Coupang, Inc. Q2 FY2025 earnings call

• Revenue growth: Consolidated revenue grew 16% y-o-y or 19% in constant currency to $8.5 billion. Product Commerce active customer growth accelerated to 10% this quarter, and revenue per active customer lifted. • Margin expansion: Product Commerce gross profit margin expanded to 32.6% with nearly 230 basis points improvement, adjusted EBITDA margin over 9%. Consolidated adjusted EBITDA was $428 million. • Segment highlights: Fresh category revenues grew 25% in constant currency; FLC volumes, selection, and sellers grew faster than Product Commerce; Taiwan revenues surged 54% q-o-q, with repeat customers driving growth; Coupang Play launched Sports Pass and became available to all Korean customers including non-WOW members.

Product Commerce segment: Revenues grew 14% year-over-year or 17% in constant currency. Gross profit was $2.4 billion, growing 23% or 26% in constant currency, with a gross profit margin of 32.6%, a record high and a 230 basis points improvement year-over-year. Developing Offerings segment: Revenues grew 33% year-over-year on reported and constant currency basis, driven by accelerating triple-digit growth in Taiwan and high double-digit growth in Eats.

• Developing Offerings adjusted EBITDA losses for full year now expected to be between $900 million and $950 million, primarily due to Taiwan. • Product Commerce margins continue to have large opportunities for further expansion via technology, AI, and margin-accretive offerings. • Consolidated OG&A expenses expected to decline as a percentage of revenues in near to medium term.

• Scaling inefficiencies in new markets like Taiwan, similar to past experiences. • Foreign currency volatility, which impacts growth evaluation when not using constant currency. • Uncertainty in the pace of margin expansion and investment returns in Developing Offerings.

Q: About margin, what's the outlook for Product Commerce margin improvement in second half?

A: Product Commerce margins have reached 9% and still have large opportunities via technology, AI, and margin-accretive offerings. Expect further expansion though not linear.

Q: What's the AI strategy?

A: AI is a long-term enabler of top line growth and margin expansion. Focus on practical high-impact applications, e.g., 50% of new code written by AI in early implementations.

Q: On Developing Offerings investments, will investment peak this year?

A: Developing Offerings are managed as a pool with each offering at different stages. Too early to determine beyond this year, but overall consolidated margin increase guidance holds.

Q: On Taiwan selection growth, is it maintaining?

A: Continuing to broaden selection across all categories in Taiwan, encouraged by customer response.

Q: On food delivery pickup orders, margin trend?

A: Focus on best selection, value, etc., for food delivery, still early to discuss specific margin trends from pickup orders initiative