Coupang, Inc. (CPNG) shares are on a high note in pre-market trading on Wednesday, fueled by the company’s impressive third-quarter earnings report released on Tuesday. The South Korean e-commerce giant surpassed analysts’ expectations on both revenue and profit fronts, demonstrating continued growth momentum.
Net revenues surged 27% year-over-year, reaching $7.9 billion, exceeding the consensus estimate of $7.76 billion. Excluding Farfetch, a luxury fashion e-commerce platform acquired by Coupang, net revenue growth clocked in at 20% on a reported basis and 25% on an FX-neutral basis. The company’s gross profit also soared, climbing 45% to $2.3 billion, with a margin of 28.8%, an increase of 350 basis points.
Coupang’s core Product Commerce segment, which encompasses its e-commerce platform, generated $6.9 billion in net revenues, representing a 16% growth on a reported basis and 20% on an FX-neutral basis. Active customers in the segment reached 22.5 million, signifying an 11% growth during the quarter. The segment’s adjusted EBITDA rose to $470 million, a $71 million year-over-year increase, translating to a margin of 6.8%.
Despite the impressive financial performance, Coupang’s share price took a tumble in pre-market trading after the company announced that its founder and CEO, Bom Kim, had adopted a pre-arranged stock trading plan under SEC Rule 10b5-1. This plan, which Kim initiated several months ago, will allow him to sell up to 15,000,000 shares of Coupang Class A Common Stock, starting no earlier than November 11, 2024, subject to specific terms and conditions.
The news of Kim’s planned stock sale dampened the initial enthusiasm sparked by the strong earnings report. Investors, concerned about the potential impact on the company’s future prospects, reacted negatively, leading to a drop in the share price.
Despite the pre-market downturn, Coupang’s third-quarter results showcased its strong growth trajectory, particularly in its core Product Commerce segment. However, the CEO’s stock sale plan casts a shadow on the company’s immediate outlook, leaving investors to assess the potential implications of this move on Coupang’s future.
