Stock Story -
E-commerce marketplace Coupang (NYSE:CPNG) beat analysts' expectations in Q4 FY2023, with revenue up 23.2% year on year to $6.56 billion. It made a non-GAAP profit of $0.08 per share, improving from its profit of $0.06 per share in the same quarter last year.
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Coupang (CPNG) Q4 FY2023 Highlights:
- Revenue: $6.56 billion vs analyst estimates of $6.41 billion (2.4% beat)
- EPS (non-GAAP): $0.08 vs analyst estimates of $0.06 (30.2% beat)
- Free Cash Flow of $375.6 million, down 30% from the previous quarter
- Gross Margin (GAAP): 25.6%, up from 24% in the same quarter last year
- Active Customers: 21 million
- Market Capitalization: $29.3 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 MarketplaceMarketplaces have existed for centuries. Where once it was a main street in a small town or a mall in the suburbs, sellers benefitted from proximity to one another because they could draw customers by offering convenience and selection. Today, a myriad of online marketplaces fulfill that same role, aggregating large customer bases, which attracts commission-paying sellers, generating flywheel scale effects that feed back into further customer acquisition.
Sales GrowthCoupang's revenue growth over the last three years has been strong, averaging 29.1% annually. This quarter, Coupang beat analysts' estimates and reported decent 23.2% year-on-year revenue growth.
Key Takeaways from Coupang's Q4 Results It was great to see Coupang beat analysts' revenue expectations this quarter, driven by strong outperformance in its Developing Offerings segment ($273 million of revenue vs estimates of $234 million), which includes its Taiwan operations, food delivery, video streaming, and fintech. We were also glad its 21 million active customers (14 million WOW members) topped Wall Street's estimates of 20.6 million. Coupang noted its revenue growth would have been 9.4% higher without the accounting change it made in Q2 2023 concerning its fulfillment and logistics revenue.
On the profitability side, Coupang blew past analysts' EBITDA, EPS, and free cash flow projections. The company has now posted five quarters of positive free cash flow in a row, showing it's gaining leverage on its fixed cost base. Overall, this quarter's results seemed fairly positive and shareholders should feel optimistic. The stock is up 5.6% after reporting and currently trades at $17.82 per share.
