Coupang reports record quarterly operating profit in Q2

[COUPANG]

Coupang reported a record-high quarterly revenue, operating profit and net income for the second quarter, primarily thanks to its flagship fast Rocket Delivery service.

During Wednesday's conference call, the Korean e-commerce giant unveiled plans to invest $400 million in its new business areas, including its business in Taiwan, video streaming service Coupang Play and food delivery service Coupang Eats.

Coupang, which is listed on the New York Stock Exchange, reported an operating profit of $147.64 million for the second quarter, up 42 percent from the same period last year, marking it the biggest quarterly operating profit.

The company stayed in the black for four consecutive quarters since the third quarter of 2014, the year when it introduced its "rocket delivery" service, which offers delivery service within 24 hours upon order.

Coupang reported earnings per share of $0.08, surpassing the projected $0.05 for the quarter.

The company's revenue stood at $5.84 billion, reflecting a 21 percent year-on-year growth. The figure represents the highest quarterly revenue in Coupang's history, surpassing the market consensus of $5.68 billion.

Net profit was $145 million, rising from the previous year's loss and marking the company's highest-ever quarterly net profit.

"We continue to deliver expanding profitability and sustained high growth, not one at the expense of the other, because of our years of unparalleled investment and an unrelenting focus on both the customer experience and operational excellence," Bom Kim, founder and CEO of Coupang, said during a conference call Wednesday. "Our flywheel is accelerating — both revenue and active customers increased at a faster pace this quarter."

Even amid inflation and an economic slowdown, the count of active customers — or those who made at least one purchase at Coupang — expanded by 10.2 percent on-year, hitting a record high of 19.7 million this quarter. Additionally, revenues per active customer went up by 5 percent to $2.96 million.

By business segments, its core services generated $5.68 billion in revenue, up 21 percent on-year. The segment includes flagship services such as Rocket Delivery and Coupang Marketplace, a cross-border e-commerce platform that connects buyers and sellers directly.

"Our growth rate in the second quarter [had a] 21 percent growth rate, [and] that growth is a multiple of the overall retail market, which grew at 3.1 percent year-on-year," Kim said. "Third-party sales in virtually every category, including fashion and beauty, are growing at multiples of the retail market."

The Developing Offerings segment, which includes Coupang Eats, Couplang Play, fintech and investments in international expansion, showed a 2 percent decline year-on-year to $156.29 million.

In response to a surge in WOW member subscriptions in tandem with the integration of its delivery app Coupang Eats, the company unveiled it will solidify its unlimited Coupang Eats discount as a permanent feature of its WOW membership program.

Speaking on the expansion front, Kim noted the smooth progress of Coupang's overseas endeavors in Taiwan. In a bid to further bolster this growth trajectory in Taiwan, and to extend its service spectrum encompassing Coupang Play and Coupang Eats, the company has unveiled a plan to invest $400 million into the development of its offerings.

"In the second quarter, Coupang was the most downloaded app in Taiwan," Kim said. "And in the ten months since we launched Rocket Delivery, Taiwan has scaled faster than Rocket Delivery in Korea did in its first 10 months post-launch."

Goldman Sachs previously forecasted a 60 percent increase in Coupang's stock price within a year. The investment bank said that Coupang's sustained growth is expected to continue, particularly in its fulfillment operations encompassing inventory management, delivery and storage.

Coupang shares climbed 6.2 percent in after-hours trading following the earnings release to close at $19 Tuesday local time.

Coupang went public in 2021 on the New York Stock Exchange and is the first and only e-commerce company in Korea to list. Its initial public offering price was $35 per share, and trading started on March 11, 2021, at $63.5.

BY SEO JI-EUN [seo.jieun1@joongang.co.kr]