Coupang, Inc. · NYSE:CPNG
Coupang — Q4 2023 Earnings Presentation
28 slides from Coupang's earnings presentation, Feb 27, 2024
Slide 1: Q4 2023 Financial Results
coupang Q4 2023 Financial Results February 27, 2024
Slide 2: Disclaimer
Disclaimer Forward-Looking Statements This presentation may contain statements that may be deemed to be "forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Act”), that are intended to enjoy the protection of the safe harbor for forw
Slide 3: Common Stock
Common Stock 1.3% YoY Dilution 1,830M 1,854M / ; ; ; Q4 22 Q123 Q2 23 Q3 23 Q4 23 OutstandingCommon Stock = Outstanding Equity-based Awards Note: Dilution represents the change in the total of outstanding common stock and outstanding equity-based awards. coupang | 2
Slide 4: Korea is a massive and fast-growing commerce market
Korea is a massive and fast-growing commerce market CAGR 2023 - 2027E Total Commerce CAGR: 4% 2023 2027E Note: All figures exclude automobiles and fuel Source: Euromonitor International Ltd, Coupang estimates based on Euromonitor’s Retailing 2024, Consumer Foodservice 2024, and Travel 2024 editions;
Slide 5: Older cohorts still growing fast, newer cohorts growing faster
Older cohorts still growing fast, newer cohorts growing faster Spend per Customer by Cohort Each cohort starting at higher spend/customer Year1 Year 2 Year 3 Year 4 Year 5 Year 6 2018 2019 2020 2021 2022 @—2023 Note: Spend per customer equates to total gross spending per customer. Amounts above are
Slide 6: Active Customers
Active Customers Up 16% YoY Q123 Q2 23 Q3 23 coupang | 5
Slide 7: WOW Members
WOW Members Up 27% YoY sil Q4 20 Q4 23 WOW members represents paid WOW members at the end of each quarter presented coupang 16
Slide 8: Total Net Revenues
Total Net Revenues Up 23% YoY Up 20% YoY FX-neutral ___ Would have been ~94.0 bps higher without FLC accounting change $6.6B : ; ; ' : Q123 Q2 23 Q3 23 Note: Starting in Q2 2023, we implemented certain contract changes that resulted in a change to the prospective accounting for FLC revenue (previous
Slide 9: Total Net Revenues Accelerating Growth Rate
Total Net Revenues Accelerating Growth Rate Impact from FLC accounting change FX-neutral growth rate 18% Q123 Q2 23 Q3 23 Q4 23 Note: Starting in @2.2023, we implemented certain contract changes that resulted in a change to the prospective accounting for FLC revenue (previously on a gross basis, and
Slide 10: Total Net Revenues - TTM
Total Net Revenues - TTM Up 18% YoY | Up 20% YoY FX-neutral _ Would have been ~520 bps higher without FLC accounting change $24.4B j - i; ; : Q4 22 Q123 Q2 23 Q3 23 Note: Starting in Q2 2023, we implemented certain contract changes that resulted in a change to the prospective accounting for FLC reve
Slide 11: Operating Income
Operating Income Up 57% YoY $130M ) ; Q4 22 Q123 Q2 23 Q3 23 Q4 23 coupang | 10
Slide 12: Net Income
Net Income Up $930M YoY $1.0B $895M tax reserve adjustment 7 i Z Q4 22 Q123 Q2 23 Q3 23 Q4 23 Note: During @4 2023 we recorded a non-recurring adjustment of $895M million from changes in tax-related reserves, including the release of valuation allowances related to certain deferred tax assets, from
Slide 13: Operating Income (Loss) and Net Income (Loss) - TTM
Operating Income (Loss) - TTM Up $585M YoY $473M Net Income (Loss) - TTM Up $1.5B YoY $1.4B $895M tax reserve adjustment $(112M) Q4 22 Q4 23 $(92M) Q4 22 Q4 23 Note: During @4 2023 we recorded a non-recurring adjustment of $895M million from changes in tax-related reserves, including the release of
Slide 14: Gross Profit
Gross Profit Up 32% YoY GPM up 160 bps YoY $1.7B $1.3B 25.6% 24.0% Q4 22 Q123 Q2 23 Q3 23 coupang | 3
Slide 15: Adjusted EBITDA
Adjusted EBITDA Up $83M YoY 4.5% margin, up 50 bps YoY — Would have been ~40 bps lower without FLC accounting change $294M $211M a i; i 4.0% Q4 22 Q123 Q2 23 Q3 23 Q4 23 © margin Note: Adjusted EBITDA defined as net income (loss) excluding the effects of: depreciation and amortization, interest expe
Slide 16: Gross Profit and Adjusted EBITDA - TTM
Gross Profit - TTM Up 31% YoY GPM up 250 bps YoY $4.7B $6.2B Adjusted EBITDA - TTM Up $693M YoY Would have been 4.4% margin, up 250 bps YoY — ~20 ps iower without FLC accounting change $1.1B @ margin 25.4% 4.4% $381M 22.9% 1.9% Q4 22 Q4 23 QA 22 QA 23 Note: Starting in @2 2023, we implemented certai
Slide 17: Segment Results: Product Commerce
Segment Results: Product Commerce Net Revenue Up 21% YoY Would have been UP 18% YoY F/X neutral — ~290 ps higher without FLC accounting change $6.3B ; : : ; / Adj. EBITDA Up $178M YoY Would have been 7.1% margin, up 190 bps YoY — ~20 bpsiower without FLC accounting change $444M $266M 71% 5.1% Q4 22
Slide 18: Segment Results: Product Commerce - TTM
Segment Results: Product Commerce - TTM Net Revenue - TTM Up 18% YoY Would have been UP 19% YoY F/X neutral — 52° bps hieher without FLC accounting change $23.6B $20.0B Adj. EBITDA - TTM Up $0.9B YoY Would have been 6.5% margin, up 350 bps YoY — (20. 2ps over accounting change $1.5B 6.5% $606M 3.0%
Slide 19: Segment Results: Developing Offerings
Segment Results: Developing Offerings Net Revenue Adj. EBITDA Up 105% YoY Down $95M YoY Up 102% YoY F/X neutral $273M oO $(55M) '55.0)%| $133M Q4 22 Q123 Q2 23 Q3 23 Q4 23 Q4 22 Q123 Q2 23 Q3 23 Q4 23 @ margin coupang | 1
Slide 20: Segment Results: Developing Offerings - TTM
Segment Results: Developing Offerings - TTM Net Revenue - TTM Up 26% YoY Up 27% YoY F/X neutral $789M $628M Q4 22 Q4 23 Adj. EBITDA - TTM Down $241M YoY (35.8)% $(225M) (59.0)% $(466M) a4 22 Q4 23 @ margin coupang | 19
Slide 21: Operating Cash Flow and Free Cash Flow - TTM
Operating Cash Flow - TTM Up $2.1B YoY $2.7B Free Cash Flow - TTM Up $2.0B YoY $1.8B Q4 23 $(246M) Q4 22 Q4 23 Note: @4 2023 TTM Free Cash Flow is significantly higher than the corresponding TTM adjusted EBITDA due to certain one-time and seasonal working capital benefits during the year, among othe
Slide 22: Long-term Margin Opportunity
Long-term Margin Opportunity Year Ended December 31, Long-Term 2021 2022 2023 TELS Product Commerce 9 9 9 Adj. EBITDA margin (2.0) % 3.0 % 65% 10+% Consolidated (4:1) % 19% 44% Adj. EBITDA margin Key long-term margin drivers: 1 Efficiency and supply 3 Scaling accretive chain optimization Operating |
Slide 23: Our Operating Tenets
Our Operating Tenets One, we exist to deliver new moments of wow for customers. Two, we don’t start with what looks easy. We work backwards from imagining jaw-dropping customer experiences and we embrace the hard work required to challenge trade-offs that customers take for granted. Three, we will e
Slide 24: Appendix
Create a world where c ne rs wonder / a | Dy . “How did | ever liv € without Coupang?” ee Appendix —_.
Slide 25: Growth Rates
Growth Rates Q12023 Q2 2023 Q3 2023 Q4 2023 Active Customers 5% 10% 14% 16 % Total net revenues 13% 16 % 21% 23 % Total net revenues (constant currency) 20% 21% 18 % 20% I t fi the FLC ting ch in Q2 2023 mpact from the accounting change in Q: _ 13% 16% 19% (constant currency) Note: Starting in Q2 20
Slide 26: Non-GAAP Measure: Adjusted EBITDA
Non-GAAP Measure: Adjusted EBITDA Three Months Ended December 31, March 31, June 30, September 30, December 31, Gin millions) 2022 2023 2023 2023 2023 Total net revenues $ 5,327 $ 5,801 $ 5,838 $ 6184 $ 6,561 Net income 102 91 145 91 1,032 Net income margin 19% 16% 25% 15% 15.7% Adjustments: Depreci
Slide 27: Non-GAAP Measure: Adjusted EBITDA - TTM
Non-GAAP Measure: Adjusted EBITDA - TTM Trailing Twelve Months Ended oy, December 31, December 31, March 31, June 30, September 30, December 31, Gin millions) 2021 2022 2023 2023 2023 2023 Total net revenues $ 18,406 $ 20,583 $ 21,266 $ 22,067 $ 23,149 $ 24,383 Net (loss) income (1,543) (92) 208 429
Slide 28: Non-GAAP Measure: Free Cash Flow - TTM
Non-GAAP Measure: Free Cash Flow - TTM Trailing Twelve Months Ended . oe December 31, March 31, June 30, September 30, December 31, Gin millions) 2022 2023 2023 2023 2023 Net cash provided by operating activities $ 565 $ 1,122 $ 1,960 $ 2,623 $ 2,652 Adjustments: Purchases of land and buildings (226