Coupang Q1 2026 Earnings Call - Margin Compression Reflects Temporary Cost Dislocation, Not Structural Weakness

Krista, Conference Operator: Hello everyone. My name is Krista and I will be your conference operator today. At this time, I would like to welcome everyone to the Coupang 2026 1st quarter earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number 5 on your telephone keypad. If you would like to withdraw your question, press star and the number 5 once again. Now I’d like to turn the call over to Michael Parker, Vice President of Investor Relations. You may begin your conference.

Michael Parker, Vice President of Investor Relations, Coupang: Thanks, operator. Welcome everyone to Coupang’s first quarter 2026 earnings conference call. I’m pleased to be joined on the call today by our Founder and CEO, Bom Kim, and our CFO, Gaurav Anand. The following discussion, including responses to your questions, reflects management’s views as of today’s date only. We do not undertake any obligation to update or revise this information, except as required by law. Certain statements made on today’s call may include forward-looking statements. Actual results may differ materially. Additional information about factors that could potentially impact our financial results is included in today’s press release and in our filings with the SEC, including our most recent annual report on Form 10-K and subsequent filings. As we share our first quarter 2026 results on today’s call, the comparisons we make to prior periods will be on a year-over-year basis, unless otherwise noted.

We may also present both GAAP and non-GAAP financial measures. Additional disclosures regarding these non-GAAP measures, including reconciliations of these measures to the most comparable GAAP measures, are included in our earnings release, our slides accompanying this webcast, and our SEC filings, which are posted on the company’s investor relations website. Now I’ll turn the call over to Bom.

Bom Kim, Founder and CEO, Coupang: Thanks everyone for joining us today. I’d like to cover a few things, where we stand in the recovery from last quarter’s data incident, how we see the path forward on growth, and the nature of the temporary dislocation in margins and how we think about it over the longer term. Starting with where we are. Customer obsession, operational excellence, and disciplined capital allocation have guided us since our inception, and they’re the same principles guiding us through this period. As we shared previously, January marked the low point in our product commerce revenue growth rate. Each month since has improved on a year-over-year basis, and the pace of improvement strengthened through February and March. Our recovery is powered by the same drivers that have shaped our business since we launched Rocket Delivery over 10 years ago. A relentless focus on wowing customers across selection, price, and service.

That experience was built over many years and $billions of investment, and one which we believe continues to widen its lead in the market. The customer behavior we’ve seen since the data incident reinforces this. For example, the vast majority of WOW members never left, and they have continued to compound their spend at double-digit rates throughout this period. Of those who did leave, the majority have come back and picked up where they left off, resuming the levels of spend they were at before the incident, and they’re now compounding alongside the members who stayed. Through the end of April, we’ve closed nearly 80% of the decline in WOW memberships that followed the incident through a combination of those returning members and strong new signups. New WOW signups and churn have returned to historical stable levels.

Across the board, customers are re-engaging in ways that reflect the conviction they’ve long placed in the Coupang experience. It’s worth spending a moment on how this recovery shows up in the reported numbers in product commerce. Year-over-year growth will take time to fully reflect the underlying recovery. The months of paused compounding from the affected period continue to weigh on the comps even as customer behavior normalizes. Our revenue growth rate trajectory from January to March is running ahead of historical patterns. We expect the year-over-year comps to continue improving throughout the year. Turning to margins. Two distinct factors are pressuring profitability this quarter. I want to describe them separately because they behave very differently going forward. The first is the customer vouchers we issued in response to the incident. These are one time in nature.

The bulk of the impact is contained to Q1, with a modest tail into the first part of Q2. The second is a set of temporary inefficiencies in our network. Our capacity build-out and supply chain commitments are all made well in advance, calibrated to a demand trajectory we project based on a stable, predictable customer pattern. That’s how we manage cost to serve efficiently, and that’s the path we were on before the incident. When an external event of this kind disrupts that pattern, actual demand falls short of what those commitments were sized for, and we carry the cost of underutilized capacity and inventory secure through the period. As demand returns to a predictable curve, we expect our capacity and supply chain to come back into balance and the inefficiencies to work their way out.

We’re adapting our network and supply chain through this period as we did when we came out of COVID, and we expect those adjustments will show up progressively in the P&L. Stepping back from the near term, we believe the long-term drivers of margin expansion at Coupang remain intact and continue to improve. We expect operational efficiencies across our network, supply chain optimization, ongoing investment in automation and technology, and the scaling of our margin and creative categories and offerings to drive further margin expansion over the long term. We expect annual margin expansion to resume next year, and we have strong conviction in the underlying margin potential of the business over the long term. Beyond the recovery, the work of building the business continues. Selection remains the primary lever for unlocking the underlying growth potential in our product commerce segment.

A meaningful portion of what customers want to buy is still not available on Rocket. We believe the combination of our first-party catalog and Fulfillment Logistics by Coupang is the path to closing that gap at scale. Automation and AI across our services, including our fulfillment logistics network, continue to improve service levels and lower costs to serve in parallel. We expect them to be meaningful contributors to both the customer experience and margin expansion in the years ahead. Turning to developing offerings. In Taiwan, we’re building the foundation for a truly differentiated customer experience. Our own last mile delivery network, which guarantees next-day delivery, now covers the vast majority of our volume. That coverage continues to expand. We’re still in the early stages of bringing the full Rocket Delivery experience to Taiwan customers. Even at this stage, the response from customers has been remarkable.

Cohort retention behavior is reminiscent of what we saw in the early years of product commerce in Korea. Our conviction in the long-term opportunity, both to wow customers and to generate attractive returns on the capital we’re deploying, grows stronger each quarter. Given that conviction, this year our focus in Taiwan is on building the foundation for an unparalleled customer experience and durable growth over the long term. That means deliberate long-term investments in network design, last mile logistics build-out, and supply chain improvements, the kind of foundation that takes time to lay, but that will define the customer experience and competitive position of the service for years to come. In Eats, as I mentioned, the recovery is following a similar path to product commerce, which speaks to the strength of the customer value proposition we are building across both services. In developing offerings, our approach is unchanged.

We start with small investments, test rigorously, and deploy more capital only into opportunities we believe can generate lasting customer wow and durable cash flows. We remain disciplined capital allocators taking the long view. Our recovery is ongoing, and we have more work ahead. We’re focused on continuing to build and improve on the experience that brought customers to Coupang in the first place across product commerce and developing offerings. I’ll now turn the call over to Gaurav to walk through the financials in more detail.

Gaurav Anand, Chief Financial Officer, Coupang: Thanks, Bom. As we guided coming into the year, Q1 reflected the impacts from last quarter’s data incident, and our results are consistent with the trajectory we outlined in February. The underlying business has continued to strengthen as we have progressed through this period, and we expect the impacts on Product commerce to diminish as we now move further from the affected quarter. I will first walk through the segment operating results and then speak to our consolidated performance. In Product commerce, we reported segment net revenues of $7.2 billion, growing 4% on a reported basis and 5% in constant currency. As we look at each month within the quarter, the constant currency growth rate, adjusted for timing of holidays, reached its low point in January and accelerated sequentially in February and March, consistent with the recovery that we had described earlier.

Product commerce active customers for the quarter were 23.9 million, growing 2% year-over-year but down 3% over last quarter. The sequential decline reflects the lagging effect of the data incident on the metric because active customers are measured on a trailing three-month basis, and the incident occurred late in Q4. The affected period is more fully reflected in this quarter’s count than in the last quarter. The most recent trend is the more meaningful signal. We have seen stabilization and improvement in the underlying metrics this quarter, with encouraging momentum in account reactivations and new customer growth. The recent positive momentum in WOW membership we spoke to last quarter has also accelerated over the past few months.

As we noted, the vast majority of WOW members never left, and through the end of April, we have closed 80% of the decline in WOW membership that followed the incident. The majority of WOW members who left have returned, and they have resumed the levels of spend they were at before the incident. Product commerce gross profit for the quarter was $2.2 billion, with a gross profit margin of 30.3%. This represents a contraction of approximately 100 basis points year-over-year and 160 basis points quarter-over-quarter. The decline in gross profit margin is the result of near-term factors tied to the data incident, including the impact of vouchers we issued in response to the incident and the temporary inefficiencies in our network, such as excess capacity and supply chain commitments positioned against our pre-incident demand curve.

We believe the long-term drivers of margin expansion at Coupang remain intact and will continue to compound, including operational efficiencies, supply chain optimization, ongoing investment in automation and technology, and the scaling of our margin accretive categories and offerings. We expect them to resume driving margin expansion and their underlying impact to become more evident as we move past these temporary inefficiencies. Segment Adjusted EBITDA for Product Commerce was $358 million for the quarter, resulting in an Adjusted EBITDA margin of 5%. This represents a contraction of roughly 300 basis points year-over-year and 270 basis points quarter-over-quarter, driven primarily by the gross profit dynamics I just described, along with the near-term pressure from operating costs that were sized for a pre-incident demand curve. We expect this to normalize as we work through those commitments and we make adjustments.

Turning to Developing Offerings, we reported segment net revenue of $1.3 billion, growing 28% on a reported basis and 25% in constant currency. The growth is primarily driven by the hypergrowth rate in Taiwan along with a continued high growth rate in Eats and RocketNow in Japan. We generated $123 million in gross profit for the quarter in Developing Offerings, down 25% over last year. As we continue to make investments in response to the encouraging customer engagement we are seeing across these early-stage offerings. Segment Adjusted EBITDA losses were $329 million, consistent with our expected cadence of investment underlying our full year guidance of between $950 million and $1 billion in segment Adjusted EBITDA losses that we communicated last quarter.

On a consolidated basis, we reported total net revenues of $8.5 billion for the quarter, representing growth of 8% on both a reported and constant currency basis. This is consistent with the 5%-10% constant currency growth rate range we guided to last quarter. Consolidated gross profit was $2.3 billion with a gross profit margin of 27%, a contraction of approximately 230 basis points year-over-year and 180 basis points quarter-over-quarter. This margin compression reflects the temporary impacts that I outlined in product commerce from the data incident, along with the increased level of investment in developing offerings. OG&A expense was $2.5 billion or 29.9% of total net revenues, roughly 250 basis points higher than Q1 of last year.

The year-over-year increase largely reflects two dynamics. Much of our cost base was sized for the demand trajectory we were on before the incident, which creates a near-term gap between cost base and current revenue, and the increase in operating costs within developing offerings, consistent with the levels of investment we are making to support those growth initiatives. Our losses before income taxes was $255 million, and we incurred income tax expense of $11 million. Our effective tax rate this quarter was elevated because the losses in our early stage are the operations in Taiwan and Japan don’t generate offsetting tax benefits at the consolidated level. We anticipate an effective tax rate of between 75%-80% for the full year. We continue to expect this to normalize closer to 25% over the long term.

We are reporting an operating loss for the quarter of $242 million and net loss attributable to Coupang stockholders of $266 million, resulting in a diluted loss per share of $0.15. Consolidated Adjusted EBITDA was $29 million, resulting in an Adjusted EBITDA margin of 0.3%. This represents a contraction of approximately 450 basis points Y-o-Y and 270 basis points Q-o-Q, driven primarily by the product commerce gross profit dynamics from the data incident and the increased level of investment in developing offerings. On cash flow, for the trailing 12-month period, we generated operating cash flow of $1.6 billion and free cash flow of $301 million.

The year-over-year decrease in trailing twelve-month free cash flow is primarily driven by the increased losses in developing offerings as well as higher levels of CapEx. This quarter, we also repurchased 20.4 million shares of our Class A common stock for $391 million. Our board of directors has recently approved an additional $1 billion to be added to our stock repurchase program as part of our broader capital allocation strategy to generate meaningful returns for our shareholders. Now, a few final comments on our outlook. For Q2, we anticipate consolidated constant currency revenue growth of 9%-10%. We also expect our top-line growth rates to continue improving over the course of the year as the impacts from the data incident diminish.

We also expect consolidated Adjusted EBITDA margin year-over-year contraction of approximately 300-400 basis points for Q2, primarily reflecting the near-term factors from the recent data incident. As we have noted, the long-term drivers of margin expansion remain intact. As we work our way through the temporary inefficiencies in our network, we expect margins to improve throughout the year with annual margin expansion resuming next year. The levels of service and value we are able to consistently provide to customers and the response we increasingly see from those customers give us confidence that the recovery will continue to build through the year.

We remain intensely focused on delivering moments of WOW for our customers every day. Operator, we are now ready to begin the Q&A.

Krista, Conference Operator: The first question is from Eric Cha with Goldman Sachs. Your line is now open.

Eric Cha, Analyst, Goldman Sachs: Thank you. Thank you for the opportunity. I have two questions. First one is, would you say, given the returning WOW members and probably higher demand visibility into the second half, the timing difference of demand and investment could be somewhat resolved in second half? If so, would the 2027 margin would have profitability expansion over 2025 level? That’s the first question. The second question is, did the developing offering guidance you gave previously, did that include the voucher impact? I don’t think it is, any likelihood the annual guidance may be revised higher, given the annualized volumes first quarter was a bit higher than expected. Thank you.

Bom Kim, Founder and CEO, Coupang: Hi, Eric. Thanks for your question. I think it’s worth going a little bit deeper into the margins point that you raised. I mentioned earlier that some short-term factors are in play, like customer vouchers as well as temporary inefficiencies. On the latter point, let me take a moment to explain how our cost structure works, because I think it’s important context for understanding both this quarter and the path forward. A meaningful portion of our cost base is fixed and built in advance. That includes our fulfillment centers, logistics network, supply chain commitments we make to partners, as well as headcount we secure to operate all of it. None of these decisions are made on a quarter’s notice.

A new fulfillment center takes substantial time to plan, you know, build, and bring online. Supply chain commitments are negotiated with significant lead times. As you can imagine, you know, hiring and training our people is something we do well in advance of when we need them. You know, we size all of these against a projected demand curve. That’s what we expect customer demand to look like quarters and, in some cases, even years from now, based on the trajectory we’re on. When demand follows that curve, our fixed cost base operates at the utilization we plan for, and our cost to serve looks the way it should. That’s how we’ve consistently expanded margins over time.

When an external event temporarily disrupts that curve, demand falls short of what those costs were sized for. The fulfillment centers are still there. Supply chain commitments are still in place. The teams are still on payroll. The volume flowing through is lower, so our utilization of those costs is temporarily below target. That underutilization shows up directly in our gross margins and our Adjusted EBITDA. It’s the same dynamic that played out when we came out of COVID, when capacity built for one demand curve, you know, was suddenly serving a different one. When this happens, we have typically two choices. You know, the first is to make dramatic changes in the short term to try to hit some short-term number.

You know, close facilities, reduce headcount, and so forth. That option is available, but we believe it’s the wrong one for our business and our customers in the long run. You know, we’d be unwinding capacity that we know we’ll need again as the recovery continues and unwinding now to rebuild it later, especially with the lead times that some of these things have, is not only disruptive but highly inefficient. The second choice that we have is to absorb that temporary underutilization, knowing that as growth recovers, demand catches up back up to the cost base, and the utilization returns to target, and that’s the choice we’re making. We’re making this. We’re managing this period actively. We’re adapting our network where appropriate, you know, much like we did coming out of COVID.

Our overarching posture is that the cost base we built was the right one for the path we’re on, and we’re not gonna dismantle it for a temporary dislocation. As the recovery progresses, utilization rebalances and the margin pressures work their way out. That’s the mechanism that gives us confidence in resuming annual margin expansion next year.

Gaurav Anand, Chief Financial Officer, Coupang: Eric, on your question, regarding the DO losses, the $329 million loss in Q1 is in line with what we had expected. Our full year Developing Offering investments remain tracking to the $950 million to $1 billion range we had given. It includes, you know, voucher program that we have provided. Developing Offerings, again, you know, is in early foundational building stages with lots of moving pieces across initiatives. A lot of decisions, you know, being made at regular intervals. You know, we are watching, continuing to watch it closely, and will continue to update you as the year unfolds if anything changes.

Bom Kim, Founder and CEO, Coupang: Operator, I think we’re ready for the next question.

Krista, Conference Operator: Thank you. Our next question will come from Jiong Shao with Barclays.

Jiong Shao, Analyst, Barclays: Good evening. Thank you very much for taking my questions. I have two. I’d like to perhaps ask one at a time, if that’s okay. I was just wondering, firstly, would you be able to sort of help us quantify a bit about the voucher impact, in Q1, you know, on revenue or EBITDA for Product Commerce and to deal, given some vouchers for Eats, some vouchers for Product Commerce, or to whatever degree you are willing to share? That’s my first question.

Gaurav Anand, Chief Financial Officer, Coupang: Hey. Sure. Let me take that. Regarding the $1.2 billion voucher program, our primary objective has been to ensure that our customers felt valued and supported during this challenging period. The redemption levels were consistent with our internal expectations, and from an accounting perspective, the vouchers are netted against the revenue. They did have an impact this quarter on both revenue growth and margins. As we noted earlier, with the voucher utilization period extending into the first few weeks of April, we do expect there to be a modest impact in Q2 also.

Jiong Shao, Analyst, Barclays: Gaurav, if I may, I just following up on that. I believe your vouchers are expiring in about 10 days, so the impact for Q2 should be much smaller. At the same time, you’re guiding your Q2 EBITDA to be down 3-4 points year-over-year. Was that just because of the sort of the scale of the operation Bom Kim talked about earlier, like you sized it that up for a certain scale, now there’s a lot of fixed cost? Are there other reasons that’s driving the 300-400 basis points decline year-over-year on the group EBITDA for your Q2 guide?

Gaurav Anand, Chief Financial Officer, Coupang: Yeah, Jiong. As, you know, Bom mentioned earlier, we had planned, you know, fixed capacity, both the chosen gross margin and our OG&A to be at the levels which were higher than, you know, the current trends that were created by this event. Because of that, the continued margin, you know, Q2 guidance is what we said it is.

Jiong Shao, Analyst, Barclays: Okay. Okay. Thank you, Gaurav. My second question is that we have seen some media reports, my apologies if they are not final or official, that Bom Kim has been designated as the head of the chaebol. For those of us who are not super familiar with these sort of things in Korea, I don’t know, could you talk about, like, what does that mean? Does that mean anything different for shareholders, for corporate governance, if that matters at all? Thank you so much.

Gaurav Anand, Chief Financial Officer, Coupang: Sure. You know, we are aware of the recent designation in Korea and are carefully reviewing it. As always, you know, we continue to be committed to complying with all regulatory requirements in all the jurisdictions where we operate. We’ll continue engaging constructively, you know, with all our regulators and work through all our obligations as needed. That’s, you know, as much as, yeah, as we can share at this time.

Jiong Shao, Analyst, Barclays: Okay. All right. Thank you.

Krista, Conference Operator: Thank you. As a reminder, to ask a question, please dial star five, and to leave the queue, you’ll dial star five again. Our next question comes from Stanley Yang with J.P. Morgan.

Stanley Yang, Analyst, J.P. Morgan: Thank you for your opportunity to ask question. I have two questions. First question is, you mentioned already about the WOW members trend. When do you expect your WOW users to be recovered to your pre-data breach level? What will be the normalized annual addition of WOW users after your full recovery? My second question is there any change in your developing offering loss mix between Taiwan and Japan? When or at which scale do you expect Taiwan loss to peak out and start declining? I also would appreciate your comment on the operating trend of the RocketNow in Japan. Thank you.

Bom Kim, Founder and CEO, Coupang: Hi, Stanley. Thanks for your question. You know, in terms of specific dates, I think we’re focused more on the trajectory and the underlying customer behavior, more than on any date for recovery. I think there are some very helpful and informative signals that we’re seeing in the customer behavior that’s worth noting around our WOW membership. As we mentioned, not only is WOW membership numbers being driven by new signups, but it’s also driven by members who are returning. You know, the vast majority of our WOW members never paused in the aftermath of the incident. They continued to compound at double-digit rates the same way they have for years.

The minority who did pause are returning rapidly, the majority of them have returned in a very short period of time. Just as importantly, they’re resuming their prior levels of spend, not splitting that share of wallet with alternatives. We’ve now closed nearly 80% of the decline in WOW memberships that occurred after the event with a combination of those returning members and strong new signups, which are along with churn back to historical levels. I think what’s helpful to note is that all of those patterns are consistent with an event-driven disruption working its way out, not with a structural shift in our position. The fact that the vast majority of the customers never paused, they continued to compound at double-digit rates.

The members who paused are returning rapidly and picking up their spend right where they left off and continuing to compound is confirmation our view that, you know, we’re returning to the same drivers that have been powering our growth for years in the past. Those customers continue to value the Coupang experience and are not finding that value proposition somewhere else. You know, that’s what we believe will continue to power our growth in the years ahead.

Gaurav Anand, Chief Financial Officer, Coupang: Regarding your question on Taiwan and, you know, investment. You know, Taiwan continues to grow at, you know, hypergrowth rates. We’re very excited about it and the future that it holds for us. The investments, we’re not spreading out investments between different initiatives right now. We, you know, we allocate capital just based on where we see the opportunities are the strongest, and each initiative is at a different point in the life cycle. You know, we continue to be excited.

Bom Kim, Founder and CEO, Coupang: Yeah, I think it’s in Taiwan, as I mentioned earlier, you know, we’re prioritizing building the foundation for an unparalleled customer experience. We’re excited to be entering a lot of these very exciting foundational, foundation building stage of the journey, such as network design, supply chain improvements. We now have provided access to our next-day delivery experience to a vast majority of consumers in Taiwan. It already represents the vast majority of our volume. We’re continuing to strengthen that last-mile delivery network, not only to increase access, but to improve the levels of service that we provide. We’re also investing to expand aggressively the selection that customers can purchase on that network across more categories.

Krista, Conference Operator: Thank you. Our next question will come from Seyon Park with Morgan Stanley.

Seyon Park, Analyst, Morgan Stanley: Hi. Hi, thank you for the opportunity. I also have two questions. First, is just on the macro picture overall. I think industry-wise, we have started to see a bit of a deceleration in e-commerce growth. Just given the K-shaped economy that, you know, we’re kind of seeing, I kind of wanted to get your views as to whether we are seeing any signs of slowing for the e-commerce industry overall or whether it’s some seasonal factors that are also impacting it. Given Coupang is, you know, now a big chunk of that e-commerce, you know, clearly the impact that we’ve seen from the data breach may also have impacted the growth of the overall industry as well. Just kind of wanted to get management’s view on how they see just the overall industry growth.

There seems to be a lot of conflicting data. Obviously, GDP was also stronger, so any views there would be much appreciated. The second question is really on the buybacks. You announced that another $1 billion has been approved. It does seem like the cadence of the buyback is starting to accelerate. Hence, just wanted to get, you know, some guidance or any comments as to whether we should see a higher cadence of buybacks in the coming quarters. Thank you.

Bom Kim, Founder and CEO, Coupang: Hi, Seon. I think from our perspective, we’re always much more focused and obsessed with our customers, how our customers are behaving. We ultimately believe the biggest drivers of customer behavior are the experience that we’re providing. We’ve seen that consistently through ups and downs in the macro over the many years that we’ve served our customers in the markets that we operate in. I think there’s some important, again, things to maybe point out again that we’ve always seen for years our customers compounding their spend. The vast majority of customers who remained with us and did not pause continued to compound at double digits, very healthy rates.

The customers, who’ve returned, the, you know, majority of customers, who of the minority that paused who’ve returned have picked up exactly where they’ve left off and are now also compounding. Alongside them. I think a lot of the behavior that we’re seeing is still very strong on that front. I do think it’s also important. Maybe you are seeing some discrepancy also in the underlying behavior that I’m talking about and the numbers you may be seeing this quarter because the year-over-year growth rate this quarter doesn’t move in lockstep with that underlying customer behavior that I’m pointing out. Maybe I’ll take this opportunity to explain also how growth at Coupang normally compounds.

You know, each month our existing customers grow their spend with us, and new customers join and start building their spend over time. Both of those streams add to a base and keeps getting larger. That’s the engine that has produced our historical growth rates. That’s been remarkably consistent for us, and I think we’ve shared data in the past. We share it regularly. That’s really an important health metric for us. And through, again, ups and downs in the macro, that engine of existing customers continue to compound, new customers joining and, you know, building their spend over time. Those two streams are really the engine that produces our growth rate. Now, when an external event interrupts that cycle for a period, two things happen.

First, the customers who pause stop adding to that base for the months that they’ve paused, and the new customers who would have joined during that period don’t join at the usual pace. Second, this is the subtle part, you know, we lose the months of compounding of that customer spend that we typically observe with both streams. Once a month is gone, you can’t get it back. Now, even if everything underneath fully recovers, paused customers come back at prior spending levels, new acquisitions return to historical pace, the year-over-year comparison still carries the weight of those lost months. This year’s revenue is now missing the months of compounding that didn’t happen during that affected period.

While last year’s revenue also included all twelve months of uninterrupted compounding. The two sides of the comparison are no longer symmetric. This effect, you know, works its way out as we lap the affected period. After we’ve lapped the affected period, you know, that’s the point at which the comp returns to being apples to apples. This also probably gets to a little bit to Eric’s earlier question as well about our growth rate this year. While we see very encouraging and positive signs in our customers returning, picking up their spends where they left off, growing and compounding, we see very healthy compounding behavior underneath.

Because of the lost months of compounding, you know, you’ll see our Y-o-Y growth lag, and we’ll be behind the demand curve that we projected for our fixed costs. A lot of the, you know, that’s the earlier point that I made about cost dynamics. Some of the things that Eric was asking about, I think can be gleaned from or some of the things that we wanna point out can be gleaned from what I’m sharing here. Hopefully this gives you a fuller picture of how we think about growth and the drivers of growth.

Krista, Conference Operator: I’ll take our last question from the line of Wei Fang. Your line is open. Okay. Thank you very much. Thank you very much. I have two. First one’s just a follow-up on an answer to prior question on your 2Q EBITDA guide. I don’t think you mentioned any impact from the fuel inflation. Just want to understand if that’s included there and also if you can help quantify for us. The second question’s on competition. I understand that some Chinese e-commerce players are now growing their MAUs nicely in Korea as well. I think they combine maybe more than 10 million already in terms of users.

Wei Fang, Analyst: I know maybe, the spending level’s not there yet, but can mention, give us some overview, on the landscape maybe today versus a year ago, anything has changed? Maybe anything, any comment you can give in terms of like a 3P take rate, in the business. Thank you.

Bom Kim, Founder and CEO, Coupang: Hi, Wei. Thanks for your question. You know, we’ve always operated in a in highly competitive markets, we’ve had many new entrants, many players. It’s one of the most dynamic, you know, spaces and industries that you can operate in. Over many years, what we’ve learned over and over again that, you know, kind of what matters most is the customer experience and staying relentlessly focused on customers and not what any set of competitors or individual competitor does. The markets that we’re operating in are large. We represent just a small share in each of them, and there’s room for many winners.

I think what we believe ultimately drives growth is the differentiated value we provide to customers, the combination of selection, price, and delivery that no one else offers. I think we were very encouraged, as I mentioned, that the vast majority of customers who stayed with us through, you know, the affected period over the last couple of quarters have continued to compound at double digit rates as they have for years. The customers who’ve come back have not split, have returned to their old levels of spend and have not split that spend with other alternatives. That’s also, we think, a good sign that, you know, they really value what we’re providing, the Coupang experience, and not finding that value proposition elsewhere.

That value proposition is really the engine of our growth. It’s really what we’re focused on making even more valuable for our customers every day. That’s what we believe will really determine our success in the years ahead.

Gaurav Anand, Chief Financial Officer, Coupang: I’ll respond to your question on the impact of oil prices. With the increase in fuel prices not going really into effect until late Q1, we saw a very small impact on our operations this quarter in Q1. We benefit from, you know, the efficiencies created by our end-to-end owned supply chain and logistics infrastructure and processes. Looking into the near future, we keep, you know, our focus on continuing to create the best experience for consumers while we also are driving operational excellence. We don’t see this or the oil prices having a significant or material impact in Q2 so far, and we’ll continue to monitor it.

On Q2, again, you know, even though we guided, you know, our margins to where we did, there is no structural change in our entitlement and over time what we see. Thank you.

Michael Parker, Vice President of Investor Relations, Coupang: Thank you.

Krista, Conference Operator: Thank you. This concludes today’s conference call. Thank you, and you may now disconnect.