Coupang (CPNG)

Online platform company Coupang (NYSE:CPNG) reported Q3 CY2025 results exceeding the market’s revenue expectations, with sales up 17.8% year on year to $9.27 billion. Its GAAP profit of $0.05 per share was $0.01 above analysts’ consensus estimates.

Company Overview

Founded in 2010 by Harvard Business School student Bom Kim, Coupang (NYSE:CPNG) is an e-commerce giant often referred to as the "Amazon of South Korea".

Consumers ever rising demand for convenience, selection, and speed are secular engines underpinning ecommerce adoption. For years prior to Covid, ecommerce penetration as a percentage of overall retail would grow 1-2% annually, but in 2020 adoption accelerated by 5%, reaching 25%, as increased emphasis on convenience drove consumers to structurally buy more online. The surge in buying caused many online retailers to rapidly grow their logistics infrastructures, preparing them for further growth in the years ahead as consumer shopping habits continue to shift online.

Coupang's Korea-based competitors include Naver (KRX:035420), Lotte Shopping (KRX:023530), and Kakao (KRX:035720). Amazon (NASDAQ:AMZN), Pinduoduo’s Temu (NASDAQ:PDD), and Alibaba’s AliExpress (NYSE:BABA) are also big international players in the market.

A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Luckily, Coupang’s sales grew at an impressive 18.3% compounded annual growth rate over the last three years. Its growth beat the average consumer internet company and shows its offerings resonate with customers, a helpful starting point for our analysis.

This quarter, Coupang reported year-on-year revenue growth of 17.8%, and its $9.27 billion of revenue exceeded Wall Street’s estimates by 2.7%.

Looking ahead, sell-side analysts expect revenue to grow 16.6% over the next 12 months, a slight deceleration versus the last three years. We still think its growth trajectory is attractive given its scale and implies the market is baking in success for its products and services.

Buyer Growth

As an online retailer, Coupang generates revenue growth by expanding its number of users and the average order size in dollars.

Over the last two years, Coupang’s active customers, a key performance metric for the company, increased by 11.2% annually to 24.7 million in the latest quarter. This growth rate is strong for a consumer internet business and indicates people love using its offerings.

In Q3, Coupang added 2.02 million active customers, leading to 8.9% year-on-year growth. The quarterly print was lower than its two-year result, suggesting its new initiatives aren’t accelerating buyer growth just yet.

Revenue Per Buyer

Average revenue per buyer (ARPB) is a critical metric to track because it measures how much customers spend per order.

Coupang’s ARPB growth has been impressive over the last two years, averaging 8.5%. Its ability to increase monetization while quickly growing its active customers reflects the strength of its platform, as its buyers continue to spend more each year.

This quarter, Coupang’s ARPB clocked in at $375.18. It grew by 8.2% year on year, mirroring the performance of its active customers.

For online retail (separate from online marketplaces) businesses like Coupang, gross profit tells us how much money the company gets to keep after covering the base cost of its products and services, which typically include the cost of acquiring the products sold, shipping and fulfillment, customer service, and digital infrastructure.

Coupang’s unit economics are far below other consumer internet companies because it must carry inventories as an online retailer. This means it has relatively higher capital intensity than a pure software business like Meta or Airbnb and signals it operates in a competitive market. As you can see below, it averaged a 29% gross margin over the last two years. That means Coupang paid its providers a lot of money ($71.04 for every $100 in revenue) to run its business.

This quarter, Coupang’s gross profit margin was 29.4%, in line with the same quarter last year. Zooming out, Coupang’s full-year margin has been trending up over the past 12 months, increasing by 2.2 percentage points. If this move continues, it could suggest better unit economics due to more leverage from its growing sales on the fixed portion of its cost of goods sold (such as servers).

Investors frequently analyze operating income to understand a business’s core profitability. Similar to operating income, EBITDA is a common profitability metric for consumer internet companies because it removes various one-time or non-cash expenses, offering a more normalized view of profit potential.

Coupang has managed its cost base well over the last two years. It demonstrated solid profitability for a consumer internet business, producing an average EBITDA margin of 4.6%. This result was particularly impressive because of its low gross margin, which is mostly a factor of what it sells and takes huge shifts to move meaningfully. Companies have more control over their operating margins, and it’s a show of well-managed operations if they’re high when gross margins are low.

Analyzing the trend in its profitability, Coupang’s EBITDA margin rose by 5.4 percentage points over the last few years, as its sales growth gave it operating leverage.

In Q3, Coupang generated an EBITDA margin profit margin of 4.5%, in line with the same quarter last year. This indicates the company’s cost structure has recently been stable.

We track the change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

In Q3, Coupang reported EPS of $0.05, up from $0.04 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Coupang’s full-year EPS of $0.22 to grow 144%.

If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.

Coupang has shown mediocre cash profitability over the last two years, giving the company limited opportunities to return capital to shareholders. Its free cash flow margin averaged 3.5%, subpar for a consumer internet business.

Taking a step back, an encouraging sign is that Coupang’s margin expanded by 9.1 percentage points over the last few years. The company’s improvement shows it’s heading in the right direction, and we can see it became a less capital-intensive business because its free cash flow profitability rose more than its operating profitability.

Coupang’s free cash flow clocked in at $439 million in Q3, equivalent to a 4.7% margin. This result was good as its margin was 5.3 percentage points higher than in the same quarter last year, building on its favorable historical trend.

One of the best ways to mitigate bankruptcy risk is to hold more cash than debt.

Coupang is a profitable, well-capitalized company with $7.32 billion of cash and $4.95 billion of debt on its balance sheet. This $2.38 billion net cash position is 4.1% of its market cap and gives it the freedom to borrow money, return capital to shareholders, or invest in growth initiatives. Leverage is not an issue here.

We were impressed by how significantly Coupang blew past analysts’ EBITDA expectations this quarter. We were also happy its revenue and EPS outperformed Wall Street’s estimates. Overall, we think this was a solid quarter with many key metrics above expectations. The stock remained flat at $32.06 immediately following the results.

Updated: December 4, 2025 at 9:59 PM EST

A common mistake we notice when investors are deciding whether to buy a stock or not is that they simply look at the latest earnings results. Business quality and valuation matter more, so we urge you to understand these dynamics as well.

In our opinion, Coupang is a solid company. To begin with, the its revenue growth was impressive over the last three years, and analysts believe it can continue growing at these levels. And while its gross margins make it extremely difficult to reach positive operating profits compared to other consumer internet businesses, its EPS growth over the last three years has been fantastic. On top of that, its rising cash profitability gives it more optionality.

Coupang’s EV/EBITDA ratio based on the next 12 months is 24.7x. When scanning the consumer internet space, Coupang trades at a fair valuation. If you believe in the company and its growth potential, now is an opportune time to buy shares.

Wall Street analysts have a consensus one-year price target of $36.23 on the company (compared to the current share price of $27.03), implying they see 34% upside in buying Coupang in the short term.