Coupang reported third‑quarter 2025 results that surpassed consensus estimates, with net revenue reaching $9.27 billion—an 18% year‑over‑year increase and 20% constant‑currency growth. Operating income climbed to $162 million, up 49% from the same period last year, while net income rose to $95 million, a 48% jump. Diluted earnings per share hit $0.05, beating the $0.04 consensus by $0.01, a 25% surprise relative to analysts’ expectations. The company’s earnings beat was driven by disciplined cost management and a favorable mix shift toward higher‑margin fulfillment services within its core Product Commerce segment.
The Product Commerce segment, which accounts for the bulk of Coupang’s revenue, generated $7.98 billion in sales—up 16% YoY and 18% constant currency—while gross profit expanded 24% to $2.56 billion. Adjusted EBITDA for the segment surged 50% to $705 million, reflecting stronger pricing power and the scaling of higher‑margin logistics operations. In contrast, the Developing Offerings segment posted a $1.29 billion revenue increase but widened its adjusted EBITDA loss to $292 million, underscoring the short‑term cost of expanding into new markets such as Taiwan and the continued investment in Coupang Eats and Farfetch.
Margin dynamics reveal a mixed picture. Consolidated gross profit margin improved by 51 basis points YoY to 29.4%, but the quarter‑over‑quarter margin contracted by nearly 70 basis points due to seasonal weather‑related costs in Product Commerce and the capital outlay for Developing Offerings. Product Commerce’s gross margin expanded 212 basis points to 32.1%, driven by higher average selling prices and a shift toward more profitable categories. Adjusted EBITDA margin for the core business rose 201 basis points to 8.8%, a result of both pricing gains and operational leverage from automation initiatives across the logistics network.
Management reaffirmed its full‑year 2025 revenue outlook at roughly 20% constant‑currency growth, a target that aligns with the company’s confidence in sustained demand in South Korea and the accelerating momentum in Taiwan. CFO Gaurav Anand noted that the company expects Developing Offerings’ adjusted EBITDA losses to reach the higher end of the $900 million to $950 million guidance, reflecting the ongoing investment cycle. CEO Bom Kim highlighted that the core business’s margin expansion is a “significant opportunity” to broaden selection across first‑party and marketplace offerings, while automation technologies are expected to further improve service levels and reduce operating costs.
Headwinds include seasonal weather impacts that increased fulfillment costs in Product Commerce and the heavy investment required to scale the Developing Offerings segment, particularly in Taiwan. Competition from global players such as Alibaba’s AliExpress and PDD Holdings’ Temu intensifies pricing pressure in the domestic market. On the upside, automation across the logistics network and the expansion of reusable eco‑bags to non‑fresh orders are expected to drive long‑term cost efficiencies and enhance customer experience. The company’s cash flow from operations reached $2.4 billion and free cash flow improved to $1.3 billion, providing a solid liquidity base for future investments and shareholder returns.
Market reaction to the earnings was muted, with investors focusing on the widening losses in Developing Offerings despite the core business’s strong performance. The post‑earnings sentiment reflected concerns about the pace of investment in new markets and the impact on near‑term profitability, even as the company beat revenue and EPS estimates. The market’s cautious stance underscores the importance of a clear path to profitability for the developing segment in sustaining long‑term shareholder value.
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