Coupang Inc (CPNG, Financial) released its 8-K filing on November 5, 2024, announcing robust financial results for the third quarter ended September 30, 2024. The e-commerce giant reported net revenues of $7.9 billion, exceeding the analyst estimate of $7.76 billion, marking a 27% year-over-year increase. However, the company's diluted earnings per share (EPS) of $0.04 fell short of the estimated $0.06, primarily due to operating losses from its Farfetch acquisition.
Company Overview
Coupang Inc is a leading e-commerce company offering a wide range of products, including apparel, electronics, and groceries. The company operates through two main segments: Product Commerce and Developing Offerings. The Product Commerce segment, which includes core retail and marketplace offerings, generates the majority of Coupang's revenue.
Performance Highlights and Challenges
In Q3 2024, Coupang Inc reported a gross profit of $2.3 billion, a 45% increase from the previous year, with a gross profit margin of 28.8%. Despite these gains, the company's net income attributable to stockholders decreased by $21 million to $70 million, largely due to losses from Farfetch. The acquisition impacted the diluted EPS, which declined by 1 cent to $0.04. Excluding Farfetch, the diluted EPS would have been $0.06.
Financial Achievements and Industry Impact
Coupang's Product Commerce segment achieved net revenues of $6.9 billion, a 16% increase year-over-year, with an adjusted EBITDA of $470 million. The Developing Offerings segment, which includes international operations and new ventures like Coupang Eats and Fintech, saw a remarkable 347% increase in net revenues to $975 million. These achievements underscore Coupang's strategic expansion and its ability to capitalize on growth opportunities in the retail sector.
Key Financial Metrics
Adjusted EBITDA for the quarter was $343 million, reflecting a margin of 4.4%. Operating cash flow for the trailing twelve months was $1.8 billion, though it decreased by $805 million year-over-year due to non-recurring working capital benefits in the prior period. Free cash flow also saw a decline, amounting to $935 million, down $920 million from the previous year.
| Metric | Q3 2024 | Q3 2023 | % Change |
|---|---|---|---|
| Total Net Revenues | $7.9 billion | $6.2 billion | 27% |
| Gross Profit | $2.3 billion | $1.6 billion | 45% |
| Net Income | $64 million | $91 million | -30% |
| Adjusted EBITDA | $343 million | $239 million | 44% |
Analysis and Commentary
The results highlight Coupang's continued growth trajectory, driven by its expanding customer base and diversified offerings. The company's CFO, Gaurav Anand, noted,
This quarter we continued the strong momentum we’ve seen throughout this year, delivering robust growth in revenues and margins."However, the financial impact of the Farfetch acquisition presents a challenge, affecting net income and EPS. The company's focus on operational excellence and customer satisfaction remains pivotal as it navigates these challenges.
Overall, Coupang Inc's Q3 2024 performance demonstrates its resilience and strategic positioning in the competitive e-commerce landscape, with significant revenue growth and expansion into new market segments.
Explore the complete 8-K earnings release (here) from Coupang Inc for further details.
