Bernstein: Coupang’s third-quarter loss exceeds expectations; margin recovery may be delayed until mid-2027

Where did the third-quarter results fall short?

Revenue in the third quarter of 2026 was 9.962 billion dollars, up 7.5% year over year and broadly in line with Bernstein’s and market consensus expectations. However, the operating loss was 450 million dollars, well above the firm’s estimate of 155 million dollars and the market consensus of 204 million dollars.
The operating loss included 248 million dollars in costs related to the fulfillment-center fire. Meanwhile, after turning positive in the second quarter, the company’s free cash flow turned negative again in the third quarter.

Third-quarter revenue in the Product Commerce business grew 4.9% year over year. Excluding fire-related costs, gross margin was 29.5%, below 30.5% in the second quarter and 32.1% in the same period last year.
Bernstein believes the self-operated model carries fixed costs such as inventory, fulfillment, and logistics, which are harder to absorb when transaction-volume growth slows. Under the firm’s model, the self-operated share of total transaction value rose from 64% in the second quarter to 69% in the third quarter. Expectations for a gradual shift toward third-party and FLC models have also been pushed back.

In the third quarter, Taiwan’s Wow membership doubled year over year and grew 14% quarter over quarter. Dawn delivery covered more than half of the local population.
Expansion also increased investment: the adjusted EBITDA loss in emerging businesses widened from 219 million dollars in the second quarter to 269 million dollars in the third quarter. Management raised the upper end of its full-year loss guidance for these businesses by 50 million to 100 million dollars, primarily to accelerate Taiwan expansion.

The company guided to fourth-quarter year-over-year revenue growth of 13% to 14% on a constant-currency basis, and a quarter-over-quarter improvement of 0.5 to 1.5 percentage points in its consolidated adjusted EBITDA margin. The margin was 1.2% in the third quarter, below 1.8% in the second quarter.
Management expects the Product Commerce margin to return to pre-incident levels only by mid-2027. Marketing spending remains high, supplier negotiations are ongoing, and Wiseapp data showing weak transaction value in October all affect whether scale can support a recovery in margins.
Given the slower margin recovery and higher investment in Taiwan, Bernstein cut its earnings-per-share forecasts for 2027 and 2028 from 0.21 dollars and 0.37 dollars to 0.17 dollars and 0.32 dollars, respectively. It maintained its Underperform rating and lowered its price target from 12 dollars to 11 dollars.