• Net Revenue Growth: 21% year over year; 14% excluding Farfetch; 28% in constant currency; 21% excluding Farfetch in constant currency.
• Gross Profit Growth: 48% year over year; 29% excluding Farfetch and fire insurance gain.
• Adjusted EBITDA: $1.4 billion for the year; 4.5% margin.
• Free Cash Flow: Over $1 billion generated.
• Product Commerce Revenue Growth: 9% year over year; 16% in constant currency.
• Developing Offerings Revenue Growth: 300% year over year; 124% excluding Farfetch; 136% in constant currency excluding Farfetch.
• Gross Profit Margin: 31.3% for the quarter; 29% excluding Farfetch and insurance gain.
• Net Income: $156 million attributable to Coupang stockholders; $24 million excluding fire insurance gain.
• Adjusted EBITDA Margin: 5.3% for the quarter; 7.8% for Product Commerce segment.
• Operating Cash Flow: $1.9 billion for the year.
• Effective Income Tax Rate: 53% for the quarter; cash tax obligation closer to 20% excluding Farfetch losses.

• Warning! GuruFocus has detected 9 Warning Signs with CPNG.

Release Date: February 25, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Coupang Inc (NYSE:CPNG) achieved a 23% increase in net revenues, excluding Farfetch, with a strong 29% growth in gross profit.
• The company generated $1.4 billion in adjusted EBITDA, expanding margins to 4.5%, and delivered over $1 billion in free cash flow.
• Coupang Inc (NYSE:CPNG) made significant improvements in fulfillment and logistics, increasing same-day or early morning deliveries by 45%.
• The company expanded its Rocket Delivery service to include next-day installation services for large items, enhancing customer convenience.
• Coupang Inc (NYSE:CPNG) successfully launched its WOW membership program in Taiwan, showing strong international growth potential.

Negative Points

• The weakening of the Korean won against the US dollar impacted revenue growth, necessitating constant currency adjustments.
• OG&A expenses increased due to the inclusion of Farfetch and related acquisition and restructuring costs.
• The effective income tax rate was high at 53%, driven by consolidation of pre-tax losses in Farfetch and non-deductible expenses.
• Developing offerings segment incurred adjusted EBITDA losses, with expectations of $650 million to $750 million losses in 2025.
• Investment intensity in technology and infrastructure is expected to continue, impacting short-term profitability.

Q & A Highlights

Q: Over the past several months, data has indicated a slowdown in the domestic e-commerce market. Have you seen a similar trend in your GMV growth, and can you provide more color on your top-line growth outlook for 2025? Also, can you elaborate on the FLC business and its margin profile for 2025? A: Bom Kim, CEO: Despite macroeconomic uncertainties, our growth remains strong due to deep customer engagement and continuous improvement in selection, service, and price. We expect our Q1 growth to align with Q4, excluding Farfetch. Our strategy focuses on providing the best experience at the lowest price, which we believe will allow us to outpace market growth. Regarding FLC, we are optimizing service levels for customers and merchants, with FLC growing at a high multiple of our overall business.

Q: Regarding Eats, how will the platform fee adjustments impact your developing offering guidance? Also, when can we expect a moderation in tech spending? A: Gaurav Anand, CFO: We partner well with stakeholders in Eats, offering free delivery and low fees. We don't comment on individual profitability but see opportunities to improve operations. On tech spending, the increase is due to Farfetch acquisition costs and investments in AI and automation. We expect OG&A expenses to decline over time as a percentage of revenue.

Q: What is the strategy for Farfetch post-restructuring, and will there be integration with Coupang? Also, what is the outlook for CapEx investments? A: Bom Kim, CEO: We are pleased with Farfetch's progress and will continue to streamline operations and enhance customer experience. We aim for sustainable growth in the global luxury market. Gaurav Anand, CFO: CapEx as a percentage of revenue remains consistent, supporting growth in Korea and Taiwan. We expect to continue leveraging CapEx efficiently.

Q: Can you elaborate on the $650 million to $750 million investment guidance for developing offerings, including Farfetch and other initiatives like Taiwan and Japan? A: Bom Kim, CEO: Developing offerings include various investments aimed at strengthening our customer value proposition. Farfetch had one-off benefits in Q4, and we evaluate opportunities based on customer demand and operational excellence. Our investments reflect growing confidence in delivering a WOW experience and attractive returns.

Q: What is the expected investment intensity for 2025 compared to 2024, and how will it impact EBITDA margins? A: Gaurav Anand, CFO: We remain disciplined in our investments, expecting OG&A expenses to decline over time. Our approach focuses on disciplined execution and ensuring investments align with customer demand and operational excellence.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.