Coupang, Inc.

Hello, everyone. My name is Krista, and I will be your conference operator today. At this time, I would like to welcome everyone to the Coupon 2023 Fourth Quarter Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number five on your telephone keypad. If you would like to withdraw your question, press star and the number five once again. Now, I'd like to turn the call over to Mike Parker, Vice President of Investor Relations. You may begin your conference.

Thanks, Operator. Welcome, everyone, to Coupang's fourth quarter 2023 earnings conference call. I'm pleased to be joined on the call today by our founder and CEO, Bum Kim, and our CFO, Gaurav Anand. The following discussion, including responses to your questions, reflects management's views as of today's date only. We do not undertake any obligation to update or revise this information, except as required by law. Certain statements made on today's call include forward-looking statements. Actual results may differ materially. Additional information about factors that could potentially impact our financial results is included in today's press release and in our filings with the SEC. including our most recent annual report on Form 10-K and subsequent filings. During today's call, we may present both GAAP and non-GAAP financial measures. Additional disclosures regarding these non-GAAP measures, including reconciliations of these measures to the most comparable GAAP measures, are included in our earnings release, our slides accompanying this webcast, and our SEC filings, which are posted on the company's Investor Relations website. And now, I'll turn the call over to Bob.

Thanks everyone for joining us today. The fourth quarter of 2023 capped a year of accelerating growth, record profits, and expanding free cash flows for our business. We believe that creating moments of wow for customers across selection, price, and service form the foundation for long-term growth, profitability, and ultimately free cash flow, which serves as the basis of long-term shareholder value. In 2023, Our growth in both active customers and revenues accelerated every quarter. In Q1, we began the year with 5% year-over-year growth in active customers. In Q4, our active customers grew 16% year-over-year. And the spend of every annual customer cohort is growing over 15%, even our oldest cohorts. In Q1, our revenues grew at 20% year-over-year on a constant currency basis. Apples to apples, without the FLC accounting change we made in Q2, our Q4 revenue growth rate would have been over 900 basis points higher than our Q1 growth rate of 20%. We also generated record net income and free cash flow for the year, thanks to the expanding profitability of product commerce, our largest and most established offering, whose adjusted EBITDA now exceeds 7% in Q4. We did all of this while only growing our share count by 1.3%. Our share dilution has remained at around 1% in each of the three years since we became a public company, including the year of our IPO. And our free cash flow generation for 2023 totaled $1.8 billion, even after investment of over $450 million in our developing offerings. Our cash balance today stands at over $5.5 billion. Sizable and durable free cash flow streams are not created overnight or even in a few quarters. Since the beginning of this company, we have made foundational bets on new competency initiatives. These are bold bets that required years of investment, persistence, and patience, before they began producing meaningful free cash flows for our business. They were attractive to us because we saw opportunities to break trade-offs and deliver a wow experience to customers. For example, rocket delivery was an entirely new competency. We had never purchased and managed inventory, opened fulfillment centers, assembled a nationwide logistics fleet, or built bespoke technology to orchestrate one-day delivery on our unique integrated network. With the success of this new competency, we were able to add incremental initiatives that have expanded our impact, like Dawn Delivery. Today, we benefit from the success of the new competency initiatives we've scaled, and we have the ability now to seed and scale incremental initiatives, leveraging our vast technology, processes, scale, and knowledge. Our bar for investments remains incredibly high. We only invest when we have conviction that our opportunities can reach meaningful scale and deliver high returns on capital. We look for confirming evidence at each stage of investment. If they don't meet our high thresholds, we reduce or exit investments. And when we see strong signals, we're not shy about investing more. A number of our investments are already showing remarkable progress and promise. One such incremental initiative is Fulfillment and Logistics by Coupon, or FLC, for which we continue to make significant investment in infrastructure and technology. Customers responded enthusiastically to expanding selection on Rocket. In Q4, our FLC volumes doubled year over year, and the number of participating merchants in FLC jumped 80%. Small and medium enterprises, or SMEs, who do not have access to physical shelves in traditional retail and lack the capital to build their own technology and infrastructure, account for over 80% of our merchant base in FLC today. We're delighted to share with these enterprising small businesses access to billions of dollars of historical investment we've made in our rocket network to help them delight customers and grow their businesses. Another incremental investment that is proving its potential on growth, scale, and impact is Taiwan. We're excited about the opportunity to challenge trade-offs and wow customers in a geography with an attractive retail market. Since launching Rocket in October of 2022, Taiwan's customers and revenues have continued to compound at an incredible rate, more than doubling over the last two quarters alone. It's a pace of adoption and growth that exceeds what we experienced in Korea over the same period of time after the launch of Rocket. In Taiwan, we're able to leverage the advanced technology learnings and processes among other assets that we've developed over many years. We expect that to enable us to reach profitability in Taiwan faster than we did in Korea. Many of our incremental investments benefit from our already strong customer cohort behavior. Our cohorts continuously expand their levels of spend across Coupa. With our new categories and offerings, we have the ability to further expand the spending and engagement potential of all of our customers. Eats is a great example. Since we launched the WOW Membership Savings Program in early Q2, we've seen our order volumes double. Every month, we've seen new adoption and strong retention of those new customers. And as we see one-time investments such as new merchant acquisition promotions expire, we expect EATS' positive underlying unit economics, along with scale, to drive cash generation in the future. What is equally exciting is the positive externalities we've seen in customer engagement across our products and offerings. Just as purchasing in one category helps spur engagement in other categories, we've seen higher engagement on EATS lead to higher engagement in product commerce. We also see this engagement pattern with Play, our video streaming service. Play was the most downloaded app in Korea in all categories on both iOS and Android in 2022 and 2023. It's also delighted customers by not just broadcasting, but creating from scratch unprecedented live sporting events in Korea. Some of the most streamed live sporting events over the past two years in Korea have been unique sports matches created and exclusively streamed by play. For the first time ever, millions were able to see Neymar, Haaland, and Son play in Korea with international franchises like Manchester City, PSG, and Tottenham Spurs. This spring, the Dodgers and Padres will open their regular season with two games in Seoul, for which tickets and live broadcasts in Korea will be available exclusively to WOW members. This will mark the first time that regular season MLB games have ever been played in Korea. And last, a note about Farfetch. While we weren't seeking an acquisition, we came across a rare opportunity to buy a sector-leading service with $4 billion in GMV for a $500 million investment. We hope in a few years we'll be having the conversation about how Coupang turned Farfetch into a business that transformed the customer experience around luxury fashion while also providing strategic value for Coupang. It's too early for that conversation today. Even if that full potential is not fully realized, we're highly confident that this will prove to be a prudent financial decision. We're already executing on a plan to make far-fetched self-funding with no additional investment beyond the announced capital commitment. And we see many paths to making this a worthwhile investment for shareholders. And while we're excited about the long-term potential of such investments, we remain focused on our biggest priorities. We have a very small share of the retail markets in Korea and Taiwan. Each of those opportunities are massive, and capturing them remains by far our greatest prospect and priority. As always, we remain committed to the relentless focus on wowing our customers to create a world where they wonder, how did I ever live without Coupang? Now, I'll turn the call over to Gaurav to review the financials in more detail.