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CI

Coupang, Inc. (CPNG)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered 18% YoY revenue growth to $9.27B and gross margin expansion to 29.4%; diluted EPS was $0.05, and adjusted EBITDA was $413M with a 4.5% margin .
  • Product Commerce drove the quarter: net revenues $8.0B (+16% YoY), gross profit $2.56B (+24% YoY), segment adj. EBITDA $705M (8.8% margin, +201 bps YoY) .
  • Against Wall Street, revenue and EPS beat: revenue actual $9.27B vs $9.15B*, EPS $0.05 vs $0.04*; management reaffirmed FY constant-currency revenue growth “roughly 20%” and raised full-year effective tax rate to 60–65% (temporarily elevated) .
  • The developing offerings (Taiwan, Eats, Farfetch) continued triple-digit revenue growth in Taiwan but posted a larger adjusted EBITDA loss ($292M) as investment accelerated; management expects full-year DO losses near the high end of $900–$950M .
  • Key stock reaction catalysts: revenue/EPS beat, ongoing margin expansion in Product Commerce, offset by higher tax rate and stepped-up Taiwan investments; share repurchases of $81M in Q3 provide capital-return support .

What Went Well and What Went Wrong

What Went Well

  • Strong topline and margin expansion: consolidated net revenues $9.27B (+18% YoY) and gross margin 29.4% (+51 bps YoY); adjusted EBITDA $413M (+20% YoY) .
  • Product Commerce outperformance: gross margin 32.1% (+212 bps YoY), segment adj. EBITDA $705M (+50% YoY) with margin up 201 bps; active customers 24.7M (+10% YoY) .
  • Management emphasized operational excellence and automation as drivers of service and cost: “aggressively accelerating the deployment of automation technologies… improving service levels and operating costs” (Bom Kim) .

What Went Wrong

  • Developing Offerings posted larger losses: segment adj. EBITDA loss of $292M (+$165M YoY) due to accelerated Taiwan investments .
  • Consolidated gross margin decreased nearly 70 bps QoQ due to seasonal weather impacts and mix, and Product Commerce gross margin decreased 46 bps QoQ .
  • Tax rate headwind: effective tax rate elevated to ~42% in Q3 and guided 60–65% for FY 2025, driven by early-stage losses (including Taiwan) .

Financial Results

Consolidated Performance vs Prior Periods

MetricQ1 2025Q2 2025Q3 2025
Total Net Revenues ($USD Billions)$7.908 $8.524 $9.267
YoY Revenue Growth (%)11% 16% 18%
Gross Profit ($USD Billions)$2.316 $2.561 $2.720
Gross Profit Margin (%)29.3% 30.0% 29.4%
Operating Income ($USD Millions)$154 $149 $162
Net Income Attrib. to CPNG ($USD Millions)$107 $32 $95
Diluted EPS ($USD)$0.06 $0.02 $0.05
Adjusted EBITDA ($USD Millions)$382 $428 $413
Adjusted EBITDA Margin (%)4.8% 5.0% 4.5%
TTM Operating Cash Flow ($USD Billions)$2.0 $1.9 $2.4
TTM Free Cash Flow ($USD Billions)$1.0 $0.784 $1.268

Segment Breakdown

Segment MetricQ1 2025Q2 2025Q3 2025
Product Commerce Net Revenues ($USD Billions)$6.870 $7.334 $7.980
Product Commerce Gross Profit ($USD Billions)$2.151 $2.390 $2.564
Product Commerce Segment Adj. EBITDA ($USD Millions)$550 $663 $705
Developing Offerings Net Revenues ($USD Billions)$1.038 $1.190 $1.287
Developing Offerings Gross Profit ($USD Millions)$165 $171 $156
Developing Offerings Segment Adj. EBITDA ($USD Millions)$(168) $(235) $(292)

KPIs

KPIQ1 2025Q2 2025Q3 2025
Product Commerce Active Customers (Millions)23.4 23.9 24.7
Net Revenues per Product Commerce Active Customer ($USD)$294 $307 $323
Net Revenues per PAC (Constant Currency) ($USD)$321 $315 $329

Q3 2025 vs Wall Street Consensus

MetricConsensus*ActualSurprise
Revenue ($USD Billions)$9.146*$9.267 +$0.121B / +1.3%
Primary EPS ($USD)$0.04*$0.05 +$0.01
EBITDA ($USD Millions)$324.4*$413 (Adj. EBITDA) Not directly comparable (consensus EBITDA vs reported Adj. EBITDA)

Values marked with * retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Consolidated Revenue Growth (Constant Currency)FY 2025“~20%” (Q1) “~20%” (Q3 reaffirmed) Maintained
Developing Offerings Adjusted EBITDA LossFY 2025$650–$750M (Q1) $900–$950M; now “around the higher end” (Q2 set; Q3 reaffirmed high end) Raised in Q2; maintained high end in Q3
Effective Tax RateFY 202550–55% (Q1) 60–65% (Q3); cash tax rate consistent Raised
OG&A as % of RevenueNear/Medium TermDecline expected (Q1–Q2) Decline expected; Q3 OG&A 27.6% (-~70 bps QoQ) Maintained directional
Product Commerce Margin (Long-Term)Multi-year>10% target discussed (Q2) “Expect product commerce margins to move well past 10%” (Q3) Strengthened tone

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
AI/Technology/AutomationOngoing investments in automation, robotics, ML for picking/sorting; tech spend elevated but expected to normalize Accelerating deployment of automation; building internal AI compute; practical applications in demand forecasting, fulfillment, routes; disciplined capital allocation Increasing adoption; cost/speed benefits expanding
Taiwan ExpansionWOW membership launch; selection up ~500%; triple-digit YoY growth; +54% QoQ in Q2; building last-mile Momentum “accelerating”; 3P marketplace rollout; growing share via own last-mile; DO losses higher due to investment Scaling rapidly; investment phase intensifies
Product Commerce/FreshFresh +25% const currency YoY in Q2; FLC growing far faster than overall business Fresh trajectory “continued,” value props (one-/same-day, free shipping >$11) reiterated; cohort spend growth Sustained strength
Tariffs/MacroLimited impact; focus on constant currency; outgrow retail market via customer experience Holiday timing (Chuseok) timing helped Q3; underlying trends solid; FY growth guide unchanged Neutral-to-positive; timing noise
Capital Allocation$1B buyback authorization (Q1) Repurchased 2.8M shares for $81M in Q3 Ongoing buybacks
APEC/External Partnerships—APEC sponsorship noted; “not a significant business lever” per management ; AI vision PR highlights AI-driven commerce Branding/PR; modest direct impact

Management Commentary

  • “We’re aggressively accelerating the deployment of automation technologies across our logistics and fulfillment network… already improving service levels and operating costs” (Bom Kim) .
  • “Product commerce margins are already around 9%… We expect product commerce margins to move well past the 10%” (Gaurav Anand) .
  • On Taiwan: “Customer behavior… looks remarkably similar to what we experienced in the early stages of our Korea retail journey… building our own last-mile logistics” (Bom Kim) .
  • On AI: “Focused on building our own internal AI computing infrastructure… practical applications… reduce waste, improve productivity, and enhance the customer experience” (Bom Kim) .

Q&A Highlights

  • Taiwan scale and losses: Management reiterated strong adoption/retention similar to early Korea, with investments in last-mile and selection; DO losses guided to higher end due to Taiwan momentum .
  • Fresh and seasonality: Fresh momentum continued; holiday timing (Chuseok) aided Q3 comparability, but trends remain solid; FY guidance unchanged .
  • AI strategy: Building internal AI compute; practical focus on operations and efficiency; limited external testing; disciplined capital allocation .
  • Tech investment cycle: OG&A ratio beginning to decline QoQ; margins expected to expand annually despite quarter-to-quarter variability .
  • APEC sponsorship: Not a significant direct business lever; primarily partnership/branding .

Estimates Context

  • Q3 beats: Revenue $9.27B vs $9.15B*, EPS $0.05 vs $0.04*; supports modest upward revisions to near-term revenue/EPS, though elevated FY tax rate (60–65%) may temper EPS uplift .
  • Prior quarters: Q2 revenue beat ($8.52B vs $8.38B*), EPS miss ($0.02 vs $0.05*); Q1 beat on EPS ($0.06 vs $0.049*), slight revenue miss vs constant currency interpretation .
    Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Core engine intact: Product Commerce continues to compound with cohort spend expansion and margin accretion; management expects margins “well past 10%” over time .
  • Near-term optics: Q3 revenue/EPS beat and buybacks support the equity story, but higher FY tax rate and DO losses (Taiwan scale-up) add EPS headwinds and margin variability .
  • Taiwan as an option: Evidence of early PMF with last-mile buildout and 3P rollout; investment phase likely persists, positioning for medium-term growth but depressing DO profitability near term .
  • Automation/AI leverage: Ongoing deployment should drive service and cost improvements; practical, internally focused AI compute strategy balances ROI with capability build .
  • Watch seasonality/mix: Q3/Q2 margin deltas tied to weather and category mix; annual margin trajectory remains up and to the right per management .
  • Capital returns: Q3 repurchases ($81M) signal willingness to return capital alongside growth investments .
  • Estimate stance: Expect modest revenue/EPS upward revisions on Q3 beat, partially offset by higher tax guidance; focus on Product Commerce margin trajectory and Taiwan investment cadence .

Citations: Q3 8-K and press release ; Q3 call ; Q2 8-K and call ; Q1 8-K and call ; APEC/AI PRs .