Coupang, Inc. (CPNG) Q3 2022 Earnings Call Transcript

For the period ending September 30, 2022

November 9, 2022 5:30 p.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good afternoon. My name is Paula, and I will be your conference operator today. At this time, I would like to welcome everyone to the Coupang Third Quarter 2022 Earnings Conference Call. [Operator Instructions]

Now I'd like to turn the call over to Mike Parker, Vice President of Investor Relations. You may begin your conference.

Mike Parker

Thanks, operator. Welcome everyone to Coupang's third quarter 2022 earnings conference call. I'm pleased to be joined on the call today by our Founder and CEO, Bom Kim; and our CFO, Gaurav Anand.

The following discussion, including responses to your questions, reflects management's views as of today's date only. We do not undertake any obligation to update or revise this information, except as required by law.

Certain statements made on today's call include forward-looking statements. Actual results may differ materially. Additional information about factors that could potentially impact our financial results is included in today's press release and in our filings with the SEC, including our most recent annual report on Form 10-K and subsequent filings.

During today's call, we may present both GAAP and non-GAAP financial measures. Additional disclosures regarding these non-GAAP measures, including reconciliations of these measures to the most comparable GAAP measures are included in our earnings release and our SEC filings, which are posted on the company's Investor Relations website.

And now, I'll turn the call over to Bom.

Bom Kim

Thanks everyone for joining us today. I'm excited to share with you some highlights from our third quarter operating results. Revenues increased to $5.1 billion, growing 27% year-over-year on an FX neutral basis and over 10% year-over-year on a U.S. dollar basis. This was driven by an increase in both active customers and revenue per active customer.

We generated over $1.2 billion in gross profit with a record 24.2% gross margin, representing over $3.4 billion in gross profit recorded year-to-date. Our adjusted EBITDA was $195 million for the quarter at 3.8% adjusted EBITDA margin. Our cumulative adjusted EBITDA year-to-date is positive $170 million. And in Q3, we achieved positive net income of $91 million for the consolidated business, improving $415 million year-over-year.

First on Product Commerce, while the macro environment remained uncertain around the world, the Korean retail in Q3 grew at a strong pace of 7% year-over-year. Even as the world reopens post-COVID, our growth has been resilient. Our FX-neutral revenue recorded a robust 27% year-over-year growth. Our active customers for Product Commerce grew even faster than the 7% year-over-year active customer growth for the consolidated business. The spend of our customer cohorts even our oldest continues to compound at a fast rate and that strong spend growth can be seen across all categories, even our most mature.