CPNG 10-K & 10-Q changes, risk factors and insider trading

Investing in our Class A common stock involves a high degree of risk. You should consider and read carefully all of the risksrisks, uncertainties, events, and uncertaintiescontingencies described below, as well as other information included in this Annual Report on Form 10-K, including the sections titled “Special Note Regarding Forward-Looking StatementsStatements,” and “Management’s Discussion and Analysis of Financial Condition and Results of OperationsOperations,” and our consolidated financial statements and related notes appearing elsewhere in this Form 10-K, before making an investment decision. The risksrisks, uncertainties, events, and uncertaintiescontingencies described below may not be the only ones we face. Our business, financial condition, results of operations, and prospectsprospects, as well as the price of our Class A common stock could also be affected by additional factors that apply to all companies operating globally. The occurrence of any of the following risksfollowing, or additionaladditional, risksrisks, uncertainties, events, and uncertaintiescontingencies not presently known to us, or that we currently believe to be immaterial, or that apply to all companies operating globally could materially and adversely affect our business, financial condition, results of operations, and prospects, as well as the price of our Class A common stock which would cause you to lose all or part of your investment. Some of the risks, uncertainties, events, and contingencies discussed below may have occurred in the past, but the descriptions below are not representations as to whether or not the risks, uncertainties, events, or contingencies have occurred in the past and instead reflect our beliefs and opinions as to the risks, uncertainties, events, and contingencies that could materially and adversely affect us in the future.

Our business faces significant risksrisks, uncertainties, events, and uncertainties.contingencies. The risk factors described below are only a summary of the principal risk factors associated with investing in our Class A common stock. These risks are more fully described in this “Risk Factors” section, including the following:

•our results of operations may fluctuate significantly, which makes our future results of operations and prospects difficult to predict and could cause our results of operations to fall below expectations;

•we have had a history of net losses, and we may not be able to generate sufficient revenues to achieve or maintain profitability in future periods;

•because a majority of our operations take place in Korea and are subject to Korean law, there are circumstances in which certain of our Korean affiliates’ executives may be held either directly or vicariously criminally liable for the actions of our Korean affiliates or our Korean affiliates’ executives and employees;

•anywe failurehave experienced, and may again experience, a data incident involving the unauthorized access to protectproprietary, confidential, or customer data and we may experience cybersecurity incidents affecting our apps, websites, networks, and systemssystems. againstAny securitysuch breachesincident or otherwisefailure to protect our confidential information could interfere with customer transactions and order fulfillment, damage our reputation and brandbrand, and may subject us to investigation, possible sanctionssanctions, orand other actions and penalties;

•any failure to comply with privacy laws or regulations, or to fulfill privacy-related customer expectations in the jurisdictions where we operate, could damage our reputation and brand and business and may subject us to possibleregulatory sanctionsscrutiny, sanctions, and/or penalties;

•we rely on Coupang Pay to conduct a substantial amount of the payment processing across our business. If Coupang Pay’s services were limited, restricted, curtailed, or degraded in any way, or become unavailable to us or our customers for any reason, our business may be adversely affected;

•our expansion into new geographies and offerings and any substantial increase in the number or type of our offerings expose us to new and increased challenges and risksrisks, including legal and regulatory compliance burdens, potential differences in consumer preferences in new markets, and uncertain costs of building out fulfillment and logistics infrastructure;

•international relations, including escalations in tensions between North Korea and South Korea, and other global conflicts could adversely affect the South Korean or global economies and demand for our products and services; and

Our revenue and results of operationsexpenses may fluctuate for a variety of reasons, many of which are beyond our control. These reasons include those described elsewhere in this “Risk Factors” section as well as the following:

•the introduction or activities of competitors’ stores, apps, websites, merchandise, or servicesservices, including the use of AI shopping tools;

•the extent to which we offer fast and free delivery through Rocket Delivery,delivery, continue to offer a compelling value proposition to our customers, and provide additional benefits to our customers;

•the outcomes of any legal proceedingsproceedings, claims and claims or regulatory investigations,investigations (including those prompted by the data incident discussed in Item 1C. “Cybersecurity” below), which may include significant monetary damages,fines which could be significant, injunctive relief, personal liability (including criminal liability), sanctions, fines,monetary damages, customer compensation, suspensions or revocations of related permits and licenses, and other penalties;

•increases in our temporary or long-term costs such as labor and energy sources, packing supplies, leases, technology and logistics, and other goods not for resaleinfrastructure;

•the extent to which our servicescustomers, operations, and financial results are affected by cybersecurity and data security incidents, including the data incident discussed in Item 1C. “Cybersecurity” below, including, but not limited to, spyware, viruses, phishing, and other spam emails, denial of service attacks, unauthorized data access, data theft, computer intrusions, outages, and similar events; and

Fluctuations in our revenues and results of operationsexpenses may result in a failure to meet the expectations of analysts or investors, which could cause the price per share of our Class A common stock to decline. In addition, our revenue growth may not be sustainable and our growth ratesrates, if any, may decrease. Our revenue and results of operations depend in part on the continued growth of demand for the products and services offered by us or our merchants, and on general economic and business conditions worldwide. A softening of demand, whether caused by changes in customer preferencespreferences, increased competition, or a weakening of the Koreaneconomies of the countries where we operate or globalglobally, economies,or other factors, may materially and adversely affect our revenue or growth rate, which could also materially and adversely affect our business, financial condition, results of operations, and prospects, as well as the price per share of our Class A common stock.

Our limited operating history and evolving business make it difficult to evaluate our future prospects, including future revenuerevenues, growth rate, and margins as well as the risks and challenges we may encounter.

Our limited operating history and evolving business make it difficult to evaluate and assess our future prospects, as well as the risks and challenges that we may encounter. Although we launched our first website in 2010 and our first mobile application in 2011, our business and the markets in which we compete have rapidly evolved over time. As a result, our ability to accurately forecast our future results of operations is limited and subject to a number of risks and uncertainties, including our ability to plan for and model future growth and expenses and to expand our business in existing markets and enter new markets. As such, you should not rely on our business and financial performance in any prior quarterly or annual period as an indication of our future business or financial performance. Many factors may contribute to a decline in our growth rate,rate or margins, including, but not limited to, market saturation, increased competition, slowing demand, global macroeconomic and geopolitical conditions, the difficulty of capitalizing on growth opportunities, regulatory and governmental actions, and the maturation of our business. If our growth rate declines, or if we fail to improve our margins as we anticipate, investors’ perceptions of our business could be materially and adversely affected and the price per share of our Class A common stock could decline.

•respond to changes in the way customers access and use the Internet and mobile devicesdevices, including the use of AI shopping tools;

•expand our business in newexisting and existingnew geographies;

•further develop our scalable, high-performance technology and fulfillment infrastructure that canto efficiently and reliably handle increased usage, as well as the deployment of new features and the sale of new merchandise and services; and

We have had a history of net losses prior to our most recent fiscal years,2023, we may incur losses in the future, and we cannot ascertain whether we will maintain or increase profitability in future periods, which would materially and adversely affect our business, financial condition, results of operations, and prospects.

Prior to 2023, we have had a history of annual net losses, including $(0.1) billion and $(1.5) billion for 2022 and 2021 respectively, as well as an accumulated deficit of $(4.25.7) billion as of December 31, 2024.2022 and $(4.0) billion as of December 31, 2025. Even though we have experienced recent profitability and expect to remain profitable,profitability, we cannot ascertain whether we will be able to maintain or increase our profitability in future periods. OurWe expect to increase our costs and expenses are expected to increase in future periods, which could materially and adversely affect our future results of operations. In particular, we intend to continue to spend significant amounts to increase our customer base, increase the number and variety of merchandise and services we offer, expand our marketing channels, expand into new geographies, broaden our operations, develop additional fulfillment centers,and logistics capacity, hire additional and retain existing employees and managers, and develop our technology and fulfillment infrastructure. These increased costs may materially and adversely affect our profitability and operating expenses. Some of our initiatives to generate revenue are new and unproven, and any failure of these initiatives to meet our goals could create additional losses and materially and adversely affect our business, financial condition, results of operations, and prospects.

In addition, we expect to invest in longer-term initiatives, which will likely impact our shorter-term results of operations. We may find that these efforts are more expensive than we currently anticipate and/or encounter technological and other development delays. We will also face increased compliance costs associated with growth and the expansion of our customer base. Our efforts to grow our business may cost more than we expect, and we may not be able to increase our revenue enough to offset our increased operating expenses or to achieve and, if achieved, maintain profitability in future periods.

We may incur significant losses in the future for a number of reasons, including the other risks described in this “Risk Factors” section, and unforeseen expenses, difficulties, complications or delays, and other unknown events. If we are unable to achievesustain and,or if achieved, sustainincrease profitability in future periods, the value of our business and the price per share of our Class A common stock could decline.

If we fail to timely identify or effectively respond to changing customer preferences and spending patterns, fail to expand the products and services being purchased by customers, or fail or are unable to obtain or offer appropriatedesirable categories of products,products or services, our relationship with our customers and the demand for our products and services could be materially and adversely affected, which could in turn materially and adversely affect our business, financial condition, results of operations, and prospects.

Our future business and financial performance depends on continued demand for the types of goods and services that we and our merchants offer. The popularity of certain products, including apparel, beauty, food, and consumer electronics, may vary over time due to perceived availability, subjective value, seasonality,seasonality (including the impact and timing of holidays), and/or general societal trends. A decline in the demand for certain products or services we or our merchants sell could materially and adversely affect our revenue. For example, demand for luxury product offerings, which we have recently expanded, can be particularly variable due to changes in consumer preferences and may be particularly susceptible to recessions or other economic downturns. In addition, a temporary or sudden surge in demand for certain products may temporarily inflate the volume of those products listed on or purchased through our apps and websites, placing a significant strain on our infrastructure and throughput capacity. These trends may also cause significant fluctuations in our results of operations from period to period. A failure to timely identify or effectively respond to changing consumer preferences and spending patterns, an inability to keep adequate inventory of the type of products being purchased by customers, failure to grow and retain the members of our Rocket WOW membership program,programs, or a failure or inability to obtain or offer appropriate categories of products and services could negatively affect our relationship with customers and the demand for our products and services.

Our ability to identifyidentify, and developdevelop, and effectively manage sourcing relationships with qualified, economically stable suppliers and merchants,merchants who satisfy our requirements, and our ability to acquire sufficient amounts of products in a timely and cost-efficient manner is critical to our business. Significant changes to, or a failure to develop and maintain, sourcing relationships with a broad and deep supplier base could materially and adversely affect our business, financial condition, and results of operations.

Further, we also offer our customers private-label products on our apps and websites. Selling private-label products subjects us to additional and/or heightened risks, including but not limited to, risks of: potential product liability and mandatory or voluntary product recalls; potential liability arising from our commercial relationships with the manufacturers of our private-label products; potential liability for incidents, including, but not limited to, the injuries of our subcontractors’ employees at manufacturing sites that we do not control; failure to successfully protect our intellectual property rights and the rights of applicable third parties; harm to our reputation and brand image; increased regulatory scrutiny and fines related to subcontracting and our pricing and advertising practices with respect to private-label products; and other risks generally encountered by entities that source, market, and sell private-label products.

If we are unable to successfully implement some or all of our major strategic initiatives in a timely manner, our ability to maintain and improve our market position may be materially and adversely affected.affected, which could in turn materially and adversely affect our business, financial condition, results of operations, and prospects.

Our strategy is to continue to build on our market position by continuing to implement certain key strategic initiatives,initiatives in a timely manner, which include the following:

•focusing on customer satisfaction and our customers’ loyalty to our apps, websites, and programs, including our Rocket WOW membership programprograms;

•expanding our product and service offerings and expanding into new geographies; and

We may not be successful in implementing any or all of these key strategic initiatives.initiatives in a timely manner. If we are unable to successfully implement some or all of our key strategic initiatives in an effective and timely manner, our ability to maintain and improve our market position, and our competitive position, brand, and reputation may be harmed, which may materially and adversely affect our business, financial condition, and results of operations.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes appearing elsewhere in this Form 10-K. This discussion, particularly information with respect to our future results of operations or financial condition, business strategy and plans, and objectives of management for future operations, includes forward-looking statements that involve risks and uncertainties as described under the heading “Special Note Regarding Forward-Looking Statements” in this Form 10-K. YouAs shoulda reviewresult theof disclosuremany factors, including, without limitation, those factors set forth in Part I—I, Item 1A. "“Risk Factors"” in this Form 10-K for a discussion of important factors that could cause10-K, our actual results toor timing of certain events could differ materially from thosethe anticipatedresults inor timing described in, or implied by, these forward-looking statements. In the following discussion and analysis, amounts may not foot due to rounding.

Coupang is a technology and Fortune 200150 company listed on the New York Stock Exchange (NYSE: CPNG) that provides retail, restaurant delivery, video streaming, and fintech services to customers around the world under brands that include Coupang, Coupang Eats, CoupangPlay, PlayRocket Now, and Farfetch. Headquartered in the United States, Coupang has operations and support services in geographies including South Korea, Taiwan, Singapore, China, IndiaIndia, Japan, and Europe. Coupang’s mission is to revolutionize the everyday lives of its customers and create a world where people wonder, “How did I ever live without Coupang?”

We believe that we are a preeminent retail destination because of our broad selection, low prices, and exceptional delivery and customer experience across our owned inventory selection as well as products offered by third-party merchants, in Korea.merchants. Our unique end-to-end integrated fulfillment, logistics, and technology network enables Rocket Delivery, which provides free, next-day delivery for orders placed anytime of the day, even seconds before midnight—across millions of products in Korea. Our structural advantages from complete end-to-end integration, investments in technology, and scale economies generate higher efficiencies that allow us to pass savings to customers in the form of lower prices. The capabilities we have built provide us with opportunities to expand into other offerings and geographies.

In January 2024 we acquired the business and assets of Farfetch Holdings plc (“Farfetch”), a leading global marketplace for the luxury fashion industry. Throughout 2024 and 2025, we undertook restructuring actions to reduce headcount and exit leases and licensing agreements associated with Farfetch. See Note 16 — "Business Combinations - Farfetch" to the consolidated financial statements included elsewhere in Part II, Item 8 of this Annual Report on Form 10-K. During 2024, we have undertaken restructuring actions to reduce headcount, exit leases and licensing agreements. In February 2025, we entered into a settlement agreement and mutual release with Authentic Brands Group LLC related to a license agreement.

In June 2021, a fire extensively damaged our Deokpyeong fulfillment center (“FC Fire”) resulting in a loss of the inventory, building, equipment, and other assets at the site. We are insured on property losses from the FC Fire, and while the insurer continues assessment of the total potential loss coverage on the claim, during the fourth quarter of 2024 we agreed to a settlement on a portion of the claim and now deemdeemed the recovery of insurance proceeds under the policy as probable. We recognized an insurance gain of $175 million in the fourth quarter of 2024, which included $116 million for the inventory loss included in “Cost of sales” and $59 million for property and equipment losses, included in “Operating, general and administrative”. We received provisional payments of $138 million in prior years, which were previously deferred within “Other current liabilities”, and received a further payment of $40 million in the fourth quarter of 2024. Whether and to what extent additional insurance recoveries will be received is currently unknown.

Our segments reflect the way we evaluate our business performance and manage operations. See Note 3 — "Segment Reporting" to the consolidated financial statements included elsewhere in Part II, Item 8 of this Annual Report on Form 10-K.

Product Commerce primarily includes our core Korean retail (owned inventory) and marketplace offerings (third-party merchantsmerchants, including SMEs) and Rocket Fresh, our fresh grocery offering, as well as advertising products associated with these offerings. Revenues from Product Commerce are derived primarily from online product sales of owned inventory to customers in Korea, commissions,commissions and logistics and fulfillment fees earned from merchants that sell products through our mobile application and website, and from Rocketour Korean retail WOW membership.membership program.

Developing Offerings includes more nascent offerings and services, including CoupangEats Eats, (our restaurant ordering and delivery service), inPlay Korea, Coupang Play, (our online content streaming service in Korea,), fintech, our retail operations in Taiwan, as well as advertising products associated with these offerings,offerings. andDeveloping Offerings also includes Farfetch,Farfetch (our newly acquired global luxury fashion marketplace.marketplace). Revenues from Developing Offerings are primarily generated from ourFarfetch, global luxury fashion marketplace, online restaurant ordering and delivery services in KoreaEats, and retail operations in Taiwan.

(4)Net income for 2024 includes $175 million of insurance gains related to the FC Fire and $121 million of costs related to the Korea Fair Trade Commission (the “KFTC”) administrative fine.fine described in Note 14 — "Commitments and Contingencies" in Part II, Item 8. “Financial Statements and Supplementary Data”.

Net Revenues per Product Commerce Active Customer and Constant Currency Net Revenues per Product Commerce Active Customer

A customer is anyone who has created an account on our apps or websites, identified by a unique email address. As of the last date of each quarterly reported period, we determine our number of Product Commerce Active Customers by counting the total number of individual customers who have ordered at least once directly from our Product Commerce apps or websites during the relevant quarterly period. A customer is anyone who has created an account on our apps or websites, identified by a unique email address. The change in Product Commerce Active Customers in a reported period captures both the inflow of new customers who have made a purchase in the period as well as the outflow of existing customers who have not made a purchase in the period. We view the number of Product Commerce Active Customers as an indicator of future growth in our net revenue, the reach of our network, the awareness of our brand, and the engagement of our customers.

A discussion regarding our financial condition and results of operations for 20232024 compared to 20222023 can be found under Part II, Item 7 —7. “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for 2023.2024.

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 theythe expire.reward expires. The amount of the deferred revenue related to these loyalty rewards is not material.

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 earned 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,programs, which is also included in net other revenue.

The increase in Developing Offerings net revenues is primarily due to incrementalan increase in total net revenues from our acquisitiongrowth initiatives, as we are seeing greater levels of Farfetchcustomer engagement in thethese firstearly-stage quarter of 2024 of $1.7 billion. The remaining increase is primarily due to our growth initiatives in Eats and Taiwan.offerings.

The increase in costCost of sales primarilyincreased reflectsmainly due to higher volume from increased sales and customer demand. Additionally, the acquisition of Farfetch increased cost of sales by $945 million. Partially offsetting these increases was a $116 million insurance gain related to an inventory loss from the FC Fire.Fire Costreduced cost of sales by $116 million in 2024. The decrease in cost of sales as a percentage of revenuerevenues decreased from 74.6% for 2023 to 70.8% for 2024 primarilyis due to a decrease in Product Commerce cost of sales as a percentage of revenues from 69.6% to 68.0%, resulting from an increased percentage of revenues earned from higher margin revenue categories and offerings, furtherincluding operationalrevenue efficiencies,earned from Fulfillment and continuedLogistics by Coupang (“FLC”) as we saw greater levels of merchant adoption and customer engagement, as well as further supply chain optimization.optimization, Costpartially ofoffset sales as a percentage of revenue also benefited fromby the inclusion of Farfetch, which operates with a higher gross profit margin, and a reduction in expenses from the insurance gain,gain in 2024, resulting in a 0.8% and 0.4% reduction of cost of sales as a percentage of revenue,revenue respectively.in These2024. benefitsThis werewas also partially offset by a (0.7)%1.4% impact from ourthe growth in certain Developing Offerings initiatives inthat developingcurrently offerings.operate with lower margins.

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-relatedservice 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 depreciation and amortization expense.

The increase in operating, general and administrative expenses primarily reflects increases in technologyinfrastructure and infrastructuretechnology costs to support our continued growth.growth, Additionally,partially the acquisition of Farfetch increased operating costsoffset by $941 million. The increase also includes the impact of the KFTC administrative fine (the “administrative fine”) of $121 million. Partially offsetting these charges was a $59 million insurancein gain2024. relatedOperating, to propertygeneral and equipment losses from the FC Fire. Theseadministrative expenses as a percentage of revenue increased from 23.4% for 2023 to 27.7% for 2024 primarily consisting of 1.7% due to theincreased inclusioninfrastructure ofand Farfetch,technology whichcosts, operatesmost atnotably ain higherDeveloping expenseOfferings, margin.partially Thereoffset is alsoby a 0.4% impact due tofrom the administrative fine.fine Thein remainder of the increase is due primarily to increased technology and infrastructure costs.2024.

Interest expense increaseddecreased $92$54 million compared to the2024, prior year,primarily due to the incremental interest expenseredemption of $96 million associated with the Farfetchsyndicated Termterm Loans thatloans we assumed as part of the Farfetch Acquisition.Acquisition (“Farfetch Term Loans”) in July 2025, which was financed by borrowing under our five-year revolving credit agreement (“Revolving Credit Facility”) at a lower interest rate.

We are subject to income taxes predominantly in Korea, as well as in the United States and other foreign jurisdictions in which we do business. Foreign jurisdictions have different statutory tax rates than those in the United States. Additionally, certain of our foreign earnings may also be taxable in the United States. Accordingly, our effective tax rate is subject to significant variation and can vary based on the amount of pre-tax income or loss, the relative proportion of foreign to domestic income, use of tax creditscredits, and changes in the valuation of our deferred tax assets and liabilities. Beginning in 2022, the Tax Cuts and Jobs Act, as currently enacted, requires taxpayers to capitalize research and development expenses with amortization periods over five and fifteen years, which has and is expected to continue to increase the amount of our GILTI inclusion.

Our effective income tax rate changed from a benefit of (133.1)% in 2023 to an expense of 86.0% in 2024decreased primarily due to a decrease in U.S. taxes on foreign income resulting from lower taxable income attributable to the releaseOBBBA and changes in the mix of the valuation allowance for our Koreanjurisdictional deferred tax assets in 2023.earnings. Our effective tax rate differsalso from the federal statutory ratedecreased due to valuation allowances, net operating losses and tax credits used for the periods, partially offset by the mix of our income (loss) before income taxes generated across the various jurisdictions in which we operate, including the impact of internationalthe provisionsadministrative fine in 2024 as discussed in Note 6 — "Income Taxes" in Part II, Item 8. “Financial Statements and Supplementary Data” of thethis TaxForm Cuts and Jobs Act and permanent differences from non-deductible expenses.10-K. Pre-tax losses from Farfetch,loss making jurisdictions, for which we recognized no income tax benefit due to the related valuation allowances, increased the effective income tax rate by 36.9%.44.2%. We expect that our effective tax rate in future periods will continue to differ significantly from the applicable statutory rate.

Cash paid for income taxes, net of refunds was $138$177 million and $110$138 million for the years ended December 31, 20242025 and 2023,2024, respectively.

In addition to the United States tax law changes, our global operations make the tax rate sensitive to significant foreign tax law changes. A number of countries have begun to enact legislation to implement the OECD’s international tax framework, including Pillar Two global minimum tax regime. South Korea has enacted legislation to implement OECD framework including the Under-taxed Profit Rules (the “UTPR”) which may impose additional reporting and compliance obligations to our groupis effective from January 1, 2025. Based on the Safe Harbor Rules provided by OECD guidance, including the Transitional Safe Harbor Rules, Coupang, Inc. does not owe Pillar Two liability for 2025. Furthermore, pursuant to the latest discussions within the Inclusive Framework of the OECD, including the Side-by-Side Safe Harbor approach, Coupang, Inc. is expected to qualify for safe harbor from Income Inclusion Rules and the UTPR for 2026 and onwards. This minimum tax will be treated as a period cost in future years and did not impact operating results for 2024.2025. We are continuing to monitor legislative developments and are in the process of evaluating the potential impact of Korean and other legislation on our results of future operations.

Segment Gross Profit and Adjusted EBITDA

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

The increase in Product Commerce segment adjusted EBITDA was primarily due to the increase in netgross revenues,profit improveddescribed operating efficiencies and an increased percentage of revenues earned from higher margin revenue offerings.above.

ConstantTotal CurrencyNet Revenue andRevenues, Constant Currency Revenueand GrowthTotal Net Revenues Growth, Constant Currency

Liquidity is a measure of our ability to access sufficient cash flows to meet the short-term and long-term cash requirements of our business operations. Our primary sources of liquidity are cash on hand, supplemented through various debt financing arrangements and sales of our equity securities. We had total cash, cash equivalentsequivalents, and restricted cash of $6.0$6.4 billion as of December 31, 2024,2025, the majority of which was held by our foreign subsidiaries and may not be freely transferable to the United States due to local laws or other restrictions. Additionally, as of December 31, 2025, we havehad $923$1.5 millionbillion available under our revolvingRevolving creditCredit facilitiesFacility as described below.

The ability of certain subsidiaries to transfer funds or pay dividends to Coupang, Inc. is also restricted due to terms in our credit agreements which require the subsidiaries to meet certain financial covenants, including requirements to maintain a positive net equity balance or having current period income.

As of December 31, 20242025 and 2023,2024, we had stockholders’ equity of $4.6 billion and $4.1 billion. We may incur losses in the future. We expect that our investment into our growth strategy will continue to be significant, particularly with respect to our Developing Offerings segment, which will continue to focus on our newer offerings and entrance into new geographies, as well as overall expansion of our fulfillment, logistics, and technology capabilities. As part of this expansion to fulfill anticipated future customer demand and continuationplanned toexpansion expandof services, we plan to acquire and build new fulfillment centers. We have entered into various new construction contracts for capital projects which are expected to be completed over the next threetwo years. These contracts have remaining capital expenditures commitments of $306$290 million as of December 31, 2024.2025. We expect that our future expenditures for both infrastructure and workforce-related costs will exceed several billion dollars over the next several years. As of December 31, 2025, current taxes payable in Korea was approximately $245 million and is expected to be paid in 2026.

We believe that our sources of liquidity will be sufficient to meet our anticipated cash requirements for at least the next 12 months. However, we may need additional cash resources in the future if we find and pursue other opportunities for investment, acquisition, strategic cooperation, or other similar actions, which may include investing in technology, our logistics and fulfillment infrastructure, or related talent. If we determine that our cash requirements exceed our amounts of cash on hand or if we decide to further optimizechange our capital structure, we may seek to issue additional debt or equity securities or obtain credit facilities or other sources of financing. This financing may not be available on favorable terms, or at all.

In December 2025, Coupang Corp. announced a customer compensation program to issue approximately $1.2 billion worth of vouchers, beginning in January 2026, to customers who were notified of the Incident at the end of November 2025 that maywere beredeemable applied towardsfor future Coupang purchases. These vouchers are reflected as reductions to the selling price and revenue recognized on each corresponding transaction as they are redeemed. Voucher redemption occurred primarily in the first quarter of 2026 and concluded in mid-April 2026.

We believe that the Incident has increased and may further increase the Korean government’s focus on our business and couldmay continue to result in additional expenses, including from remediation, inquiries, enforcement actions, and litigation. See Note 10 — “Commitments and Contingencies” to the condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for information on recent administrative fines.

Developing Offerings includes more nascent offerings and services, including Eats,our on-demand delivery service consisting of Eats in Korea and Rocket Now,Now in Japan, Play, fintech, our retail operations in Taiwan, as well as advertising products associated with these offerings, and also includes Farfetch. Revenues from Developing Offerings are primarily generated from Farfetch, Eats, and retail operations in Taiwan.

We experienced a lower year-over-year growth rate in Product Commerce Active Customers in the first quarterand second quarters of 2026 primarily due to the impact of the Incident.

The increase in Product Commerce net revenues for the three and six months ended MarchJune 31,30, 2026 is primarily due to a 3%5% 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 and a 2%3% increase in our Product Commerce Active Customers. The growth raterates for the three and six months ended MarchJune 31,30, 2026 waswere negatively affected by the Incident’s impact on the growth rate in Product Commerce Active Customers, as well as 1%7% and 4% from the negative effect of foreign exchange rates.rates, respectively.

The increase in Developing Offerings net revenues for the three and six months ended MarchJune 31,30, 2026 is primarily due to an increase in total net revenues from our growth initiatives, as we are seeing greater levels of customer engagement in these early-stage offerings.

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 relatedlogistics-related expenses, delivery costs from our restaurant delivery business, and depreciation and amortization expense.

Cost of sales increased mainly due to higher volume from increased sales and customer demand. Cost of sales as a percentage of revenue increased primarily due to an increase for Product Commerce from 68.7%67.4% and 68.0% for the three and six months ended MarchJune 31,30, 2025 to 69.7%69.5% and 69.6% for the three and six months ended MarchJune 31,30, 2026, primarily from the impact of the Incident, including the customer compensation program and increased costs in supply chain management.management Alsoand contributinga higher rate of customer discounts. The increase in cost of sales as a percentage of revenue for three months ended June 30, 2026 is partially offset by the decrease for Developing Offerings from 85.6% for the three months ended June 30, 2025 to 84.2% for the three months ended June 30, 2026, resulting from improvements in various offerings, most notably Taiwan. Contributing to the increase in cost of sales as a percentage of revenue for the six months ended June 30, 2026 is the increase for Developing Offerings from 84.1%84.9% for the threesix months ended MarchJune 31,30, 2025 to 90.7%87.4% for the threesix months ended MarchJune 31,30, 2026, which is primarily driven by an increase in costs of sales relative to the growth in revenue as well as growth in certain Developing Offerings initiatives that currently operateoperating with lower margins.margins over the six-month period. We expect cost of sales as a percentage of revenue to remain elevated over the near term as we recover from the Incident.

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 relatedservice-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 depreciation and amortization expense.

The increase in operating, general and administrative expenses for the three and six months ended MarchJune 31,30, 2026 primarily reflects the impact of certain administrative fines of approximately $410 million as well as increases in fulfillment, technology, and marketing costs to support our continued growthgrowth. andThe theseadministrative costfines increases resulted in higherincreased operating, general and administrative expenses as a percentage of revenue by 4.6% and 2.4% for the three and six months ended June 30, 2026, respectively. The remaining increase is due to the lower rate of revenue growth as a result of the Incident. We expect operating, general and administrative expenses as a percentage of revenue to remain elevated over the near term as we recover from the Incident.

Interest expense remained flat compared to the three months ended June 30, 2025 and decreased $10 million compared to the threesix months ended MarchJune 31,30, 2025, respectively, due to higherthe interest ratesexpense in the prior year periodperiods associated with the Farfetch syndicated term loans assumedthat aswere partredeemed ofin theJuly Farfetch acquisition.2025.

Interest income for the three and six months ended MarchJune 31,30, 2026 remaineddecreased relatively flatslightly when compared with the prior year period.periods.

Our tax provision for 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 certain 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 GILTINCTI provisions, the valuation allowance against deferred tax assets in loss making jurisdictions, and other permanent differences.

Our tax provision for income taxes for the three and six months ended MarchJune 31,30, 2026 was unfavorably impacted by losses before income taxes in certain jurisdictions for which we receive no tax benefit,benefit and certain non-deductible administrative fines discussed in Note 10 — "Commitments and Contingencies" to the condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q, resulting in a negative effective tax rate.

The increasedecrease in gross profit for the three and six months ended MarchJune 31,30, 2026 is primarily due to an increase in revenue of $306 million, compared to the prior year period. Gross profit grew at a slower rate than net revenues due to the impact of the Incident, including the customer compensation program and increased costs in supply chain management.management and a higher rate of customer discounts.

The decrease in Product Commerce adjusted EBITDA for the three and six months ended MarchJune 31,30, 2026 is primarily due to a slower gross profit growth rate due to the impacts of the Incident described above and increases in fulfillment, technology, and marketing costs to support our continued growth.

The decreaseincrease in gross profit for the three and six months ended MarchJune 31,30, 2026 resulted from an increase in costs of sales relative to the growth in revenue asdescribed well as growth in certain Developing Offerings initiatives that currently operate with lower margins.above.

The increaseddecreased loss for the three months ended MarchJune 31,30, 2026 in Developing Offerings adjusted EBITDA is primarily the result of the decreaseincrease in revenue and gross profit described aboveabove. asThe wellincreased asloss for the six months ended June 30, 2026 in Developing Offerings adjusted EBITDA is primarily the result of increased investments in our Developing Offerings initiatives, including Taiwan, Play, and Rocket Now.Now over the six-month period.

Liquidity is a measure of our ability to access sufficient cash flows to meet the short-term and long-term cash requirements of our business operations. Our primary sourcessource of liquidity areis cash on hand, which is supplemented through various debt financing arrangements and sales of our equity securities. We had total cash, cash equivalents, and restricted cash of $6.4$6.2 billion as of MarchJune 31,30, 2026, the majority of which was held by foreign subsidiaries and may not be freely transferable to the United States due to local laws or other restrictions. Additionally, as of MarchJune 31,30, 2026, we had $750$0.3 millionbillion available under our Revolvingcredit Creditfacilities Facility.as described below.

As of MarchJune 31,30, 2026 and December 31, 2025, we had stockholders’ equity of $3.9$3.0 billion and $4.6 billion, respectively. We may incur losses in the future. We expect that our investment into our growth strategy will continue to be significant, particularly with respect to our Developing Offerings segment, which will continue to focus on our newer offerings and entrance into new geographies, as well as overall expansion of our fulfillment, logistics, and technology capabilities. As part of this expansion to fulfill anticipated future customer demand and planned expansion of services, we plan to acquire and build new fulfillment centers. We have entered into various new construction contracts for capital projects which are expected to be completed over the next two years. These contracts have remaining capital expenditures commitments of $236$181 million as of MarchJune 31,30, 2026. We expect that our future expenditures for both infrastructure and workforce-related costs will exceed several billion dollars over the next several years.

The year-over-year change in operating cash flow was driven by a $380$981 million decrease into net income.(loss) income, which includes $410 million for certain administrative fines. These administrative fines were unpaid as of June 30, 2026 and did not impact operating cash flow. Cash provided by operating activities was also impacted by certain$232 million of cash payments for income taxes. In addition, changes in working capital fluctuations in operating assets and liabilities, includingincluded a $187 million decrease in inventory ofand $146a $150 million increase in accounts payable, primarily reflecting the timing of inventory purchases and vendor payments, as well as a $84 million decrease in other assets of $70 million due to decreases in deposits and contract assets, partially offset by a decrease from accounts payable of $58 million due to the timing of inventory purchases and vendor payments.assets.

The year-over-year change in financing cash flow was primarily driven by a netan increase of $710$931 million from proceeds from debt and short-term borrowings, net of repayments. During the threesix months ended MarchJune 31,30, 2026, we borrowed $750 million under the Revolving Credit Facility for general operating purposes. This was partially offset by our repurchase of 20.443.7 million shares of Class A common stock for an aggregate amount of $391$850 million during the threesix months ended MarchJune 31,30, 2026.

We have entered into material unconditional purchase obligations. These contractual commitments primarily relate to technology relatedtechnology-related service contracts, fulfillment center construction contracts, and software licenses. For contracts with variable terms, we do not estimate the total obligation beyond any minimum pricing as of the reporting date.

The Revolving Credit Facility provides for syndicated, unsecured revolving loans with a total borrowing capacity of up to $1.5 billion. Borrowings under the Revolving Credit Facility bear interest at a rate per annum equal to the applicable benchmark rate, including but not limited to Term SOFR, plus an applicable margin ranging from 0.75% to 1.25%. The Revolving Credit Facility contains customary affirmative and negative covenants, including certain financial covenants. During the threesix months ended MarchJune 31,30, 2026, we borrowed $750 million under the Revolving Credit Facility for general operating purposes and $750 million was outstanding as of MarchJune 31,30, 2026 and is included in “Short-term borrowings”.

DuringUnder 2026, we entered into various unsecured borrowings underall other revolving credit facilities, thetotal majorityborrowing ofcapacity whichat areJune due30, in2026 2026.was These$1.6 credit facilities contain customary affirmativebillion and negative covenants, including certain financial covenants. As of March 31, 2026, aggregate outstanding borrowings under all other credit facilities totaled $928$1.2 millionbillion with a weighted average interest rate of 3.01%.2.89%.