10-QPeriod: Q3 FY2021

Coupang, Inc. Quarterly Report for Q3 Ended Sep 30, 2021

Filed November 12, 2021For Securities:CPNG

Summary

Coupang, Inc.'s Q3 2021 filing for the period ending September 30, 2021, reveals a company experiencing substantial revenue growth but facing increasing operational costs and a widening net loss. Total net revenues saw a significant increase of 48% year-over-year for the quarter and 63% for the first nine months, driven by strong growth in both net retail sales and net other revenue, indicating increasing customer engagement and expanding services. However, this growth came at a cost, with total operating cost and expenses rising substantially, leading to an operating loss of $315 million for the quarter and $1.1 billion for the nine months. The company's net loss also widened considerably, up 87% year-over-year for the quarter to $324 million and 199% for the nine months to $1.1 billion. This was partly due to a significant fire incident in June 2021 that damaged a fulfillment center, resulting in $296 million in losses recognized in the nine-month period. Despite the increasing losses, Coupang ended the period with a strong cash position of $4.3 billion, bolstered by its IPO proceeds earlier in the year, providing a significant buffer for continued investment in growth and infrastructure.

Financial Statements
Beta
Revenue$4.64B
Cost of Revenue$3.89B
Gross Profit$754.53M
Operating Expenses$4.96B
Operating Income-$315.11M
Interest Expense$7.38M
Net Income-$323.98M
EPS (Basic)$-0.19
EPS (Diluted)$-0.19
Shares Outstanding (Basic)1.75B
Shares Outstanding (Diluted)1.75B

Key Highlights

  • 1Total net revenues grew significantly, up 48% year-over-year to $4.6 billion for Q3 2021 and 63% for the first nine months to $13.3 billion.
  • 2Net retail sales increased by 43% year-over-year in Q3 2021, and net other revenue more than doubled at 113% year-over-year, showcasing strong customer adoption across all segments.
  • 3The company reported an operating loss of $315 million for Q3 2021 and $1.1 billion for the nine months, a substantial increase from the prior year periods.
  • 4Net loss for the quarter widened to $324 million, an increase of 87% year-over-year, and for the nine months reached $1.1 billion, up 199% year-over-year.
  • 5A fire at a fulfillment center in June 2021 resulted in $296 million in losses recognized for the nine-month period, impacting profitability.
  • 6Despite losses, Coupang's cash and cash equivalents and restricted cash stood at $4.3 billion as of September 30, 2021, providing ample liquidity post-IPO.
  • 7Active customers grew to 16.8 million by the end of Q3 2021, with net revenue per active customer increasing to $276, indicating healthy customer engagement.

Frequently Asked Questions

Coupang reported strong revenue growth, with total net revenues reaching $4.6 billion for the third quarter ended September 30, 2021, a 48% increase compared to the same period in 2020. This growth was driven by increases in both net retail sales and net other revenue, reflecting higher customer activity and expansion of services.

Profitability remained a challenge for Coupang. The company reported a net loss of $324 million for the third quarter of 2021, a significant increase from the $173 million net loss in the same quarter of 2020. This widened loss was impacted by increased operating costs and expenses, including losses related to a fulfillment center fire.

A fire at the Deokpyeong fulfillment center in June 2021 resulted in a loss of $296 million recognized for the nine months ended September 30, 2021. This loss was split between cost of sales ($158 million) and operating, general and administrative expenses ($127 million), impacting the company's overall net loss for the period.

Coupang maintained a robust cash position, with cash and cash equivalents and restricted cash totaling $4.3 billion as of September 30, 2021. This was significantly boosted by the net proceeds of approximately $3.4 billion from its Initial Public Offering (IPO) completed in March 2021.