Coupang posts first positive EBITDA, raises full-year forecast

Coupang Inc., South Korea’s answer to global e-commerce giant Amazon.com, said on Wednesday its second-quarter performance has improved significantly, posting its first-ever positive EBITDA, or earnings before interest, tax, depreciation and amortization.

The e-commerce platform operator, listed on the New York Stock Exchange, said in a regulatory filing that it turned into the black on EBITDA terms for the first time since it went public in March of last year.

The company achieved adjusted EBITDA of $66 million in the April-June period on a consolidated basis, which represents an improvement of more than $350 million over the past two quarters.

EBITDA is a profitability indicator that shows a company's ability to generate cash from its business activities.

Its operating loss narrowed to $67.14 million in the second quarter from a loss of $518.6 million in the year-earlier period. That marks the company’s smallest loss since its NYSE debut.

Revenue increased 27% year-on-year to $5.04 billion from $4.48 billion.

The company said its profitability will further increase in the third quarter when its recent increase in its monthly ultra-fast Rocket Delivery WOW membership fees to 4,990 won ($3.8) from 2,900 won will start to be reflected in its earnings.

“Customers turn to us for amazing experiences, faster delivery and lower prices, and we’re determined to wow them every day,” said Bom Kim, founder and chief executive of Coupang.

“We increased our investment, to a record $500 million in the second quarter alone, in exclusive discounts, free Rocket deliveries and free Coupang Play video content for our WOW members.”

EXPECTS POSITIVE FULL-YEAR EBITDA

Retailers operating on the Coupang platform have also seen their sales revenue grow steadily over the past few years.

About 157,000 small business owners on its platform achieved a combined 8.1 trillion won sales in 2021, more than double their revenue in 2019, Coupang said.

Encouraged by its better-than-expected quarterly earnings, Coupang said it is raising its full-year forecasts.

“At the beginning of the year, we provided guidance of total company adjusted EBITDA losses below $400 million for 2022. We are now raising that guidance to achieve positive adjusted EBITDA for the full year,” said Coupang Chief Financial Officer Gaurav Anand.

Coupang, the first Korean company to directly list on the NYSE, has seen its shares tumble in recent quarters as its business model was put to test.

Coupang’s founder Kim is striving to expand its business in the US and the Southeast Asian market, in particular, to repeat its success in Korea of its trademark same-day Rocket Delivery service.

Shares in Coupang closed at $19.76 on the NYSE on Wednesday, up 4.1% from the previous session, recovering to the $20 range in after-hours trading for the first time in four months.

Coupang's results were announced after the market close.

Write to Jong -Kwan Park at pjk@hankyung.com
In-Soo Nam edited this article.