A Coupang delivery truck in a Seoul neighborhood. Yonhap News
Coupang Inc., the parent company of Coupang (CPNG), reported an operating loss of 350 billion won ($242 million) in the first quarter, as compensation costs from a massive data breach late last year weighed heavily on profitability.
According to a consolidated earnings report filed with the U.S. Securities and Exchange Commission (SEC) on Tuesday, first-quarter revenue rose 8% year-on-year to $8.504 billion (12.46 trillion won).
Growth, however, has clearly slowed. The first-quarter operating loss of $242 million (354.5 billion won) marked a swing from an operating profit of $154 million (233.7 billion won) a year earlier. Net loss came in at $266 million (389.7 billion won), also reversing from a profit. The results not only broke the company’s streak of double-digit quarterly growth since its IPO but also marked its largest loss since the fourth quarter of 2021.
Performance diverged across business segments. Revenue from Product Commerce, the company’s core business that includes Rocket Delivery, grew just 4% year-on-year to $7.176 billion. Active customers fell to 23.9 million, down 700,000 from 24.6 million in the previous quarter, signaling customer attrition. In contrast, the Developing Offerings segment — which includes Rocket Delivery in Taiwan, Farfetch and Coupang Eats — saw revenue jump 28% to $1.328 billion.
Industry observers attribute the earnings miss to compensation costs stemming from the data breach that occurred in November last year, combined with expanded investment in new businesses. At the time, Coupang announced a customer compensation program worth approximately $1.2 billion (about 1.685 trillion won) in the form of purchase vouchers. The vouchers are structured to be deducted from revenue.
Separately, Coupang Inc. repurchased 20.4 million of its own shares worth $391 million during the quarter. The company also said it has approved an additional $1 billion share buyback program as part of its capital allocation strategy.