Coupang (CPNG) Q2 2024 earnings summary

Executive summary

• Net revenues grew 25% year-over-year to $7.3 billion for Q2 2024, driven by both Product Commerce and Developing Offerings, including the Farfetch acquisition.

• Gross profit increased 41% year-over-year to $2.1 billion, with gross margin improving by 310 basis points to 29.3%; excluding Farfetch, gross profit was $1.9 billion, up 27%.

• Adjusted EBITDA was $330 million (4.5% margin), up 10% year-over-year; excluding Farfetch, adjusted EBITDA was $361 million (5.3% margin).

• Net loss attributable to stockholders was $77 million, mainly due to $80 million in Farfetch losses and a $121 million KFTC administrative fine; excluding these, net income was $124 million.

• Free cash flow for the quarter was $488 million, up 8% year-over-year; trailing twelve months free cash flow was $1.5 billion.

Financial highlights

• Product Commerce net revenues increased 13% year-over-year to $6.4 billion; Developing Offerings surged 472% to $892 million, mainly from Farfetch.

• Product Commerce active customers increased 12% year-over-year to 21.7 million.

• Product Commerce segment adjusted EBITDA was $530 million (8.2% margin), up $122 million year-over-year; Developing Offerings segment adjusted EBITDA was negative $200 million.

• Operating cash flow for the trailing twelve months was $2.2 billion, up $250 million year-over-year.

• Ending cash balance was $5.8 billion, up 22% year-over-year.

Outlook and guidance

• Management reiterated long-term guidance of over 10% Adjusted EBITDA margin and expects continued margin expansion.

• Full-year adjusted EBITDA loss guidance for developing offerings remains at roughly $750 million, including Farfetch.

• Cash tax obligation for the year expected to be 20%-25%, excluding Farfetch losses.

• Management expects continued investment in Developing Offerings and expansion into new geographies, with significant infrastructure and workforce expenditures planned.

• Liquidity remains strong with $5.8 billion in cash and equivalents and $875 million available under the revolving credit facility.