Coupang Inc., the U.S.-based parent of Coupang, swung to a loss in the first quarter, posting an operating loss in the mid-350 billion won range. The setback is seen as stemming from a higher cost of goods sold ratio, heavier selling, general and administrative expenses, and widening losses in growth businesses after the large-scale personal data leak at the end of last year.
According to Coupang Inc.'s first-quarter consolidation results filed with the U.S. Securities and Exchange Commission (SEC) on the 6th (Korea time), first-quarter sales came to $8.504 billion (about 12.4597 trillion won, at a constant exchange rate). That was up 8% from $7.908 billion (about 11.4876 trillion won) a year earlier.
Profitability, however, deteriorated. Coupang Inc.'s first-quarter operating loss totaled $242 million, or about 354.5 billion won. In the same period last year, it posted an operating profit of $154 million (about 233.7 billion won) but fell into the red in one year. The latest operating loss amounts to about 52% of last year's annual operating profit (679 billion won).
Net results also turned to a loss. The first-quarter net loss came to $266 million (about 389.7 billion won). Coupang had recorded net income of $114 million (about 165.6 billion won) in the first quarter last year. Earnings per share (EPS) were -0.15 cents. Coupang's first-quarter operating loss and net loss were the largest in about 4 years and 3 months since the fourth quarter of 2021.
Rising expenses are cited as the backdrop for the first-quarter deterioration in profitability. Cost of revenue was $6.207 billion, with the cost-to-sales ratio at 73%. That was up 2.3 percentage points from a year earlier (70.7%). Selling, general and administrative expenses (OG&A) also increased, pushing total operating expenses to $8.746 billion, exceeding sales.
As a result, gross profit was $2.3 billion (about 3.3699 trillion won), down about 1% from a year earlier. Adjusted EBITDA was $29 million (about 42.5 billion won), a sharp drop from $382 million (about 559.7 billion won) a year earlier.
A slowdown in the core Product Commerce business also weighed on results. First-quarter revenue in the Product Commerce segment—which includes Rocket Delivery, Rocket Fresh, Rocket Growth, and Marketplace—came to $7.176 billion (about 10.5139 trillion won). That was up 4% from a year earlier ($6.87 billion, about 9.9797 trillion won), and 5% on a constant-currency basis.
However, the Product Commerce growth rate fell sharply from 12% in the fourth quarter last year. Product Commerce adjusted EBITDA was $358 million, down 35% from a year earlier.
Customer metrics also softened somewhat. Active customers in Product Commerce totaled 23.9 million, up 2% from a year earlier, but down from 24.6 million in the fourth quarter last year. Revenue per customer was $300, or 439,540 won, up 3% from $294 (about 427,080 won) a year earlier.
Losses widened in the growth businesses segment, which includes Taiwan Rocket Delivery, Farfetch, and Coupang Eats, despite higher revenue. Growth business revenue was $1.328 billion (about 1.9457 trillion won), up 28% from a year earlier ($1.038 billion, about 1.5078 trillion won). On a constant-currency basis, growth was 25%.
By contrast, adjusted EBITDA loss in the growth businesses expanded to $329 million (about 482 billion won). Compared with the same period last year ($168 million, about 244 billion won), the loss widened by 96%. Scale increased, but investment burdens and business expansion expenses pressured profitability.
Cash flow also weakened. Operating cash flow over the past 12 months was $1.6 billion (about 2.3443 trillion won), down $425 million (about 622.7 billion won) from a year earlier. Free cash flow was $301 million (about 441 billion won), down $724 million (about 1.0608 trillion won) over the same period.
Coupang Inc. repurchased 20.4 million shares ($391 million) this quarter. Separately, the board also approved an additional $1 billion share repurchase program as part of a recent capital allocation strategy.
Meanwhile, Coupang Inc. disclosed in a December filing with the U.S. Securities and Exchange Commission a customer compensation program related to the personal information incident. At the time, Coupang Inc. said, "For customers notified of the incident in late November, we announced a customer compensation program to provide purchase vouchers worth about 1.685 trillion won (about $1.2 billion) starting Jan. 15, 2026," adding, "The purchase vouchers, which can be used to buy Coupang products, are deducted from the selling price and the revenue of each respective transaction." The redemption period for the vouchers ended on Apr. 15.