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E-commerce marketplace Coupang (NYSE:CPNG) missed analysts' expectations in Q2 CY2024, with revenue up 25.4% year on year to $7.32 billion. It made a non-GAAP profit of $0.07 per share, down from its profit of $0.08 per share in the same quarter last year.
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Coupang (CPNG) Q2 CY2024 Highlights:
- Revenue: $7.32 billion vs analyst estimates of $7.39 billion (small miss)
- EPS (non-GAAP): $0.07 vs analyst estimates of $0 ($0.07 beat)
- Gross Margin (GAAP): 29.3%, up from 26.1% in the same quarter last year
- Adjusted EBITDA Margin: 4.5%, in line with the same quarter last year
- Free Cash Flow of $486 million, up from $107 million in the previous quarter
- Active Customers: 21.7 million, up 1.99 million year on year
- Market Capitalization: $36.39 billion
Founded in 2010 by Harvard Business School student Bom Kim, Coupang (NYSE:CPNG) is a South Korean e-commerce giant often referred to as the "Amazon (NASDAQ:AMZN) of South Korea".
Online RetailConsumers ever rising demand for convenience, selection, and speed are secular engines underpinning ecommerce adoption. For years prior to Covid, ecommerce penetration as a percentage of overall retail would grow 1-2% annually, but in 2020 adoption accelerated by 5%, reaching 25%, as increased emphasis on convenience drove consumers to structurally buy more online. The surge in buying caused many online retailers to rapidly grow their logistics infrastructures, preparing them for further growth in the years ahead as consumer shopping habits continue to shift online.
Sales GrowthCoupang's revenue growth over the last three years has been strong, averaging 21% annually. This quarter, Coupang reported decent 25.4% year-on-year revenue growth, falling short of analysts' expectations.
Ahead of the earnings results, analysts were projecting sales to grow 21.1% over the next 12 months.
Usage Growth As an online retailer, Coupang generates revenue growth by expanding its number of buyers and the average order size in dollars.
Over the last two years, Coupang's active buyers, a key performance metric for the company, grew 9.6% annually to 21.7 million. This is decent growth for a consumer internet company.
In Q2, Coupang added 1.99 million active buyers, translating into 10.1% year-on-year growth.
Revenue Per BuyerAverage revenue per buyer (ARPB) is a critical metric to track for consumer internet businesses like Coupang because it measures how much customers spend per order.
Coupang's ARPB growth has been decent over the last two years, averaging 6.8%. The company's ability to increase prices while growing its active buyers demonstrates the value of its platform. This quarter, ARPB grew 14% year on year to $337.47 per buyer.
Key Takeaways from Coupang's Q2 Results Although Coupang beat analysts' EPS expectations this quarter, its number of customers and revenue missed Wall Street's estimates. Overall, this was a bad quarter for Coupang. The stock traded down 4.5% to $19.75 immediately following the results.
