Segment Reporting

3 Months Ended

Mar. 31, 2025

Segment Reporting [Abstract]

Segment Reporting

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

The CODM uses two profitability measures, Segment Gross Profit and Segment Adjusted EBITDA, in assessing segment performance and allocating resources to each segment.

Segment Gross Profit is defined as total net revenues less cost of sales attributable to each reportable segment.

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. The significant segment expense for the measurement of Segment Adjusted EBITDA is the same as the significant segment expense for gross profit. Other segment items for Segment Adjusted EBITDA includes operating, general and administrative expense.

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.

Reportable segment financial information is as follows:

	Three Months Ended March 31,
(in millions)	2025		2024
Net revenues
Product Commerce	$	6,870	$	6,494
Developing Offerings	1,038		620
Total net revenues	$	7,908	$	7,114
Cost of sales
Product Commerce	$	4,719	$	4,658
Developing Offerings	873		527
Total cost of sales	$	5,592	$	5,185
Gross profit
Product Commerce	$	2,151	$	1,836
Developing Offerings	165		93
Total gross profit	$	2,316	$	1,929
Reconciling items:
Operating, general and administrative	(2,162)		(1,889)
Interest expense	(23)		(27)
Interest income	49		55
Other income (expense), net	36		(9)
Income before income taxes	$	216	$	59
Segment adjusted EBITDA
Product Commerce	$	550	$	467
Developing Offerings	(168)		(186)
Total segment adjusted EBITDA	$	382	$	281
Reconciling items:
Depreciation and amortization	$	(122)	$	(95)
Equity-based compensation	(121)		(88)
Acquisition and restructuring related gains and (losses), net	15		(58)
Interest expense	(23)		(27)
Interest income	49		55
Other income (expense), net	36		(9)
Income before income taxes	$	216	$	59

Note: Amounts may not foot due to rounding.