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 Coupang 2025 Second 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 second quarter 2025 earnings conference call. I'm pleased to be joined on the call today by our founder and CEO, Bom 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 may 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. As we share our second quarter 2025 results on today's call, the comparisons we make to prior periods will be on a year-over-year basis unless otherwise noted. We may also 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 Bam.

Thanks everyone for joining us today. I'll start first with a few highlights for the quarter. We carried this solid momentum from the start of the year into a strong Q2. We grew consolidated revenue 16% year over year or 19% in constant currency to $8.5 billion. Along with that growth, we also delivered another quarter of margin expansion, most evident in our product commerce segment, where gross profit margins expanded nearly 230 basis points to 32.6%, and adjusted EBITDA margins grew 80 basis points to over 9%. On a consolidated basis, we generated $428 million of adjusted EBITDA, growing margins by over 50 basis points, while also investing aggressively for the future. Our results continue to highlight two key points. First, we remain in the early stages of a multi-decade journey to transform commerce and wow customers across the markets we serve. Second, every improvement we make in selection, price, and service strengthens customer engagement, enabling us to lower costs and create a virtuous cycle of value for our customers, sellers, and brands. Perhaps nowhere is that more visible than in our product commerce segment, where we're rapidly expanding Rocket's selection while continuing to redefine customer expectations around delivery speed. In addition to adding over half a million new items on Rocket in the past quarter alone, we increased our same day and on delivery volume by more than 40% compared to the same period last year. Our investments in customer experience continue to drive deeper customer adoption and engagement, fueling the durable revenue growth at high multiples of the relatively flat Korean retail market. This quarter, we accelerated product commerce active customer additions and saw a significant lift in revenue per active customer. The majority of revenue growth this quarter was driven by our existing customers, with all customer cohorts, even the most mature, demonstrating robust double-digit spending increases. And as we continue to expand selection to match customer preferences, they're also purchasing across a broader number of categories. Another highlight is our fresh category, one of the many categories we offer to consumers within product commerce. This quarter, fresh grew revenues 25% in constant currency year over year. We significantly expanded our fresh assortment, especially in produce, meat, and seafood, resulting in a sharp increase in customers using fresh and total spend this quarter. Frush's strong performance underscores a broader pattern we're seeing across multiple categories, where customers continue to respond with enthusiasm to enhancements in service levels and product selection. Fulfillment Logistics by Coupon, or FLC, continues its impressive momentum, with volumes, selection, and sellers all growing several times faster than the rate of the overall product commerce segment. We're making significant investments to enhance FLC's tools and services, empowering sellers to leverage our leading fulfillment and logistics infrastructure to expand their businesses. FLC has accelerated the growth of tens of thousands of SME sellers, over 70% of whom operate outside of Seoul, making FLC an essential driver of economic revitalization for underserved regional economies across Korea. We're also excited by the potential of automation and AI to accelerate our efforts to innovate around the customer experience and drive operational excellence. As we invest further into these capabilities, we see significant opportunities to enhance service levels while simultaneously achieving meaningful cost savings. Just as our core product commerce offerings like Fresh and FLC have become powerful drivers of long-term growth, our developing offerings portfolio is positioned to unlock significant market opportunities and generate meaningful cash flow streams in the years ahead. Taiwan is a prime example of such an opportunity. One of our top priorities this year has been to considerably broaden our selection and improve inventory availability, a common challenge during hypergrowth. Hundreds of top brands are now working directly with us, a number that increased exponentially in the past quarter, enabling us to dramatically expand supply for our customers. The customer response has been equally dramatic, with revenues accelerating rapidly. Our Taiwan offering is growing faster and stronger than even the most optimistic forecast we set at the beginning of the year. After ending last year in Q4 with a quarter-over-quarter revenue growth of 23%, this quarter revenues surged 54% quarter-over-quarter, more than double the pace of revenue growth from just two quarters ago. Year-over-year revenue growth was triple digits in Q2, and we expect that to be even higher in Q3. What's most encouraging is that this growth is primarily fueled by repeat customers. While new customer additions did contribute to growth and a quarter-over-quarter increase of nearly 40% in active customers, The majority of the revenue growth and acceleration we saw this quarter stem from the continued strengthening of spend and retention across our existing customer cohorts. Our conviction in the long-term potential of Taiwan is only growing as we're seeing a trajectory similar to what we saw in the early years of scaling our retail offering in Korea. In Eats, we continue to see strong momentum reflecting our relentless efforts to wow customers with the best selection, amazing value, and the fastest and most reliable delivery experience. With Coupang Play, our digital content and live entertainment service in Korea, we continue to expand our offerings to delight customers. This quarter, we launched Sports Pass, a new offering that provides customers with premium access to a broader range of popular live sports content from the Premier League, and La Liga for soccer, to the NBA and NFL, to NASCAR and F1 racing. We're also excited to share that Play is now available to all coupon customers in Korea, including non-WOW members who can enjoy a wide selection of original series, movies, shows, and news at no cost, supported by advertising. As we reflect on the quarter and our positioning across the markets we serve, we believe Coupang's opportunity is massive and still largely untapped. Our commitment to customer obsession, operational excellence, and disciplined capital allocation continues to guide our approach. We're more excited than ever about what lies ahead. Now, I'll turn the call over to our CFO, Gaurav Anand, to walk you through the financial results of the quarter in more detail.