Coupang reports $90.9 million net profit in the first quarter

Coupang reported a net profit of $90.9 million in the first quarter, compared with the net loss of $209 million in the same period a year earlier. Analysts had forecast $0.05 per share earnings for the quarter. Coupang exceeded analyst expect...

A Coupang banner hangs on the facade of the New York Stock Exchange on March 11, 2021, when the e-commerce operator began trading on the NYSE. [YONHAP]

Coupang reported a net profit of $90.9 million in the first quarter, compared with a net loss of $209 million in the same period a year earlier.

Analysts had forecast earnings per share of $0.05 for the quarter. Coupang exceeded analyst expectations with $0.06.

Since the third quarter of 2022, Coupang has reported net profit for three consecutive quarters.

The first quarter revenue jumped 13 percent on year to $5.8 billion, above the market consensus of $5.64 billion.

“Overall, our first quarter results demonstrated robust growth amidst challenging retail conditions,” Coupang chief financial officer Gaurav Anand said in an online conference call Wednesday. “With the Korean retail market growing at four percent in the first quarter, we continued our trend of growing at multiples of the overall market.”

Both Anand and CEO Bom Kim pointed to the growth of Rocket Delivery, a next-day delivery service.

Fulfillment & Logistics by Coupang (FLC) includes Rocket Delivery, which involves products from Coupang inventory, and Coupang Marketplace, a cross-border e-commerce platform that connects buyers and sellers without an intermediary. For the latter, the operator handles storage, inventory, packaging and delivery.

“In the first quarter, FLC units sold increased nearly 90 percent from a year ago. It continues to scale rapidly, reaching seven percent of our revenue and four percent of total units sold this quarter,” Anand said.

Adjusted Ebitda was $241 million, compared to a negative $91 million for the same period a year before.

“We are also confident that we can expand margins to our target of 10 percent or higher adjusted Ebitda, thanks to the long runway we see for operational improvements,” Kim said. “The majority of the nearly 600 [basis points] improvement in profit margin this quarter came from operational improvements in Product Commerce, not benefits from advertising, [Coupang] Eats or WOW membership. It was also not driven by one-time cost-cutting measures like layoffs.”

The e-commerce company had 19 million active users, 5 percent up from the same period a year earlier. Net revenue per active customer was $305, up 8 percent on year.

Kim also mentioned the shutdown of its business in Japan, which the company confirmed in March.

“We weren’t producing the returns we’d hoped for,” Kim said. “In contrast, we like what we’ve been seeing in Taiwan, which is showing the same signs of transformative potential that we saw in Korea when we launched Rocket Delivery.”

Coupang rolled out its Rocket Delivery service in Taiwan last October.

In after-hours trading following the earnings release, Coupang shares fell 2.19 percent to close at $17.39.

Coupang went public in 2021 on the New York Stock Exchange and is the first and only e-commerce company in Korea to list. It sold shares at $35.00, and trading started on March 11, 2021, at $63.50.

BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]