuate quarter-to-quarter.
• The effective income tax rate increased in Q2 due to consolidation of Farfetch losses and non-deductible expenses, and the company expects cash tax obligation closer to 20% to 25% excluding Farfetch losses.
• Management reiterated discipline on new market investments such as Taiwan and stated that incremental spend will be applied only when returns are clear.
• Management stated that margin expansion drivers including category mix and operational efficiency are expected to continue contributing to further margin expansion over quarters and years.