Q3 Revenue Hits 10.69 Trillion KRW
Active Customers and Revenue Per Capita Also Increase
Coupang set a new record for the highest quarterly revenue ever in the third quarter of this year, despite concerns about so-called 'Talpang'?customers leaving Coupang?due to the increase in paid membership (Wow) fees. It also recorded an operating profit and quickly recovered the loss incurred from preemptively reflecting the estimated fine imposed by the Korea Fair Trade Commission in the previous quarter within just one quarter.
Coupang, listed on the New York Stock Exchange, announced on the 6th that its third-quarter revenue this year reached $7.866 billion, a 32% increase compared to the same period last year. Applying Coupang’s quarterly average KRW-USD exchange rate of 1,359.02 won, the revenue amounts to approximately 10.69 trillion won, marking the highest quarterly figure ever.
Operating profit was $109 million (about 148.1 billion won), up 29% from the previous year. The quarterly operating profit and loss had recorded a loss of $25 million (about 34.2 billion won) in the second quarter due to the Korea Fair Trade Commission’s fine related to the manipulation of search rankings for private brand (PB) products, but it turned to a profit within one quarter. However, Coupang’s operating profit margin relative to revenue was 1.38%, slightly down from 1.41% the previous year.
The third-quarter net profit was $64 million (86.9 billion won), down 27% from last year. The net profit margin relative to revenue was 0.8%, a 1.5% decrease compared to the previous year. Earnings per share (EPS) were $0.04, down 1 percentage point from $0.05 in the same period last year. Nevertheless, net profit also turned positive within one quarter after a 34.2 billion won operating loss in the second quarter.
Coupang’s cumulative operating profit for the first to third quarters this year was about 167 billion won, a 62% decrease compared to 444.8 billion won in the same period last year. Net profit also recorded a cumulative net loss of 88.7 billion won during the same period this year, compared to a cumulative net profit of 426.4 billion won in the first to third quarters last year.
Coupang also explained that the number of active customers who purchased at least one product in the third quarter was 22.5 million, an 11% increase compared to 20.2 million in the same period last year, and sales per customer rose 8% to $318 (432,160 won).
Earlier, Coupang raised the monthly membership fee for existing paid members from 4,990 won to 7,890 won in July. Accordingly, the industry focused on the potential scale of the 'Talpang' group leaving Coupang, but it is interpreted that the Wow membership fee increase had virtually no impact.
Revenue from the product commerce segment, including Rocket Delivery and Rocket Fresh, was $6.891 billion (9.365 trillion won), a 20% increase from the previous year. Adjusted EBITDA for the product commerce segment rose 18% year-on-year to $470 million.
A view of Gwangju Advanced Logistics Center, the largest in the Honam region, which Coupang officially opened in the third quarter of this year and has begun full-scale operations. Provided by Coupang
Revenue from growth business segments such as Coupang Eats, Coupang Play, and Farfetch reached $975 million (1.325 trillion won), growing 356% compared to last year. Adjusted EBITDA loss decreased by about 21% to $127 million (172.5 billion won). Farfetch’s adjusted EBITDA loss was $2 million (2.7 billion won), significantly down from $31 million (42.4 billion won) in the second quarter.
Coupang recorded a free cash flow deficit of $42 million (5.7 billion won) in the third quarter due to nationwide logistics infrastructure investments that accelerated this year. Coupang’s free cash flow in the same period last year was a surplus of $536 million (about 702 billion won).
Previously, Coupang announced plans to build and operate logistics centers in nine regions including Daejeon, Gwangju, Gyeongbuk, and Busan by 2026, directly employing 10,000 people. The amount invested in logistics infrastructure and other areas this quarter was about $383 million (approximately 520.5 billion won).
Gaurav Anand, Coupang’s Chief Financial Officer (CFO), said, "New products and categories such as Rocket Growth (FLC) and the new luxury service R.lux demonstrate tremendous growth opportunities through the expansion of Rocket Delivery selection. We also achieved near break-even profitability at Farfetch earlier than planned. We will continue to focus on delighting customers and operational excellence."
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