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CI

Coupang, Inc. (CPNG)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 delivered durable growth and margin gains: net revenues $8.524B (+16% YoY; +19% FX-neutral), gross profit $2.561B (+20% YoY) with gross margin 30.0%, and adjusted EBITDA $428M (5.0%) .
  • Revenue beat consensus ($8.38B*) while EPS missed ($0.05* vs $0.02 actual); Q1 was mixed (EPS beat; revenue miss), and Q4 2024 saw an EPS beat with a revenue miss*.
  • Product Commerce set a record gross profit margin at 32.6% (+227 bps YoY) and adj. EBITDA margin ~9.0% (+80 bps YoY); Developing Offerings grew revenue +33% YoY but posted a larger adj. EBITDA loss of $235M .
  • Guidance updated: Developing Offerings adj. EBITDA losses raised to $900–$950M for FY25 (from $650–$750M), and the FY25 effective tax rate increased to 65–70% (cash tax ~60%); consolidated FX-neutral revenue growth ~20% reaffirmed .
  • Taiwan is accelerating rapidly (Q2 revenue +54% QoQ; triple-digit YoY), driven primarily by repeat customers and broader selection; management highlighted AI and automation as continued margin drivers .

What Went Well and What Went Wrong

What Went Well

  • Product Commerce margin records and mix: gross profit margin reached 32.6% (+~227 bps YoY; +130 bps QoQ), adjusted EBITDA margin just over 9% (+80 bps YoY; >100 bps QoQ), reflecting automation, supply chain optimization, and margin-accretive categories .
  • Strong consolidated performance: net revenues $8.5B (+16% YoY), gross profit $2.6B (+20% YoY), op income $149M (+$174M YoY), adjusted EBITDA $428M (5.0%) .
  • Taiwan momentum: revenues +54% QoQ and triple-digit YoY, with majority of growth from repeat customers; active customers +~40% QoQ; selection and supply expanded markedly .
    • Quote: “Our Taiwan offering is growing faster and stronger than even the most optimistic forecast... revenues surged 54% quarter over quarter...” .

What Went Wrong

  • Developing Offerings losses widened: adj. EBITDA loss of $235M in Q2 and FY25 loss range raised to $900–$950M (primarily Taiwan scaling), weighing on consolidated profitability .
  • Higher OG&A burden: OG&A was 28.3% of revenue (+96 bps QoQ), tied to elevated tech/infrastructure spend and non-recurring Farfetch restructuring costs; management expects OG&A to decline as a % of revenue near-to-medium term .
  • Tax rate headwind: Q2 effective tax rate 84% due to Taiwan and Farfetch restructuring losses (no tax benefit); FY25 ETR raised to 65–70% with cash taxes ~60% .

Financial Results

MetricQ4 2024Q1 2025Q2 2025
Total Net Revenues ($USD Billions)$7.965 $7.908 $8.524
Diluted EPS ($USD)$0.08 $0.06 $0.02
Gross Profit Margin (%)31.3% 29.3% 30.0%
Adjusted EBITDA ($USD Millions)$421 $382 $428
Adjusted EBITDA Margin (%)5.3% 4.8% 5.0%

Segment breakdown

Segment MetricQ4 2024Q1 2025Q2 2025
Product Commerce Net Revenues ($USD Billions)$6.883 $6.870 $7.334
Product Commerce Gross Profit ($USD Billions)$2.251 $2.151 $2.390
Product Commerce Gross Margin (%)32.7% 31.3% 32.6%
Product Commerce Adj. EBITDA ($USD Millions)$539 $550 $663
Product Commerce Adj. EBITDA Margin (%)7.8% 8.0% 9.0%
Developing Offerings Net Revenues ($USD Billions)$1.082 $1.038 $1.190
Developing Offerings Adj. EBITDA ($USD Millions)$(118) $(168) $(235)

KPIs

KPIQ4 2024Q1 2025Q2 2025
Product Commerce Active Customers (Millions)22.8 23.4 23.9
Net Revenues per PC Active Customer ($USD)$302 $294 $307
Constant Currency Net Revenues per PC Active Customer ($USD)$320 $321 $315

Versus Wall Street consensus (S&P Global)

MetricQ4 2024 Consensus*Q4 2024 ActualQ1 2025 Consensus*Q1 2025 ActualQ2 2025 Consensus*Q2 2025 Actual
Revenue ($USD Billions)$8.137*$7.965 $8.018*$7.908 $8.380*$8.524
Primary EPS ($USD)$0.0085*$0.04 $0.0494*$0.0539 $0.05*$0.0207

Values marked with * were retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Developing Offerings Adjusted EBITDA LossFY 2025$650–$750M $900–$950M Raised (larger loss)
Effective Tax RateFY 202550–55% ETR; cash tax ~40% 65–70% ETR; cash tax ~60% Raised
Consolidated Revenue Growth (FX-neutral)FY 2025~20% ~20% reaffirmed Maintained
Product Commerce Margin PotentialMulti-year“>10% eventual adjusted EBITDA margin potential” “Product Commerce to lead to >10% margin; consolidated to follow” Maintained
OG&A as % of RevenueNear-to-medium termExpected to decline Expected to decline Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
AI/AutomationRobotics/automation doubled “highly automated” footprint; margin tailwinds expected . Tech spend elevated to build scalable foundation; margins >10% long-term .AI core to operations; practical apps scaling; “up to 50% of new code written by AI” in early implementations; humanoid robotics over time .Increasing investment and impact
Taiwan ExpansionQ4: +23% QoQ revenue; WOW launched; strong momentum . Q1: selection +~500%; rising repeat spend .Q2: +54% QoQ; triple-digit YoY; majority growth from repeat customers; active customers +~40% QoQ .Accelerating
FLC (Fulfillment Logistics by Coupang)Growing at multiples of overall business; marketplace faster than 1P .Volumes, selection, sellers growing several times faster than Product Commerce; margin accretive; significant investments in tools/services .Strengthening
Eats (Food Delivery)Sustained momentum in 2024; free delivery; lowest fees globally; room to grow outside Seoul .Continued strong momentum; testing initiatives (e.g., pickup); engagement rising; still far from full potential .Improving
FarfetchBreakeven run rate from large losses; seasonality and one-offs in Q4 .Q2: restructuring-related losses contribute to high ETR; non-recurring costs in OG&A .Restructuring impact near term
Macro/TariffsLimited impact; focus on customer engagement as driver .Reaffirmed ~20% FX-neutral growth; focus on selection, service, price; will update if outlook changes .Stable
AI Infra (CIC)—Rebranded AI cloud service “Coupang Intelligent Cloud”; provides GPUaaS, potential external enterprise access .Emerging initiative
TaxTemporarily high ETR 50–55% expected in 2025; cash tax ~40% .Q2 ETR 84%; FY25 ETR 65–70%; cash tax ~60% .Higher headwind

Management Commentary

  • Product Commerce and margins: “Gross profit margin was a record 32.6%, representing roughly 230 bps of improvement over last year and 130 bps versus last quarter.”
  • Margin potential: “We believe the eventual adjusted EBITDA margin potential… to be in excess of 10%… Product Commerce… delivered $663M of Adjusted EBITDA with a margin of just over 9%.”
  • Taiwan trajectory: “Revenues surged 54% quarter over quarter… growth primarily fueled by repeat customers… trajectory similar to early years in Korea.”
  • AI strategy: “AI… core to our operations… seeing up to 50% of the new code written by AI… expect transformative impact on operations through enhanced automation and humanoid robotics.”
  • OG&A outlook: “We continue to expect consolidated OG&A expenses to decline as a percentage of revenues in the near to medium term.”

Q&A Highlights

  • Margins trajectory: Management expects Product Commerce margins to exceed 10% over time; margins may be uneven quarter-to-quarter but should expand annually .
  • Developing Offerings investment arc: FY25 losses raised to $900–$950M; Taiwan drives most of the revision; too early to guide beyond 2025 .
  • AI Infrastructure/enterprise: Coupang building internal AI compute; exploring small-scale external enterprise access; disciplined capital allocation .
  • Taiwan unit economics: Management emphasized repeat customers and selection breadth; acknowledged early-stage scaling inefficiencies typical at this stage .
  • OG&A drivers: Elevated tech/infrastructure spend and Farfetch non-recurring costs; reiterated near-to-medium-term OG&A percent decline expectation .

Estimates Context

  • Q2 2025: Revenue beat ($8.52B actual vs $8.38B consensus*), EPS missed ($0.02 vs $0.05*).
  • Q1 2025: EPS beat ($0.054 actual vs $0.049*), revenue missed ($7.91B actual vs $8.02B*).
  • Q4 2024: EPS beat ($0.04 actual vs $0.009*), revenue missed ($7.97B actual vs $8.14B*).
  • Implications: Raised Developing Offerings loss guidance and higher FY25 tax rate likely to pressure forward EPS assumptions; Product Commerce margin trajectory and Taiwan acceleration support revenue/gross profit expectations.

Values marked with * were retrieved from S&P Global.

Key Takeaways for Investors

  • Product Commerce margin strength is the core earnings driver; record gross margin (32.6%) and adj. EBITDA margin (~9%) demonstrate leverage from automation and supply chain optimization .
  • Taiwan is scaling faster than anticipated and is a major growth optionality, but near-term losses in Developing Offerings will be higher to fund acceleration .
  • Consolidated revenue growth remains robust and reaffirmed (~20% FX-neutral for FY25), with FLC and category expansion contributing to durable growth despite macro noise .
  • Tax headwinds intensify in FY25 (ETR 65–70%; cash tax ~60%), a key modeling adjustment for EPS and cash flow forecasts .
  • AI investment is tangible and increasingly impactful (software development productivity, operations automation), supporting medium-term margin expansion .
  • Near-term trading lens: Expect narrative to focus on the trade-off between impressive core margin advances and higher Developing Offerings losses; watch for ongoing Taiwan KPIs and OG&A mix as catalysts .
  • Medium-term thesis: Margin expansion path (>10% long-term potential), FLC accretion, and international repeat-cohort dynamics underpin structural value creation; execution in Taiwan/Eats and disciplined capital allocation remain pivotal .

Citations: Q2 2025 press release and exhibits ; 8-K Item 2.02 and full release incorporation ; Q2 2025 earnings call transcript ; Q1 2025 press release and call ; Q4 2024 press release and call .

Values marked with * were retrieved from S&P Global.