0001834584-26-000042
SEC filingRevenue grew 8% YoY but gross margin contracted due to data incident costs and customer compensation, leading to net loss.
For the three months ended March 31, 2026, Coupang reported total net revenues of $8.504 billion, an increase of 8% year-over-year (8% on a constant currency basis). Net retail sales rose 6% (7% constant currency) to $6.476 billion, while net other revenue grew 11% (12% constant currency) to $2.028 billion. Despite top-line growth, gross profit decreased 1% to $2.297 billion, resulting in a gross margin of 27.0% versus 29.3% in the prior year. The contraction was primarily driven by the impact of the November 2025 data incident, including a customer compensation program of approximately $1.2 billion in vouchers that reduced recognized revenue and increased supply chain costs. Operating expenses increased 13% to $8.746 billion, leading to an operating loss of $242 million compared to operating income of $154 million in Q1 2025. Net loss was $266 million versus net income of $114 million. Adjusted EBITDA plummeted 92% to $29 million, with margin shrinking from 4.8% to 0.3%. Free cash flow turned negative at $110 million, compared to positive $116 million in the prior year.
Product Commerce: Segment revenue grew 4% (5% constant currency) to $7.176 billion, supported by a 2% increase in active customers to 23.9 million and a 2% increase in net revenue per active customer (3% constant currency). However, customer growth decelerated due to the data incident. Gross profit improved only 1% to $2.174 billion, as cost of sales as a percentage of revenue rose from 68.7% to 69.7%. Segment Adjusted EBITDA fell 35% to $358 million, reflecting lower gross profit growth and increased fulfillment, technology, and marketing investments.
Developing Offerings: Revenue surged 28% (25% constant currency) to $1.328 billion, driven by growth in nascent initiatives including Eats, Rocket Now, Play, and Taiwan. However, gross profit declined 25% to $123 million, as cost of sales margin rose from 84.1% to 90.7% due to lower-margin offerings. Segment Adjusted EBITDA loss widened 96% to $329 million, mainly from increased investments and lower gross margins.
Management did not provide explicit financial guidance for future periods. However, the MD&A indicates that investments in technology, fulfillment infrastructure, and Developing Offerings will remain significant. The data incident is expected to continue to exert pressure on customer growth and costs, with potential additional expenses from regulatory scrutiny and litigation. Capital expenditures are planned to exceed several billion dollars over the next few years, with $236 million in remaining commitments for construction projects. The company borrowed $750 million under its revolving credit facility in Q1 2026 for general purposes and has $366 million remaining under its stock repurchase program, which was subsequently increased by $1 billion in May 2026. Overall, management expects current liquidity sources to be sufficient for at least the next 12 months, though future financing may be pursued for strategic opportunities.
Cash and cash equivalents stood at $6.301B at March 31, 2026, down slightly from $6.318B at year-end 2025. Total debt increased to $2.289B, composed of $1.672B in short-term borrowings (up from $960M) and $617M in long-term debt. The significant increase in short-term borrowings reflects $750M drawn on the revolving credit facility and $928M in other revolving credit facilities. Shareholders' equity declined to $3.930B from $4.623B, primarily due to the net loss of $266M and $391M in share repurchases.
The Notes discuss unconditional purchase obligations under Note 10, including legally binding contracts for technology services, fulfillment center construction, content, and software licenses with terms exceeding one year. However, no specific dollar amounts are disclosed. The KFTC administrative fine of approximately $121M is being paid in installments through June 2026.
During Q1 2026, Coupang repurchased 20.4 million Class A shares for $391M. The Board authorized an additional $1B buyback in May 2026, supplementing the existing $366M remaining from the May 2025 authorization. No dividends were declared. Capital expenditures totaled $296M (3.5% of revenue). Net debt issuance was $681M, including $1.936B in proceeds and $1.198B in repayments, primarily for short-term working capital.
Segment reporting in Note 3 shows two segments: Product Commerce (core retail and marketplace) and Developing Offerings (nascent services including Taiwan, Eats, Farfetch). Product Commerce revenue grew 4.5% YoY to $7.176B, but segment adjusted EBITDA fell 35% to $358M. Developing Offerings revenue grew 27.9% to $1.328B, yet segment adjusted EBITDA loss widened from $168M to $329M, indicating continued investment. No geographic breakdown beyond Korea/Taiwan was provided.