Coupang's earnings hit record-high in Q2

By Lee Kyung-min

Coupang achieved record revenues and operating profit in the second quarter of this year despite weakening consumer sentiment amid inflation and economic recession concerns, the Nasdaq-listed e-commerce titan said Wednesday.

Second-quarter sales of $5.8 billion was up 16 percent from a year ago, while operating profit of $145 million was an improvement by $221 million.

Adjusted EBITDA stood at $300 million with a margin of 5.1 percent. Short for earnings before interest, taxes, depreciation and amortization, EBITDA is one of the most widely used measures of a company's financial health and ability to generate cash.

Operating cash flow for the past 12 months was $2 billion, a year-on-year increase of $2.3 billion.

Free cash flow was $1.1 billion for the same period, an increase of $2.2 billion year-on-year.

The number of active customers increased 10 percent from a year ago to 19.7 million.

Coupang founder Kim Bom-suk, also known as Bom Kim, expressed confidence in further growth and improved profitability.

He emphasized that the corporate free cash flow more than doubled in the April-June quarter. The feat came on the heels of Coupang registering its first ever surplus of $451 million in the January-March period on a cumulative 12-month basis.

“We achieved both profitability and extended growth,” he said during a conference call.

“We have generated $2 billion in operating cash flow and $1.1 billion surplus in free flow on a cumulative basis over the past year. We are certain that we will be able to deliver our long-term target guidance on an adjusted EBITDA margin of over 10 percent.”

The firm plans to provide Coupang Eats discounts as part of the e-commerce firm's wow membership monthly subscription benefit.

Advancing the move is a meaningful increase in paid wow membership subscriptions joined by users who appreciated the benefit of about 10 percent off of food ordered and delivered through the Coupang Eats app.

“The total number of wow members using Coupang Eats increased 80 percent. This in turn led to their spending increase averaging 20 percent and our market share by at least 5 percent,” Kim said.

Coupang's overseas expansion drive will pick up speed, bolstered in part by an investment of $400 million in Taiwan.

“Coupang was the most downloaded app in Taiwan in the second quarter. The growth in the first 10 months since the launch of Rocket Delivery in Taiwan outpaced that of Korea in the same period,” Kim said.

IBK Securities analyst Nam Seong-hyun said the e-commerce firm's single-digit share of the massive retail market will increase significantly in the quarters to come.

“The firm's active customer growth is accelerating as underpinned by recovering profitability. Improvements in the operating cash flow of $2 billion of and over $1 billion in free cash flow are signs of a turnaround and further growth.”