Coupang Reports Strong Growth in Q4 2024 Despite Net Income Decline

Coupang reported consolidated net revenues of $8.0 billion for Q4 2024, marking a 21% increase year-over-year (YoY) on a reported basis and an impressive 28% YoY on an FX-neutral basis. When excluding the impact of Farfetch, the growth figures were 14% YoY on a reported basis and 21% on an FX-neutral basis.

The company’s gross profit surged to $2.5 billion, reflecting a substantial 48% YoY growth. The gross profit margin improved to 31.3%, an increase of 570 basis points (bps) from the previous year. Notably, excluding the Farfetch impact and a fulfillment center fire insurance gain, gross profit stood at $2.2 billion, indicating a 29% YoY growth with a margin of 29.0%.

Despite the revenue and gross profit increases, Coupang experienced a significant decline in net income, reporting $131 million for the quarter. This figure is down $876 million from the previous year, primarily due to a non-cash tax benefit of $895 million recognized in Q4 2023. Net income attributable to Coupang stockholders was $156 million, a decrease of 85% YoY. The diluted earnings per share (EPS) were $0.08, down from $0.57 in Q4 2023. Excluding the fire insurance gain, diluted EPS was a mere $0.01.

Coupang reported adjusted EBITDA of $421 million for the quarter, which translates to a margin of 5.3%, representing an 80 bps improvement YoY. When excluding Farfetch, adjusted EBITDA reached $391 million with a margin of 5.2%, up over 70 bps from last year.

In the Product Commerce segment, net revenues amounted to $6.9 billion, reflecting a 9% YoY increase on a reported basis and a 16% increase when adjusted for foreign exchange rates. The segment saw its gross profit rise to $2.3 billion with a gross profit margin of 32.7%. Adjusted EBITDA for Product Commerce was $539 million, up significantly from $444 million in Q4 2023.

The Developing Offerings segment, which includes International, Coupang Eats, Play, Fintech, and Farfetch, saw remarkable growth with revenues of $1.1 billion, a staggering 296% YoY increase on a reported basis. Excluding Farfetch, the growth was still strong at 124% YoY. However, the segment reported an adjusted EBITDA loss of $118 million, although this was an improvement of $32 million YoY, benefiting from the consolidation of Farfetch.

For the full year 2024, Coupang reported total net revenues of $30.3 billion, achieving a 24% YoY increase on a reported basis and 29% on an FX-neutral basis. Gross profit rose to $8.8 billion, marking a 43% YoY improvement, with a gross profit margin of 29.2%.

The net income for the year was $66 million, compared to $1.2 billion in the previous year, largely impacted by the prior year’s tax benefits. Adjusted net income attributable to Coupang stockholders, excluding certain gains and losses, was approximately $407 million. Operating cash flow for the year was $1.9 billion, a decrease of $766 million from 2023, while free cash flow also declined to $1.0 billion.

Coupang’s Q4 and full-year results showcase the company's robust growth trajectory amid challenges in net income due to prior year tax benefits. The strong performance in both the Product Commerce and Developing Offerings segments highlights Coupang's ability to expand its market share and diversify its revenue streams. As the company continues to innovate and adapt in the competitive e-commerce landscape, stakeholders will be keenly watching its strategies in the upcoming quarters.