Coupang Announces Results for Fourth Quarter 2023

Rhea-AI Summary

Coupang, Inc. (CPNG) reports strong financial results for Q4 2023 with net revenues of $6.6 billion, up 23% YoY. Gross profit increased to $1.7 billion, with a margin of 25.6%. Operating cash flow was $2.7 billion, and free cash flow reached $1.8 billion for the full year. The company's total net revenues for FY2023 were $24.4 billion, showing an 18% YoY growth. Coupang's active customers surpassed 21 million, and the WOW membership program had 14 million paid members by the end of 2023.

Positive

• Strong financial performance with net revenues of $6.6 billion in Q4 2023, up 23% YoY
• Gross profit increased to $1.7 billion with a margin of 25.6%
• Operating cash flow of $2.7 billion and free cash flow of $1.8 billion for the full year
• Total net revenues for FY2023 were $24.4 billion, showing an 18% YoY growth
• Active customers surpassed 21 million, growing at 16% YoY
• WOW membership program had 14 million paid members at the end of 2023, a 27% increase YoY

Negative

• None.

Insights

Market Research Analyst

The reported net revenues of $6.6 billion, marking a 23% year-over-year increase and the 20% growth on an FX-neutral basis, are significant indicators of Coupang's robust performance in a competitive e-commerce market. The distinction between reported and FX-neutral growth rates is crucial for investors, as it provides insight into the company's actual growth trajectory, excluding the volatile effects of currency fluctuations. The impact of the accounting change in FLC revenue is also noteworthy, as it suggests underlying operational improvements that are not immediately apparent from top-line growth figures alone.

The gross profit margin improvement to 25.6% reflects efficient cost management and a potentially favorable product mix. This metric is essential for stakeholders as it signifies the company's ability to translate sales into profit, which is a critical driver of long-term value creation. Additionally, the expansion of the WOW membership program by 27% YoY indicates a strengthening of customer loyalty and recurring revenue streams, which are vital for sustainable growth.

Financial Analyst

The financial results indicate a strong year for Coupang, with significant improvements in net income and free cash flow. A net income of $1.4 billion and an adjusted net income of $465 million, after accounting for a substantial non-cash tax benefit, suggest a solid bottom line. However, investors should consider the one-time tax benefit's impact on profitability and whether such profitability levels are sustainable without similar adjustments in the future.

Adjusted EBITDA margins for both the Product Commerce segment and the Developing Offerings segment improved, yet the latter still posted a negative figure. This suggests that while the core business is becoming increasingly profitable, investments in new ventures are still incurring losses. The cash flow improvements, with operating cash flow at $2.7 billion and free cash flow at $1.8 billion, are particularly impressive and indicate a strong liquidity position, which is crucial for funding ongoing operations and future growth initiatives.

Economist

Coupang's performance must be contextualized within the broader economic environment, characterized by inflationary pressures and currency volatility. The company's ability to provide $3 billion in benefits and savings to WOW members during a period of high inflation is strategically significant. It demonstrates Coupang's commitment to maintaining consumer purchasing power, which can help drive volume and market share gains, particularly in cost-sensitive markets. This consumer-centric approach may contribute to resilience in consumer spending on Coupang's platform, even as broader retail spending may be dampened by economic headwinds.

Furthermore, Coupang's mention of a 'single-digit share of the vast retail spend in Korea and even smaller in Taiwan' underscores the potential for growth in these markets. The company's focus on expanding its market share in these regions could lead to increased revenues, but it also implies a need for continuous investment to capture additional market segments. The long-term implications for stakeholders include evaluating the balance between growth investments and profitability, especially in an uncertain economic climate.

Net Revenues of $6.6 billion, up 23% YoY and 20% on an FX-neutral basis

Gross Profit of $1.7 billion, up 32% YoY

Operating Cash Flow of $2.7 billion and Free Cash Flow of $1.8 billion for the full year

SEATTLE--(BUSINESS WIRE)-- Coupang, Inc. (NYSE: CPNG) today announced financial results for its fourth quarter ended December 31, 2023.

Q4 2023 Key Financial and Operational Highlights

• Net revenues were $6.6 billion, up 23% YoY on a reported basis and 20% YoY on an FX-neutral basis.
• The net revenues growth rate would have been an estimated 940 bps higher than the 20% growth without the accounting change in FLC revenue, which we began recording on a net basis starting in Q2 2023.
• Gross profit increased 32% YoY to $1.7 billion. Gross profit margin was 25.6%, an improvement of 160 bps YoY.
• Net income was $1.0 billion, and adjusted net income was $137 million after adjusting for the non-cash tax benefit of $895 million from changes in tax-related reserves, including the release of valuation allowances related to certain deferred tax assets.
• Diluted EPS was $0.57, and adjusted diluted EPS was $0.08 after adjusting for the $0.49 benefit from changes in tax-related reserves.
• Adjusted EBITDA for the quarter was $294 million with a margin of 4.5%, an improvement of 50 bps over last year. The accounting change in FLC revenue this quarter had a positive impact of 40 bps on margin.
• Product Commerce segment net revenues was $6.3 billion, up 21% YoY on a reported basis and 18% on an FX-neutral basis.
• Product Commerce segment adjusted EBITDA was $444 million with a margin of 7.1%, an improvement of 190 bps YoY. The Q2 accounting change in FLC revenue had a positive impact of 60 bps on margin.
• Developing Offerings segment (including International, Coupang Eats, Play and Fintech) net revenues was $273 million, up 105% YoY on a reported basis and 102% on an FX-neutral basis.
• Developing Offerings segment adjusted EBITDA was negative $150 million, compared to negative $55 million in the prior year.
• Active customers surpassed 21 million, growing at 16% YoY.

FY2023 Key Financial and Operational Highlights

• Total net revenues were $24.4 billion, increasing 18% YoY on a reported basis and 20% YoY on an FX-neutral basis.
• The revenue growth rate would have been an estimated 520 bps higher than the 20% growth without the accounting change in FLC revenue, which we began recording on a net basis starting in Q2 2023.
• Total gross profit improved 31% YoY to $6.2 billion with gross profit margin of 25.4%, an expansion of over 250 bps YoY.
• Net income was $1.4 billion, and adjusted net income was $465 million after adjusting for the non-cash tax benefit of $895 million from the changes in certain tax-related reserves, including the release of valuation allowances related to certain deferred tax assets.
• Diluted EPS was $0.75, and adjusted diluted EPS was $0.26 after adjusting for the $0.50 benefit from the changes in tax-related reserves.
• Adjusted EBITDA was $1.1 billion with a margin of 4.4%, a YoY improvement of over 250 bps. The Q2 accounting change in FLC revenue had a positive impact of 30 bps on margin.
• Product Commerce segment net revenues reached $23.6 billion, growing 18% YoY on a reported basis and 19% on an FX-neutral basis.
• Product Commerce segment adjusted EBITDA was $1.5 billion with a margin of 6.5%, an expansion of 350 bps YoY. The Q2 accounting change in FLC revenue had a positive impact of 40 bps on margin.
• Developing Offerings segment net revenues was $789 million, up 26% YoY on a reported basis and 27% on an FX-neutral basis.
• Developing Offerings segment adjusted EBITDA was negative $466 million, compared to negative $225 million in the prior year.
• Cash flow from operations was $2.7 billion, an improvement of $2.1 billion YoY.
• Free cash flow was $1.8 billion, an improvement of $2.0 billion YoY.
• WOW membership program had 14 million paid members at the end of 2023, an increase of 27% YoY.

“Our accelerating growth in revenues, active customers, and WOW members reflect our unrelenting focus on creating ‘wow’ for our customers across selection, price, and service,” said Bom Kim, Founder and CEO of Coupang. “This year we provided a record $3 billion in benefits and savings to our WOW members, providing relief amidst high inflation. Customers are increasingly turning to WOW membership for its unparalleled value, from exclusive discounts on retail products and Eats, to free Dawn Delivery, to unlimited Play content streaming, and so much more. We’re committed to investing in even more savings and benefits for customers to make our WOW membership program indisputably the best deal on the planet.”

“While we are pleased with the progress we made this quarter, we see even greater opportunity in front of us, as we represent just a single digit share of the vast retail spend in Korea, and even smaller in Taiwan,” said Coupang’s CFO, Gaurav Anand. “We are extremely proud of our teams whose work over many years is responsible for the results we reported throughout this year. As we look towards 2024, we are more excited than ever about the opportunity to continue delighting our customers and driving long-term shareholder value.”

Fourth Quarter 2023 Results

Consolidated Financial Summary

	Three Months Ended December 31,
(in millions, except net revenues per Active Customer and earnings per share)	2023			2022			% Change
Total net revenues	$	6,561		$	5,327		23	%
Total net revenues growth, constant currency(1)							20	%
Active Customers		21.0			18.1		16	%
Total net revenues per Active Customer	$	312		$	294		6	%
Total net revenues per Active Customer, constant currency(1)	$	303					3	%
Gross profit	$	1,681		$	1,278		32	%
Net income	$	1,032		$	102		NM(3)
Adjusted net income(1)	$	137		$	62		121	%
Adjusted EBITDA(1)	$	294		$	211		39	%
Earnings per share, basic	$	0.58		$	0.06		NM(3)
Earnings per share, diluted	$	0.57		$	0.06		NM(3)
Adjusted diluted earnings per share(1)	$	0.08		$	0.03		167	%
Net cash provided by operating activities	$	609		$	580		5	%
Free cash flow(1)	$	382		$	462		(17	) %

Segment Information

	Three Months Ended December 31,
(in millions)		2023				2022			% Change
Product Commerce
Net revenues	$	6,288			$	5,194			21	%
Net revenues growth, constant currency(1)									18	%
Segment adjusted EBITDA	$	444			$	266			67	%
Developing Offerings
Net revenues	$	273			$	133			105	%
Net revenues growth, constant currency(1)									102	%
Segment adjusted EBITDA	$	(150	)		$	(55	)		173	%

Growth Rates

	Q1 2023			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	%
Impact from FLC accounting change in Q2 2023 (constant currency)	—			+3 %			+6 %			+9 %

Full Year 2023 Results

Consolidated Financial Summary

	Year Ended December 31,
(in millions, except net revenues per Active Customer and earnings per share)		2023			2022			% Change
Total net revenues	$	24,383		$	20,583			18	%
Total net revenues growth, constant currency(1)								20	%
Gross profit(2)	$	6,190		$	4,710			31	%
Net income (loss)	$	1,360		$	(92	)		NM(3)
Adjusted net income (loss)(1)	$	465		$	(133	)		NM(3)
Adjusted EBITDA(1)	$	1,074		$	381			182	%
Earnings per share, basic	$	0.76		$	(0.05	)		NM(3)
Earnings per share, diluted	$	0.75		$	(0.05	)		NM(3)
Adjusted diluted earnings per share(1)	$	0.26		$	(0.08	)		NM(3)
Net cash provided by operating activities	$	2,652		$	565			NM(3)
Free cash flow(1)	$	1,775		$	(246	)		NM(3)

Segment Information

	Year Ended December 31,
(in millions)		2023				2022			% Change
Product Commerce
Net revenues	$	23,594			$	19,955			18	%
Net revenues growth, constant currency(1)									19	%
Segment adjusted EBITDA	$	1,540			$	606			154	%
Developing Offerings
Net revenues	$	789			$	628			26	%
Net revenues growth, constant currency(1)									27	%
Segment adjusted EBITDA	$	(466	)		$	(225	)		107	%
Total net revenues growth, constant currency, adjusted net income (loss), adjusted diluted earnings per share and adjusted EBITDA are non-GAAP measures. See “Non-GAAP Financial Measures” and “Reconciliations of Non-GAAP Measures” below for the reconciliation of the non-GAAP measures with their comparable amounts prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Gross profit is calculated as total net revenues minus cost of sales. Non-meaningful.

Webcast and Conference Call

Coupang, Inc. will host a conference call to discuss fourth quarter results on February 27, 2024 at 5:30 PM Eastern Time (February 28, 2024 at 7:30 AM Korea Standard Time). A live webcast of the conference call will be available on our Investor Relations website, ir.aboutcoupang.com, and a replay of the conference call will be available for at least three months. This press release, including the reconciliations of certain non-GAAP measures to their nearest comparable U.S. GAAP measures, as well as our fourth quarter earnings presentation, are also available on that site.

About Coupang

Coupang is one of the largest retailers in Asia, with a mission to revolutionize the everyday lives of its customers and create a world where people wonder, “How did I ever live without Coupang?” Coupang offers a variety of services, including same-day and next-morning delivery of general merchandise and groceries, delivery of prepared foods through Coupang Eats, and video streaming through Coupang Play. Coupang is headquartered in the United States, with operations and support services performed in geographies including South Korea, Taiwan, Singapore, China, and India.

FORWARD-LOOKING STATEMENTS

This earnings release or related management commentary 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 forward-looking statements provided by the Act as well as protections afforded by other federal securities laws.

We have based the forward-looking statements contained in this report on our current expectations and projections about future events and trends that we believe may affect our industry, business, financial condition, and results of operations. Actual results and outcomes could differ materially for a variety of reasons, including, among others: the continued growth of the retail market and the increased acceptance of online transactions by potential customers, competition in our industry, managing our growth and expansion into new markets and offerings, risks associated with current and future acquisitions, mergers, dispositions, joint ventures or investments, our financial performance, the extent to which we owe income or other taxes, our ability to retain existing suppliers and to add new suppliers, our market position, our operation and management of our fulfillment and delivery infrastructure, legal and regulatory developments, and the impact of the global economy including inflation, foreign currency exchange rates and geopolitical events. For additional information on other potential risks and uncertainties that could cause actual results to differ from the results predicted, please see our most recent Annual Report on Form 10-K and subsequent filings. All forward-looking statements in this presentation are based on information available to Coupang and assumptions and beliefs as of the date hereof, and we disclaim any obligation to update any forward-looking statements, except as required by law. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements.

Additional information relating to certain of our financial measures contained herein, including non-GAAP financial measures, is available in the appendix to this presentation, our most recent earnings release and at our website at www.ir.aboutcoupang.com.

COUPANG, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)

	Three Months Ended December 31,								Year Ended December 31,
(in millions, except per share amounts)		2023				2022				2023				2022
Net retail sales	$	5,563			$	4,761			$	21,223			$	18,338
Net other revenue		998				566				3,160				2,245
Total net revenues		6,561				5,327				24,383				20,583
Cost of sales		4,881				4,049				18,193				15,873
Operating, general and administrative		1,550				1,195				5,717				4,822
Total operating cost and expenses		6,431				5,244				23,910				20,695
Operating income (loss)		130				83				473				(112	)
Interest income		54				27				178				53
Interest expense		(13	)			(7	)			(48	)			(27	)
Other expense, net		—				(9	)			(19	)			(7	)
Income (loss) before income taxes		171				94				584				(93	)
Income tax benefit		(861	)			(8	)			(776	)			(1	)
Net income (loss)	$	1,032			$	102			$	1,360			$	(92	)
Earnings per share
Basic	$	0.58			$	0.06			$	0.76			$	(0.05	)
Diluted	$	0.57			$	0.06			$	0.75			$	(0.05	)
Weighted average shares outstanding
Basic		1,789				1,771				1,782				1,765
Diluted		1,810				1,793				1,803				1,765

COUPANG, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited)

(in millions)	December 31, 2023				December 31, 2022
Assets
Cash and cash equivalents	$	5,243			$	3,509
Restricted cash		353				176
Accounts receivable, net		314				184
Inventories		1,666				1,657
Prepaids and other current assets		316				304
Total current assets		7,892				5,830
Property and equipment, net		2,465				1,820
Operating lease right-of-use assets		1,601				1,405
Deferred tax assets		925				40
Long-term lease deposits and other		463				418
Total assets	$	13,346			$	9,513
Liabilities and stockholders' equity
Accounts payable	$	5,099			$	3,622
Accrued expenses		352				299
Deferred revenue		97				92
Short-term borrowings		282				175
Current portion of long-term debt		203				129
Current portion of long-term operating lease obligations		386				326
Other current liabilities		526				420
Total current liabilities		6,945				5,063
Long-term debt		529				538
Long-term operating lease obligations		1,387				1,234
Defined severance benefits and other		381				264
Total liabilities		9,242				7,099
Commitments and contingencies
Redeemable noncontrolling interest		15				—
Stockholders' equity
Common Stock		—				—
Class A — shares authorized 10,000, outstanding 1,616 and 1,598 Class B — shares authorized 250, outstanding 175 and 175
Additional paid-in capital		8,489				8,154
Accumulated other comprehensive (loss) income		(17	)			3
Accumulated deficit		(4,383	)			(5,743	)
Total stockholders' equity		4,089				2,414
Total liabilities and stockholders' equity	$	13,346			$	9,513

COUPANG, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)

(in millions)		2023				2022
Operating activities
Net income (loss)	$	1,360			$	(92	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		275				231
Provision for severance benefits		159				161
Equity-based compensation		326				262
Non-cash operating lease expense		338				310
Deferred income taxes		(884	)			(41	)
Non-cash others		140				112
Change in operating assets and liabilities:
Accounts receivable, net		(133	)			(34	)
Inventories		(44	)			(367	)
Other assets		(153	)			(249	)
Accounts payable		1,514				444
Accrued expenses		43				7
Other liabilities		(289	)			(179	)
Net cash provided by operating activities		2,652				565
Investing activities
Purchases of property and equipment		(896	)			(824	)
Proceeds from sale of property and equipment		19				13
Other investing activities		(50	)			(37	)
Net cash used in investing activities		(927	)			(848	)
Financing activities
Proceeds from issuance of common stock/units, equity-based compensation plan		9				18
Proceeds from short-term borrowings and long-term debt		572				701
Repayment of short-term borrowings and long-term debt		(392	)			(467	)
Net short-term borrowings and other financing activities		10				(5	)
Net cash provided by financing activities		199				247
Effect of exchange rate changes on cash and cash equivalents, and restricted cash		(14	)			(87	)
Net increase (decrease) in cash and cash equivalents, and restricted cash		1,910				(123	)
Cash and cash equivalents, and restricted cash, as of beginning of period		3,687				3,810
Cash and cash equivalents, and restricted cash, as of end of period	$	5,597			$	3,687

Supplemental Financial Information

Share Information

	As of December 31,
(in millions)	2023		2022
Outstanding common stock	1,791		1,773
Outstanding equity-based awards	63		57
Outstanding common stock and equity-based awards	1,854		1,830

Key Business Metrics and Non-GAAP Financial Measures

We review the key business and financial metrics discussed below. We use these measures to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans, and make strategic decisions.

Key Business Metrics

Active Customers

As of the last date of each reported period, we determine our number of Active Customers by counting the total number of individual customers who have ordered at least once directly from our apps or websites in Korea during the relevant period. A customer is anyone who has created an account on our apps or websites, identified by a unique email address. The change in Active Customers in a reported period captures both the inflow of new customers as well as the outflow of existing customers who have not made a purchase in the period. We view the number of Active Customers as a key indicator of our potential for growth in total net revenues, the reach of our network, the awareness of our brand, and the engagement of our customers.

Total Net Revenues per Active Customer

Total net revenues per Active Customer is the total net revenues generated in a period divided by the total number of Active Customers in that period. A key driver of growth is increasing the frequency and the level of spend of Active Customers who are shopping on our apps or websites. We therefore view total net revenues per Active Customer as a key indicator of engagement and retention of our customers and our ability to drive future revenue growth.

	Three Months Ended December 31,
(in millions, except net revenues per Active Customer)		2023			2022		% Change
Active Customers		21.0			18.1		16	%
Total net revenues per Active Customer	$	312		$	294		6	%
Total net revenues per Active Customer, constant currency (YoY)	$	303					3	%

Non-GAAP Financial Measures

We report our financial results in accordance with U.S. GAAP. However, management believes that certain non-GAAP financial measures provide investors with additional useful information in evaluating our performance. These non-GAAP financial measures may be different than similarly titled measures used by other companies.

Our non-GAAP financial measures should not be considered in isolation from, or as substitutes for, financial information prepared in accordance with U.S. GAAP. Non-GAAP measures have limitations in that they do not reflect all the amounts associated with our results of operations as determined in accordance with U.S. GAAP. These measures should only be used to evaluate our results of operations in conjunction with the corresponding U.S. GAAP measures. For further information regarding these non-GAAP measures, including the limitations thereof and reconciliations of each non-GAAP financial measure to its most directly comparable U.S. GAAP financial measure, please refer to the financial tables in the “Reconciliations of Non-GAAP Financial Measures” section of this release.

Non-GAAP Measure	Definition	How We Use The Measure
Adjusted EBITDA	• Net income (loss), excluding the effects of: - depreciation and amortization, - interest expense, - interest income, - other income (expense), net, - income tax expense (benefit), - equity-based compensation, - impairments, and - other items not reflective of our ongoing operations.	• Provides information to management to evaluate and assess our performance and allocate internal resources. • We believe Adjusted EBITDA and Adjusted EBITDA Margin are frequently used by investors and other interested parties in evaluating companies in the retail industry for period-to-period comparisons as they remove the impact of certain items that are not representative of our ongoing business, such as material non-cash items and certain variable charges.
Adjusted EBITDA Margin	• Adjusted EBITDA as a percentage of total net revenues.
Constant Currency Revenue	• Constant currency information compares results between periods as if exchange rates had remained constant. • We define constant currency revenue as total revenue excluding the effect of foreign exchange rate movements, and use it to determine the constant currency revenue growth on a comparative basis. • Constant currency revenue is calculated by translating current period revenues using the prior period exchange rate.	• The effect of currency exchange rates on our business is an important factor in understanding period-to-period comparisons. Our financial reporting currency is the U.S. dollar (“USD”) and changes in foreign exchange rates can significantly affect our reported results and consolidated trends. For example, our business generates sales predominantly in Korean Won (“KRW”), which are favorably affected as the USD weakens relative to the KRW, and unfavorably affected as the USD strengthens relative to the KRW. • We use constant currency revenue and constant currency revenue growth for financial and operational decision-making and as a means to evaluate comparisons between periods. We believe the presentation of our results on a constant currency basis in addition to U.S. GAAP results helps improve the ability to understand our performance because they exclude the effects of foreign currency volatility that are not indicative of our actual results of operations.
Constant Currency Revenue Growth	• Constant currency revenue growth (as a percentage) is calculated by determining the increase in current period revenue over prior period revenue, where current period foreign currency revenue is translated using prior period exchange rates.
Free Cash Flow	• Cash flow from operations Less: purchases of property and equipment, Plus: proceeds from sale of property and equipment.	• Provides information to management and investors about the amount of cash generated from our ongoing operations that, after purchases and sales of property and equipment, can be used for strategic initiatives, including investing in our business and strengthening our balance sheet, including paying down debt, and paying dividends to stockholders.
Segment Gross Profit	• Gross profit for a period attributable to each respective reportable segment.	• We believe segment gross profit and segment gross profit margin are frequently used by investors and other interested parties in evaluating companies in the retail industry for period-to-period comparisons. However, other companies may calculate segment gross profit and segment gross profit margin in a manner different from ours and therefore they may not be directly comparable to similar terms used by other companies.
Segment Gross Profit Margin	• Segment gross profit as a percentage of segment net revenues.
Adjusted net income (loss)	• Net income (loss), excluding the effects of tax valuation allowance releases and other tax reserve adjustments not reflective of our ongoing operations.	• We believe adjusted net income (loss) and adjusted diluted earnings provides useful supplemental information for investors to compare our current earnings results from one period to another exclusive of certain items that are not reflective of our ongoing operations. Adjusted diluted earnings per share is a performance measure and should not be used as a measure of liquidity.
Adjusted diluted earnings per share	• Adjusted net income (loss) divided by the weighted average dilutive shares outstanding for the period.

Reconciliations of Non-GAAP Measures

A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty of expenses that may be incurred in the future, although it is important to note that these factors could be material to Coupang’s results computed in accordance with GAAP.

The following tables present the reconciliations from each U.S. GAAP measure to its corresponding non-GAAP measure for the periods noted:

Constant Currency Revenue and Constant Currency Revenue Growth (YoY)

	Three Months Ended December 31,
	2023								2022			Year over Year Growth
(in millions)	As Reported		Exchange Rate Effect			Constant Currency Basis			As Reported			As Reported		Constant Currency Basis
Consolidated
Net retail sales	$	5,563	$	(167	)	$	5,397		$	4,761		17	%	13	%
Net other revenue		998		(21	)		977			566		76	%	73	%
Total net revenues	$	6,561	$	(187	)	$	6,374		$	5,327		23	%	20	%
Net Revenues by Segment
Product Commerce	$	6,288	$	(183	)	$	6,106		$	5,194		21	%	18	%
Developing Offerings		273		(5	)		268			133		105	%	102	%
Total net revenues	$	6,561	$	(187	)	$	6,374		$	5,327		23	%	20	%

	Year Ended December 31,
	2023							2022			Year over Year Growth
(in millions)	As Reported		Exchange Rate Effect		Constant Currency Basis			As Reported			As Reported		Constant Currency Basis
Consolidated
Net retail sales	$	21,223	$	221	$	21,444		$	18,338		16	%	17	%
Net other revenue		3,160		33		3,193			2,245		41	%	42	%
Total net revenues	$	24,383	$	254	$	24,637		$	20,583		18	%	20	%
Net Revenues by Segment
Product Commerce	$	23,594	$	246	$	23,840		$	19,955		18	%	19	%
Developing Offerings		789		8		797			628		26	%	27	%
Total net revenues	$	24,383	$	254	$	24,637		$	20,583		18	%	20	%

Constant Currency Revenue and Constant Currency Revenue Growth (QoQ)

	Three Months Ended December 31,										Quarter over Quarter Growth
	2023							2022
(in millions)	As Reported		Exchange Rate Effect		Constant Currency Basis			As Reported			As Reported		Constant Currency Basis
Total net revenues	$	6,561	$	44	$	6,605		$	5,327		6	%	7	%

Constant Currency Revenue and Constant Currency Revenue Growth (YoY) Prior Quarters

	Three Months Ended											Year over Year Growth
(in millions)	2023								2022
Total net revenues	As Reported		Exchange Rate Effect			Constant Currency Basis			As Reported			As Reported		Constant Currency Basis
Q1	$	5,801	$	340		$	6,141		$	5,117		13	%	20	%
Q2	$	5,838	$	246		$	6,083		$	5,038		16	%	21	%
Q3	$	6,184	$	(144	)	$	6,039		$	5,101		21	%	18	%

Free Cash Flow

	Three Months Ended December 31,								Year Ended December 31,
(in millions)		2023				2022				2023				2022
Net cash provided by operating activities	$	609			$	580			$	2,652			$	565
Adjustments:
Purchases of land and buildings		(42	)			(21	)			(374	)			(226	)
Purchases of equipment		(191	)			(100	)			(522	)			(598	)
Total purchases of property and equipment	$	(233	)		$	(121	)		$	(896	)		$	(824	)
Proceeds from sale of property and equipment		7				3				19				13
Total adjustments	$	(227	)		$	(118	)		$	(877	)		$	(811	)
Free cash flow	$	382			$	462			$	1,775			$	(246	)
Net cash used in investing activities	$	(263	)		$	(130	)		$	(927	)		$	(848	)
Net cash provided by (used in) financing activities	$	(163	)		$	21			$	199			$	247

Adjusted EBITDA and Adjusted EBITDA Margin

	Three Months Ended December 31,							Year Ended December 31,
(in millions)		2023				2022			2023				2022
Total net revenues	$	6,561			$	5,327		$	24,383			$	20,583
Net income (loss)		1,032				102			1,360				(92	)
Net income (loss) margin		15.7	%			1.9	%		5.6	%			(0.4	) %
Adjustments:
Depreciation and amortization		77				57			275				231
Interest expense		13				7			48				27
Interest income		(54	)			(26	)		(178	)			(53	)
Income tax benefit		(861	)			(9	)		(776	)			(1	)
Other expense, net		—				9			19				7
Equity-based compensation		86				71			326				262
Adjusted EBITDA	$	294			$	211		$	1,074			$	381
Adjusted EBITDA margin		4.5	%			4.0	%		4.4	%			1.9	%

Segment Gross Profit and Segment Gross Profit Margin

	Three Months Ended December 31,								Year Ended December 31,
(in millions)		2023				2022				2023				2022
Gross profit	$	1,681			$	1,278			$	6,190			$	4,710
Segment gross profit and gross profit margin:
Product Commerce	$	1,717			$	1,265			$	6,282			$	4,675
Gross profit margin		27.3	%			24.4	%			26.6	%			23.4	%
Developing Offerings	$	(36	)		$	14			$	(91	)		$	35
Gross profit margin		(13.3	) %			10.3	%			(11.6	) %			5.5	%

Adjusted Net Income (Loss) Reconciliation

	Three Months Ended December 31,							Year Ended December 31,
(in millions)		2023				2022			2023				2022
Net income (loss)	$	1,032			$	102		$	1,360			$	(92	)
Adjustment:
Change in income tax valuation allowance and other tax reserves		(895	)			(41	)		(895	)			(41	)
Adjusted net income (loss)	$	137			$	62		$	465			$	(133	)

Adjusted Diluted Earnings per Share Reconciliation

	Three Months Ended December 31,							Year Ended December 31,
(in millions)		2023				2022			2023				2022
Diluted earnings per share	$	0.57			$	0.06		$	0.75			$	(0.05	)
Adjustment:
Change in income tax valuation allowance and other tax reserves		(0.49	)			(0.02	)		(0.50	)			(0.02	)
Adjusted diluted earnings per share	$	0.08			$	0.03		$	0.26			$	(0.08	)

Certain amounts may not foot due to rounding

View source version on businesswire.com: https://www.businesswire.com/news/home/20240227252388/en/

Investor Contact:

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Source: Coupang

FAQ

What were Coupang's (CPNG) net revenues for Q4 2023?

Coupang reported net revenues of $6.6 billion for Q4 2023, showing a 23% YoY growth.

How much was Coupang's (CPNG) gross profit in Q4 2023?

Coupang's gross profit in Q4 2023 increased to $1.7 billion with a margin of 25.6%.

What was the total net revenue for Coupang (CPNG) in FY2023?

Coupang's total net revenues for FY2023 were $24.4 billion, indicating an 18% YoY growth.

How many active customers did Coupang (CPNG) have by the end of 2023?

Coupang had surpassed 21 million active customers by the end of 2023, growing at 16% YoY.

How many paid members were there in Coupang's (CPNG) WOW membership program by the end of 2023?

Coupang's WOW membership program had 14 million paid members by the end of 2023, showing a 27% increase YoY.