cpng-20240331

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: March 31, 2024

☐ 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:

Class A Common Stock, par value $0.0001 per share

CPNG

New York Stock Exchange

(Title of each class)

(Trading Symbol)

(Name of each exchange on which registered)

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 May 2, 2024, there were 1,613,184,828 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.

COUPANG, INC.

Form 10-Q

For the Quarterly Period Ended March 31, 2024

TABLE OF CONTENTS


	PART I. FINANCIAL INFORMATION	Page
Item 1.	Financial Statements (Unaudited)	4
	Condensed Consolidated Statements of Operations	4
	Condensed Consolidated Statements of Comprehensive (Loss) Income	5
	Condensed Consolidated Balance Sheets	6
	Condensed Consolidated Statements of Redeemable Noncontrolling Interests and Equity	7
	Condensed Consolidated Statements of Cash Flows	8
	Notes to Condensed Consolidated Financial Statements	9
	Note 1. Basis of Presentation and Summary of Significant Accounting Policies	9
	Note 2. Net Revenues	9
	Note 3. Segment Reporting	10

	Note 4. Defined Severance Benefits	11
	Note 5. Income Taxes	11
	Note 6. Earnings per Share	11
	Note 7. Fair Value Measurement	12
	Note 8. Supplemental Financial Information	12
	Note 9. Short-term Borrowings and Long-term Debt	13
	Note 10. Commitments and Contingencies	13
	Note 11. Business Combinations	14

	Note 12. Subsequent Events	16
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	26
Item 4.	Controls and Procedures	27

	PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	28
Item 1A.	Risk Factors	28
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 3.	Defaults Upon Senior Securities	28
Item 4.	Mine Safety Disclosures	28
Item 5.	Other Information	28
Item 6.	Exhibits	29
	Signatures	30

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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, or may be impacted by, the following:

•our expectations regarding our future operating and financial performance including our ability to achieve, maintain and increase long-term future profitability;

•our ability to successfully execute our business and growth strategy;

•the continued growth of the retail market and the increased acceptance of online transactions by potential customers;

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

•our ability to compete in our industry;

•our ability to maintain and improve our market position;

•our ability to manage expansion into new geographies and offerings;

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

•our anticipated investments in new products and offerings, and the effect of these investments on our results of operations;

•our ability to effectively integrate acquisitions and realize the anticipated benefits of such transactions;

•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;

•the impact of cybersecurity incidents with respect to our systems and those of third parties on which we rely;

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

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

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

•our ability to implement, maintain, and improve our internal control over financial reporting;

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

•the impact of world events such as natural disasters, acts of war or geopolitical conflicts, terrorism or disease outbreaks;

•the effects of global macroeconomic conditions, including, but not limited to, inflationary pressures, a general economic slowdown or recession, interest rate fluctuations 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; and

•the outcomes of any claims, litigation, governmental audits, inspections, and investigations; 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, 2023 (the “2023 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.

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, Item 1A, under the caption “Risk Factors,” of our 2023 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

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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.

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Part I. Financial Information

Item 1. Financial Statements (Unaudited)

COUPANG, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)


	Three Months Ended March 31,
(in millions, except per share amounts)		2024		2023
Net retail sales		$	5,895	$	5,205
Net other revenue		1,219		596
Total net revenues		7,114		5,801

Cost of sales		5,185		4,381
Operating, general and administrative		1,889		1,313
Total operating cost and expenses		7,074		5,694

Operating income		40		107

Interest income		55		32
Interest expense		(27)		(8)
Other expense, net		(9)		(7)
Income before income taxes		59		124

Income tax expense		83		33

Net (loss) income		$	(24)	$	91
Net loss attributable to noncontrolling interests		(29)		—
Net income attributable to Coupang stockholders		$	5	$	91

Earnings per share
Basic		$	—	$	0.05
Diluted		$	—	$	0.05
Weighted-average shares outstanding
Basic		1,794		1,775
Diluted		1,815		1,794

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

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COUPANG, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(unaudited)


	Three Months Ended March 31,
(in millions)		2024		2023
Net (loss) income		$	(24)	$	91

Other comprehensive loss:
Foreign currency translation adjustments, net of tax		(105)		(19)
Actuarial gain on defined severance benefits, net of tax		1		1
Total other comprehensive loss		(104)		(18)

Comprehensive (loss) income		(128)		73
Comprehensive (loss) income attributable to noncontrolling interests		(29)		—
Comprehensive (loss) income attributable to Coupang stockholders		$	(99)	$	73

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

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Q1 2024 Form 10-Q


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COUPANG, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)


(in millions, except par value)	March 31, 2024		December 31, 2023
Assets
Cash and cash equivalents	$	5,226	$	5,243
Restricted cash	347		353
Accounts receivable, net	601		314
Inventories	1,938		1,666
Prepaids and other current assets	457		316
Total current assets	8,569		7,892

Property and equipment, net	2,509		2,465
Operating lease right-of-use assets	1,912		1,601
Deferred tax assets	841		925
Intangible assets, net	349		37
Long-term lease deposits and other	769		426
Total assets	$	14,949	$	13,346

Liabilities, redeemable noncontrolling interests, and equity
Accounts payable	$	5,370	$	5,099
Accrued expenses	388		352
Deferred revenue	135		97
Short-term borrowings	272		282
Current portion of long-term debt	196		203
Current portion of long-term operating lease obligations	419		386
Other current liabilities	655		526
Total current liabilities	7,435		6,945

Long-term debt	1,062		529
Long-term operating lease obligations	1,668		1,387
Defined severance benefits and other	585		381
Total liabilities	10,750		9,242

Commitments and contingencies (Note 10)

Redeemable noncontrolling interests	114		15

Equity
Common stock	—		—
Class A — shares authorized 10,000, outstanding 1,620 and 1,616 Class B — shares authorized 250, outstanding 175 and 175
Additional paid-in capital	8,578		8,489
Accumulated other comprehensive loss	(121)		(17)
Accumulated deficit	(4,378)		(4,383)

Noncontrolling interests	6		—
Total equity	4,085		4,089
Total liabilities, redeemable noncontrolling interests and equity	$	14,949	$	13,346

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

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COUPANG, INC.

CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY

(unaudited)


	Redeemable Noncontrolling Interests		Class A and Class B Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Noncontrolling Interests		Total Equity
(in millions)			Shares	Amount
Balance as of December 31, 2022	$	—	1,773	$	—	$	8,154	$	3	$	(5,743)	$	—	$	2,414
Net income	—		—	—		—		—		91		—		91
Foreign currency translation adjustments, net of tax	—		—	—		—		(19)		—		—		(19)
Actuarial gain on defined severance benefits, net of tax	—		—	—		—		1		—		—		1
Issuance of common stock upon exercise of stock options	—		1	—		3		—		—		—		3
Issuance of common stock upon settlement of restricted stock units	—		3	—		—		—		—		—		—
Equity-based compensation	—		—	—		70		—		—		—		70
Balance as of March 31, 2023	$	—	1,777	$	—	$	8,227	$	(15)	$	(5,652)	$	—	$	2,560


	Redeemable Noncontrolling Interests		Class A and Class B Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Noncontrolling Interests		Total Equity
(in millions)			Shares	Amount
Balance as of December 31, 2023	$	15	1,791	$	—	$	8,489	$	(17)	$	(4,383)	$	—	$	4,089
Net (loss) income	(25)		—	—		—		—		5		(4)		1
Capital contributions from noncontrolling interest holders	55		—	—		—		—		—		—		—
Recognition of noncontrolling interest upon acquisition	69		—	—		—		—		—		10		10

Foreign currency translation adjustments, net of tax	—		—	—		—		(105)		—		—		(105)
Actuarial gain on defined severance benefits, net of tax	—		—	—		—		1		—		—		1
Issuance of common stock upon exercise of stock options	—		—	—		1		—		—		—		1
Issuance of common stock upon settlement of restricted stock units	—		4	—		—		—		—		—		—
Equity-based compensation	—		—	—		88		—		—		—		88
Balance as of March 31, 2024	$	114	1,795	$	—	$	8,578	$	(121)	$	(4,378)	$	6	$	4,085

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

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COUPANG, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)


	Three Months Ended March 31,
(in millions)	2024		2023
Operating activities
Net (loss) income	$	(24)	$	91
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	95		64
Provision for severance benefits	45		39
Equity-based compensation	88		70
Non-cash operating lease expense	103		84
Deferred income taxes	47		—
Other	42		29
Change in operating assets and liabilities, net of acquisition:
Accounts receivable, net	(14)		56
Inventories	(33)		(61)
Other assets	(55)		60
Accounts payable	(31)		162
Accrued expenses	(30)		(47)
Other liabilities	(21)		(46)
Net cash provided by operating activities	212		501

Investing activities
Purchases of property and equipment	(107)		(95)
Proceeds from sale of property and equipment	2		1
Net cash acquired in acquisition	68		—
Other investing activities	(80)		11
Net cash used in investing activities	(117)		(83)

Financing activities
Proceeds from issuance of common stock, equity-based compensation plan	1		3
Proceeds from short-term borrowings and long-term debt	14		32
Repayment of short-term borrowings and long-term debt	(17)		(1)
Other financing activities	54		44
Net cash provided by financing activities	52		78
Effect of exchange rate changes on cash and cash equivalents, and restricted cash	(170)		(59)
Net (decrease) increase in cash and cash equivalents, and restricted cash	(23)		437
Cash and cash equivalents, and restricted cash, as of beginning of period	5,597		3,687
Cash and cash equivalents, and restricted cash, as of end of period	$	5,574	$	4,124

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

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COUPANG, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1. Basis of Presentation and Summary of Significant Accounting Policies

The accompanying unaudited condensed consolidated financial statements of Coupang, Inc. (“Coupang”) together with its wholly-owned subsidiaries (collectively, “we,” “us,” or “our”) 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 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 liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. We based our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ materially from these estimates.

The unaudited interim financial information reflects all normal recurring adjustments that are, in the opinion of management, necessary for fair presentation of the results of the 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 our 2023 Form 10-K.

Farfetch Acquisition

In January 2024, we acquired the business and assets of Farfetch Holdings plc (“Farfetch”), a leading global marketplace for the luxury fashion industry (the “Farfetch Acquisition”). Refer to “Note 11 - Business Combinations – Farfetch” for additional information.

Recent Accounting Pronouncements Adopted

In September 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2022-04, “Supplier Finance Programs (Subtopic 405-50) - Disclosure of Supplier Finance Program Obligations.” The standard requires 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 adoption of the ASU resulted in incremental disclosures in our condensed consolidated financial statements, with the exception of the rollforward disclosure which will be effective prospectively for the year ended December 31, 2024.

Recent Accounting Pronouncements Yet To Be Adopted

In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures.” The standard requires additional disclosures about an entities segments, primarily about significant segment expenses that are reported to the Chief Operating Decision Maker. Early adoption is allowed under the standard. We are evaluating the effect of adopting the ASU on our disclosures, which is effective beginning with the fiscal year ended December 31, 2024, and interim reporting beginning with the period ended March 31, 2025.

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740) - Improvements to Income Tax Disclosures.” The standard requires disclosure of specific categories of an entities income tax expenses and income taxes paid among other disclosures. Early adoption is allowed under the standard. We are evaluating the effect of adopting the ASU on our disclosures, which is effective beginning with the fiscal year ended December 31, 2025.

2. Net Revenues

Details of total net revenues were as follows:


	Three Months Ended March 31,
(in millions)	2024		2023
Net retail sales	$	5,895	$	5,205
Third-party merchant services	1,047		461
Other revenue	172		135
Total net revenues	$	7,114	$	5,801

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 owned inventory product sales to consumers. Third-

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party merchant services represent commissions, advertising, and delivery fees earned from merchants and restaurants that sell their products through our online businesses. Other revenue includes revenue earned from our Rocket WOW membership program and 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. We recognized revenue of $92 million and $89 million for the three months ended March 31, 2024 and 2023, respectively, primarily related to payments in advance of products and services delivered which were included in deferred revenue on the consolidated balance sheets as of the beginning of the respective years.

3. Segment Reporting

We own and operate a retail business that primarily serves the Korean retail market along with other international markets. The Chief Operating Decision Maker (“CODM”) is our Chief Executive Officer. We have 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.

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

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

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, we do not report asset information by segment.

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


	Three Months Ended March 31,
(in millions)	2024		2023
Net revenues
Product Commerce	$	6,494	$	5,658
Developing Offerings	620		142
Total net revenues	$	7,114	$	5,801
Segment adjusted EBITDA
Product Commerce	$	467	$	288
Developing Offerings	(186)		(47)
Total segment adjusted EBITDA	$	281	$	241
Reconciling items:
Depreciation and amortization	$	(95)	$	(64)
Equity-based compensation	(88)		(70)
Acquisition and restructuring related costs	(58)		—
Interest expense	(27)		(8)
Interest income	55		32
Other expense, net	(9)		(7)
Income before income taxes	$	59	$	124

Note: Amounts may not foot due to rounding.

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4. Defined Severance Benefits

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


	Three Months Ended March 31,
(in millions)	2024		2023
Current service costs	$	40	$	35
Interest cost	4		3
Amortization of:
Prior service credit	—		1
Net actuarial loss	1		—
Net periodic benefit cost	$	45	$	39

5. Income Taxes

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

Our effective tax rate was 140.1% for the three months ended March 31, 2024, compared to 26.6% for the prior year period. The increase in our effective tax rate is primarily due to the loss before income taxes incurred by Farfetch, with no offsetting tax benefit, and the prospective impact of releasing the valuation allowance on our Korean deferred tax assets in the fourth quarter of 2023.

6. Earnings per Share

Basic earnings per share is computed by dividing net income attributable to Coupang stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share is computed by dividing net income attributable to Coupang stockholders by the weighted-average number of shares of common stock and potentially dilutive common stock outstanding during the period.

We have two classes of common stock outstanding, Class A common stock and Class B common stock (collectively “common stock”), with equal rights to dividends and income. Earnings per share attributable to Coupang stockholders are therefore the same for Class A and Class B common stock, both on an individual and combined basis.

The following table presents the calculation of basic and diluted earnings per share attributable to Coupang stockholders:


	Three Months Ended March 31,
(in millions, except per share amounts)	2024		2023
Numerator:
Net income attributable to Coupang stockholders	$	5	$	91



Denominator:
Weighted-average shares used in computing net income per share attributable to Class A and Class B common stockholders:
Basic	1,794		1,775
Dilutive effect of equity compensation awards	21		20
Diluted	1,815		1,794

Earnings per share:
Basic	$	—	$	0.05
Diluted	$	—	$	0.05

Anti-dilutive shares	2		6

Note: Amounts may not foot due to rounding.

Coupang, Inc.

SEC Form 10-Q filed by Coupang Inc.