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Coupang, Inc. (CPNG)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 net revenues were $8.0B (+21% YoY; +28% FX-neutral), with record gross profit of $2.5B and gross margin of 31.3% (+570 bps YoY); adjusted EBITDA was $421M (5.3% margin), and diluted EPS was $0.08, or $0.01 excluding the $175M FC fire insurance gain .
  • Product Commerce gross profit rose 31% YoY to $2.3B (32.7% margin), and adjusted EBITDA reached $539M (7.8% margin), while Developing Offerings revenues grew 296% YoY to $1.1B with adjusted EBITDA loss narrowing to $(118)M .
  • Management guided 2025 constant-currency consolidated growth at ~20%, Q1 at ~20%, annual adjusted EBITDA margin expansion, Product Commerce gross profit growing faster than revenues, Developing Offerings FY25 adjusted EBITDA losses of $650–$750M, and a 50–55% accounting effective tax rate (cash tax ~40%) .
  • Strategic catalysts: accelerated automation/AI deployment and FLC expansion (margin-accretive) alongside Taiwan scaling (Q4 Taiwan net revenues +23% QoQ), while near-term headwinds include FX pressure (KRW weakness) and elevated accounting ETR from Farfetch consolidation .

What Went Well and What Went Wrong

What Went Well

  • Record profitability: consolidated gross profit hit $2.5B (+48% YoY), with adjusted gross profit (ex-Farfetch and FC insurance) at $2.2B (+29% YoY) and adjusted EBITDA $421M (5.3% margin) .
  • Margin expansion drivers: Product Commerce adjusted gross margin ex-insurance improved to 31.0% (+370 bps YoY; +100 bps QoQ), driven by automation, supply-chain optimization, and margin-accretive offerings. “Benefits from greater utilization of automation and technology, further supply chain optimization and the scaling of margin-accretive offerings” .
  • Customer experience upgrades: same-day/dawn deliveries increased 45%; extended same-day cutoff by two hours; fresh assortment +30%; Jeju Island dawn delivery expansion. “We made significant changes… increase by 45% the deliveries that were either same day or dawn… extended the order cutoff… increased our fresh assortment by over 30%… Jeju Island free overnight Rocket Delivery” .

What Went Wrong

  • Operating expenses: OG&A as % of revenue increased >370 bps YoY (>440 bps ex-insurance), reflecting Farfetch inclusion and higher tech/infrastructure investment intensity near term .
  • Taxes: accounting effective tax rate was 53% in Q4 due to Farfetch pretax losses and nondeductible expenses; cash tax closer to ~20% in 2024 (moving to ~40% in 2025) .
  • FX/mix pressures: KRW weakness weighed on reported growth, and rising FLC net revenue mix compresses revenue growth even as gross profit becomes a better indicator of underlying business momentum .

Financial Results

MetricQ2 2024Q3 2024Q4 2024Vs. Estimates
Total Net Revenues ($USD Billions)$7.323 $7.866 $7.965 N/A (SPGI consensus unavailable)
Gross Profit ($USD Billions)$2.142 $2.269 $2.491 N/A
Gross Profit Margin (%)29.3% 28.8% 31.3% N/A
Adjusted Gross Profit ($USD Billions, ex-Farfetch & FC insurance)$1.939 $2.086 $2.170 N/A
Net Income Attributable to Stockholders ($USD Millions)$(77) $70 $156 N/A
Diluted EPS ($USD)$(0.04) $0.04 $0.08; $0.01 ex-insurance N/A
Adjusted EBITDA ($USD Millions)$330 $343 $421 N/A
Adjusted EBITDA Margin (%)4.5% 4.4% 5.3% N/A
Cash from Operations ($USD Millions)$664 $334 (quarter) $676 (quarter) N/A
Free Cash Flow ($USD Millions)$488 $(42) (quarter) $463 (quarter) N/A

Notes: SPGI consensus for Q4 2024 was unavailable due to data limits; estimate comparisons could not be performed.

Segment breakdown (Q4 2024):

SegmentNet Revenues ($USD Billions)Gross Profit ($USD Billions)Gross Margin (%)Adjusted EBITDA ($USD Millions)
Product Commerce$6.883 $2.251 32.7% $539
Developing Offerings$1.082 $0.240 22.2% $(118)

KPIs:

KPIQ2 2024Q3 2024Q4 2024
Product Commerce Active Customers (Millions)21.7 22.5 22.8
Net Revenues per Product Commerce Active Customer ($USD)$296 $307 $302
Net Revenues per Product Commerce Active Customer (Constant Currency) ($USD)$309 $318 $320

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Consolidated Revenue Growth (Constant Currency)FY2025Not provided~20% YoY New
Consolidated Revenue Growth (Constant Currency)Q1 2025Not provided~20% YoY New
Product Commerce Gross Profit vs RevenueFY2025Not providedGross profit to grow faster than CC revenues New
Adjusted EBITDA MarginFY2025Annual margin expansion expected (long-term >10%) Annual margin expansion expected Maintained
Developing Offerings Adjusted EBITDA LossFY2025FY2024 guide ≈ $(750)M including Farfetch $(650)M–$(750)M Maintained/tightened range
Effective Tax Rate (Accounting)FY2025FY2024 cash tax ~20–25% (context) 50–55%; cash tax ~40% New (higher accounting ETR)

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
Automation & AIMargin gains from automation/AI; Product Commerce margin record 30.3% Continued efficiencies; uneven QoQ margins “Huge runway”; automation still low-teens of infrastructure; AI driving “trillions of predictions” Strengthening focus
FLC (Fulfillment & Logistics by Coupang)Sellers +25% QoQ; +150% YoY; accretive; accounting change compresses revenue growth Units/sellers/volumes >130% YoY; significant growth driver Growing faster than overall; margin-accretive; gross profit better indicator than revenue Scaling; mix shift
Taiwan expansionStrong conviction; leveraging Korea playbook Momentum; disciplined investment Q4 net revenues +23% QoQ; launched WOW membership; “substantial scale” Accelerating
Farfetch turnaroundTarget near breakeven by YE; progress ongoing Achieved near breakeven in Q3 Breakeven run-rate; seasonal Q4 profitability; minimal scale loss Improving
OG&A/Tech spendHigher OG&A due to Farfetch; KFTC fine; tech/infrastructure investment OG&A up; tech spend timing, not structural OG&A % revenue up; expect decline over time; investing in AI/automation Short-term elevated, declining over time
Tax rateExpect 2024 cash tax ~20–25% Q3 accounting ETR 52% (cash ~20–25%) Q4 accounting ETR 53%; FY2025 accounting ETR 50–55%; cash ~40% Higher accounting ETR in 2025
Macro/FX—Korean retail spend flat; outpaced market KRW weakness; focus on CC growth; deepening customer engagement FX headwind persists

Management Commentary

  • Strategic orientation: “Everything begins and ends with the customer… best experience at the lowest price,” breaking trade-offs via innovation and operational excellence .
  • Automation/AI runway: “The percentage of our total infrastructure that is highly automated is still just in the low teens… next wave from robotics… to AI… promises to drive even higher levels of growth and margin expansion” .
  • Taiwan momentum: “Net revenues in the fourth quarter growing 23% quarter-over-quarter… vast majority… organic; launched WOW membership program” .
  • Farfetch: “Losses have shrunk dramatically to a breakeven run rate today… 49 million monthly visitors… minimal loss of scale” .
  • 2025 outlook: “Constant currency consolidated growth… about 20%… Product Commerce gross profit to grow faster… adjusted EBITDA margin expansion on an annual basis… Developing Offerings losses $650–$750M… accounting effective tax rate 50–55%” .

Q&A Highlights

  • Macro and growth mix: Management expects Q1 growth ~Q4 levels (~20% CC ex-Farfetch), emphasizing small share of total retail spend and deepening cohort engagement; FLC remains margin-accretive and growing multiples faster than overall business .
  • OG&A and tech investment cadence: OG&A elevated from Farfetch and tech/infrastructure; expected to decline as % of revenue over time; AI and automation investments to drive efficiency and margins .
  • Farfetch strategy & integration: Focus on streamlining operations, customer experience in luxury; explore synergies prudently; seasonal Q4 profitability noted .
  • CapEx outlook: Maintain disciplined CapEx as % of revenue, supporting growth in Korea and Taiwan; timing unevenness expected .
  • Developing Offerings losses and Japan Eats: FY25 DO losses $650–$750M; disciplined approach to new initiatives (e.g., Japan food delivery) with focus on clear differentiation and path to operational excellence .

Estimates Context

  • Wall Street consensus (S&P Global) could not be retrieved due to data limits; estimate comparisons for Q4 2024 are unavailable at this time. Based on management’s 2025 guidance (~20% CC revenue growth; annual adjusted EBITDA margin expansion; DO losses $650–$750M; accounting ETR 50–55%), estimate revisions may need to reflect: focus on gross profit over revenue, elevated accounting tax rate, and continued investment-driven OG&A near term .

Key Takeaways for Investors

  • Prioritize gross profit and margin trends as FLC mix (net revenue accounting) structurally compresses reported revenue growth; Q4 adjusted gross profit grew +29% YoY and Product Commerce adjusted margins improved QoQ .
  • FX-neutral lens matters: KRW weakness pressured reported growth; constant-currency consolidated growth was +28% in Q4 (ex-Farfetch +21%) .
  • Automation/AI are tangible drivers: automation still low-teens of infrastructure with “huge runway”; expect efficiency gains and margins to benefit in 2025 and beyond .
  • Developing Offerings: losses guided $(650)–$(750)M in FY25; watch execution in Taiwan (Q4 net revenues +23% QoQ) and Eats unit economics while Farfetch stabilizes at breakeven run-rate .
  • Taxes: 2025 accounting ETR 50–55% (cash ~40%) will be a headwind to GAAP EPS; model accordingly .
  • OG&A trajectory: near-term higher due to Farfetch and tech spend but expected to decline as % of revenue; monitor leverage progress .
  • Non-GAAP adjustments materially impacted Q4: $175M insurance gain ($116M gross profit; $59M OG&A) boosted GAAP EPS; use adjusted metrics for trend analysis .
Citations: All quantitative and qualitative claims are sourced from Coupang’s Q4 2024 earnings press release and 8-K, and Q2/Q3 2024 materials and Q4 earnings call transcripts.
- Q4 PR/8-K: **[1834584_5c670d17f34944898d178a03b3d812a4_0]** **[1834584_5c670d17f34944898d178a03b3d812a4_1]** **[1834584_5c670d17f34944898d178a03b3d812a4_3]** **[1834584_5c670d17f34944898d178a03b3d812a4_6]** **[1834584_5c670d17f34944898d178a03b3d812a4_9]** **[1834584_5c670d17f34944898d178a03b3d812a4_15]** **[1834584_5c670d17f34944898d178a03b3d812a4_16]** **[1834584_5c670d17f34944898d178a03b3d812a4_18]** **[1834584_0001834584-25-000028_cpng-12312024ex991.htm:0]** **[1834584_0001834584-25-000028_cpng-12312024ex991.htm:1]** **[1834584_0001834584-25-000028_cpng-12312024ex991.htm:2]** **[1834584_0001834584-25-000028_cpng-12312024ex991.htm:3]** **[1834584_0001834584-25-000028_cpng-12312024ex991.htm:5]** **[1834584_0001834584-25-000028_cpng-12312024ex991.htm:12]** **[1834584_0001834584-25-000028_cpng-12312024ex991.htm:13]** **[1834584_0001834584-25-000028_cpng-12312024ex991.htm:14]** **[1834584_0001834584-25-000028_cpng-12312024ex991.htm:15]**
- Q4 call: **[1834584_CPNG_3417843_1]** **[1834584_CPNG_3417843_2]** **[1834584_CPNG_3417843_4]** **[1834584_CPNG_3417843_5]** **[1834584_CPNG_3417843_6]** **[1834584_CPNG_3417843_7]** **[1834584_CPNG_3417843_8]** **[1834584_CPNG_3417843_9]** **[1834584_CPNG_3417843_10]**
- Q3 PR/call: **[1834584_546fd0c033d7495aaf734f48ef0d2d83_0]** **[1834584_546fd0c033d7495aaf734f48ef0d2d83_1]** **[1834584_546fd0c033d7495aaf734f48ef0d2d83_3]** **[1834584_546fd0c033d7495aaf734f48ef0d2d83_13]** **[1834584_546fd0c033d7495aaf734f48ef0d2d83_15]** **[1834584_CPNG_3405984_3]** **[1834584_CPNG_3405984_4]** **[1834584_CPNG_3405984_5]** **[1834584_CPNG_3405984_7]**
- Q2 PR/call: **[1834584_86a26dca39d048d7be91f2a2ade4fac8_0]** **[1834584_86a26dca39d048d7be91f2a2ade4fac8_1]** **[1834584_86a26dca39d048d7be91f2a2ade4fac8_15]** **[1834584_CPNG_3396702_4]** **[1834584_CPNG_3396702_5]** **[1834584_CPNG_3396702_8]**