Coupang(US:CPNG)2025-11-04 21:15Financial Performance - Total net revenues for Q3 2025 reached $9,267 million, an 18% increase from $7,866 million in Q3 2024[100] - Gross profit for Q3 2025 was $2,720 million, reflecting a 20% growth compared to $2,269 million in Q3 2024[100] - Net income for Q3 2025 was $95 million, a 48% increase from $64 million in Q3 2024, with a net income margin of 1.0%[100] - Net retail sales for Q3 2025 were $7,081 million, a 15% increase from $6,140 million in Q3 2024[105] - Net other revenue for Q3 2025 was $2,186 million, a 27% increase from $1,726 million in Q3 2024[105] - Adjusted EBITDA for Q3 2025 was $413 million, up 20% from $343 million in Q3 2024[100] - Operating income for Q3 2025 was $162 million, a 49% increase from $109 million in Q3 2024[105] - Product Commerce net revenues increased to $7,980 million for Q3 2025, a 16% increase from $6,891 million in Q3 2024[110] - Developing Offerings net revenues rose to $1,287 million for Q3 2025, reflecting a 32% increase from $975 million in Q3 2024[110] - Free cash flow for Q3 2025 was $442 million, compared to a loss of $42 million in Q3 2024[100] Customer Metrics - Product Commerce Active Customers increased to 24.7 million in Q3 2025, a 10% rise from 22.5 million in Q3 2024[102] - The company experienced a 7% growth in total net revenues per Product Commerce Active Customer, driven by increased customer engagement[110] Expenses and Costs - Cost of sales increased by $950 million or 17% for Q3 2025, while the cost of sales as a percentage of revenue decreased to 70.6% from 71.2% in Q3 2024[113] - The increase in operating, general and administrative expenses for Q3 2025 was primarily due to higher infrastructure and technology costs, with expenses as a percentage of revenue slightly increasing to 27.6%[115] Tax and Income Adjustments - The effective tax rate decreased from 51.5% to 42.4% in Q3 2025 compared to Q3 2024, primarily due to changes in U.S. taxes on foreign income[119] - Developing Offerings adjusted EBITDA showed a loss of $292 million in Q3 2025, a 130% increase in loss compared to $127 million in Q3 2024[122] Cash Flow and Equity - Free cash flow for the nine months ended September 30, 2025, was $805 million, up from $553 million in the same period of 2024[130] - Net income for the nine months ended September 30, 2025, was $240 million, a significant improvement from a net loss of $65 million in 2024[131] - The company had total cash, cash equivalents, and restricted cash of $7.3 billion as of September 30, 2025[133] - Stockholders' equity increased to $4.7 billion as of September 30, 2025, compared to $4.1 billion at the end of 2024[135] Investment and Growth Strategy - The company plans to invest significantly in its growth strategy, particularly in the Developing Offerings segment, with expected future expenditures exceeding several billion dollars[135] - A stock repurchase program was authorized for up to $1 billion, with $81 million spent to repurchase 2.8 million shares during the three and nine months ended September 30, 2025[136] - The company entered into various new construction contracts with remaining capital expenditure commitments of $365 million as of September 30, 2025[135] Debt and Borrowing - Aggregate outstanding borrowings under all other credit facilities totaled $953 million as of September 30, 2025[148] - Coupang, Inc. entered into a three-year term loan agreement in September 2025 with aggregate borrowings of $449 million at an average fixed interest rate of 3.80%[150] - The company had an outstanding balance of $669 million on credit facilities with variable interest rates as of September 30, 2025[157] Currency and Interest Rate Risk - A hypothetical 10% adverse change in average exchange rates would have resulted in a decline in total net revenues of approximately $808 million for the three months ended September 30, 2025[160] - The company is exposed to fluctuations in the exchange rates of various currencies against the USD, predominantly the KRW[158] - Coupang, Inc. does not currently use derivatives to hedge foreign currency risk but may consider it in the future[161] - The company evaluates and approves credit standards to manage credit risk related to cash and cash equivalents held with financial institutions[162] - Coupang, Inc. aims to align costs with revenue denominated in the same currency but is not always able to do so due to geographic spread[159] - The company’s interest rate risk arises primarily from variable rate debt and undrawn revolving credit agreements[156] Acquisition and Settlement - The acquisition of Farfetch in January 2024 included a settlement agreement that terminated guaranteed minimum royalty payments totaling $264 million[95] - Coupang, Inc. fully redeemed $392 million of principal amount outstanding on the Farfetch Term Loans in July 2025[151]