Coupang, Inc. (CPNG) Q4 2022 Earnings Call Transcript

For the period ending December 31, 2022

February 28, 2023 5:30 p.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good afternoon. My name is Ashlee, and I will be your conference operator today. At this time, I would like to welcome everyone to the Coupang 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 fourth 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. A year ago, we were emerging from a challenging period of COVID-related disruptions. We shared our outlook that 2022 would be an important year to demonstrate our ability to march towards long-term profitability targets while still compounding at a multiple of the overall retail market. We also shared that we would renew our focus on operational improvements as it was increasingly clear that COVID was winding down. And we would report our results under two segments, Product Commerce and Developing Offerings, to provide increased visibility on our continued progress. We ended Q4 of 2021 with a gross profit margin of around 16%, and an adjusted EBITDA loss of $285 million.

A year later, 2022 Q4 concluded with a gross profit margin of 24%, an improvement of over 800 basis points. We recorded over $200 million in adjusted EBITDA for the quarter, an improvement of nearly $500 million year-over-year. Adjusted EBITDA margin was 4%, an increase of over 900 basis points year-over-year. And a net income of $100 million in Q4 represents an improvement of over $500 million versus the prior year. We delivered these results while growing revenues by over 20% year-over-year on an FX-neutral basis.