Coupang Inc., the parent company of Coupang, reported an operating loss of 642.3 billion won ($642 million) in the third quarter of this year, despite generating over 14 trillion won ($12.4 billion) in revenue. While revenue continued to grow, profitability declined, resulting in three consecutive quarters of losses this year. The cumulative operating loss for the first three quarters exceeded 1.83 trillion won, marking the largest loss since the company's inception.
According to the third-quarter consolidated financial report submitted to the U.S. Securities and Exchange Commission (SEC) on November 4, Coupang's revenue for the third quarter was $9.962 billion, a 7% increase from $9.267 billion in the same period last year. Excluding the impact of currency fluctuations, the growth rate based on fixed exchange rates was 11%. Using an average exchange rate of 1,427.52 won per dollar for the third quarter, the revenue translates to 14.22 trillion won.
In contrast, the operating loss was $450 million (642.3 billion won). Last year, the company reported an operating profit of $162 million (224.5 billion won) in the third quarter, but this year it turned to a loss. The net loss for the third quarter also rose to $505 million (715.1 billion won), a reversal from a profit of $95 million (131.6 billion won) in the same period last year.
Coupang has recorded operating losses of 354.5 billion won in the first quarter and 835 billion won in the second quarter, continuing the trend into the third quarter. Although the loss in the third quarter was smaller than in the second quarter, it was still significant, nearing the annual operating profit of 679 billion won recorded last year. This marks the second-largest operating loss on a quarterly basis since the company went public in 2021.
With three consecutive quarters of losses, the cumulative operating loss for the first three quarters of this year reached 1.8318 trillion won, surpassing the previous record for annual operating losses of 1.7088 trillion won set in 2021. This figure is also 592.2 billion won higher than the previous record for cumulative operating losses in the first three quarters of 2021, which was 1.2396 trillion won.
The operating losses incurred over the past nine months are comparable to the operating profits Coupang earned over the last three years. The company recorded an operating profit of 617.4 billion won in 2023, marking its first annual profit. This was followed by operating profits of 602.3 billion won in 2024 and 679 billion won last year. The total operating profit over the past three years amounts to 1.8987 trillion won, leaving a difference of only 66.9 billion won compared to the cumulative operating loss for the first three quarters of this year.
The net loss also surged significantly. Coupang reported net losses of 389.7 billion won in the first quarter, 856 billion won in the second quarter, and 715.1 billion won in the third quarter. The cumulative net loss for the first three quarters reached 1.9608 trillion won, approaching 2 trillion won. This figure exceeds the annual net loss of 1.764 trillion won recorded in 2021.
The third-quarter results also reflect costs related to a fire at the Incheon logistics center in July. According to Coupang, the operating loss for the third quarter, excluding fire-related costs, was estimated at $220 million. This indicates a discrepancy of about $248 million compared to the actual operating loss of $450 million. Even without the fire-related costs, the company still recorded an operating loss.
Adjusted EBITDA was $116 million, a 72% decrease from $413 million in the same period last year. The adjusted EBITDA margin also fell to 1.2%, down 3.29 percentage points from the previous year.
Revenue from the core product commerce segment in the third quarter was $8.374 billion, a 5% increase year-over-year. However, the EBITDA for this segment dropped by 45% to $385 million. Revenue from growth segments, including operations in Taiwan, Coupang Eats, and Farfetch, rose by 23% to $1.588 billion.
There is growing interest in whether Coupang will record its largest annual operating loss this year. With cumulative losses already surpassing the annual loss recorded in 2021 by the third quarter, the company's profitability recovery in the fourth quarter will likely determine its annual performance.
* This article has been translated by AI.
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