Earnings Call Insights: Coupang (CPNG) Q3 2025
Management View
- Bom Suk Kim, Founder, CEO & Chairman, highlighted that “we delivered 18% year-over-year growth in consolidated revenues or 20% in constant currency, expanding to $9.3 billion for the quarter.” He emphasized expanding gross profit margins to 29.4% and adjusted EBITDA margins to 4.5%. Kim reported that the Product Commerce segment grew both gross profit and adjusted EBITDA margins by more than 200 basis points over last year, attributing these results to strong customer spend and ongoing investments in customer experience and selection.
- Kim stated, “one of the biggest opportunities to expand our customer value proposition and drive future growth is broadening selection across both first-party and marketplace offerings.” He discussed accelerating brand onboarding and deepening relationships with partners, as well as significant investments in Fulfillment and Logistics by Coupang (FLC) to support expansion into categories like furniture, fashion, and sporting goods.
- The CEO described the rollout of automation technologies across the logistics network as “already improving service levels and operating costs,” with expectations for further impact in coming years. Kim also pointed to the extension of reusable eco-bags to non-Fresh orders as part of operational innovation.
- On international expansion, Kim noted that “in Taiwan, our momentum continues to accelerate, generating exciting year-over-year and quarter-over-quarter revenue growth again this quarter.” He said that Taiwan’s customer adoption trajectory resembles early-stage Korea and that new logistics infrastructure and marketplace rollout are driving momentum.
- Gaurav Anand, Chief Financial Officer, reported, “Product Commerce…delivered durable growth this quarter, even accelerating versus the growth rates we saw last quarter. Net revenues were $8 billion, increasing 16% year-over-year or 18% on an FX-neutral or constant currency basis.” He added that gross profit in Product Commerce was $2.6 billion, up 24% year-over-year, with a margin of 32.1%.
Outlook
- Management reaffirmed expectations for full year consolidated revenue growth of roughly 20% in constant currency, in line with prior guidance. Anand stated, “we continue to expect our full year consolidated growth rates to be in line with our guidance that we have communicated throughout this year and to come in at roughly 20% year-over-year growth in constant currency.”
- For Developing Offerings, Anand said, “We previously guided for full year Developing Offerings’ adjusted EBITDA losses of $900 million to $950 million this year. We now expect to come around the higher end of that range due to continued momentum we are seeing, especially Taiwan.”
- The company expects a temporarily elevated full year effective tax rate of 60% to 65% due to early-stage losses in markets like Taiwan.
Financial Results
- Consolidated net revenues grew to $9.3 billion, representing 18% reported growth and 20% constant currency growth. Gross profit reached $2.7 billion, with consolidated gross profit margin expanding to 29.4% year-over-year, though down nearly 70 basis points from Q2, mainly due to seasonality and increased investment in Developing Offerings.
- Product Commerce segment adjusted EBITDA reached $705 million for the quarter, with a margin of 8.8%, while Developing Offerings reported a segment adjusted EBITDA loss of $292 million, reflecting increased investment, especially in Taiwan.
- Operating income was $162 million with a margin of 1.7%. Net income attributable to Coupang’s stockholders was $95 million, or diluted EPS of $0.05. Adjusted EBITDA at the consolidated level was $413 million with a 4.5% margin.
- Operating cash flow for the trailing 12 months was $2.4 billion, and free cash flow was $1.3 billion for the same period.
Q&A
- Minuh Cha, Goldman Sachs: Asked about the impact of the Naver/Kurly partnership on Fresh GMV and the effects of holiday timing. Kim responded that Fresh’s growth “remains well above that of our overall business,” emphasizing innovation and affordability. Anand clarified that “the timing of Chuseok this year…drove some impacts on compatibility,” but underlying demand remains strong and guidance is unchanged.
- Stanley Yang, JPMorgan: Inquired about Taiwan market share and loss trajectory. Kim replied, “Taiwan has exceeded our expectations this year and remains one of our fastest-growing opportunities,” but said it is too early to provide specific share or loss figures. He stressed customer adoption and retention trends similar to early Korea.
- Seyon Park, Morgan Stanley: Asked about Taiwan’s market differences and AI plans. Kim acknowledged differences but highlighted similar consumer behaviors. On AI, Kim said, “we are focused on building our own internal AI computing infrastructure…We have some small effort to test and learn on…making parts of that technology available externally,” but primary focus is internal efficiency and customer experience.
- Jiong Shao, Barclays: Asked about 1P logistics scale in Taiwan and tech investment tapering. Kim said it is “still early in our journey” for 1P logistics in Taiwan and more detail will be provided as the business matures. Anand noted slowing growth in tech investment spend, with OG&A as a percentage of revenue “down nearly 70 bps over last quarter.”
- Wei Fang, Mizuho Securities: Asked about the WOW membership and APEC sponsorship. Kim described WOW membership’s early customer response as “encouraging” and similar to early Korea trends. On APEC sponsorship, Kim said it is “not a significant business lever.”
Sentiment Analysis
- Analysts maintained a neutral to slightly positive tone, expressing interest in competitive dynamics, Taiwan’s trajectory, and investment discipline, but did not press aggressively for granular financial details.
- Management’s tone was confident in prepared remarks, emphasizing repeated customer adoption patterns and ongoing margin expansion. During Q&A, management was measured but optimistic, using phrases like “we believe” and “we’re confident,” while avoiding overcommitment on specifics regarding Taiwan or AI.
- Compared to last quarter, both analysts and management maintained similar sentiment, with cautious optimism prevailing and a continued focus on scalability and long-term growth.
Quarter-over-Quarter Comparison
- Revenue growth accelerated slightly in Product Commerce compared to Q2, with active customer growth and spend per customer both cited as drivers. Gross profit margin in Product Commerce declined 46 basis points quarter-over-quarter, attributed to seasonal operational costs and mix shifts.
- Management continues to prioritize disciplined investment in Taiwan and Developing Offerings, reaffirming a high range for annual losses in these segments due to momentum, whereas last quarter’s commentary was more open-ended on future investment levels.
- Tech investment spend as a percentage of revenue declined from the previous quarter.
- Analyst focus remained centered on Taiwan’s growth potential, competitive positioning in Korea, and pace of margin expansion, consistent with the previous quarter.
- Management’s confidence in annual margin expansion and customer adoption in Taiwan was restated, with no material change in tone or strategic focus from last quarter.
Risks and Concerns
- Management cited seasonal weather-related operational costs impacting margins in Product Commerce for Q3.
- Elevated investment in Developing Offerings, especially Taiwan, is driving higher expected losses for the year.
- The effective tax rate remains temporarily high due to early-stage losses in Taiwan and other new initiatives.
- Analysts questioned the competitive impact of new partnerships in Korea and the scalability of the Taiwan business.
- Management reiterated a disciplined approach to capital allocation and investment pacing, especially in international markets.
Final Takeaway
Coupang’s Q3 2025 results underscore robust top-line growth and expanding margins in Product Commerce, supported by disciplined investment in automation and customer experience. Taiwan remains a key driver of Developing Offerings’ accelerated revenue growth, with customer adoption patterns resembling early Korea and management reiterating confidence in long-term potential. While investment losses in Developing Offerings are expected to reach the higher end of guidance, the company maintains its full-year consolidated revenue growth outlook of roughly 20% in constant currency, signaling ongoing momentum and a commitment to operational excellence and capital discipline.