Coupang Posts Record Operating Loss in Just Three Quarters, Erasing Three Years of Profits (Comprehensive)

Cumulative Revenue Nears KRW 40 Trillion Despite KRW 1.8318 Trillion Operating Loss
Operating Loss of KRW 288.3 Billion Even Excluding Fire Costs, Largest Since Q4 2021
Revenue Beats Wall Street Expectations, but Profitability Falls Short

Coupang, Inc., the parent company of Coupang, posted an operating loss in the first three quarters of this year that exceeded its previous annual record. Revenue for the first three quarters came close to KRW 40 trillion, but the operating loss totaled KRW 1.8318 trillion, nearly matching the company's combined operating profit over the past three years. Losses continued for a third consecutive quarter as costs rose and losses from a fire at a logistics center in Incheon added to the burden. Even excluding one-time expenses related to the fire, the third-quarter operating loss was the largest since the fourth quarter of 2021.

According to Coupang, Inc.'s consolidated third-quarter earnings report, filed with the U.S. Securities and Exchange Commission (SEC) on November 4 (Korea time), revenue for the first three quarters of this year totaled KRW 39.9813 trillion. That was up 10.1% from KRW 36.3094 trillion in the same period last year.

Annual Record Loss Surpassed in Just Three Quarters

Revenue grew, but profitability deteriorated. The operating loss for the first three quarters of this year reached KRW 1.8318 trillion. Coupang posted operating losses of KRW 354.5 billion in the first quarter and KRW 835 billion in the second, followed by a loss of KRW 642.3 billion in the third quarter. The total exceeded the KRW 1.7088 trillion operating loss recorded in 2021, the company's largest annual operating loss since its founding. It also surpassed the previous record for the first three quarters of a year, KRW 1.2396 trillion in 2021.

This year's cumulative operating loss amounted to 96.5% of the company's combined operating profit over the past three years. Coupang, Inc. recorded its first full-year operating profit in 2023 and remained profitable for three consecutive years through last year. Operating profit totaled KRW 617.4 billion in 2023, KRW 602.3 billion in 2024 and KRW 679 billion in 2025, for a combined KRW 1.8987 trillion. The cumulative net loss also reached KRW 1.9608 trillion, close to KRW 2 trillion. That is nearly double the combined net profit of KRW 1.004 trillion over the past three years and exceeds the previous annual record net loss of KRW 1.764 trillion in 2021.

Third-quarter revenue rose 7% year over year to $9.962 billion. Converted at the quarterly average exchange rate of KRW 1,427.52 per U.S. dollar, revenue came to KRW 1.42209 trillion, up about 11% from the same period last year in won terms. Operating results, however, swung from a profit of KRW 224.5 billion in the third quarter of last year to a loss of KRW 642.3 billion this year. The third-quarter operating loss narrowed from the previous quarter but was the second-largest since the company's 2021 listing, following the loss in the second quarter of this year. The loss in a single quarter was comparable to last year's full-year operating profit of KRW 679 billion. The third-quarter net loss was KRW 715.1 billion, a reversal from net profit of KRW 131.6 billion in the same period last year.

Operating Loss of KRW 288.3 Billion Even Excluding Fire Costs; Core Business Profit Falls 45%

Coupang, Inc. said losses of $248 million (about KRW 354 billion) from the fire at its Incheon logistics center in July were reflected in its third-quarter results. These included the book value of inventory and fixed assets held before the fire, as well as payment obligations related to sellers' inventory. The company said that excluding the fire-related costs, its third-quarter operating loss would have been $202 million (KRW 288.3 billion) and its net loss $321 million (KRW 458.2 billion). This was the largest quarterly operating loss excluding one-time expenses since the fourth quarter of 2021, when the company reported a loss of KRW 469.2 billion.

Cost pressures also increased. Cost of sales in the third quarter was $7.401 billion. The cost-of-sales ratio rose to 74.3%, up 3.7 percentage points from 70.6% in the same period last year. Selling, general and administrative expenses increased 17.7% to $3.011 billion. Total operating expenses reached $10.412 billion, exceeding revenue. Gross profit fell 6% to $2.561 billion, while adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) dropped 72% to $116 million.

Third-quarter revenue in the Product Commerce segment, which includes Rocket Delivery, Rocket Fresh, Rocket Growth and Marketplace, rose 5% year over year to $8.374 billion. Revenue converted into won was KRW 1.1954 trillion, up 8%. Adjusted EBITDA (operating profit before amortization), however, fell 45% to $385 million (KRW 549.5 billion). The Product Commerce margin was 4.6%, down 4.24 percentage points from the same period last year.

Active customers in Product Commerce totaled 25.2 million, up 500,000 from 24.7 million in both the same period last year and the previous quarter. Revenue per customer rose 6% to KRW 473,930 from KRW 447,730 ($323) in the same period last year.

Revenue in the Developing Offerings segment, which includes Rocket Delivery in Taiwan, Farfetch and Coupang Eats, rose 23% year over year to $1.588 billion (KRW 226.69 billion), from $1.287 billion. Growth at constant exchange rates was 27%. The adjusted EBITDA loss from expanded investments narrowed to $269 million (about KRW 384 billion), from $292 million in the same period last year.

Revenue Tops Wall Street Forecasts, but Losses More Than Double Estimates

Coupang's third-quarter revenue exceeded Wall Street expectations, but profitability fell short. Bloomberg had forecast revenue of $9.717 billion, while actual revenue came to $9.962 billion. Revenue in Product Commerce and Developing Offerings also exceeded market expectations of $8.23 billion and $1.51 billion, respectively, reaching $8.374 billion and $1.588 billion.

Operating losses, however, came to $450 million, more than double the estimated $194.2 million. The net loss was also greater than expected, at $501 million versus an estimate of $203.23 million. The loss per share was $0.28, wider than the market forecast of $0.12.

Losses also exceeded market expectations in each of the previous two quarters. The first-quarter operating loss was $242 million, about six times the forecast of $39.27 million. In the second quarter, when a KRW 624.7 billion fine for a personal information breach was reflected in the results, the loss per share was $0.32, greater than the expected $0.20.

During the third quarter, Coupang, Inc. spent $201 million to repurchase 12.7 million Class A common shares. After the earnings announcement, Coupang, Inc. shares were trading at $14.70, down about 3% in after-hours trading as of 6:30 a.m. on November 4 (Korea time). That is less than half the peak of $32.35 recorded on October 29 last year. However, major investment firms, including Bank of America, JPMorgan and UBS, set price targets in the $24-$28 range, citing user growth and the growth potential of the Taiwan business.

This content was produced with the assistance of AI translation services.