Coupang (CPNG -6.00%), the South Korean e-commerce and delivery technology company, reported financial results on August 5, 2025, for the second quarter. The company posted GAAP revenue of $8.5 billion, beating analyst forecasts of $8.4 billion. However, diluted earnings per share (GAAP) came in at $0.02, missing the $0.07 GAAP consensus estimate. Management highlighted continued strong growth in its core Product Commerce segment and significant increases in customer engagement, while cautioning about lower free cash flow (non-GAAP) for the trailing twelve months due to timing of capital expenditures and working capital fluctuations. On balance, the quarter featured robust top-line expansion and margin gains, but some disappointment on profitability and cash generation.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (GAAP, Diluted) | $0.02 | $0.07 | $(0.04) | NM |
| Revenue (GAAP) | $8.5 billion | $8.4 billion | $7.3 billion | 16 % |
| Adjusted EBITDA | $428 million | $330 million | 29.7 % | |
| Free Cash Flow | $247 million | $488 million | (49 %) |
Source: Analyst estimates for the quarter provided by FactSet.
Business Overview and Strategic Focus
Coupang (CPNG -6.00%) is well known for its fast and reliable e-commerce service, providing same- and next-day delivery for a wide range of goods. Its core business, called Product Commerce, covers the online marketplace with capabilities like Rocket Delivery, which handles groceries and general merchandise. The company also operates a newer Developing Offerings segment, including food delivery, operations in Taiwan, and activities in luxury fashion via its Farfetch acquisition.
The company has focused in recent years on enhancing its customer experience, highlighted by quick delivery options and expanding product selection. It is also ramping up investments to grow its business outside Korea, with expansion into Taiwan and deeper involvement in the luxury segment. Key drivers for the business are customer satisfaction, strong marketplace partnerships with small and medium-sized merchants, and continued technology-driven operational efficiencies.
Quarter Highlights: Financial and Operational Performance
The second quarter showed strong revenue momentum, particularly in the Product Commerce segment. Product Commerce delivered $7.3 billion in net revenue, up 14% year over year on a reported basis, with gross profit in the segment rising 23% (GAAP). Customer growth played a big part, as Product Commerce Active Customers climbed 10% year-over-year to 23.9 million. Each active customer generated an average of $307 in sales, up 4% versus last year. The Product Commerce segment’s gross profit margin reached 32.6%, a 2.27 percentage point improvement from a year earlier. Segment adjusted EBITDA (non-GAAP) rose 25% to $663 million, yielding a margin of 9.0% for this part of the business (non-GAAP).
Performance was less favorable in the Developing Offerings unit, which includes Eats (food delivery), Taiwan operations, and the luxury platform acquired from Farfetch. Revenue for the Developing Offerings segment grew 33% year-over-year to $1.2 billion (GAAP), but gross profit declined 11% to $171 million. This drove adjusted EBITDA (non-GAAP) losses for the segment deeper, at a negative $235 million compared to a $200 million loss in Q2 2024. The trends highlight the heavy investments and early-stage losses tied to growing these newer businesses.
Margin improvements at the company level were notable. Gross profit margin was 30.0%, an improvement of 0.79 percentage points from last year. Companywide adjusted EBITDA was $428 million with a 5.0% margin, counterbalanced by higher costs in expansion businesses and ongoing technology investment.
Cash and capital management also featured prominently. Free cash flow (non-GAAP) fell 49% to $247 million, with the company attributing the drop to the timing of capital expenditures and working capital fluctuations. No stock buybacks occurred in the quarter. As of June 30, 2025, the cash and cash equivalents balance (GAAP) was $6.8 billion, compared to $5.9 billion at year-end 2024.
Products, Services, and Initiatives
At the heart of the business, the company’s e-commerce platform is distinguished by its Rocket Delivery service, which offers rapid delivery for groceries and most consumer goods. The company also supplies food delivery services through Eats, and entered the luxury e-commerce market following its purchase of Farfetch in January 2024. In Taiwan, the selection for customers surged by about 500% compared to the prior year, partly due to direct supplier partnerships.
Merchant relationships remain a major priority. More than three-quarters of merchants are small-to-medium enterprises (SMEs), who gain from the company’s Fulfillment and Logistics by Coupang (FLC) service. FLC provides warehousing, packing, shipping, and returns processing for third-party sellers, and is reportedly growing at multiples of the overall business. This helps drive customers to a wider product range while supporting SME growth.
The company reiterated its focus on operational excellence, investing in automation, robotics, and artificial intelligence (AI) systems to streamline processes and forecast demand better. These efforts were evidenced by advancements in automated picking and inventory management this quarter.
No regulatory sanctions or fines were reported for the quarter. The business was impacted by a Korean Fair Trade Commission penalty recorded in Q2 2024, but there were no similar events this period. Investments in employee wellness and safety continued, but with no specific new metrics provided for the reporting period.
Outlook and What to Watch
Leaders reminded investors that their effective tax rate for the full year will be elevated, at 50–55%, due to early-stage overseas losses and some nondeductible expenses. The company expects the free cash flow and working capital trends to normalize by year-end, suggesting the current lower level of cash generation may be temporary rather than a permanent shift.
Investors and followers of the company should continue monitoring the profitability and cash flow trends, especially in the Developing Offerings segment. While the business is investing heavily in Taiwan and luxury commerce, losses in the Developing Offerings segment (adjusted EBITDA, non-GAAP) widened to $235 million, despite top-line gains.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
