Shares of Coupang (CPNG 6.62%) were moving higher today after the technology company reported better-than-expected results in its fourth-quarter earnings report. As of 11:44 a.m. ET, the stock was up 4.6%. Coupang keeps growingCoupang -- which is headquartered in Seattle, operates in several countries, and generates sales primarily in South Korea -- has embraced an Amazon-like business model, with e-commerce anchoring a number of satellite businesses. It said that revenue in the quarter rose 21%, or 28% on ...

The e-commerce platform operator came up a bit short on revenue in the fourth quarter, but beat expectations on earnings per share.Coupang (CPNG 4.43%), a U.S.-based e-commerce powerhouse that largely does business in South Korea, disclosed its fourth-quarter results on Feb. 25. The most noteworthy metric was its earnings per share (EPS) of $0.08, which significantly outperformed the expected $0.01 with some help from a one-time insurance gain. However, revenues of $7.965 billion fell short of projections o ...

Financial Data and Key Metrics Changes - Net revenues grew by nearly $6 billion or 23% in constant currency, excluding Farfetch [6] - Gross profit increased by 29%, excluding Farfetch and a fire insurance gain recorded in Q4 [7] - Adjusted EBITDA reached $1.4 billion, expanding margins to 4.5%, with over $1 billion in free cash flow [7][44] - Total net revenues grew 21% year-over-year or 14% excluding Farfetch, with constant currency growth at 28% [32] - Consolidated gross profit grew 48% or 29% excluding Farfetch and the fire insurance gain [33] - Adjusted EBITDA margin for the quarter was 5.3%, up 80 basis points year-over-year [44] Business Line Data and Key Metrics Changes - Product Commerce segment saw revenue growth of 9% year-over-year, with a gross profit margin of 32.7% [36][40] - Developing Offerings segment revenues grew roughly 300% year-over-year, with a 124% increase excluding Farfetch [38] - Average spend levels per active customer grew by 6% year-over-year [37] Market Data and Key Metrics Changes - The Korean won weakened significantly against the U.S. dollar, impacting revenue comparisons [32] - The company continues to represent a small percentage of the market's total retail spend, indicating significant growth opportunities ahead [35] Company Strategy and Development Direction - The company focuses on customer experience and operational excellence as core principles driving growth [9][17] - Plans to expand margins in 2025 through automation, technology utilization, and supply chain optimization [25] - The strategy includes disciplined investments in technology and logistics infrastructure to enhance customer experience [17][42] Management's Comments on Operating Environment and Future Outlook - Management acknowledges uncertainty in the macro environment but remains confident in growth due to deep customer engagement [56][58] - The company expects Q1 growth to remain consistent with Q4, excluding Farfetch [59] - Anticipates constant currency consolidated growth rates for 2025 to be about 20% year-over-year [49] Other Important Information - The company reported a non-recurring insurance gain of $175 million related to a fire incident, impacting financial results [31] - Farfetch's losses have shrunk to a breakeven run rate, with significant improvements in operational efficiency [23] Q&A Session Summary Question: Impact of domestic e-commerce market slowdown on GMV growth and 2025 outlook - Management acknowledges macro uncertainty but emphasizes strong customer engagement driving growth [56][58] Question: FLC business margin profile trend for 2025 - Management indicates FLC is growing at a high multiple of overall business and focuses on optimizing service levels [60] Question: Impact of Eats platform fee adjustments - Management highlights commitment to low fees for merchants and free delivery for customers, aiming to improve operations [67] Question: Future of tech spending and its benefits - Management expects OG&A expenses to decline over time as a percentage of revenue, driven by tech investments [69] Question: Strategy for Farfetch post-restructuring - Management plans to leverage resources across the company and focus on operational improvements for sustainable growth [78] Question: CapEx investment outlook - Management indicates CapEx levels will remain consistent as a percentage of revenue, focusing on growth in Korea and Taiwan [80] Question: Developing offerings investment guidance - Management confirms investments in Developing Offerings will be between $650 million and $750 million, reflecting confidence in growth opportunities [93]

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Financial Performance and Risks - The company reported a history of net losses, with losses of $(0.1) billion in 2022 and $(1.5) billion in 2021, and an accumulated deficit of $(4.2) billion as of December 31, 2024[58]. - The company has experienced fluctuations in revenue and results of operations, making future performance difficult to predict[53]. - The company acknowledges that its growth may not be sustainable and that future revenue growth rates could decline[53]. - Increased costs related to food, energy, labor, and other factors may materially impact the company's operating costs and financial performance[136]. - The company may require additional capital for growth, which might not be available on favorable terms, potentially impairing business development[158]. - The company is subject to various legal proceedings, including claims and investigations related to employment, labor, and intellectual property, which could result in significant liabilities and expenses[226]. Competition and Market Position - The company faces intense competition and must innovate to avoid losing market share, which could adversely affect its financial performance[51]. - The company faces intense competition from both online and offline retailers, which may impact its market position and operational results[88]. - Competitors may leverage greater resources for marketing and innovation, increasing competitive pressures on the company[90]. - The company faces competitive pressures from rivals with advantages such as longer operating histories and better brand recognition, which could adversely affect its business and financial condition[94]. Growth and Expansion Strategies - The company plans to continue investing significantly to increase its customer base and expand its offerings, which may lead to increased operating expenses[59]. - The company intends to expand its product offerings and enhance customer satisfaction through its Rocket WOW membership program[66]. - The company has expanded its offerings into new categories and geographies, including consumer electronics and luxury products, which may expose it to new risks and challenges[99]. - The company expects continued investment in Farfetch's operating expenses and headcount, which may not guarantee success[71]. - The company has experienced significant growth and plans to continue increasing its employee headcount to support this growth[74]. Operational Challenges and Risks - The acquisition of Farfetch introduces risks related to integration and operations in new geographic areas, which may impact the company's financial condition[51]. - The company may encounter challenges in securing suitable facilities for fulfillment operations, which could adversely affect its business[84]. - The company must effectively manage growth and operational challenges to avoid negatively impacting its financial condition and results of operations[79]. - The company may face challenges in integrating acquired businesses, which could disrupt operations and divert management attention[123]. - Service interruptions and delivery delays caused by external factors could negatively affect customer satisfaction and the company's financial condition[140]. Regulatory and Compliance Issues - The company is subject to regulatory risks associated with Coupang Pay, which could lead to fines, penalties, and operational restrictions if compliance is not maintained[135]. - The company is subject to heightened governmental scrutiny, which may increase the risk of litigation and adversely affect its business[170]. - The company is under scrutiny by the Korean Fair Trade Commission (KFTC) regarding transactions with subsidiaries, which could lead to fines or other actions[177]. - The company is subject to increased legal, accounting, and financial compliance costs as a public reporting company, which may strain resources and divert management's attention[166]. - The company may incur substantial costs to comply with privacy and cybersecurity laws, which could impact its growth strategy and customer retention[223]. Supply Chain and Inventory Management - The company faces significant inventory risks due to seasonality, new product launches, and changes in customer demand, which could materially impact operations[117]. - Seasonal fluctuations in sales are expected, particularly during holidays like Chuseok and Lunar New Year, leading to variable quarterly results and potential inventory markdowns[118]. - The company relies on various third-party providers for essential services, and any failure in these services could materially affect business operations[149]. - The company depends on its merchants to provide a high-quality experience, and any negative customer experiences could harm its reputation and ability to attract customers[137]. Technology and Innovation - The company is investing significantly in technology and research and development to enhance operations and explore new growth strategies, but these investments may not yield immediate financial returns[109]. - The company utilizes AI and machine learning technologies, which present risks such as operational disruptions and data security breaches that could adversely affect its business[246]. - The evolving regulatory landscape surrounding AI and machine learning may require significant compliance costs and changes to business practices[246]. Economic and Geopolitical Factors - The Korean economy's performance significantly impacts Coupang Corp.'s revenue, with a substantial majority generated from sales in Korea, making it vulnerable to economic downturns and uncertainties[184]. - Potential adverse developments in Korea's economy include declines in consumer disposable income, political instability, and increased household debt, which could negatively affect customer spending[185]. - Tensions with North Korea pose a risk to Coupang Corp.'s business, financial condition, and stock price due to potential military hostilities and geopolitical instability[189]. Legal and Taxation Issues - The company is subject to taxes in multiple jurisdictions including the United States, Korea, China, Taiwan, and the United Kingdom, complicating tax liabilities[249]. - The company may face challenges in enforcing judgments obtained in courts outside Korea, complicating legal proceedings for investors[198]. - The company faces risks related to compliance with anti-corruption and anti-money laundering laws, which could lead to substantial civil and criminal penalties[229].

Financial Performance - Total net revenues for Q4 2024 were $8.0 billion, up 21% YoY and 28% on an FX-neutral basis[5] - Total net revenues for FY2024 were $30.3 billion, increasing 24% YoY on a reported basis and 29% YoY on an FX-neutral basis[5] - Total net revenues for the year ended December 31, 2024, were $30,268 million, up 24.5% from $24,383 million in 2023[23] - Total net revenues for Q4 2024 reached $7,965 million, representing a year-over-year growth of 21%[45] - Total net revenues for Q4 2024 were $8,395 million, representing a year-over-year growth of 28%[38] - Total net revenues for the year ended December 31, 2024, were $31,552 million, a 29% increase compared to 2023[38] - Total net revenues excluding Farfetch for Q4 2024 were $7,494 million, compared to $6,561 million in Q4 2023, indicating a growth of 14.2%[44] - Total net revenues excluding Farfetch for the year ended December 31, 2024, were $28,610 million, a 17% increase compared to 2023[45] Segment Performance - Product Commerce segment net revenues reached $6.9 billion, up 9% YoY on a reported basis and 16% YoY on an FX-neutral basis[9] - Developing Offerings segment net revenues were $1.1 billion, up 296% YoY on a reported basis and 308% YoY on an FX-neutral basis[5] - Product Commerce net revenues reached $7,280 million in Q4 2024, with a year-over-year growth of 16%[38] - Developing Offerings net revenues for Q4 2024 were $1,115 million, showing a significant year-over-year growth of 308%[38] - Developing Offerings net revenues excluding Farfetch for the year ended December 31, 2024, were $1,911 million, a 142% increase from 2023[47] Profitability Metrics - Gross profit for Q4 2024 increased 48% YoY to $2.5 billion, with a gross profit margin of 31.3%, an improvement of 570 bps YoY[5] - Net income attributable to Coupang stockholders was $156 million, a decrease of $876 million from last year due to a non-cash tax benefit in Q4 2023[5] - Net income attributable to Coupang shareholders for Q4 2024 was $156 million, a decrease of 84.9% compared to $1,032 million in Q4 2023[43] - Basic earnings per share for Q4 2024 was $0.09, down from $0.58 in Q4 2023[23] - Adjusted EBITDA for Q4 2024 was $421 million, with a margin of 5.3%, up 80 bps YoY[5] - Adjusted EBITDA for the year ended December 31, 2024, was $1,375 million, up 28.1% from $1,074 million in 2023, with an adjusted EBITDA margin of 4.5%[1] - Adjusted net income attributable to Coupang stockholders excluding the impact from the FC Fire insurance gain was $24 million for Q4 2024, down from $1,032 million in Q4 2023[43] Cash Flow and Assets - Free cash flow for the full year was $1.0 billion, a decrease of 43% YoY[7] - Free cash flow for Q4 2024 was $463 million, an increase from $382 million in Q4 2023[39] - Cash and cash equivalents as of December 31, 2024, totaled $5,879 million, an increase from $5,243 million in 2023[25] - Total assets increased to $15,344 million as of December 31, 2024, compared to $13,346 million in 2023[25] - Net cash provided by operating activities for 2024 was $1,886 million, down from $2,652 million in 2023[27] - The company reported a net cash provided by operating activities of $676 million for Q4 2024, compared to $609 million in Q4 2023[39] Liabilities and Noncontrolling Interests - Coupang's total liabilities increased to $11,167 million as of December 31, 2024, from $9,242 million in 2023[25] - The company reported a net loss attributable to noncontrolling interests of $25 million in Q4 2024[23] - The company reported a net loss attributable to noncontrolling interests of $25 million for Q4 2024, compared to no loss in Q4 2023[1] Other Notable Points - The acquisition of Farfetch was completed at the end of January 2024, impacting the Developing Offerings segment results[12] - The company emphasizes the importance of constant currency revenue for understanding period-to-period comparisons, particularly due to foreign exchange rate effects[35] - Adjusted gross profit for Q4 2024 was $2,491 million, with an adjusted gross profit margin of 29.0%[45] - The gross profit margin excluding the impact from the FC Fire insurance gain was 29.8% for Q4 2024, up from 25.6% in Q4 2023[45] - Adjusted basic earnings per share for Q4 2024 was $0.01, compared to $0.58 in Q4 2023, reflecting the impact of the FC Fire insurance gain[42]

Core Viewpoint - Amazon and Coupang are both strong contenders in the e-commerce space, with Amazon being a global leader and Coupang emerging as a significant competitor in Asia, particularly South Korea [1][2][3]. Group 1: Amazon - Amazon's stock has increased by 33% over the past year, driven by a 10% year-over-year increase in net sales and an 86% rise in earnings per share (EPS) to $1.86 [4][5]. - The company benefits from a resilient macroeconomic environment and has improved operational efficiencies, leading to higher margins [5]. - Amazon's diversification in consumer spending and technology positions it well for continued growth, with projected revenue growth of 10% and EPS growth of 15% in 2025 [6]. Group 2: Coupang - Coupang generated over $30 billion in revenue in the past year and is the dominant e-commerce player in South Korea [8][9]. - The company is expanding its operations in Asia, with logistics hubs in Singapore and Taiwan, and has diversified its offerings with acquisitions like Farfetch and services such as Coupang Eats and Coupang Pay [10]. - Analysts forecast a 24% revenue growth for 2024 and a 15% growth for 2025, with EPS projected to rise from $0.01 in 2024 to $0.50 in 2025 [11]. - Coupang's stock trades at a forward P/E ratio of 51, which is higher than Amazon's 35, reflecting its stronger earnings momentum and growth potential in emerging markets [12]. Group 3: Investment Comparison - Both Amazon and Coupang are compelling investment options, but Coupang may have an edge in 2025 as it approaches a profitability inflection point, potentially leading to higher stock performance compared to Amazon [13].

Market Overview - Major market indexes are trading close to new highs, pushing valuations above historical norms, with the S&P 500's P/E ratio around 30, nearly double the historical average [1] Coupang - Coupang is South Korea's leading online retail company, attracting investment from billionaires like Howard Marks and Chase Coleman [2] - The stock rebounded last year with a 20% year-over-year revenue growth in Q3, excluding the acquisition of Farfetch, and 25% growth when excluding currency changes [3] - Coupang controls nearly 40% of South Korea's e-commerce market, projected to grow from $124 billion in 2023 to $182 billion by 2028, with active customer count reaching 22.5 million, up 11% year over year [4] - The company has expanded operations to Taiwan, Singapore, China, India, and Europe, indicating a need to prove its business model in other geographies [5] - The unique delivery system allows for rapid package delivery in densely populated areas, with significant investment in growth in Taiwan [6] - The stock's P/S multiple of 1.6 is lower than Amazon's early growth years, suggesting potential for excellent returns as the company grows [7] Skechers - Skechers is a top footwear brand growing earnings at double-digit rates, trading at just 16 times earnings, with new investment from Andreas Halvorsen of Viking Global Investors [8] - The company has achieved a 14% annualized revenue growth over the last decade, yet the stock has consistently traded at a P/E ratio under 20, which appears unjustified [8] - Recent quarterly sales grew 13% year over year, with earnings surging 26%, indicating a strong brand reputation for style, comfort, and quality at affordable prices [9] - The stock has faced recent declines due to potential U.S. tariffs on imports from China, impacting near-term earnings, but analysts expect 16% earnings growth in 2025 [11] - Viking Global anticipates that Skechers will successfully navigate tariffs by adjusting its supply chain, potentially leading to returns on par with earnings growth [12]

Group 1: Company Performance - Coupang, Inc. (CPNG) closed at $25.13, reflecting a -1.53% change from the previous day's closing price, underperforming the S&P 500's daily loss of 0.43% [1] - Over the past month, Coupang's shares have increased by 14.7%, while the Retail-Wholesale sector and the S&P 500 gained 5.51% and 2.6%, respectively [1] Group 2: Upcoming Financial Results - Coupang is set to announce its earnings on February 25, 2025, with an expected EPS of -$0.01, indicating a 112.5% decline from the same quarter last year [2] - Revenue is forecasted to be $8.08 billion, representing a 23.17% increase compared to the corresponding quarter of the previous year [2] Group 3: Analyst Estimates and Valuation - Recent changes to analyst estimates for Coupang are important as they reflect short-term business trends, with positive revisions indicating a favorable business outlook [3] - The Zacks Rank system, which assesses estimate changes, currently ranks Coupang at 3 (Hold), with a 15.88% decrease in the consensus EPS estimate over the last 30 days [5] - Coupang has a Forward P/E ratio of 53.54, significantly higher than the industry average of 23.71, indicating a premium valuation [6] - The company has a PEG ratio of 53.01, compared to the Internet - Commerce industry's average PEG ratio of 1.2, suggesting a high valuation relative to expected earnings growth [7] Group 4: Industry Context - The Internet - Commerce industry, part of the Retail-Wholesale sector, holds a Zacks Industry Rank of 60, placing it in the top 24% of over 250 industries [7] - The strength of industry groups is measured by the Zacks Industry Rank, with the top 50% rated industries outperforming the bottom half by a factor of 2 to 1 [8]

Company Performance - Coupang, Inc. (CPNG) closed at $25.52, with a slight increase of +0.04% compared to the previous day, underperforming the S&P 500's daily gain of 0.24 [1] - Over the past month, shares of Coupang have increased by 14.96%, significantly outperforming the Retail-Wholesale sector's gain of 5.98% and the S&P 500's gain of 2.37% [1] Upcoming Earnings - The upcoming earnings report for Coupang is scheduled for February 25, 2025, with an expected EPS of -$0.01, indicating a 112.5% decline compared to the same quarter last year [2] - Revenue is projected to be $8.08 billion, reflecting a 23.17% increase from the same quarter last year [2] Analyst Estimates - Recent changes to analyst estimates for Coupang are crucial, as positive revisions often indicate a favorable business outlook [3] - The Zacks Consensus EPS estimate has decreased by 15.88% in the past month, and Coupang currently holds a Zacks Rank of 3 (Hold) [5] Valuation Metrics - Coupang has a Forward P/E ratio of 53.52, which is significantly higher than the industry average Forward P/E of 22.2 [6] - The company also has a PEG ratio of 52.99, compared to the Internet - Commerce industry's average PEG ratio of 1.15 [7] Industry Context - The Internet - Commerce industry, part of the Retail-Wholesale sector, has a Zacks Industry Rank of 77, placing it in the top 31% of over 250 industries [8]