Coupang, Inc.

Results of Operations

(1)Includes results of operations of Farfetch from acquisition date, January 30, 2024.

(2)Non-meaningful.

Total Net Revenues

We categorize our total net revenues as (1) net retail sales and (2) net other revenue. Total net revenues incorporate reductions for estimated returns, promotional discounts, and earned loyalty rewards and exclude amounts collected on behalf of third parties, such as value added taxes. We periodically provide customers with promotional discounts to retail prices, such as percentage discounts and other similar offers, to incentivize increased customer spending and loyalty. These promotional discounts are discretionary and are reflected as reductions to the selling price and revenue recognized on each corresponding transaction. Loyalty rewards are offered as part of revenue transactions to all retail customers, whereby rewards are earned as a percentage of each purchase, for the customer to apply towards the purchase price of a future transaction. We defer a portion of revenue from each originating transaction, based on the estimated standalone selling price of the loyalty reward earned, and then recognize the revenue as the loyalty reward is redeemed in a future transaction, or when the reward expires. The amount of the deferred revenue related to these loyalty rewards is not material.

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Net retail sales represent the majority of our total net revenues which we earn from online product sales of our owned inventory to customers. Net other revenue includes revenue from commissions from merchants that sell their products through our apps or websites. We are not the merchant of record in these transactions, nor do we take possession of the related inventory. Net other revenue also includes consideration from online restaurant ordering and delivery services performed by us, as well as advertising services provided on our apps or websites. We also earn subscription revenue from memberships to our Rocket WOW membership program, which is also included in net other revenue.

The following table presents our total net revenues by segment.

The increase in Product Commerce net revenues for the three and nine months ended September 30, 2025 is primarily due to a 7% growth in total net revenues per Product Commerce Active Customer, excluding effects of foreign exchange rates, driven by increased customer engagement within and across more product categories, as well as a 10% increase in our Product Commerce Active Customers. The growth rates for the three and nine months ended September 30, 2025 were partially offset by 2% and 5%, respectively, from the negative impact of foreign exchange.

The increase in Developing Offerings net revenues for the three and nine months ended September 30, 2025 is due to an increase in total net revenues of our growth initiatives, as we are seeing greater levels of customer engagement in these early-stage offerings.

Cost of Sales

Cost of sales primarily consists of the purchase price of products sold directly to customers where we record revenue gross, and includes logistics costs. Inbound shipping and handling costs to receive products from suppliers are included in inventory and recognized in cost of sales as products are sold. Additionally, cost of sales includes outbound shipping and logistics related expenses, delivery costs from our restaurant delivery business, and depreciation and amortization expense.

Cost of sales increased $950 million or 17% and $2.1 billion or 13% for the three and nine months ended September 30, 2025, respectively, mainly due to higher volume from increased sales and customer demand. Cost of sales as a percentage of revenue decreased from 71.2% and 71.6% for the three and nine months ended September 30, 2024 to 70.6% and 70.4% for the three and nine months ended September 30, 2025. The decrease in cost of sales as a percentage of revenue is due to a decrease for Product Commerce from 70.0% and 70.5% for the three and nine months ended September 30, 2024 to 67.9% and 68.0% for the three and nine months ended September 30, 2025, resulting from an increased percentage of revenues earned from higher margin revenue categories and offerings, including revenue earned from Fulfillment and Logistics by Coupang (“FLC”) as we saw greater levels of merchant adoption and customer engagement, as well as further supply chain optimization. This is partially offset by the growth in certain Developing Offerings initiatives that currently operate with lower margins.

Operating, General and Administrative Expenses

Operating, general and administrative expenses include all our operating costs excluding cost of sales, as described above. More specifically, these expenses include costs incurred in operating and staffing our fulfillment centers (including costs attributed to receiving, inspecting, picking, packaging, and preparing customer orders), customer service-related costs, payment processing fees, costs related to the design, execution, and maintenance of our technology infrastructure and online offerings, advertising costs, general corporate function costs, and related depreciation and amortization expense.

The increase in operating, general and administrative expenses for the three and nine months ended September 30, 2025 primarily reflects increases in infrastructure and technology costs to support our continued growth. Operating, general and administrative expenses as a percentage of revenue increased from 27.5% for the three months ended September 30, 2024 to 27.6% for the three months ended September 30, 2025 and decreased from 27.9% for the nine months ended September 30, 2024 to 27.8% for the nine months ended September 30, 2025. The increase for the three months ended September 30, 2025 is due to increased infrastructure and technology costs, most notably in Developing Offerings. The decrease for the nine months ended September 30, 2025 is due primarily to the KFTC administrative fine (the “administrative fine”) of $121 million in the prior year period, partially offset by increased technology and infrastructure costs.

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Interest Income

Interest income primarily consists of interest earned on our deposits held with financial institutions.

Interest income for the three and nine months ended September 30, 2025 remained relatively flat when compared with the prior year periods.

Income Taxes

Our tax provision from income taxes for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter we update our estimate of the annual effective tax rate, and if our estimated tax rate changes, we make a cumulative adjustment. No income tax benefit was accrued for jurisdictions where we anticipate incurring a loss during the full fiscal year as the related deferred tax assets were fully offset by a valuation allowance. Our resulting effective tax rate differs from the applicable statutory rate, primarily due to tax credits, U.S. taxes on foreign earnings such as the inclusion of the global intangible low-taxed income (GILTI) provisions, the valuation allowance against deferred tax assets in loss making jurisdictions, and other permanent differences.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA introduces a broad range of tax reform provisions, including the allowance of immediate deduction of qualified domestic research and development expenses, modifications to the international tax framework, and changes to certain business-related exclusions, deductions, and credits. Certain provisions are effective starting in our fiscal year ending December 31, 2025, and the impacts of the OBBBA are reflected in our results for the three and nine months ended September 30, 2025, resulting in an immaterial decrease in our interim period tax provision.

Our effective tax rate decreased from 51.5% to 42.4% in the three months ended September 30, 2025 and decreased from 133.5% to 58.3% in the nine months ended September 30, 2025, as compared to the three and nine months ended September 30, 2024, respectively, primarily due to a decrease in U.S. taxes on foreign income resulting from lower taxable income attributable to the OBBBA and changes in the mix of our jurisdictional earnings. Our effective tax rate also decreased for the nine months ended September 30, 2025 due to the impact of the administrative fine in the prior year period discussed in Note 5 — "Income Taxes" to the condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q.

Segment Gross Profit and Adjusted EBITDA

Segment gross profit is defined as net revenues less cost of sales attributable to each reportable segment. Gross margin is defined as gross profit divided by net revenues attributable to each reportable segment.

Segment Adjusted EBITDA is defined as income (loss) before income taxes for a period before depreciation and amortization, equity-based compensation expense, interest expense, interest income, and other income (expense), net. Segment adjusted EBITDA also excludes impairments and other items that we do not believe are reflective of our ongoing operations.

(1)See “Non-GAAP Financial Measures” below for the reconciliation of the non-GAAP measures with their comparable amounts prepared in accordance with U.S. GAAP.

Product Commerce

The increase in gross profit for the three and nine months ended September 30, 2025 is primarily due to an increase in revenue of $1.1 billion and $2.4 billion, respectively, compared to the prior year periods. Gross profit grew at a faster rate than net revenues due to an increased percentage of revenues earned from higher margin revenue categories and offerings, including revenue earned from FLC as we continue to see greater levels of merchant adoption and customer engagement, as well as further supply chain optimization.

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The increase in Product Commerce adjusted EBITDA for the three and nine months ended September 30, 2025 is primarily due to the increase in gross profit described above.

Developing Offerings

The decrease in gross profit for the three months ended September 30, 2025 resulted from growth in certain Developing Offerings initiatives that currently operate with lower margins. The increase in gross profit for the nine months ended September 30, 2025 is primarily the result of the increase in revenue described above. This is partially offset by the growth in initiatives currently operating with lower margins described previously.

The increased loss for the three and nine months ended September 30, 2025 in Developing Offerings adjusted EBITDA is primarily the result of increased investments in our Developing Offerings initiatives, including Taiwan, in both the three and nine month periods.