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

Coupang Inc. has posted its largest operating loss since its public listing in 2021, hit by the fallout from a heavy fine over 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.

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

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

The primary driver behind the expanded operating loss was the reflection of a 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 a personal data leak incident last year, Coupang Inc. turned to a deficit in the first quarter of this year and has now recorded consecutive quarterly operating losses.

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

Revenue reached a record high of KRW 13.3007 trillion ($8.856 billion), marking a 4% increase from the same period last year.

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

The scale of the second-quarter net loss is close to three times last year's total net profit (KRW 303 billion).

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

While Coupang Inc. does not explicitly disclose constant currency figures, it announces revenue growth rates applying constant exchange rates to highlight its underlying business expansion.

By business segment, revenue from 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) dropped 42% from a year earlier to KRW 573.7 billion.

The number of active Product Commerce customers—defined as customers who made at least one purchase during the period—reached 24.7 million, up 3% from the same period last year.

This also represents an increase compared to the active customer count in the first quarter (23.9 million).

Revenue from growth businesses, including operations in Taiwan and Coupang Eats, jumped 20% to KRW 2.1492 trillion.

The adjusted EBITDA loss for growth businesses narrowed by 7% year-over-year to KRW 328.9 billion.

Selling, general, and administrative expenses for the second quarter rose 26% year-over-year to $3.05 billion, and total second-quarter operating expenses 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 ($459 million) of Class A common stock as treasury shares.

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

Regarding revenue from Rocket Delivery and other services, he explained, "This quarter showed a reversal in trends, driven by the inflow of returning and new customers."

(Photo: Yonhap News)
※ Please note: This article was translated by AI and may contain errors.