Coupang Inc. Records Record Operating Loss of KRW 835 Billion Due to Personal Data Leak Fine

Coupang Inc. posted its largest quarterly operating loss since its public listing in 2021, weighed down by a hefty fine for a personal data leak.

Despite the loss, the company continued its growth in scale, with revenue surpassing KRW 13 trillion and an increasing number of active customers.

Coupang Inc., listed on the New York Stock Exchange, announced in a regulatory filing on the 4th (local time) that it recorded an operating loss of KRW 835 billion ($556 million) in the second quarter, turning to a deficit compared to the same period last year.

This figure reflects the average won-dollar exchange rate of KRW 1,501.89 for the second quarter.

The primary driver behind the expanded operating loss was the KRW 624.7 billion fine imposed on Coupang by the Personal Information Protection Commission.

Coupang Inc. stated that excluding the fine, its second-quarter operating loss would have been KRW 219.2 billion, with a net loss of KRW 240.3 billion.

Following its shift to a deficit in the first quarter of this year in the wake of last year's personal data leak incident, Coupang Inc. has now posted operating losses for two consecutive quarters.

The scale of the second-quarter deficit exceeds last year's annual operating profit of KRW 679 billion, marking the largest quarterly loss ever since its New York listing in 2021.

Revenue hit a record high of KRW 13.3007 trillion ($8.856 billion), up 4% year-over-year.

The net loss for the second quarter reached KRW 856 billion ($570 million), also shifting to a deficit and marking two consecutive quarters of net losses.

The second-quarter net loss is close to triple last year's total annual net profit of KRW 303 billion.

Based on constant currency rates, excluding the impact of foreign exchange fluctuations, Coupang Inc.'s second-quarter revenue grew by 10%.

While Coupang Inc. does not explicitly disclose constant currency figures in its main statements, it announces revenue growth applying constant currency to illustrate its underlying business expansion.

By business segment, revenue for Product Commerce, Coupang's core shopping service including Rocket Delivery, grew 8% year-over-year to KRW 11.1515 trillion.

Product Commerce adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) stood at KRW 573.7 billion, down 42% from a year earlier.

The number of active Product Commerce customers—those who made at least one purchase during the period—reached 24.7 million, a 3% increase year-over-year.

This also marked an increase compared to the active customer count of 23.9 million in the previous first quarter.

Revenue from developing offerings, including Taiwan operations and Coupang Eats, jumped 20% to KRW 2.1492 trillion.

The adjusted EBITDA loss for developing offerings was KRW 328.9 billion, a 7% reduction from a year ago.

Selling, general, and administrative expenses for the second quarter rose 26% year-over-year to $3.05 billion, while total operating expenses for the quarter reached $9.412 billion, surpassing revenue.

Due to the impact of the fine, free cash flow plummeted 79% year-over-year to $51 million, compared to $247 million in the same period last year.

During the second quarter, Coupang Inc. repurchased 23.2 million shares of Class A common stock worth $459 million as treasury shares.

Gaurav Anand, Chief Financial Officer of Coupang, stated during the earnings conference call, "We are confident that driving operational efficiencies, optimizing our supply chain, continuing investments in automation technology, and expanding high-margin category businesses will drive margin expansion over the long term."

Regarding revenue from Rocket Delivery and other segments, he explained, "This quarter, we saw a trend reversal driven by the influx of returning and new customers."
※ Please note: This article was translated by AI and may contain errors.