Investors cheer as Coupang cuts 29% first-quarter net loss – TechCrunch

South Korean e-commerce platform coupang mentioned its net loss in the first quarter was down 29% from a year earlier. The company posted a net loss of $209.2 million in the first quarter of this year, up from last year’s net losses of $295 million in the first quarter and $404.9 million in the fourth quarterrespectively.

Investors cheered the result, pushing Coupang’s stock value up more than 13% in premarket trading.

The SoftBank Vision Fund-backed company said in its publication of results it “recorded the highest gross profit and gross profit margin in company history”, which helped its product business segment achieve profitability in the first quarter.

“In the first quarter, we recorded the highest gross profit and gross margin in company history,” Bom Kim, chairman of Coupang, said in his earnings call on Wednesday. “Generating over $1 billion in gross profit and exceeding 20% ​​gross margin. This represents a 42% improvement in gross profit year over year.”

Coupang’s revenue grew to $5.12 billion in the period ending March 2022 from $4.2 billion in the first quarter of 2021, a 22% growth. The company also revealed that its number of active customers increased by 13% year over year.

Claiming that its results were “largely due to process improvement, automation and supply chain optimization initiatives”, Coupang managed to register a $194 million improvement over the fourth quarter 2021 of its adjusted EBITDA, a heavily adjusted profit measure.

The company was, however, unprofitable by metric, revealing its adjusted EBITDA in Q1 2022 was -$91 million, though an improvement from Red Ink’s $132.9 million a year. earlier.

“While we saw a headwind from inflation and some supply chain disruption in the last quarter, our bottom line was net positive, due to improved processes and technology. , capacity utilization, supply chain optimization, and continued scaling of advertising, among other areas,” Kim mentioned.

One of Coupang’s fastest growing offerings is Rocket Fresh, a same-day fresh food delivery service in South Korea that delivers customers within hours of purchase, according to Kim. The service is available to subscribers to Coupang’s membership program, Rocket Wow Club. (These fast delivery services have become popular around the world, despite concerns about their profitability.)

The company recently increased its membership price for new and existing customers to improve profitability.

“There continue to be a lot of unpredictable short-term variables as we mentioned, but [the long term trajectory] we will continue to see significantly faster growth than the e-commerce segment,” Kim said on the call.

As the company grows in size, it expects to see more benefits from economies of scale, and its ability to invest in software and hardware automation and efficiency projects will help. to growth, the company said.

In March, SoftBank Vision Fund sold 50 million shares worth $1 billion for $20.87 each to Coupang after the Japanese fund sold Coupang shares worth $1.69 billion in September 2021, according to documents filed with the United States Securities and Exchange Commission.

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