10-KPeriod: FY2021

Coupang, Inc. Annual Report, Year Ended Dec 31, 2021

Filed March 3, 2022For Securities:CPNG

Summary

Coupang, Inc.'s 2021 10-K filing highlights a significant year of growth, marked by a 54% increase in total net revenues to $18.4 billion, driven by a 15% rise in active customers and a 30% increase in net retail sales per active customer. Despite this revenue growth, the company reported a substantial net loss of $1.54 billion, an increase from the prior year's $463 million loss. This widening loss is largely attributable to significant investments in infrastructure and technology, an increase in operating, general, and administrative expenses (up 78%), and a $296 million loss related to a fulfillment center fire. The company is focused on long-term growth, emphasizing its integrated technology and infrastructure to provide a superior customer experience through services like Dawn and Same-Day Delivery. Coupang is strategically reinvesting in its established offerings to fuel growth in new initiatives, including Coupang Eats and Coupang Play. The company faces intense competition and ongoing risks related to managing rapid growth, potential operational disruptions, and evolving regulatory landscapes, particularly in South Korea.

Financial Highlights

49 data points
Beta

Revenue

$18.41B

16.0% Gross Margin

Net Income

-$1.54B

-8.4% Net Margin

EPS (Diluted)

$-1.08

Total Assets

$8.64B

Cash & Equivalents

$3.49B

Free Cash Flow

-$1.08B

Financial Statements
Beta
Revenue$18.41B
Cost of Revenue$15.46B
Gross Profit$2.95B
Operating Expenses$19.90B
Operating Income-$1.49B
Interest Expense$45.00M
Net Income-$1.54B
EPS (Basic)$-1.08
EPS (Diluted)$-1.08
Shares Outstanding (Basic)1.42B
Shares Outstanding (Diluted)1.42B

Key Highlights

  • 1Total net revenues increased by 54% to $18.4 billion in 2021, compared to $12.0 billion in 2020.
  • 2Active Customers grew by 15% to 17.9 million as of December 31, 2021.
  • 3Net retail sales per active customer increased by 30% to $283 in the fourth quarter of 2021.
  • 4The company reported a net loss of $1.54 billion for the year ended December 31, 2021, an increase from $463 million in 2020.
  • 5Operating, general, and administrative expenses increased by 78% to $4.45 billion, driven by increased employee costs, advertising, and expenses related to a fulfillment center fire.
  • 6A fire at the Deokpyeong fulfillment center in June 2021 resulted in inventory and property losses of $285 million and contributed to the overall net loss.

Frequently Asked Questions

Coupang's core strategy is to build the next generation of e-commerce by investing in technology and infrastructure with a focus on customer centricity. This includes offering fast and reliable delivery (Dawn and Same-Day Delivery), a vast selection of products including fresh groceries, low prices, and convenient services like boxless packaging and frictionless returns. They aim to address customer compromises in traditional e-commerce.

As of March 2, 2022, Coupang revised its reportable segments to 'Product Commerce,' which includes the core retail and marketplace offering, Rocket Fresh, and associated advertising. The second segment is 'Growth Initiatives,' encompassing nascent offerings like Coupang Eats, Coupang Play, international expansion, and fintech initiatives.

The company faces significant financial challenges, including a history of net losses and a substantial accumulated deficit. Key risks involve the inability to achieve or maintain profitability, managing significant growth in operations and workforce, intense competition, increased operating expenses (especially related to logistics, labor, and technology investments), and the potential for fluctuations in results of operations due to various market and operational factors. The company is prioritizing long-term growth over short-term financial performance.

The fire at the Deokpyeong fulfillment center in June 2021 caused inventory and property/equipment losses totaling $285 million. This directly contributed to an increase in the cost of sales and operating, general, and administrative expenses, and added $296 million to the company's net loss for the year.