Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: September 30, 2022

or

☐     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission File No. 001-40115

COUPANG, INC.

(Exact name of Registrant as specified in its charter)

Delaware

27-2810505

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification Number)

720 Olive Way, Suite 600

Seattle, Washington 98101

(206) 333-3839

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol(s)

Name of Each Exchange on Which Registered

Class A Common Stock, par value $0.0001 per share

CPNG

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☒

Small reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by a check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 3, 2022, there were 1,595,495,238 shares of the registrant’s Class A common stock and 174,802,990 shares of the registrant’s Class B common stock, each with a par value of $0.0001 per share, outstanding.

                        

---

Table of Contents

COUPANG, INC.

Form 10-Q

For the Quarterly Period Ended September 30, 2022

TABLE OF CONTENTS

						Page
			PART I. FINANCIAL INFORMATION
Item 1.			Financial Statements (Unaudited)			4
			Condensed Consolidated Balance Sheets			4
			Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)			5
			Condensed Consolidated Statements of Redeemable Convertible Preferred Units and Stockholders'/Members’ Equity (Deficit)			6
			Condensed Consolidated Statements of Cash Flows			8
			Notes to Condensed Consolidated Financial Statements			9
Item 2.			Management’s Discussion and Analysis of Financial Condition and Results of Operations			20
Item 3.			Quantitative and Qualitative Disclosures About Market Risk			31
Item 4.			Controls and Procedures			32
			PART II. OTHER INFORMATION
Item 1.			Legal Proceedings			34
Item 1A.			Risk Factors			34
Item 2.			Unregistered Sales of Equity Securities and Use of Proceeds			34
Item 3.			Defaults Upon Senior Securities			34
Item 4.			Mine Safety Disclosures			34
Item 5.			Other Information			34
Item 6.			Exhibits			35
			Signatures			36

1

---

Table of Contents

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (“Form 10-Q”) contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this Form 10-Q, including statements regarding our future results of operations or financial condition, business strategy and plans, and objectives of management for future operations are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “toward,” “will,” or “would,” or the negative of these words or other similar terms or expressions. These forward-looking statements include, but are not limited to, statements concerning the following:

•the COVID-19 pandemic and its impact on our business, operations, and the markets and communities in which we, our customers, suppliers, and merchants operate;

•our expectations regarding our future operating and financial performance;

•the continued growth of the e-commerce segment and the increased acceptance of online transactions by potential customers;

•the size of our addressable markets, market share, and market trends;

•our ability to compete in our industry;

•our ability to manage expansion into new markets, segments, and offerings;

•our ability to effectively manage the continued growth of our workforce and operations;

•the sufficiency of our cash and cash equivalents, and investments to meet our liquidity needs;

•our ability to retain existing suppliers and merchants and to add new suppliers and merchants;

•our suppliers’ and merchants’ ability to supply high-quality and compliant merchandise to our customers;

•our relationship with our employees and the status of our workers;

•our ability to maintain and improve our segment position;

•our ability to operate and manage the expansion of our fulfillment and delivery infrastructure;

•the effects of seasonal trends on our results of operations;

•our ability to effectively manage our exposure to fluctuations in foreign currency exchange rates;

•the effects of global macroeconomic conditions, including impacts relating to the invasion of Ukraine by Russia and its regional and global ramifications, inflationary pressures, a general economic slowdown or recession, further increases in interest rates and changes in monetary policy;

•our ability to attract, retain, and motivate skilled personnel, including key members of our senior management;

•our ability to stay in compliance with laws and regulations, including tax laws, that currently apply or may become applicable to our business both in Korea and internationally and our expectations regarding various laws and restrictions that relate to our business;

•the outcomes of any claims, litigation, governmental audits, inspections, and investigations;

•our intended use of the net proceeds from our initial public offering; and

•the other factors set forth in Part 1, Item 1A, under the caption “Risk Factors,” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 (the “2021 Form 10-K”)

We caution you that the foregoing list may not contain all of the forward-looking statements made in this Form 10-Q.

2

---

Table of Contents

You should not rely on forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, and results of operations. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors described in Part 1, Item1A, under the caption “Risk Factors,” of our 2021 Form 10-K and elsewhere in this Form 10-Q. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Form 10-Q. The results, events, and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events, or circumstances could differ materially from those described in the forward-looking statements.

In addition, statements such as “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this Form 10-Q. While we believe such information provides a reasonable basis for these statements, such information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements.

The forward-looking statements made in this Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Form 10-Q to reflect events or circumstances after the date of this Form 10-Q or to reflect new information, actual results, revised expectations, or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments.

Investors and others should note that we may announce material business and financial information to our investors using our investor relations website (ir.aboutcoupang.com), our filings with the Securities and Exchange Commission (“SEC”), webcasts, press releases, conference calls, and social media. We use these mediums to communicate with investors and the general public about our company, our products, and other issues. It is possible that the information that we make available on our website may be deemed to be material information. We therefore encourage investors and others interested in our company to review the information that we make available on our website. Notwithstanding the foregoing, the information contained on our website as referenced in this paragraph is not incorporated by reference into this Form 10-Q or any other report or document we file with the SEC.

3

---

Table of Contents

Part I. Financial Information

Item 1.  Financial Statements (Unaudited)

COUPANG, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except shares)

(unaudited)

			September 30, 2022						December 31, 2021
Assets
Current assets:
Cash and cash equivalents			$	2,903,052					$	3,487,708
Restricted cash			156,970						319,800
Accounts receivable, net			169,424						175,350
Inventories			1,406,380						1,421,501
Other current assets			292,215						232,447
Total current assets			4,928,041						5,636,806
Long-term restricted cash			192						2,839
Property and equipment, net			1,540,088						1,347,531
Operating lease right-of-use assets			1,292,486						1,374,629
Goodwill			10,121						9,739
Long-term lease deposits and other			355,733						270,290
Total assets			$	8,126,661					$	8,641,834
Liabilities and stockholders' equity
Current liabilities:
Accounts payable			$	2,940,540					$	3,442,720
Accrued expenses			248,794						304,293
Deferred revenue			129,235						93,972
Short-term borrowings			159,640						7,811
Current portion of long-term debt			2,719						341,717
Current portion of long-term operating lease obligations			278,030						287,066
Other current liabilities			270,295						266,709
Total current liabilities			4,029,253						4,744,288
Long-term debt			561,069						283,190
Long-term operating lease obligations			1,142,179						1,201,277
Defined severance benefits and other			222,194						237,122
Total liabilities			5,954,695						6,465,877
Commitments and contingencies (Note 8)
Stockholders' equity
Class A common stock, $0.0001 par value, 10,000,000,000 shares authorized, 1,594,140,393 and 1,579,399,667 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively; Class B common stock, $0.0001 par value, 250,000,000 shares authorized, 174,802,990 shares issued and outstanding as of September 30, 2022 and December 31, 2021			177						175
Additional paid-in capital			8,080,618						7,874,038
Accumulated other comprehensive loss			(64,206)						(47,739)
Accumulated deficit			(5,844,623)						(5,650,517)
Total stockholders' equity			2,171,966						2,175,957
Total liabilities and stockholders' equity			$	8,126,661					$	8,641,834

The accompanying notes are an integral part of these condensed consolidated financial statements

4

---

Table of Contents

COUPANG, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(in thousands, except per share amounts)

(unaudited)

			Three Months Ended September 30,												Nine Months Ended September 30,
			2022						2021						2022						2021
Net retail sales			$	4,540,393					$	4,137,136					$	13,577,665					$	11,938,685
Net other revenue			560,941						507,569						1,678,176						1,390,994
Total net revenues			5,101,334						4,644,705						15,255,841						13,329,679
Cost of sales			3,867,446						3,890,178						11,824,754						11,184,152
Operating, general and administrative			1,156,468						1,069,639						3,626,515						3,242,891
Total operating cost and expenses			5,023,914						4,959,817						15,451,269						14,427,043
Operating income (loss)			77,420						(315,112)						(195,428)						(1,097,364)
Interest income			15,403						2,603						26,301						5,450
Interest expense			(6,485)						(7,376)						(19,996)						(38,047)
Other income (expense), net			11,224						(4,026)						2,485						(7,479)
Income (loss) before income taxes			97,562						(323,911)						(186,638)						(1,137,440)
Income tax expense			6,883						66						7,468						171
Net income (loss)			90,679						(323,977)						(194,106)						(1,137,611)
Other comprehensive (loss) income:
Foreign currency translation adjustments, net of tax			(52,758)						24,266						(54,717)						38,887
Actuarial gain (loss) on defined severance benefits, net of tax			243						1,266						38,250						(7,708)
Total other comprehensive (loss) income			(52,515)						25,532						(16,467)						31,179
Comprehensive income (loss)			$	38,164					$	(298,445)					$	(210,573)					$	(1,106,432)
Net income (loss) attributable to Class A and Class B common stockholders per share:
Basic and diluted			$	0.05					$	(0.19)					$	(0.11)					$	(0.87)
Weighted-average shares used in computing net income (loss) per share attributable to Class A and Class B common stockholders:
Basic			1,767,275						1,747,255						1,762,465						1,313,234
Diluted			1,790,941						1,747,255						1,762,465						1,313,234

The accompanying notes are an integral part of these condensed consolidated financial statements

5

---

Table of Contents

COUPANG, INC.

CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED UNITS AND STOCKHOLDERS’/MEMBERS’ EQUITY (DEFICIT)

(in thousands)

(unaudited)

			Redeemable Convertible Preferred Units															Common Units												Class A and Class B Common Stock												Additional Paid-in Capital						Accumulated Other Comprehensive Loss						Accumulated Deficit						Total Stockholders'/Members' Equity
			Units						Amount									Units						Amount						Shares						Amount
Balance as of December 31, 2021			—						$	—								—						$	—					1,754,203						$	175					$	7,874,038					$	(47,739)					$	(5,650,517)					$	2,175,957
Net loss			—						—									—						—						—						—						—						—						(209,294)						(209,294)
Foreign currency translation adjustments, net of tax			—						—									—						—						—						—						—						3,011						—						3,011
Actuarial gain on defined severance benefits, net of tax			—						—									—						—						—						—						—						3,811						—						3,811
Issuance of common stock upon exercise of stock options			—						—									—						—						4,147						1						8,182						—						—						8,183
Issuance of common stock upon settlement of restricted stock units			—						—									—						—						2,708						—						—						—						—						—
Equity-based compensation			—						—									—						—						—						—						55,593						—						—						55,593
Balance as of March 31, 2022			—						$	—								—						$	—					1,761,058						$	176					$	7,937,813					$	(40,917)					$	(5,859,811)					$	2,037,261
Net loss			—						—									—						—						—						—						—						—						(75,491)						(75,491)
Foreign currency translation adjustments, net of tax			—						—									—						—						—						—						—						(4,970)						—						(4,970)
Actuarial gain on defined severance benefits, net of tax			—						—									—						—						—						—						—						34,196						—						34,196
Issuance of common stock upon exercise of stock options			—						—									—						—						2,031						1						4,183						—						—						4,184
Issuance of common stock upon settlement of restricted stock units			—						—									—						—						2,028						—						—						—						—						—
Equity-based compensation			—						—									—						—						—						—						72,916						—						—						72,916
Balance as of June 30, 2022			—						$	—								—						$	—					1,765,117						$	177					$	8,014,912					$	(11,691)					$	(5,935,302)					$	2,068,096
Net income			—						—									—						—						—						—						—						—						90,679						90,679
Foreign currency translation adjustments, net of tax			—						—									—						—						—						—						—						(52,758)						—						(52,758)
Actuarial gain on defined severance benefits, net of tax			—						—									—						—						—						—						—						243						—						243
Issuance of common stock upon exercise of stock options			—						—									—						—						1,204						—						2,631						—						—						2,631
Issuance of common stock upon settlement of restricted stock units			—						—									—						—						2,622						—						—						—						—						—
Equity-based compensation			—						—									—						—						—						—						63,075						—						—						63,075
Balance as of September 30, 2022			—						$	—								—						$	—					1,768,943						$	177					$	8,080,618					$	(64,206)					$	(5,844,623)					$	2,171,966

The accompanying notes are an integral part of these condensed consolidated financial statements

6

---

Table of Contents

			Redeemable Convertible Preferred Units															Common Units												Class A and Class B Common Stock												Additional Paid-in Capital						Accumulated Other Comprehensive Loss						Accumulated Deficit						Total Stockholders'/Members' Equity (Deficit)
			Units						Amount									Units						Amount						Shares						Amount
Balance as of December 31, 2020			1,329,465						$	3,465,611								105,822						$	45,122					—						$	—					$	25,036					$	(31,093)					$	(4,107,927)					$	(4,068,862)
Net loss			—						—									—						—						—						—						—						—						(295,033)						(295,033)
Foreign currency translation adjustments, net of tax			—						—									—						—						—						—						—						14,972						—						14,972
Actuarial gain on defined severance benefits, net of tax			—						—									—						—						—						—						—						918						—						918
Issuance of common units, equity-based compensation plan			—						—									22,901						38,968						—						—						—						—						—						38,968
Equity-based compensation			—						—									—						2,974						—						—						—						—						—						2,974
Impact of Corporate Conversion and IPO
Conversion of common units into Class A and Class B common stock			—						—									(128,723)						(87,064)						128,648						13						87,051						—						—						—
Conversion of redeemable convertible preferred units into Class A and Class B common stock			(1,329,465)						(3,465,611)									—						—						1,329,465						133						3,465,478						—						—						3,465,611
Issuance of Class A common stock, net of underwriting discounts and offering costs			—						—									—						—						100,000						10						3,416,809						—						—						3,416,819
Conversion of convertible notes into Class A common stock			—						—									—						—						171,750						17						609,982						—						—						609,999
Issuance of common stock, equity-based compensation plan subsequent to Corporate Conversion and IPO			—						—									—						—						2,680						—						4,767						—						—						4,767
Equity-based compensation subsequent to Corporate Conversion and IPO			—						—									—						—						—						—						83,992						—						—						83,992
Balance as of March 31, 2021			—						$	—								—						$	—					1,732,543						$	173					$	7,693,115					$	(15,203)					$	(4,402,960)					$	3,275,125
Net loss			—						—									—						—						—						—						—						—						(518,601)						(518,601)
Foreign currency translation adjustments, net of tax			—						—									—						—						—						—						—						(351)						—						(351)
Actuarial loss on defined severance benefits, net of tax			—						—									—						—						—						—						—						(9,892)						—						(9,892)
Issuance of common stock, equity-based compensation plan			—						—									—						—						3,036						—						6,002						—						—						6,002
Equity-based compensation			—						—									—						—						—						—						50,346						—						—						50,346
Balance as of June 30, 2021			—						$	—								—						$	—					1,735,579						$	173					$	7,749,463					$	(25,446)					$	(4,921,561)					$	2,802,629
Net loss			—						—									—						—						—						—						—						—						(323,977)						(323,977)
Foreign currency translation adjustments, net of tax			—						—									—						—						—						—						—						24,266						—						24,266
Actuarial gain on defined severance benefits, net of tax			—						—									—						—						—						—						—						1,266						—						1,266
Issuance of common stock, equity-based compensation plan			—						—									—						—						14,776						1						7,783						—						—						7,784
Equity-based compensation			—						—									—						—						—						—						56,138						—						—						56,138
Balance as of September 30, 2021			—						$	—								—						$	—					1,750,355						$	174					$	7,813,384					$	86					$	(5,245,538)					$	2,568,106

The accompanying notes are an integral part of these condensed consolidated financial statements

7

---

Table of Contents

COUPANG, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

			Nine Months Ended September 30,
			2022						2021
Operating activities:
Net loss			$	(194,106)					$	(1,137,611)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization			174,063						145,866
Provision for severance benefits			124,056						100,649
Equity-based compensation			191,584						193,450
Paid-in-kind interest and accretion of discount on convertible notes			—						20,148
Inventory and fixed asset losses due to fulfillment center fire			—						284,825
Non-cash operating lease expense			231,333						187,926
Non-cash others			56,536						32,786
Change in operating assets and liabilities:
Accounts receivable, net			(39,325)						(75,958)
Inventories			(288,761)						(308,559)
Other assets			(273,554)						(182,375)
Accounts payable			163,508						561,528
Accrued expenses			(6,359)						50,604
Deferred revenue			57,993						13,015
Other liabilities			(212,005)						(94,126)
Net cash used in operating activities			(15,037)						(207,832)
Investing activities:
Purchases of property and equipment			(703,074)						(505,554)
Proceeds from sale of property and equipment			10,600						960
Other investing activities			(25,979)						(2,218)
Net cash used in investing activities			(718,453)						(506,812)
Financing activities:
Proceeds from issuance of Class A common stock upon initial public offering, net of underwriting discounts			—						3,431,277
Deferred offering costs paid			—						(11,618)
Proceeds from issuance of common stock/units, equity-based compensation plan			14,998						57,521
Proceeds from short-term borrowings and long-term debt			543,185						308,772
Repayment of short-term borrowings and long-term debt			(337,071)						(111,472)
Net short-term borrowings and other financing activities			5,377						(2,289)
Net cash provided by financing activities			226,489						3,672,191
Effect of exchange rate changes on cash and cash equivalents, and restricted cash			(243,132)						(88,842)
Net (decrease) increase in cash and cash equivalents, and restricted cash			(750,133)						2,868,705
Cash and cash equivalents, and restricted cash, as of beginning of period			3,810,347						1,401,302
Cash and cash equivalents, and restricted cash, as of end of period			$	3,060,214					$	4,270,007
Supplemental disclosure of cash-flow information:
Cash paid for income taxes, net of refunds			$	2,851					$	1,088
Cash paid for interest			$	17,142					$	14,175
Non-cash investing and financing activities:
Decrease in property and equipment-related accounts payable			$	(72,052)					$	(5,516)
Conversion of common units into Class A and Class B common stock			$	—					$	87,064
Conversion of redeemable convertible preferred units into Class A and Class B common stock			$	—					$	3,465,611
Conversion of convertible notes into Class A common stock			$	—					$	609,999

The accompanying notes are an integral part of these condensed consolidated financial statements

8

---

Table of Contents

COUPANG, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1.     Basis of Presentation and Summary of Significant Accounting Policies

Description of Business

Coupang, Inc. (“Coupang”), together with its wholly-owned subsidiaries (collectively, the “Company,” “we,” “us,” or “our”), is a Delaware corporation, which owns and operates an e-commerce business that primarily serves the Korean retail market. Through the Company’s mobile applications and Internet websites, the Company offers products and services that span a wide range of categories, including home goods and décor, apparel and beauty products, fresh food and grocery, sporting goods, electronics, everyday consumables, travel, restaurant order and delivery, content streaming, and advertising, which are offered through a fully integrated technology, fulfillment and logistics infrastructure. The Company is headquartered in the United States, with operations and support services performed in markets including South Korea, Japan, Taiwan, Singapore, and China.

Basis of Presentation and Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated.

The condensed consolidated balance sheet as of December 31, 2021 included herein was derived from the audited consolidated financial statements as of that date. The accompanying unaudited condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to state fairly the Company’s financial position, results of operations and comprehensive income (loss), redeemable convertible preferred units and stockholders’/members’ equity (deficit), and cash flows for the periods presented, but are not necessarily indicative of the results of operations to be anticipated for any future annual or interim period. Certain information and note disclosures normally included in the annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s 2021 Form 10-K.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. On an ongoing basis, we evaluate our estimates, which include, but are not limited to, equity-based compensation, inventory valuation, income taxes, defined severance benefits, and revenue recognition. Actual results could differ materially from those estimates. We based our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Given the global economic climate and additional or unforeseen effects from the COVID-19 pandemic, these estimates become more challenging, and actual results could differ materially from these estimates.

Segment Information

On March 2, 2022, the Company announced that it revised its reportable segments to reflect the way the Chief Operating Decision Maker (“CODM”) assesses performance and allocates resources. The change led to the following two operating and reportable segments: Product Commerce and Developing Offerings. Refer to Note 14 — "Segment Reporting" for further discussion.

Fulfillment Center Fire

In June 2021, a fire extensively damaged the Company’s Deokpyeong fulfillment center (the “FC Fire”) resulting in a loss of the inventory, building, equipment, and other assets at the site. Inventory and property and equipment losses from the FC Fire of $158 million and $127 million were recognized in “Cost of sales” and “Operating, general and administrative,” respectively, during the second quarter of 2021. The Company is insured on property losses from the FC Fire; however, whether and to what

9

---

Table of Contents

extent the Company may recover insurance proceeds on these losses is currently unknown, and as such, no insurance recoveries have been recognized. During the second quarter of 2021, the Company also incurred or accrued for other costs directly related to the FC Fire of $11 million. The FC Fire resulted in an increase to our net loss of $296 million for the nine months ended September 30, 2021.

Concentration of Credit Risk

Cash and cash equivalents and restricted cash are potentially subject to concentration of credit risk. Cash and cash equivalents, and restricted cash are placed with several financial institutions that management believes are of high credit quality, of which 58% and 77% were held at two and four financial institutions as of September 30, 2022 and December 31, 2021, respectively. The Company’s gross accounts receivable include amounts concentrated with two and one payment processing companies representing 38% and 14% of gross accounts receivable at September 30, 2022 and December 31, 2021, respectively.

Recent Accounting Pronouncements Adopted

In August 2020, the FASB issued ASU 2020-06, “Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40).” The standard reduces the number of models used to account for convertible instruments, amends diluted earnings per share (“EPS”) calculations for convertible instruments, and amends the requirements for a contract (or embedded derivative) that is potentially settled in an entity's own shares to be classified in equity. The amendments add certain disclosure requirements to increase transparency and decision-usefulness about a convertible instrument's terms and features. Under the amendment, the Company must use the if-converted method for including convertible instruments in diluted EPS as opposed to the treasury stock method. The ASU is effective for public companies for fiscal years beginning after December 15, 2021. Early adoption is allowed under the standard with either a modified retrospective or full retrospective method. We adopted this ASU effective January 1, 2022. The adoption of the ASU did not have a material impact on our condensed consolidated financial statements.

In October 2021, the FASB issued ASU 2021-08, “Business Combinations (Topic 805) - Accounting for Contract Assets and Contract Liabilities from Contracts with Customers.” ASU 2021-08 requires an entity to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606 (Revenue from Contracts with Customers). The ASU will generally result in an entity recognizing contract assets and contract liabilities at amounts consistent with those recorded by the acquiree immediately before the acquisition date rather than at fair value. The ASU is effective on a prospective basis for public companies for fiscal years beginning after December 15, 2022 . We early adopted this ASU effective January 1, 2022. The adoption of the ASU did not have a material impact on our condensed consolidated financial statements.

Recent Accounting Pronouncements Yet To Be Adopted

In September 2022, the FASB issued ASU 2022-04, “Supplier Finance Programs (Subtopic 405-50) - Disclosure of Supplier Finance Program Obligations.” The standard will require entities that use supplier finance programs to make disclosures about the key terms of the program, the balance sheet presentation of the related amounts and disclose the amounts outstanding, including providing a rollforward of such amounts. The ASU is effective on a retrospective basis for fiscal years beginning after December 15, 2022, with the exception of the rollforward disclosure which will be effective prospectively for fiscal years beginning after December 15, 2023. Early adoption is allowed under the standard. The Company is evaluating the effect of adopting the ASU on our condensed consolidated financial statements.

2.    Net Revenues

Details of total net revenues were as follows:

			Three Months Ended September 30,												Nine Months Ended September 30,
(in thousands)			2022						2021						2022						2021
Net retail sales			$	4,540,393					$	4,137,136					$	13,577,665					$	11,938,685
Third-party merchant services			447,868						450,634						1,414,768						1,231,799
Other revenue			113,073						56,935						263,408						159,195
Total net revenues			$	5,101,334					$	4,644,705					$	15,255,841					$	13,329,679

This level of revenue disaggregation takes into consideration how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. Net retail sales are recognized from online product sales to consumers. Third-party

10

---

Table of Contents

merchant services represent commissions, advertising, and delivery fees earned from merchants and restaurants that sell their products through the Company’s online business. Other revenue includes revenue earned from our various other offerings.

Contract liabilities consist of payments in advance of delivery and customer loyalty credits, which are included in deferred revenue on the condensed consolidated balance sheets. The Company recognized revenue of $82 million and $60 million for the nine months ended September 30, 2022 and 2021, respectively, which were included in deferred revenue on the consolidated balance sheets as of December 31, 2021 and 2020, respectively. Revenue recognized from customer loyalty program liabilities as of December 31, 2021 and 2020 were not material for the nine months ended September 30, 2022 and 2021, respectively.

3.    Supplemental Financial Information

Property and Equipment, net

The following summarizes the Company’s property and equipment, net:

(in thousands)			September 30, 2022						December 31, 2021
Land			$	236,691					$	140,786
Buildings			268,891						320,059
Equipment and furniture			537,280						551,304
Leasehold improvements			419,447						340,468
Vehicles			124,313						168,585
Software			22,154						34,582
Construction in progress			371,464						200,735
Property and equipment, gross			1,980,240						1,756,519
Less: Accumulated depreciation and amortization			(440,152)						(408,988)
Property and equipment, net			$	1,540,088					$	1,347,531

Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss includes all changes in equity during a period that have yet to be recognized in income. The major components are foreign currency translation adjustments and actuarial gains (losses) on the Company’s defined severance benefits. As of September 30, 2022 and December 31, 2021, the ending balance in accumulated other comprehensive loss related to foreign currency translation adjustments was $(18) million and $36 million, respectively, and the amount related to actuarial losses on defined severance benefits was $(46) million and $(84) million, respectively.

4.    Leases

The Company is obligated under operating leases primarily for vehicles, equipment, warehouses, and facilities that expire over the next eleven years. These leases can contain renewal options. Because the Company is not reasonably certain to exercise these renewal options, or the renewal options are not solely within the Company’s discretion, the options are not considered in determining the lease term, and the associated potential option payments are excluded from expected minimum lease payments. The Company’s leases generally do not include termination options for either party or restrictive financial or other covenants.

The components of operating lease cost were as follows:

			Three Months Ended September 30,												Nine Months Ended September 30,
(in thousands)			2022						2021						2022						2021
Operating lease cost			$	100,616					$	87,814					$	307,160					$	247,566
Variable and short-term lease cost			10,348						9,895						29,910						26,784
Total operating lease cost			$	110,964					$	97,709					$	337,070					$	274,350

11

---

Table of Contents

Supplemental disclosure of cash flow information related to leases were as follows:

			Nine Months Ended September 30,
(in thousands)			2022						2021
Cash paid for the amount used to measure the operating lease liabilities			$	273,485					$	204,791
Operating lease assets obtained in exchange for lease obligations			$	355,149					$	485,788
Net increase to operating lease right-of-use assets resulting from remeasurements of lease obligations			$	4,637					$	40,812

The assumptions used to value leases for the periods presented were as follows:

			September 30, 2022						December 31, 2021
Operating leases weighted-average remaining lease term			5.8 years						5.8 years
Operating leases weighted-average discount rate			6.67		%				6.17		%

As of September 30, 2022, the Company had entered into operating leases that have not commenced with future minimum lease payments of $285 million, that have not been recognized on the Company's condensed consolidated balance sheets. These leases have non-cancellable lease terms of 2 to 10 years.

5.    Fair Value Measurement

Fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. U.S. GAAP established a hierarchy framework to classify the fair value based on the observability of significant inputs to the measurement. The levels of the fair value hierarchy are as follows:

Level 1: Observable inputs such as quoted prices in an active market for identical assets or liabilities.

Level 2: Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities in active markets, quoted prices in markets that are not active or inputs other than the quoted prices that are observable either directly or indirectly for the full term of the assets or liabilities.

Level 3: Unobservable inputs in which there is little or no market data and that are significant to the fair value of the assets or liabilities.

12

---

Table of Contents

The following table summarizes the Company's financial assets and financial liabilities that are measured at fair value on a recurring basis:

			September 30, 2022
(in thousands)			Level 1						Level 2						Level 3						Total
Financial assets:
Cash and cash equivalents			$	2,903,052					$	—					$	—					$	2,903,052
Restricted cash
Time deposit			96,525						—						—						96,525
Money market trust			60,445						—						—						60,445
Other current assets
Time deposit			6,970						—						—						6,970
Long-term restricted cash
Time deposit			192						—						—						192
Total financial assets			$	3,067,184					$	—					$	—					$	3,067,184

			December 31, 2021
(in thousands)			Level 1						Level 2						Level 3						Total
Financial assets:
Cash and cash equivalents			$	3,487,708					$	—					$	—					$	3,487,708
Restricted cash
Time deposit			250,839						—						—						250,839
Money market trust			68,961						—						—						68,961
Long-term restricted cash
Time deposit			2,839						—						—						2,839
Total financial assets			$	3,810,347					$	—					$	—					$	3,810,347

Cash and cash equivalents includes bank deposits, money market trusts and time deposits. The carrying amounts of our cash equivalents approximate their fair values, which are based on Level 1 assumptions.

6.    Short-term Borrowings and Long-term Debt

The Company’s short-term borrowings generally include lines of credit and term loan facilities with financial institutions to be utilized for general operating purposes. There were $160 million and $8 million of borrowings outstanding under these facilities as of September 30, 2022 and December 31, 2021, respectively.

In September 2022, the Company entered into a $77 million one-year term loan agreement. The Company pledged $92 million of certain land as collateral. The loan bears interest at a fixed rate of 4.75%. Principal is to be paid at maturity and interest is paid on a monthly basis.

13

---

Table of Contents

Details of carrying amounts of long-term debt were as follows:

(in thousands)																								September 30, 2022						December 31, 2021
Maturity Date						Interest rate (%)												Borrowing Limit
February 2024(1)						(4)												$	1,000,000					$	—					$	—
February 2023 - April 2025(2)						2.65			–			4.45						3,617						3,617						20,952
October 2023 - March 2027(3)						2.87			–			5.95						717,035						563,283						605,229
Total principal long-term debt																		$	1,720,652					$	566,900					$	626,181
Less: current portion of long-term debt																								(2,719)						(341,717)
Less: unamortized discounts																								(3,112)						(1,274)
Total long-term debt																								$	561,069					$	283,190

_____________

(1)Relates to the Company’s 2021 revolving credit facility.

(2)The Company entered into various loan agreements with fixed interest rates for general operating purposes.

(3)At September 30, 2022, we had pledged up to $861 million of land and buildings as collateral against long-term loan facilities.

(4)Borrowings under the 2021 revolving credit facility bear interest, at the Company’s option, at a rate per annum equal to (i) a base rate equal to the highest of (A) the prime rate, (B) the higher of the federal funds rate or a composite overnight bank borrowing rate plus 0.50%, or (C) an adjusted LIBOR for a one-month interest period plus 1.00% or (ii) an adjusted LIBOR plus a margin equal to 1.00%.

In March 2022, the Company entered into a new five-year loan agreement to borrow $279 million, which was partially used to extinguish the $149 million August 2020 term loan facility which matured in March 2022 and to finance infrastructure of a fulfillment center. The Company pledged up to $335 million of certain existing land and a building as collateral. The loan bears interest at a fixed rate of 4.26%.

In October 2022, the Company entered into a two-year revolving facility agreement with a borrowing limit of $112 million that bears interest at the average of 91-days CD interest rate plus 2.30%. The revolving facility is secured by certain of the Company’s inventories.

The Company was in compliance with the covenants for each of its borrowings and debt agreements as of September 30, 2022.

The Company’s long-term debt is recorded at amortized cost. The fair value is estimated using Level 2 inputs based on the Company’s current interest rate for similar types of borrowing arrangements. The carrying amount of the long-term debt approximates its fair value as of September 30, 2022 and December 31, 2021 due primarily to the interest rates approximating market interest rates.

7.    Convertible Notes and Derivative Instrument

From February 23, 2018 to May 16, 2018, the Company issued convertible notes in an aggregate principal amount of $502 million (total proceeds of $507 million, which included a total net funding premium at issuance), the majority of which were purchased by existing unitholders of the Company’s preferred units, with a maturity equal to the earlier of (a) the fourth anniversary from the first issuance date, (b) the consummation of a liquidity event, or (c) upon an event of default, as defined in the LLC Agreement. In connection with the Company’s initial public offering (“IPO”) in March 2021, the principal balance and the accrued interest on the convertible notes were automatically converted into 171,750,446 shares of the Company’s Class A common stock.

The convertible notes had an annual effective interest rate of 16.99%. The Company recorded interest expense from its convertible notes for the nine months ended September 30, 2021 of $20 million, consisting of $15 million of contractual interest expense and $5 million of debt discount amortization.

The convertible notes contained embedded derivatives that allowed or required the holders of the convertible notes to convert them into a variable number of the Company’s equity securities for a value equal to a significant premium over the then principal and accrued interest balance. These embedded derivatives were bifurcated and accounted for separately as a single, compound derivative instrument. The convertible notes did not convert to common shares based on this embedded feature, rather they converted based on a price calculated by dividing $6.3 billion with the number of common equity securities, on an as-converted and as-exercised basis, outstanding on the closing of the IPO. Following the convertible notes conversion to shares of Class A common stock, the embedded derivatives no longer exist.

14

---

Table of Contents

8.    Commitments and Contingencies

Commitments

The following summarizes the Company’s minimum contractual commitments as of September 30, 2022:

(in thousands)			Unconditional purchase obligations (unrecognized)						Long-term debt (including interest)						Operating leases						Total
Remainder of 2022			$	73,355					$	3,276					$	87,757					$	164,388
2023			279,732						110,228						354,732						744,692
2024			263,352						178,923						324,544						766,819
2025			200,348						13,529						270,896						484,773
2026			177,769						52,483						205,547						435,799
Thereafter			358,378						281,715						507,182						1,147,275
Total undiscounted payments			$	1,352,934					$	640,154					$	1,750,658					$	3,743,746
Less: lease imputed interest															(330,449)
Total lease commitments															$	1,420,209

Unconditional purchase obligations include legally binding contracts with terms in excess of one year that are not reflected on the consolidated balance sheets. These contractual commitments primarily relate to technology 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.

Legal Matters

From time to time, the Company may become party to litigation incidents and other legal proceedings, including regulatory proceedings, in the ordinary course of business. The Company assesses the likelihood of any adverse judgments or outcomes with respect to these matters and determines loss contingency assessments on a gross basis after assessing the probability of incurrence of a loss and whether a loss is reasonably estimable. In addition, the Company considers other relevant factors that could impact its ability to reasonably estimate a loss. A determination of the amount of reserves required, if any, for these contingencies is made after analyzing each matter. The Company's reserves may change in the future due to new developments or changes in strategy in handling these matters. Although the results of litigation and claims cannot be predicted with certainty, the Company currently believes that the final outcome of currently pending legal matters will not have a material adverse effect on its business, consolidated financial position, results of operations, or cash flows. Regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources, and other factors.

9.    Redeemable Convertible Preferred Units and Stockholders'/Members' Equity (Deficit)

Immediately prior to effectiveness of the Company’s IPO registration statement on Form S-1, Coupang, LLC, a Delaware limited liability company, converted into a Delaware corporation pursuant to a statutory conversion, which changed the Company’s name to Coupang, Inc. (“Corporate Conversion”).

Prior to the Corporate Conversion, the Company’s Limited Liability Company Agreement (“LLC Agreement”), as amended and restated on April 11, 2019, authorized the issuance of 1,448,632,049 preferred units, which were convertible into the same number of common voting units issued upon conversion of the preferred units, as well as the issuance of 264,166,544 common units.

Pursuant to the Corporate Conversion and IPO:

•1,196,605,432 preferred units and 85,579,584 common units (which include 22,443,220 PIUs), in each case, automatically converted into an equal number of shares of Class A common stock, except with respect to a conversion adjustment which reduced the outstanding common units designated as PIUs by 75,862 common units, and excluding any such preferred units and common units (including any PIUs) held by Mr. Bom Kim; and

•132,859,550 preferred units held by Mr. Kim and 43,143,440 common units (all of which were designated as PIUs) held by Mr. Kim, in each case, converted into an equal number of shares of Class B common stock.

15

---

Table of Contents

On March 15, 2021, the Company completed its IPO, in which it issued and sold 100,000,000 shares of its Class A common stock at a price of $35.00 per share. The Company received net proceeds of approximately $3.4 billion from its IPO after deducting underwriting discounts of $69 million and other offering costs. Also, the owner of our Class B common stock converted 1,200,000 shares of Class B common stock into Class A common stock, which were sold in the IPO.

Holders of vested PIUs had similar rights to those of common unit holders. The PIUs (with the exception of those granted to the Company’s Chief Executive Officer, which convert into an equal number of shares of Class B common stock) convert to shares of Class A common stock at a ratio based on the excess of the per common unit value of the Company at the time of a Corporate Conversion over the per common unit value designated at the grant date of the PIUs (the participation threshold), as specified in the underlying award agreements. All outstanding PIUs automatically converted into 22,367,358 shares of Class A common stock and 43,143,440 shares of Class B common stock at the time of the Corporate Conversion.

10.    Equity-based Compensation Plans

The 2021 Equity Compensation Plan (the “2021 Plan”) provides for the granting of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance awards, and other equity-based awards (or the cash equivalent thereof). The number of shares of the Company’s Class A common stock reserved for issuance under the 2021 Plan will be increased on January 1 of each calendar year, starting on January 1, 2022 through January 1, 2031, in an amount equal to 5% of the total number of shares of the Company’s capital stock outstanding on the last day of the calendar month before the date of each automatic increase, or a lesser number of shares determined by the Company’s board of directors. Pursuant to the 2021 Plan, effective January 1, 2022, the maximum number of shares of the Company’s Class A common stock that may be issued under the 2021 plan increased by 87,710,132 shares, or 5% of the total number of shares of the Company’s capital stock outstanding as of December 31, 2021. Following the increase, the maximum number of shares of the Company’s Class A common stock that may be issued under the 2021 Plan is 302,813,864 shares

RSUs

The Company had previously granted restricted equity units under the 2011 Plan, which vest upon the satisfaction of both a service-based condition and a performance-based condition. In connection with the Company’s Corporate Conversion and IPO, the outstanding awards were converted into RSUs.

For the RSUs with the performance condition satisfied upon the completion of the Company’s IPO, the Company recorded $41 million in equity-based compensation expense for the nine months ended September 30, 2021, consisting primarily of a cumulative catch-up adjustment related to such awards based on the full or partial fulfillment of requisite service periods. Unrecognized equity-based compensation expense related to these awards are recorded over the remaining requisite service period. RSUs generally vest over 2 to 4 years from the vesting start date, subject to the recipient remaining an employee of the Company at each vesting date.

As of September 30, 2022, the Company had $569 million of unamortized compensation costs related to all unvested RSU awards. The unamortized compensation costs are expected to be recognized over a weighted-average period of approximately 2.6 years, net of estimated forfeitures.

16

---

Table of Contents

The table below summarizes RSU activity for the nine months ended September 30, 2022 is as follows:

			Outstanding RSUs
(in thousands, except unit price)			Number of RSUs						Weighted Average Grant- Date Fair Value
December 31, 2021			23,511						$	23.80
Granted			3,816						$	23.35
Vested			(2,708)						$	24.21
Forfeited / cancelled			(1,149)						$	27.78
March 31, 2022			23,470						$	23.48
Granted			18,761						$	15.88
Vested			(2,028)						$	24.07
Forfeited / cancelled			(1,766)						$	24.89
June 30, 2022			38,437						$	19.68
Granted			2,890						$	16.49
Vested			(2,622)						$	20.18
Forfeited / cancelled			(3,834)						$	15.13
September 30, 2022			34,871						$	19.87

Equity-based Compensation Expense

The following table presents the effects of equity-based compensation in the condensed consolidated statements of operations and comprehensive income (loss):

			Three Months Ended September 30,												Nine Months Ended September 30,
(in thousands)			2022						2021						2022						2021
Cost of sales			$	3,996					$	2,928					$	11,868					$	7,281
Operating, general and administrative			59,079						53,210						179,716						186,169
Total equity-based compensation expense			$	63,075					$	56,138					$	191,584					$	193,450

11.    Income Taxes

The Company’s tax provision, or benefit, 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 the Company anticipates incurring a loss during the full fiscal year as the related deferred tax assets were fully offset by a valuation allowance. The Company’s resulting effective tax rate differs from the applicable statutory rate, primarily due to the valuation allowance against its deferred tax assets.

The Company is subject to income taxation through certain of its subsidiaries, predominantly in the United States, China, South Korea, and throughout other Asian countries.

Significant judgment is required in evaluating the Company’s tax positions and determining its provision for income taxes. The impacts of uncertain tax positions are recognized only after determining a more-likely-than-not probability that the uncertain tax positions will not withstand challenge, if any, from the relevant taxing authorities. The Company did not have any material uncertain tax positions as of September 30, 2022 and 2021.

12.    Defined Severance Benefits

Defined severance benefits are for employees of the Company’s Korean subsidiaries. Pursuant to the Employee Retirement Benefit Security Act of Korea, eligible employees of the Korean subsidiaries receive defined benefits as severance payments upon leaving the Company based on employment length and pay rate.

17

---

Table of Contents

The following table provides the components of net periodic benefit costs and the portion of these costs charged to expense:

			Three Months Ended September 30,												Nine Months Ended September 30,
(in thousands)			2022						2021						2022						2021
Current service costs			$	33,066					$	32,502					$	109,722					$	95,281
Interest expense			2,446						854						5,777						2,039
Amortization of:
Prior service credit			810						23						2,582						69
Net actuarial loss			298						1,242						5,975						3,260
Net periodic benefit costs charged to expense			$	36,620					$	34,621					$	124,056					$	100,649

s

13.    Net Income (Loss) per Share

The Company computes net income (loss) per share using the two-class method required for multiple classes of common stock and participating securities. As the liquidation and dividend rights are identical, the undistributed earnings or loss are allocated on a proportionate basis to each class of common stock, and the resulting basic and diluted net income (loss) per share attributable to common stockholders are therefore the same for Class A and Class B common stock on both an individual and a combined basis. Basic net income (loss) per share is computed using the weighted-average number of shares of Class A and Class B common stock outstanding during the period. Diluted net income (loss) per share is computed using the weighted-average number of shares of Class A and Class B common stock and potentially dilutive Class A and Class B potential common shares outstanding during the period.

Immediately prior to the IPO, the Company completed the Corporate Conversion. The Corporate Conversion resulted in a change of equity interests from common units to shares of common stock, but no change in relative shareholder rights, rank, or value before and after this reorganization transaction. As such, the Corporate Conversion of common units was considered equivalent to a stock split and requires retrospective treatment for net income (loss) per share purposes. All share and per share information has been retroactively adjusted to reflect the Corporate Conversion for all periods presented. PIUs outstanding prior to the Corporate Conversion were considered compensatory arrangements that were settled with shares of Class A or Class B common stock at the time of the Corporate Conversion and have been included as outstanding shares subsequent to that date. Similarly, any preferred units that were converted in accordance with their terms into shares of Class A or Class B common stock at the time of the Corporate Conversion have also been included as outstanding shares subsequent to that date.

The following table presents the calculation of basic and diluted net income (loss) per share:

			Three Months Ended September 30,												Nine Months Ended September 30,
(in thousands, except per share amounts)			2022						2021						2022						2021
Numerator:
Net income (loss)			$	90,679					$	(323,977)					$	(194,106)					$	(1,137,611)
Denominator:
Weighted-average shares used in computing net income (loss) per share attributable to Class A and Class B common stockholders:
Basic			1,767,275						1,747,255						1,762,465						1,313,234
Dilutive effect of equity compensation awards			23,666						—						—						—
Diluted			1,790,941						1,747,255						1,762,465						1,313,234
Net income (loss) attributable to Class A and Class B common stockholders per share:
Basic and diluted			$	0.05					$	(0.19)					$	(0.11)					$	(0.87)
Anti-dilutive shares (rounded)			6,000						42,000						25,000						50,000

18

---

Table of Contents

14.    Segment Reporting

The Company’s CODM is its Chief Executive Officer. On March 2, 2022, the Company announced that it revised its reportable segments to reflect the way the Company manages its business and to promote improved visibility to its business performance. The change led to the following two operating and reportable segments: Product Commerce and Developing Offerings. These segments are based on how the CODM manages the business, allocates resources, makes operating decisions and evaluates operating performance. Prior to this change, we operated in one operating and one reportable segment.

Product Commerce - primarily includes core retail (owned inventory) and marketplace offerings (third-party merchants) 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 and from commissions earned from merchants that sell products through the Company’s mobile application and website.

Developing Offerings - primarily includes more nascent offerings and services, including Coupang Eats, our restaurant ordering and delivery service, Coupang Play, our online content streaming service, fintech, certain international initiatives, as well as advertising products associated with these offerings. Revenues from Developing Offerings are primarily generated from online restaurant ordering and delivery services provided on the Company’s mobile applications and websites.

Our segment operating performance measure is segment adjusted EBITDA. 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.

We generally allocate operating expenses to the respective segments based on usage. The CODM does not evaluate segments using asset information and, accordingly, the Company does not report asset information by segment.

Results of operations for the reportable segments and reconciliation to income (loss) before income taxes is as follows:

			Three Months Ended September 30,												Nine Months Ended September 30,
(in thousands)			2022						2021						2022						2021
Net revenues
Product Commerce			$	4,947,174					$	4,481,525					$	14,760,758					$	12,911,901
Developing Offerings			154,160						163,180						495,083						417,778
Total net revenues			$	5,101,334					$	4,644,705					$	15,255,841					$	13,329,679
Segment adjusted EBITDA
Product Commerce			$	239,222					$	(118,235)					$	339,939					$	(235,397)
Developing Offerings			(44,303)						(89,199)						(169,720)						(227,150)
Total segment adjusted EBITDA			$	194,919					$	(207,434)					$	170,219					$	(462,547)
Reconciling items:
Depreciation and amortization			$	(54,424)					$	(51,540)					$	(174,063)					$	(145,866)
Equity-based compensation			(63,075)						(56,138)						(191,584)						(193,450)
Interest expense			(6,485)						(7,376)						(19,996)						(38,047)
Interest income			15,403						2,603						26,301						5,450
Other income (expense), net			11,224						(4,026)						2,485						(7,479)
Fulfillment center fire losses			—						—						—						(295,501)
Income (loss) before income taxes			$	97,562					$	(323,911)					$	(186,638)					$	(1,137,440)

19

---

Table of Contents

Item 2.   Management’s Discussion and Analysis of 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 condensed consolidated financial statements and related notes appearing elsewhere in this Form 10-Q, as well as our audited consolidated financial statements included in our 2021 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-Q. As a result of many factors, including, without limitation, those factors set forth in the “Risk Factors” section of our 2021 Form 10-K and the “Risk Factors” section of subsequent Quarterly Reports on Form 10-Q, our actual results or timing of certain events could differ materially from the results or timing described in, or implied by, these forward-looking statements.

Overview

We are a leading e-commerce player in Korea. We believe that we are the preeminent online destination for e-commerce in the market because of our broad selection, low prices, and exceptional convenience across our owned inventory selection as well as products offered by third-party merchants. Our unique end-to-end fulfillment, logistics, and technology network enables Rocket Delivery, which provides free, next-day delivery for orders placed any time of the day, even seconds before midnight—across millions of products. 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.

Beginning in the first quarter of 2022, we organized our operations into two segments: Product Commerce and Developing Offerings. These segments reflect the way management evaluates its business performance and manages its operations. See Note 14 — "Segment Reporting" to the condensed consolidated financial statements included elsewhere in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Product Commerce primarily includes core retail (owned inventory) and marketplace offerings (third-party merchants) 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 and from commissions earned from merchants that sell products through the Company’s mobile application and website.

Developing Offerings primarily includes more nascent offerings and services, including Coupang Eats, our restaurant ordering and delivery service, Coupang Play, our online content streaming service, fintech, certain international initiatives, as well as advertising products associated with these offerings. Revenues from Developing Offerings are primarily generated from online restaurant ordering and delivery services provided on the Company’s mobile applications and websites.

20

---

Table of Contents

Key Financial and Operating Highlights:

(in thousands)			Three Months Ended September 30,												% Change						Nine Months Ended September 30,												% Change
			2022						2021												2022						2021
Total net revenues			$	5,101,334					$	4,644,705					10		%				$	15,255,841					$	13,329,679					14		%
Total net revenues, constant currency(1)			$	5,914,613					$	4,513,626					27		%				$	17,115,796					$	12,555,591					28		%
Gross profit(2)			$	1,233,888					$	754,527					64		%				$	3,431,087					$	2,145,527					60		%
Net income (loss)(4)			$	90,679					$	(323,977)					NM(3)						$	(194,106)					$	(1,137,611)					(83)		%
Net income (loss) margin			1.8		%				(7.0)		%										(1.3)		%				(8.5)		%
Adjusted EBITDA(1)			$	194,919					$	(207,434)					NM(3)						$	170,219					$	(462,547)					NM(3)
Adjusted EBITDA margin(1)			3.8		%				(4.5)		%										1.1		%				(3.5)		%
Net cash provided by (used in) operating activities			$	58,164					$	(55,366)					NM(3)						$	(15,037)					$	(207,832)					(93)		%
Free cash flow(1)			$	(222,446)					$	(244,589)					(9)		%				$	(707,511)					$	(712,426)					(1)		%
Segment adjusted EBITDA:
Product Commerce			$	239,222					$	(118,235)					NM(3)						$	339,939					$	(235,397)					NM(3)
Developing Offerings			$	(44,303)					$	(89,199)					(50)		%				$	(169,720)					$	(227,150)					(25)		%
																					Trailing Twelve Months Ended September 30,												% Change
(in thousands)																					2022						2021
Net cash used in operating activities																					$	(217,783)					$	(191,366)					14		%
Free cash flow(1)																					$	(1,077,462)					$	(865,364)					25		%

_____________

(1)Total net revenues, constant currency; total net revenues growth, constant currency; adjusted EBITDA; adjusted EBITDA margin; and free cash flow are non-GAAP measures. See “Non-GAAP Financial Measures and Reconciliations” below for the reconciliation of the Non-GAAP measures with their comparable amounts prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

(2)Gross profit is calculated as total net revenues minus cost of sales, and includes $158 million related to inventory losses from the fulfillment center fire for the nine months ended September 30, 2021.

(3)Non-meaningful

(4)Net income (loss) includes $296 million related to fulfillment center fire losses for the nine months ended September 30, 2021.

We have experienced and may continue to experience uncertainty in our business and the global economy due to macroeconomic factors, including the prolonged COVID-19 pandemic, higher inflation and interest rates, changes in foreign currency exchange rates, supply chain disruptions including those of our vendors and suppliers, constraints in logistics and fulfillment related labor costs including costs to attract and retain employees, and consumer confidence which may impact our results. These drivers make it challenging to reasonably quantify the direct impact the pandemic has had, or may have in the future, on our business versus those impacts that may have been, or may be, indirectly related to the pandemic. For additional details, refer to Part I—Item 1A. “Risk Factors” contained in our 2021 Form 10-K.

Key Business Metrics and Non-GAAP Financial Measures

We review the key business and financial metrics discussed below. We use these measures to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans, and make strategic decisions.

Key Business Metrics

			Three Months Ended
(in thousands, except net revenues per Active Customer)			September 30, 2021						December 31, 2021						March 31, 2022						June 30, 2022						September 30, 2022
Active Customers			16,823						17,936						18,112						17,885						17,992
Total net revenues per Active Customer			$	276					$	283					$	283					$	282					$	284

21

---

Table of Contents

Active Customers

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

Net Revenues per Active Customer

Net revenues per Active Customer is the total net revenues generated in a period divided by the total number of Active Customers in that period. A key driver of growth is increasing the frequency and the level of spend of Active Customers who are shopping on our apps or websites. We therefore view net revenues per Active Customer as a key indicator of engagement and retention of our customers and our success in increasing the share of wallet.

Non-GAAP Financial Measures and Reconciliations

We report our financial results in accordance with U.S. GAAP. However, management believes that certain non-GAAP financial measures provide investors with additional useful information in evaluating our performance. These non-GAAP financial measures may be different than similarly titled measures used by other companies.

Our non-GAAP financial measures should not be considered in isolation from, or as substitutes for, financial information prepared in accordance with U.S. GAAP. Non-GAAP measures have limitations in that they do not reflect all the amounts associated with our results of operations as determined in accordance with U.S. GAAP. These measures should only be used to evaluate our results of operations in conjunction with the corresponding U.S. GAAP measures.

Free Cash Flow

Free cash flow is defined as cash flow from operations less purchases of property and equipment, plus proceeds from sale of property and equipment. We believe that free cash flow is an additional and useful indicator of liquidity that provides information to management and investors about the amount of cash generated from our core operations that, after purchases and sales of property and equipment, can be used for strategic initiatives, including investing in our business and strengthening our balance sheet. Free cash flow has limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of other U.S. GAAP financial measures, such as net cash provided by operating activities. A limitation of free cash flow is that it may be calculated differently by other companies in our industry, limiting its usefulness as a comparative measure. We expect our free cash flow to fluctuate in future periods as we invest in our business to support our plans for growth.

Adjusted EBITDA and Adjusted EBITDA Margin

Adjusted EBITDA is defined as net income/(loss) for a period before depreciation and amortization, interest expense, interest income, income tax expense (benefit), other income (expense), net, equity-based compensation, impairments, and other items that we do not believe are reflective of our ongoing operations. Adjusted EBITDA margin is defined as adjusted EBITDA as a percentage of total net revenues. We use adjusted EBITDA and adjusted EBITDA margin as key measures to evaluate and assess our performance and allocate internal resources. We believe adjusted EBITDA and adjusted EBITDA margin are frequently used by investors and other interested parties in evaluating companies in the e-commerce industry for period-to-period comparisons as they remove the impact of certain items that are not representative of our core business, such as material non-cash items and certain variable charges. However, other companies may calculate adjusted EBITDA and adjusted EBITDA margin in a manner different from ours and therefore they may not be directly comparable to similar terms used by other companies. Adjusted EBITDA and adjusted EBITDA margin are not measures of financial performance under U.S. GAAP and should not be considered as alternatives to cash flow from operating activities or as measures of liquidity or alternatives to net income/(loss) as indicators of operating performance or any other measures of performance derived in accordance with U.S. GAAP. Adjusted EBITDA and adjusted EBITDA margin have limitations as analytical tools, and you should consider them in addition to, and not in isolation or as substitutes, for analysis of our results as reported under U.S. GAAP.

Constant Currency Revenue and Constant Currency Revenue Growth

The effect of currency exchange rates on our business is an important factor in understanding period-to-period comparisons. Our financial reporting currency is the U.S. dollar (“USD”) and changes in foreign exchange rates can significantly affect our reported results and consolidated trends. For example, our business generates sales predominantly in Korean Won (“KRW”),

22

---

Table of Contents

which are favorably affected as the USD weakens relative to the KRW, and unfavorably affected as the USD strengthens relative to the KRW. We use constant currency revenue and constant currency revenue growth for financial and operational decision-making and as a means to evaluate comparisons between periods. We believe the presentation of our results on a constant currency or FX-neutral basis in addition to U.S. GAAP results helps improve the ability to understand our performance because they exclude the effects of foreign currency volatility that are not indicative of our actual results of operations.

Constant currency information compares results between periods as if exchange rates had remained constant, or FX-neutral. We define constant currency revenue as total revenue excluding the effect of foreign exchange rate movements, and use it to determine the constant currency revenue growth on a comparative basis. Constant currency revenue is calculated by translating current period revenues using the prior period exchange rate. Constant currency revenue growth (as a percentage) is calculated by determining the increase in current period revenue over prior period revenue, where current period foreign currency revenue is translated using prior period exchange rates.

These results should be considered in addition to, not as a substitute for, results reported in accordance with U.S. GAAP. Results on a constant currency basis, as we present them, may not be comparable to similarly titled measures used by other companies and are not a measure of performance presented in accordance with U.S. GAAP.

The following tables present the reconciliations from each U.S. GAAP measure to its corresponding non-GAAP measure for the periods noted:

Free Cash Flow

			Three Months Ended September 30,												Nine Months Ended September 30,												Trailing Twelve Months Ended September 30,
(in thousands)			2022						2021						2022						2021						2022						2021
Net cash provided by (used in) operating activities			$	58,164					$	(55,366)					$	(15,037)					$	(207,832)					$	(217,783)					$	(191,366)
Adjustments:
Purchases of land and buildings			(156,782)						(47,564)						(205,274)						(176,727)						(243,609)						(242,731)
Purchases of equipment			(126,618)						(142,494)						(497,800)						(328,827)						(627,574)						(432,512)
Total purchases of property and equipment			(283,400)						(190,058)						(703,074)						(505,554)						(871,183)						(675,243)
Proceeds from sale of property and equipment			2,790						835						10,600						960						11,504						1,245
Total adjustments			$	(280,610)					$	(189,223)					$	(692,474)					$	(504,594)					$	(859,679)					$	(673,998)
Free cash flow			$	(222,446)					$	(244,589)					$	(707,511)					$	(712,426)					$	(1,077,462)					$	(865,364)
Net cash used in investing activities			$	(288,755)					$	(201,231)					$	(718,453)					$	(506,812)					$	(887,166)					$	(677,118)
Net cash provided by financing activities			$	145,821					$	115,833					$	226,489					$	3,672,191					$	131,148					$	3,742,156

23

---

Table of Contents

Adjusted EBITDA and Adjusted EBITDA Margin

			Three Months Ended September 30,												Nine Months Ended September 30,
(in thousands)			2022						2021						2022						2021
Total net revenues			$	5,101,334					$	4,644,705					$	15,255,841					$	13,329,679
Net income (loss)			90,679						(323,977)						(194,106)						(1,137,611)
Net income (loss) margin			1.8		%				(7.0)		%				(1.3)		%				(8.5)		%
Adjustments:
Depreciation and amortization			54,424						51,540						174,063						145,866
Interest expense			6,485						7,376						19,996						38,047
Interest income			(15,403)						(2,603)						(26,301)						(5,450)
Income tax expense			6,883						66						7,468						171
Other (income) expense, net			(11,224)						4,026						(2,485)						7,479
Equity-based compensation			63,075						56,138						191,584						193,450
Fulfillment center fire losses			—						—						—						295,501
Adjusted EBITDA			$	194,919					$	(207,434)					$	170,219					$	(462,547)
Adjusted EBITDA margin			3.8		%				(4.5)		%				1.1		%				(3.5)		%

24

---

Table of Contents

Constant Currency Revenue and Constant Currency Revenue Growth

			Three Months Ended September 30,												Nine Months Ended September 30,
(in thousands)			2022						2021						2022						2021
Consolidated
Total net revenues			$	5,101,334					$	4,644,705					$	15,255,841					$	13,329,679
Total net revenues growth			10		%				48		%				14		%				63		%
Adjustment:
Exchange rate effect			813,279						(131,079)						1,859,955						(774,088)
Total net revenues, constant currency			$	5,914,613					$	4,513,626					$	17,115,796					$	12,555,591
Total net revenues growth, constant currency			27		%				44		%				28		%				54		%
Net retail sales			$	4,540,393					$	4,137,136					$	13,577,665					$	11,938,685
Net retail sales growth			10		%				43		%				14		%				58		%
Adjustment:
Exchange rate effect			723,839						(115,707)						1,655,356						(693,310)
Net retail sales, constant currency			$	5,264,232					$	4,021,429					$	15,233,021					$	11,245,375
Net retail sales growth, constant currency			27		%				39		%				28		%				49		%
Net other revenue			$	560,941					$	507,569					$	1,678,176					$	1,390,994
Net other revenue growth			11		%				113		%				21		%				129		%
Adjustment:
Exchange rate effect			89,440						(15,372)						204,599						(80,778)
Net other revenue, constant currency			$	650,381					$	492,197					$	1,882,775					$	1,310,216
Net other revenue growth, constant currency			28		%				106		%				35		%				115		%
Product Commerce
Net revenues			$	4,947,174					$	4,481,525					$	14,760,758					$	12,911,901
Net revenues growth			10		%				44		%				14		%				59		%
Adjustment:
Exchange rate effect			788,061						(125,667)						1,799,596						(749,827)
Net revenues, constant currency			$	5,735,235					$	4,355,858					$	16,560,354					$	12,162,074
Net revenues growth, constant currency			28		%				40		%				28		%				50		%
Developing Offerings
Net revenues			$	154,160					$	163,180					$	495,083					$	417,778
Net revenues growth			(6)		%				547		%				19		%				979		%
Adjustment:
Exchange rate effect			25,218						(5,412)						60,359						(24,261)
Net revenues, constant currency			$	179,378					$	157,768					$	555,442					$	393,517
Net revenues growth, constant currency			10		%				526		%				33		%				916		%

25

---

Table of Contents

Components of Results of Operations

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 they expire. 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, which provides customers with access to benefits such as access to Rocket Fresh, no minimum spend for Rocket Delivery, free shipping on returns, and access to Coupang Play content streaming, which is also included in net other revenue.

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 service costs from our restaurant delivery business, and depreciation and amortization expense.

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 depreciation and amortization expense.

Interest Expense

Interest expense primarily consists of interest on our short-term borrowings and long-term debt, our convertible notes issued in our 2018 convertible note financing, and finance lease liabilities.

26

---

Table of Contents

Results of Operations

			Three Months Ended September 30,												Nine Months Ended September 30,
(in thousands)			2022						2021						2022						2021
Net retail sales			$	4,540,393					$	4,137,136					$	13,577,665					$	11,938,685
Net other revenue			560,941						507,569						1,678,176						1,390,994
Total net revenues			5,101,334						4,644,705						15,255,841						13,329,679
Cost of sales			3,867,446						3,890,178						11,824,754						11,184,152
Operating, general and administrative			1,156,468						1,069,639						3,626,515						3,242,891
Total operating cost and expenses			5,023,914						4,959,817						15,451,269						14,427,043
Operating income (loss)			77,420						(315,112)						(195,428)						(1,097,364)
Interest income			15,403						2,603						26,301						5,450
Interest expense			(6,485)						(7,376)						(19,996)						(38,047)
Other income (expense), net			11,224						(4,026)						2,485						(7,479)
Income (loss) before income taxes			97,562						(323,911)						(186,638)						(1,137,440)
Income tax expense			6,883						66						7,468						171
Net income (loss)			$	90,679					$	(323,977)					$	(194,106)					$	(1,137,611)

Total Net Revenues

Total net revenues include net retail sales and net other revenues as discussed above. The following table presents our total net revenues by segment.

			Three Months Ended September 30,												Nine Months Ended September 30,
(in thousands)			2022						2021						2022						2021
Product Commerce			$	4,947,174					$	4,481,525					$	14,760,758					$	12,911,901
Developing Offerings			154,160						163,180						495,083						417,778
Total net revenues			$	5,101,334					$	4,644,705					$	15,255,841					$	13,329,679

Total net revenues increased $0.5 billion or 10% (27% on a constant currency basis), and $1.9 billion or 14% (28% on a constant currency basis), respectively, for the three and nine months ended September 30, 2022, when compared to the prior year periods.

Product Commerce net revenues increased $0.5 billion or 10% (28% on a constant currency basis), and $1.8 billion or 14% (28% on a constant currency basis), respectively, for the three and nine months ended September 30, 2022, when compared to the prior periods. These increases are primarily due to continued growth in our Active Customers and total net revenues per Active Customer, driven by increased product selection of our owned inventory, increased customer engagement across more product categories, and increased merchants available on our marketplace.

Developing Offerings net revenues decreased $9 million or (6)% (10% increase on a constant currency basis), and increased $77 million or 19% (33% on a constant currency basis), respectively, for the three and nine months ended September 30, 2022, when compared to the prior year periods. The decrease for the three months is the result of unfavorable foreign currency translation effects. The three and nine months benefited from an increase in the average spend from Active Customers, partially offset by a decrease in those customers using our Eats offering.

Cost of Sales

Cost of sales for the three and nine months ended September 30, 2022 decreased $23 million or (1)%, and increased $641 million or 6%, respectively, compared to the prior year periods. The decrease for the three months is primarily attributable to foreign currency translation effects offset by increases in volume from increased sales and customer demand. The increase for the nine months is primarily attributable to increased volume resulting from increased sales and customer demand. Cost of sales as a percentage of revenue decreased from 83.8% and 83.9% for the three and nine months ended September 30, 2021, respectively, to 75.8% and 77.5% for the three and nine months ended September 30, 2022, respectively, primarily due to supply chain optimization and an increased percentage of revenues earned from higher margin revenue categories and offerings. The nine

27

---

Table of Contents

months ended September 30, 2021 was also negatively impacted from the $158 million fulfillment center fire, which did not recur.

Operating, General and Administrative Expenses

Operating, general and administrative expenses for the three and nine months ended September 30, 2022 increased $87 million or 8%, and $384 million, or 12%, respectively, compared to the prior year periods. These increases primarily reflect higher advertisement expenses to support growth and expansion of newer offerings and initiatives. These expenses as a percentage of revenue decreased from 23.0% to 22.7% for the three months ended September 30, 2022 related primarily to improved operating leverage, partially offset by increases in advertising expenses, and decreased from 24.3% to 23.8% for the nine months ended September 30, 2022 primarily related to costs of $138 million in the prior year period related to the fulfillment center fire, partially offset by increases in advertising expenses.

Interest Expense

Interest expense for the three and nine months ended September 30, 2022 decreased $0.9 million or (12)%, and $18.1 million or (47)%, respectively, compared to the prior year periods. The decrease for the nine months was primarily attributable to the conversion of our convertible notes into shares of our Class A common stock as a result of the Corporate Conversion and our initial public offering (“IPO”) during the first quarter of 2021.

Segment adjusted EBITDA

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

			Three Months Ended September 30,												Nine Months Ended September 30,
(in thousands)			2022						2021						2022						2021
Product Commerce			$	239,222					$	(118,235)					$	339,939					$	(235,397)
Developing Offerings			(44,303)						(89,199)						(169,720)						(227,150)
Consolidated adjusted EBITDA			$	194,919					$	(207,434)					$	170,219					$	(462,547)

Product Commerce segment adjusted EBITDA was $239 million and $340 million, respectively, for the three and nine months ended September 30, 2022, an increase of $357 million and $575 million compared to the prior year periods. The improvement was primarily due to an increase in net revenues, improved margins from supply chain optimization, an increased percentage of revenues earned from higher margin revenue categories, and improved operating leverage.

Developing Offerings segment adjusted EBITDA improved $45 million or 50%, and $57 million or 25% for the three and nine months ended September 30, 2022, when compared to the prior year periods. The improved adjusted EBITDA was the result of lower advertising and promotional costs as well as lower delivery costs per order associated with Coupang Eats, offset by increased investments made in our licensed content for Coupang Play.

Liquidity and Capital Resources

Liquidity

As of September 30, 2022 and December 31, 2021, we had stockholders’ equity of $2.2 billion. We may incur losses in the future. We expect that our investment into our growth strategy will continue to be significant, including 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 continuation to expand services, we are currently building and have additional plans to build or purchase new fulfillment centers. We have entered into various construction contracts which are generally expected to be completed over the next three years. These contracts have remaining capital expenditure commitments of $438 million as of September 30, 2022. We expect that our future expenditures for both infrastructure and workforce-related costs will exceed several billion dollars over the next several years.

28

---

Table of Contents

Our primary source of funds have been cash generated from our net revenues, supplemented through debt financing and sales of our equity securities. Our on-going primary source of funds are expected to be our cash and cash equivalents, and cash generated from our net revenues, supplemented through debt financings. We had total cash and cash equivalents and restricted cash of $3.1 billion as of September 30, 2022, compared to $3.8 billion as of December 31, 2021. Additionally, the Company has $1.0 billion available under its 2021 revolving credit facility.

During the first quarter of 2021, we completed our IPO, in which we issued and sold 100,000,000 shares of our Class A common stock at a price of $35.00 per share. We received net proceeds of approximately $3.4 billion from the IPO after deducting underwriting discounts of $69 million and other offering costs.

									Nine Months Ended September 30,
(in thousands)															2022						2021
Net cash used in operating activities															$	(15,037)					$	(207,832)
Net cash used in investing activities															(718,453)						(506,812)
Net cash provided by financing activities															226,489						3,672,191
Effect of exchange rate changes on cash and cash equivalents and restricted cash															(243,132)						(88,842)
Net (decrease) increase in cash and cash equivalents, and restricted cash															$	(750,133)					$	2,868,705
Cash and cash equivalents, and restricted cash, as of beginning of period															$	3,810,347					$	1,401,302
Cash and cash equivalents, and restricted cash, as of end of period															$	3,060,214					$	4,270,007

Operating Activities

Our net cash used in operating activities was $(15) million for the nine months ended September 30, 2022, representing a change of $193 million, compared to $(208) million of net cash used for operations for the nine months ended September 30, 2021. The year-over-year change in operating cash flow was primarily driven by a $944 million decrease in net loss partially offset by a $(188) million decrease in our non-cash expenses contributing to the net loss for the nine months ended September 30, 2022. Offsetting the improvement in cash used in operating activities was the increase in cash outflows of $(563) million from changes in operating assets and liabilities, consisting primarily of: an increase in cash outflow in other assets of $(91) million as a result of additional advances made to vendors and suppliers; a decrease in cash inflow in accounts payable of $(398) million due to slower growth than in 2021 and the timing of inventory purchases in 2022; a decrease in cash inflow in accrued expenses of $(57) million impacted by lower employee accruals compared to the prior year due to slower headcount growth; and a an increase in cash outflow in other liabilities of $(118) million from operating lease liabilities, withholdings and our defined severance benefit plan.

Investing Activities

Our net cash used in investing activities was $(718) million for the nine months ended September 30, 2022, representing an increase of $212 million, or 42%, as compared to $(507) million used in investing activities for the nine months ended September 30, 2021. This increase was mainly driven by a $198 million increase in purchases of property and equipment, primarily related to investments in our fulfillment and logistics infrastructure, including purchases of buildings, land and equipment.

Financing Activities

Our net cash provided by financing activities for the nine months ended September 30, 2022 decreased $3.4 billion, compared to the nine months ended September 30, 2021. This decrease was primarily driven by $3.4 billion of proceeds, net of underwriting discounts of $69 million and other offering costs, from the issuance of 100,000,000 shares of our Class A common stock upon the completion of our IPO in 2021, a $226 million increase in repayment of debt and short-term borrowings, all partially offset by a $234 million increase in proceeds from debt and short-term borrowings.

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 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 optimize 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.

29

---

Table of Contents

Capital Resources

We have entered into material unconditional purchase obligations. These contractual commitments primarily relate to technology related service contracts, fulfillment center construction contracts and software licenses. Refer to Note 8 — "Commitments and Contingencies" in Part I, Item 1 - “Financial Statements (Unaudited)” for disclosure of our future commitments. We generally enter into term loan facility agreements to finance the acquisition of property or construction of our fulfillment centers. These agreements may require that we provide for collateral equal to or greater than the amount borrowed under the arrangement. As we continue to build additional fulfillment centers, we expect our borrowings under debt financing arrangements to continue to increase. The Company also has material operating leases which expire over the next eleven years. Total minimum contractual commitments due within the next 3 months were $164 million as of September 30, 2022. Additionally, we have open purchase orders for inventories that are primarily due in the next twelve months, and they are generally cancellable, in full or in part, through the contractual provisions.

Our short-term and long-term borrowings generally include lines of credit with financial institutions available to be drawn upon for general operating purposes.

In March 2022, the Company entered into a new five-year loan agreement to borrow $279 million, which was partially used to extinguish the $149 million August 2020 term loan facility which matured in March 2022 and to finance infrastructure of a fulfillment center. The Company pledged up to $335 million of certain existing land and a building as collateral. The loan bears interest at a fixed rate of 4.26%.

In September 2022, the Company entered into a $77 million one year term loan agreement. The Company pledged $92 million of certain land as collateral. The loan bears interest at a fixed rate of 4.75%. Principal is to be paid at maturity and interest is paid on a monthly basis.

In October 2022, the Company entered into a two-year revolving facility agreement with a borrowing limit of $112 million that bears interest at the average of 91-days CD interest rate plus 2.30%. The revolving facility is secured by certain of the Company’s inventories.

The Company has a three-year $1.0 billion unsecured credit facility (the “2021 revolving credit facility”). As of September 30, 2022, there was no balance outstanding on the 2021 revolving credit facility.

Refer to Note 6 — "Short-Term Borrowings and Long-Term Debt" in our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for disclosure of our debt obligations and collateral.

Critical Accounting Policies and Estimates

We prepare our financial statements in accordance with U.S. GAAP. Preparing these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosures. We evaluate our estimates and assumptions on an ongoing basis. Our estimates are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Our actual results could differ from these estimates. For a discussion of our critical accounting policies and estimates, refer to the section entitled “Critical Accounting Policies and Estimates” in our 2021 Form 10-K.

Other significant accounting policies are also discussed in Note 1 — “Description of Business and Summary of Significant Accounting Policies” to the consolidated financial statements in Part II, Item 8 of our 2021 Form 10-K. There have been no significant changes to these policies and estimates for the nine months ended September 30, 2022, except as described in Note 1 — "Basis of Presentation and Summary of Significant Accounting Policies" to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Recently Adopted Accounting Pronouncements

See Note 1 — "Basis of Presentation and Summary of Significant Accounting Policies" to the condensed consolidated financial statements included elsewhere in Part I, Item 1 of this Quarterly Report on Form 10-Q.

30

---

Table of Contents

Item 3.   Quantitative and Qualitative Disclosures about Market Risk

In addition to the risks inherent in our operations, we are exposed to market risks in the ordinary course of our business. Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily the result of fluctuations in interest rates, foreign currency, and credit.

Interest Rate Risk

As of September 30, 2022, we had cash, cash equivalents, and restricted cash of $3.1 billion. Interest-earning instruments carry a degree of interest rate risk. We do not enter into investments for trading or speculative purposes and have not used any derivative financial instruments to manage our interest rate risk exposure. Our interest rate risk arises primarily from our short-term borrowings. Borrowings issued at variable rates expose us to variability in cash flows. Our policy, in the management of interest rate risk, is to strike a balance between fixed and floating rate financial instruments as well as our cash and cash equivalents and any short-term investments we may hold. The balance struck by our management is dependent on prevailing interest rate markets at any point in time.

Our borrowings include lines of credit with financial institutions, some of which carry variable interest rates. As of September 30, 2022, there was no balances outstanding on our revolving credit facilities. Any future borrowings incurred under the 2021 revolving credit facility would accrue interest at a floating rate based on a formula tied to certain market rates at the time of incurrence.

Our term loan facilities have fixed interest rates. While fluctuations in interest rates do not impact our results of operations, the fair value of our debt is impacted by market interest rates, decreasing in periods of rising rates and increasing in periods of declining rates.

Foreign Currency Risk

We have accounts on our foreign subsidiaries’ ledgers, which are maintained in the respective subsidiary’s local currency and translated into USD for reporting of our consolidated financial statements. As a result, we are exposed to fluctuations in the exchange rates of various currencies against the USD and other currencies, including the KRW.

Transactional

We generate the majority of our revenue from customers within Korea. Typically, we aim to align costs with revenue denominated in the same currency, but we are not always able to do so. As a result of the geographic spread of our operations and due to our reliance on certain products and services priced in currencies other than KRW, our business, results of operations, and financial condition have been and will continue to be impacted by the volatility of the KRW against foreign currencies.

Translational

Coupang, Inc.’s functional currency and reporting currency is the USD. The local and functional currency for our Korean subsidiary, Coupang Corp., which is our primary operating subsidiary, is the KRW. The other subsidiaries predominantly utilize their local currencies as their functional currencies. Assets and liabilities of each subsidiary are translated into USD at the exchange rate in effect at the end of each period. Revenue and expenses for these subsidiaries are translated into USD using average rates that approximate those in effect during the period. Consequently, increases or decreases in the value of the USD affect the value of these items with respect to the non-USD-denominated businesses in the consolidated financial statements, even if their value has not changed in their original currency. For example, a stronger USD will reduce the reported results of operations of non-USD-denominated businesses and conversely a weaker USD will increase the reported results of operations of non-USD-denominated businesses. An assumed hypothetical 10% adverse change in average exchange rates used to translate foreign currencies to USD would have resulted in a decline in total net revenues of approximately $457 million and $1.4 billion and an immaterial impact in net income (loss) for the three and nine months ended September 30, 2022, respectively.

At this time, we do not, but we may in the future, enter into derivatives or other financial instruments in an attempt to hedge our foreign currency risk. It is difficult to predict the impact hedging activities would have on our results of operations.

Credit Risk

Our cash and cash equivalents, deposits, and loans with banks and financial institutions are potentially subject to concentration of credit risk. We place cash and cash equivalents with financial institutions that management believes are of high credit quality. The degree of credit risk will vary based on many factors, including the duration of the transaction and the

31

---

Table of Contents

contractual terms of the agreement. As appropriate, management evaluates and approves credit standards and oversees the credit risk management function related to investments.

Item 4.   Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of September 30, 2022, our disclosure controls and procedures were evaluated, under the supervision and with the participation of our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), to assess whether they are effective in providing reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934, as amended, is accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure and to provide reasonable assurance that such information is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

Based on this evaluation, our CEO and CFO concluded that our disclosure controls and procedures were not effective as of September 30, 2022, due to the material weaknesses in our internal control over financial reporting, as further described below. As a result, our management has performed additional analyses, reconciliations, and other post-closing procedures and has concluded that, notwithstanding the material weaknesses in our internal control over financial reporting, our condensed consolidated financial statements for the periods covered by and included in this Quarterly Report on Form 10-Q fairly state, in all material respects, our financial position, results of operations and cash flows for the periods presented in conformity with U.S. GAAP.

Previously Reported Material Weakness

As disclosed in our 2021 Form 10-K, we previously identified material weaknesses in our internal control over financial reporting related to (i) the design and effectiveness of information technology general controls, (ii) inadequate segregation of duties, and (iii) inadequate internal control over the timely preparation and review of account reconciliations. We have concluded that these material weaknesses arose because we did not have sufficient qualified accounting resources, formalized processes, and policies necessary to satisfy the accounting and financial reporting requirements of a public company. We have determined that these control deficiencies constituted material weaknesses in our internal control over financial reporting. A material weakness is a deficiency or combination of deficiencies in our internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our consolidated financial statements would not be prevented or detected on a timely basis. These deficiencies could result in additional misstatements to our consolidated financial statements that would be material and would not be prevented or detected on a timely basis.

Remediation Plan

Management has developed and is executing a remediation plan to address the previously disclosed material weaknesses. We are actively engaged in the remediation of each of the outstanding material weaknesses, including utilizing the assistance of outside advisors where appropriate.

To remediate the existing material weaknesses, additional time is required to demonstrate the effectiveness of the remediation efforts. The material weaknesses cannot be considered remediated until the applicable remedial controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.

Changes in Internal Control over Financial Reporting

We are taking actions to remediate the material weaknesses relating to our internal control over financial reporting. There was no change in our internal control over financial reporting that occurred during the quarter ended September 30, 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

32

---

Table of Contents

Limitations on Effectiveness of Controls and Procedures

Our management, including our CEO and CFO, do not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Due to inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

33

---

Table of Contents

Part II.   Other Information

Item 1.   Legal Proceedings

From time to time, we are subject to legal proceedings, claims, litigation, governmental audits, inspections, investigations, and other various proceedings in the ordinary course of business. We have received, and may in the future continue to receive, claims, litigation, governmental audits, inspections, and investigations relating to issues such as employment and labor, worker classification and assignment, worker pay, hours and benefits, labor relations including union and collective bargaining issues, employment authorization and immigration, worker safety, intellectual property (including patent, trademark, and copyright), product safety, personal injury, privacy, information security, tax compliance, import/export regulations, foreign exchange regulations, licenses and permits, food safety, medical products, drugs and devices, financial services, antitrust and fair trade matters, consumer protection, and environmental issues.

The results of any current or future claims, litigation, governmental audits, inspections, or investigations cannot be predicted with certainty. Regardless of the outcome, these claims and proceedings could have an adverse impact on us because of defense and settlement costs, diversion of management resources, harm to our brand and reputation, and other factors.

There have been no material developments with respect to the legal proceedings previously disclosed in Part I, Item 3 under the caption “Legal Proceedings” of our 2021 Form 10-K.

Item 1A.   Risk Factors

Investing in our securities involves a high degree of risk. You should consider and read carefully all of the risks and uncertainties disclosed in Part 1, Item 1A, under the caption “Risk Factors,” of our 2021 Form 10-K which risks could materially and adversely affect our business, results of operations, financial condition, and liquidity. No material change in the risk factors discussed in such Form 10-K has occurred. Such risk factors may not be the only ones that we face because our business operations could also be affected by additional factors that are not presently known to us or that we currently consider to be immaterial to our operations. Our business operations could also be affected by additional factors that apply to all companies operating globally.

Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds

Use of Proceeds

The Registration Statement on Form S-1 (File No. 333-253030) for our IPO of our Class A common stock was declared effective by the SEC on March 10, 2021. There has been no material change in the planned use of proceeds from our IPO as described in our final prospectus filed with the SEC pursuant to Rule 424(b) of the Securities Act and other periodic reports previously filed with the SEC.

Item 3.   Defaults Upon Senior Securities

None.

Item 4.   Mine Safety Disclosures

Not applicable.

Item 5.   Other Information

Not applicable.

34

---

Table of Contents

Item 6.   Exhibits

Exhibit Number

Description of Exhibit

Provided Herewith

Incorporated by Reference

Form

File No.

Exhibit

Filing Date

3.1

Certificate of Incorporation of the Registrant.

10-Q

001-40155

3.1

November 12, 2021

3.2

Bylaws of the Registrant.

10-Q

001-40155

3.2

November 12, 2021

10.1+

Consulting Agreement between Coupang, Inc. and Thuan Pham dated July 29, 2022.

X

31.1

Certification of the Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

X

31.2

Certification of the Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

X

32.1*

Certifications of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

X

32.2*

Certifications of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

X

101.INS

XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH

XBRL Taxonomy Extension Schema Document.

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB

XBRL Taxonomy Extension Labels Linkbase Document.

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document.

104

Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

_____________

+			Indicates management contract or compensatory plan
*			Indicates furnished exhibit

35

---

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

COUPANG, INC. (REGISTRANT)
By:			/s/ Jonathan Lee
			Jonathan Lee
			Chief Accounting Officer (Principal Accounting Officer)

Dated: November 10, 2022

36