Financial Data and Key Metrics Changes - WEBTOON reported record annual revenue of $1.35 billion, growing 5% on a reported basis and 13% on a constant currency basis [10] - The company reported a net loss of $153 million, primarily due to noncash expenses, but achieved record adjusted EBITDA of $67.9 million, an increase of over 600% compared to 2023 [10] - In Q4, revenue grew 10.4% on a constant currency basis, with reported revenue up 5.6% year-over-year [19] - Adjusted EBITDA was negative $3.5 million in Q4 compared to a positive $10.4 million in the same quarter of 2023 [22] Business Line Data and Key Metrics Changes - Paid Content revenue grew 10.9% year-over-year on a constant currency basis in Q4, with full-year growth of 12.6% [27] - Advertising revenue increased by 27.4% in Q4 on a constant currency basis, driven by growth in Korea and Japan [29] - IP Adaptation revenue declined by 6.9% year-over-year in Q4 but was up 6.7% for the full year on a constant currency basis [30] Market Data and Key Metrics Changes - In Korea, revenue grew 6.6% year-over-year on a constant currency basis in Q4, while MAU decreased by 0.5% [32] - Japan's revenue grew 18.9% year-over-year on a constant currency basis in Q4, with MAU increasing by 6.6% [35] - The Rest of the World saw a revenue decline of 3.3% year-over-year on a constant currency basis in Q4, with MAU and MPU declining by 6.1% and 3.3% respectively [37] Company Strategy and Development Direction - WEBTOON is focused on building a local creator ecosystem in Japan and investing in content studios globally to enhance its content pipeline [12][14] - The company aims to democratize storytelling and expand its global IP and creator ecosystem [17] - Management emphasized the importance of product innovation and marketing investments to drive long-term growth [61][66] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the fundamental health of the business and the growth potential in key markets like Japan and English-speaking countries [46][56] - The company anticipates facing FX headwinds in Q1 and is investing in infrastructure ahead of product improvements expected in the latter half of 2025 [44] - Management highlighted the impact of political turbulence in Korea on MAU and payer trends but believes these issues will not persist beyond the guided period [74][83] Other Important Information - The company is not providing full-year guidance but remains optimistic about long-term revenue growth and profitability [46] - Adjusted loss per share for Q4 was $0.03 compared to adjusted earnings per share of $0.09 in the prior year [42] Q&A Session Summary Question: Sustainability of growth in Japan and full-year outlook - Management is confident in the sustainability of growth in Japan and believes the IP slate will drive future performance despite some short-term challenges [51][56] Question: User engagement and onboarding experiences - Management discussed ongoing investments in user experience and product innovation, which are expected to enhance user engagement over time [61][66] Question: AI recommendation engine impact - The AI personalization engine has driven a 2% increase in engagement per user, and management sees significant long-term growth potential from this initiative [72] Question: Impact of political disruption in Korea - Management indicated that the political turmoil in Korea affected MAU and payer trends but expects these issues to resolve in the near term [74][83] Question: Advertising business scaling - Advertising continues to show strong growth, with opportunities for further expansion in English-speaking markets and Rest of World [94] Question: Content supply and monetization - Management expressed confidence in the robustness of the content engine and highlighted the importance of local content creation in Japan for global consumption [106][110]

Financial Data and Key Metrics Changes - WEBTOON reported revenue of $1.35 billion, growing 5% on a reported basis and 13% on a constant currency basis [10] - The company reported a net loss of $153 million, primarily due to noncash expenses, but achieved record adjusted EBITDA of $67.9 million, an increase of over 600% compared to 2023 [10] - Gross profit for Q4 was $82.3 million, up from $76.4 million in the prior year, representing a growth of 7.7% [39] - Adjusted EBITDA loss for Q4 was $3.5 million compared to a profit of $10.4 million in the prior year [41] Business Line Data and Key Metrics Changes - Paid Content revenue grew 10.9% year-over-year on a constant currency basis in Q4, with full-year growth of 12.6% [27] - Advertising revenue increased by 27.4% in Q4 on a constant currency basis, driven by growth in Korea and Japan [29] - IP Adaptation revenue declined by 6.9% year-over-year in Q4, but was up 6.7% for the full year on a constant currency basis [30] Market Data and Key Metrics Changes - In Korea, revenue grew 6.6% year-over-year on a constant currency basis in Q4, driven by Paid Content and Advertising [32] - Japan posted revenue growth of 18.9% in Q4 on a constant currency basis, with a full-year growth of 25.8% [35] - The Rest of the World saw a revenue decline of 3.3% year-over-year in Q4, but a full-year growth of 14.9% [37] Company Strategy and Development Direction - WEBTOON is focused on building a local creator ecosystem in Japan and investing in content studios globally to enhance its content pipeline [12][14] - The company aims to democratize storytelling and expand its global IP and creator ecosystem [17] - Management emphasized the importance of product innovation and marketing investments to drive long-term growth [61][66] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the fundamental health of the business and the growth potential in key markets like Japan and English-speaking countries [56][46] - The company anticipates facing FX headwinds in Q1 and is investing in infrastructure ahead of product improvements expected in the latter half of 2025 [44] - Management highlighted the impact of political turbulence in Korea on MAU and payer trends but believes these issues will not persist beyond the guided period [74][83] Other Important Information - The total company MAU decreased by approximately 3.7% in Q4, with a slight decline in app MAU but a 6.7% increase in webcomic app MAU [24][25] - The company is focused on improving user engagement through AI-driven personalization and revamped onboarding experiences [63][64] Q&A Session Summary Question: Sustainability of growth in Japan and full-year outlook - Management is confident in the sustainability of growth in Japan and believes the IP slate will drive future performance despite some short-term challenges [51][56] Question: Investments in users and creators - Management highlighted ongoing investments in marketing and product innovation to enhance user engagement and drive long-term growth [61][66] Question: AI recommendation engine impact - The AI personalization engine has driven a 2% increase in engagement per user, with expectations for significant long-term growth potential [72] Question: Impact of political disruption in Korea - Management noted that political turmoil affected MAU and payer trends but expects these issues to resolve in the near term [74][83] Question: Advertising business scaling - Advertising continues to show strong growth, with opportunities for further expansion in English-speaking markets and Rest of World [94] Question: Content supply and monetization - Management expressed confidence in the robustness of the content engine and highlighted the importance of local content creation in Japan [106][110]

Financial Performance - Total revenue for fiscal year 2024 is approximately $1.347 billion, representing a 12% increase on a constant currency basis compared to fiscal year 2023[2] - Adjusted EBITDA for fiscal year 2024 is estimated to be over $67 million, a growth of over 600% from $8.7 million in 2023[2] - Fourth quarter revenue is approximately $351 million, with a constant currency revenue of approximately $367 million[6] - The net income range for the fourth quarter is estimated to be between $(107) million and $(101) million[6] - The company reported a net loss of $144.8 million for 2023, with a projected net loss ranging from $151.5 million to $157.5 million for 2024[23] - Adjusted EBITDA for 2023 was $8.7 million, with a forecasted range of $67.0 million to $68.0 million for 2024[23] - Impairment losses on goodwill amounted to $63.4 million in 2023, with expected losses of $69.1 million to $70.1 million in 2024[23] - Interest income rose from $3.0 million in 2023 to an expected $15.8 million in 2024[23] - The company experienced a loss on equity method investments of $12.3 million in 2023, with a projected loss of $1.1 million for 2024[23] Operational Highlights - The company experienced approximately 10% revenue growth on a constant currency basis in the fourth quarter despite foreign exchange headwinds[2] - Cash and cash equivalents stand at approximately $572 million, plus an additional $26 million in short-term deposits[6] - WEBTOON Entertainment has approximately 170 million monthly active users, indicating strong user engagement[10] Cost and Expense Management - Stock-based compensation expense significantly increased from $3.2 million in 2023 to an anticipated $82.3 million in 2024[23] - The company incurred restructuring and IPO-related costs of $4.3 million in 2023, with a projected increase to $42.1 million in 2024[23] - Future guidance indicates a significant increase in operational costs, particularly in stock-based compensation and restructuring efforts[23] - The total expenses related to non-recurring items included financial advisory, consulting, severance, and office relocation fees[22] Strategic Outlook - The company is focusing on new product development and market expansion strategies[24] - The company plans to report detailed financial results on February 25, 2025, followed by a conference call[4] - The US dollar appreciated significantly against the Korean Won and Japanese Yen, impacting revenue growth as these currencies represent nearly 90% of total revenue[2] - Actuarial losses on retiree benefits had an approximate $6 million impact on Adjusted EBITDA in the fourth quarter[3]

Core Insights - WEBTOON Entertainment Inc. reported a full year 2024 revenue growth of 5.1%, with a robust year-over-year revenue growth on a constant currency basis of 13.0% [1][6] - The company experienced a net loss of $152.9 million, while adjusted EBITDA reached $67.9 million, representing a 685% increase year-over-year [1][6] - The balance sheet remains strong, with cash and cash equivalents of approximately $572 million and no debt [1] Full Year 2024 Highlights - Total revenue for 2024 was $1.35 billion, a 5.1% increase compared to 2023 [6] - Revenue on a constant currency basis was $1.44 billion, growing 13.0% driven by Paid Content, Advertising, and IP Adaptations [6] - Adjusted EBITDA margin was 5.0%, with adjusted EBITDA of $67.9 million, both increasing from the prior year [6] - Diluted loss per share was $1.21, compared to a loss per share of $1.06 in the prior year [6] Fourth Quarter 2024 Highlights - Total revenue for Q4 2024 was $352.8 million, a 5.6% increase from Q4 2023 [6] - Revenue on a constant currency basis for Q4 was $368.9 million, growing 10.4% [6] - Adjusted EBITDA loss was $3.5 million, compared to a gain of $10.4 million in the prior year [6] CEO Commentary - The CEO highlighted 2024 as an exciting year for the company, emphasizing the successful public listing and strong financial results [4] - The company aims to drive further innovation, enhance usability, and expand monetization opportunities for creators in 2025 [4] Cash Position - The company reported cash and cash equivalents of approximately $572 million, indicating a strong liquidity position [6] - The increase in cash from the previous year was significant, reflecting effective financial management [6]

Core Insights - WEBTOON Entertainment achieved over 12% revenue growth on a constant currency basis in 2024 compared to 2023, with Adjusted EBITDA profitability exceeding $67 million, a growth of over 600% from $8.7 million in 2023 [3][8] - The company reported total revenue of approximately $1.347 billion for the full year 2024, with a constant currency revenue of approximately $1.433 billion [8] - The fourth quarter of 2024 saw total revenue of approximately $351 million, with a constant currency revenue of approximately $367 million [8] Financial Performance - Adjusted EBITDA for the fourth quarter was impacted by approximately $6 million in actuarial losses on retiree benefits, currency translation effects, and lower gross profit in Korea due to a shift in revenue mix [4][8] - The net income for the full year 2024 is estimated to be in the range of approximately $(158) to $(152) million, while the fourth quarter net income is estimated to be approximately $(107) to $(101) million [8] - Cash and cash equivalents stood at approximately $572 million, with an additional $26 million in short-term deposits included in other current assets [8] Market Context - The US dollar appreciated significantly against the Korean Won and Japanese Yen during the fourth quarter, which affected revenue growth as these currencies represent nearly 90% of WEBTOON's total revenue [3][8] - The company faced short-term engagement impacts from political turbulence in Korea, which also contributed to the challenges in revenue growth [3] Upcoming Events - WEBTOON Entertainment plans to report its fourth quarter and full year 2024 financial results on February 25, 2025, followed by a conference call at 4:30 p.m. ET [5][6]

Core Insights - WEBTOON Entertainment Inc. reported a full year of growth and profitability in 2024, with revenue increasing by over 12% on a constant currency basis compared to 2023 [3] - The company achieved Adjusted EBITDA profitability for the second consecutive year, with over $67 million in 2024, a growth of over 600% from $8.7 million in 2023 [3] - Despite foreign exchange challenges, the company demonstrated approximately 10% revenue growth on a constant currency basis in the fourth quarter [3] Financial Performance - Total revenue for 2024 was approximately $1.347 billion, with revenue on a constant currency basis of approximately $1.433 billion [8] - The net income range for 2024 was approximately $(158) to $(152) million, while Adjusted EBITDA ranged from approximately $67 to $68 million [8] - For the fourth quarter of 2024, total revenue was approximately $351 million, with revenue on a constant currency basis of approximately $367 million [8] Currency Impact - The US dollar appreciated significantly against the Korean Won and the Japanese Yen, which represent almost 90% of WEBTOON's total revenue, impacting revenue growth [3] - Currency translation was identified as a primary factor weighing on revenue growth, alongside short-term engagement impacts from political turbulence in Korea [3] Upcoming Events - WEBTOON Entertainment plans to report its fourth quarter and full year 2024 financial results after market close on February 25, 2025, followed by a conference call at 4:30 p.m. ET [5]

Group 1 - WEBTOON Entertainment Inc. announced that CFO and COO David J. Lee will participate in two upcoming investor conferences: UBS Global Technology and AI Conference on December 3, 2024, and Raymond James TMT and Consumer Conference on December 9, 2024 [1] - Both presentations will be webcast live and archived on the Investor Relations section of the Company's website [1] Group 2 - WEBTOON is a leading global entertainment company and pioneer of the mobile webcomic format, transforming comics and visual storytelling for fans and creators [2] - The company has a CANVAS UGC platform that empowers anyone to become a creator, along with a growing roster of WEBTOON Originals creators and series [3] - WEBTOON adaptations are available on major streaming platforms such as Netflix, Prime Video, and Crunchyroll, with content partners including Discord, HYBE, and DC Comics [3] Group 3 - WEBTOON has approximately 170 million monthly active users and an IP & Creator Ecosystem that includes WEBTOON, Wattpad, and several studios [4]

Core Viewpoint - WEBTOON Entertainment Inc. is facing a class action lawsuit alleging that the company made materially false and misleading statements in its registration statement related to its June 2024 IPO, which may have breached the board's fiduciary duties to shareholders [1][4]. Financial Performance - For Q2 2024, WEBTOON reported revenue of $321 million, reflecting a minimal growth of 0.1% [2]. - The company experienced a decline in advertising revenue by 3.6% and a 3.7% drop in IP Adaptations revenue [2]. - A quarterly net loss of $76.6 million, or 70 cents per share, was reported [2]. Stock Performance - Following the financial results announcement, WEBTOON's stock price fell by $7.88, or 38.2%, closing at $12.75 per share on August 9, 2024, with unusually high trading volume [3]. - The stock has traded as low as $12.45 per share, representing a decline of over 40% from the IPO price of $21.00 per share [3]. Allegations in Class Action - The class action complaint alleges that the Registration Statement failed to disclose critical information, including: 1. A deceleration in advertising revenue growth [4]. 2. A slowdown in IP adaptations revenue [4]. 3. Exposure to weaker foreign currencies that offset revenue growth [4]. 4. Misleading positive statements regarding the company's business and prospects [4].

User Metrics - As of September 30, 2024, global Monthly Active Users (MAU) reached approximately 170 million, with contributions of 15.0% from Korea, 13.5% from Japan, and 71.5% from the Rest of World[135]. - Monthly Paying Users (MPU) reached 7.9 million with a paying ratio of 4.7%, showing slight declines compared to the previous year, but an upward trend in sequential quarters[139]. - The decline in Rest of World MAU to 119.3 million was primarily due to a decrease in web users, with a significant impact from a government ban on global content sites in one country[137]. - The company focuses on converting web users to app users, as app users are more engaged and monetization is more effective[135]. - The company tracks performance by geographic regions, categorizing users into Korea, Japan, and Rest of World, to better understand engagement trends[129]. Revenue Performance - Revenue for the three months ended September 30, 2024, was $347,915 thousand, representing a 9.5% increase from $317,764 thousand in 2023[161]. - Paid Content revenue increased by 8.9% to $285,228 thousand, while Advertising revenue grew by 20.8% to $43,384 thousand[161]. - Revenue for the nine months ended September 30, 2024, increased by $46.9 million, or 4.9%, to $995.6 million compared to $948.7 million in 2023, driven by strong growth in Paid Content and Advertising revenue[169]. - Paid Content revenue rose by $37.1 million, or 4.8%, primarily due to strong growth in Japan, while Advertising revenue increased by $12.4 million, or 11.5%[169]. - Revenue on a constant currency basis for the three months ended September 30, 2024, was $360,357,000, a 13.5% increase from $317,415,000 in 2023[194]. User Revenue Metrics - Average Revenue per Paying User (ARPPU) increased to $12.1, reflecting an 11.0% growth compared to the same quarter of 2023, driven by strategic shifts from web to app usage[143]. - In Korea, ARPPU increased to $7.9, a 3.9% rise year-over-year, attributed to the rollout of AI-driven personalized recommendations[144]. - In Japan, ARPPU reached $23.1, a 4.5% increase year-over-year, benefiting from seasonal comic consumption trends[144]. - In the Rest of World, ARPPU increased to $6.7, an 11.7% growth year-over-year, driven by increased reader habituation to paying for content[145]. Expenses and Costs - Cost of revenue rose by 4.4% to $256,534 thousand, with a total cost of revenue of $738,834 thousand for the nine months ended September 30, 2024[162]. - General and administrative expenses surged by 45.8% to $66,747 thousand, driven by increases in stock compensation and consulting fees[163]. - Marketing expenses decreased by $19.8 million, or 20.8%, to $75.6 million, reflecting increased efficiencies in marketing spend[172]. - General and administrative expenses surged by $98.5 million, or 63.3%, to $254.1 million, driven by stock compensation and a one-time bonus related to the IPO[173]. - Cost of revenue increased by $9.2 million, or 1.3%, to $738.8 million, attributed to higher commissions and fees paid to creators[171]. Income and Loss - Operating loss for the three months ended September 30, 2024, was $8,085 thousand, compared to a loss of $6,747 thousand in 2023, marking a 19.8% increase[160]. - Net income for the three months ended September 30, 2024, was $19,986 thousand, a significant recovery from a loss of $11,451 thousand in 2023[160]. - The company experienced a 128.3% increase in operating loss for the nine months ended September 30, 2024, totaling $72,993 thousand compared to $31,976 thousand in 2023[160]. - For the nine months ended September 30, 2024, the company reported a net loss of $50.3 million, adjusted for non-cash items of $76.9 million[201]. - The company reported a net income margin of 5.7% for the three months ended September 30, 2024, compared to a negative margin of -3.6% in 2023[187]. Other Financial Metrics - Interest income skyrocketed by 613.3% to $6,512 thousand, primarily due to earnings from IPO proceeds[164]. - Other income increased significantly by 1736.3% to $11,798 thousand, attributed to gains from foreign currency transactions[168]. - Income tax benefit rose by 266.8% to $9,899 thousand, mainly due to changes in valuation allowance following the LDF-eBIJ Merger[168]. - Adjusted EBITDA for the three months ended September 30, 2024, was $28,903,000, up from $3,164,000 in the same period of 2023[187]. - The company experienced a foreign currency exchange impact of $12,442,000 for the three months ended September 30, 2024[194]. Cash Flow and Capital - As of September 30, 2024, the company had $585.5 million in cash and cash equivalents, primarily invested in short-term, highly liquid investments[198]. - For the nine months ended September 30, 2024, net cash provided by operating activities was $26.5 million, compared to $7.5 million for the same period in 2023[200][202]. - Net cash used in investing activities for the nine months ended September 30, 2024, was $11.2 million, significantly lower than $45.1 million in the same period of 2023[203][204]. - Net cash provided by financing activities for the nine months ended September 30, 2024, was $353.7 million, primarily from the IPO proceeds of $293.0 million[205]. Legal and Compliance - A class action lawsuit has been filed against the company related to its IPO, alleging that the registration statement was materially false and misleading[224]. - The company is focused on remediating material weaknesses in internal control over financial reporting, including enhancing financial reporting functions and IT controls[219][221]. - The company anticipates future capital requirements will depend on growth rate, sales and marketing activities, and other business factors[198]. - The company has not entered into derivative or hedging transactions but may consider them in the future if foreign currency exposure increases[212].

Financial Performance - Total revenue for Q3 2024 was $347.9 million, representing a year-over-year growth of 9.5%[2] - Revenue on a constant currency basis was $360.4 million, reflecting a growth of 13.5% driven by Paid Content, Advertising, and IP Adaptations[2] - Net income for the quarter was $20 million, attributed to improved gross profit and an income tax benefit[2] - Adjusted EBITDA reached $28.9 million, with an Adjusted EBITDA Margin of 8.3%, both showing increases from the previous year[2] - Diluted EPS improved to $0.15 from a loss of $0.10 in the prior year, while Adjusted EPS rose to $0.22 from $0.03[2] - Total revenue for the three months ended September 30, 2024, was $347,915, an increase of 9.4% compared to $317,764 for the same period in 2023[21] - Net income for the three months ended September 30, 2024, was $19,986, compared to a net loss of $11,451 for the same period in 2023[21] - Net income for the nine months ended September 30, 2024, was a loss of $50,349 thousand, compared to a loss of $49,493 thousand for the same period in 2023[22] - Total revenue for the nine months ended September 30, 2024, was $995,631 thousand, reflecting a 4.9% increase from $948,684 thousand in 2023[25] - Revenue on a Constant Currency Basis increased by 13.9% to $1,066,123 thousand for the nine months ended September 30, 2024, compared to $936,261 thousand in 2023[25] Future Projections - The company anticipates Q4 2024 revenue growth on a constant currency basis between 10.3% and 13.3%, estimating revenue between $375 million and $385 million[4] - Adjusted EBITDA for Q4 2024 is expected to be in the range of $9 million to $14 million, with an Adjusted EBITDA Margin of 2.4% to 3.6%[4] Assets and Liabilities - Total assets as of September 30, 2024, were $2,125,741, an increase of 19.6% from $1,776,605 as of December 31, 2023[19] - Total current assets increased to $881,404 as of September 30, 2024, from $492,827 as of December 31, 2023, representing an increase of 78.7%[19] - Total liabilities decreased to $415,032 as of September 30, 2024, from $429,129 as of December 31, 2023, a reduction of 3.3%[19] - Total stockholders' equity attributable to WEBTOON Entertainment Inc. increased to $1,614,714 as of September 30, 2024, from $1,249,141 as of December 31, 2023, an increase of 29.2%[19] Cash Flow - Net cash provided by operating activities was $26,539 thousand for the nine months ended September 30, 2024, significantly up from $7,519 thousand in 2023[22] - Net cash used in investing activities decreased to $11,230 thousand for the nine months ended September 30, 2024, from $45,071 thousand in 2023[22] - Net cash provided by financing activities was $353,668 thousand for the nine months ended September 30, 2024, compared to a net cash used of $6,399 thousand in 2023[22] - Cash and cash equivalents at the end of the year increased to $585,516 thousand, up from $224,244 thousand in 2023[22] - Cash and cash equivalents increased to $585,516 as of September 30, 2024, from $231,745 as of December 31, 2023, a significant increase of 152.5%[19] Expenses - Marketing expenses for the three months ended September 30, 2024, were $32,719, slightly down from $33,066 in the same period of 2023[21] - Stock-based compensation increased significantly to $72,114 thousand for the nine months ended September 30, 2024, compared to $4,331 thousand in 2023[22] - Stock-based compensation expense increased to $12,262,000 for the three months ended September 30, 2024, from $1,232,000 in the same period of 2023[28] - The company incurred IPO-related, legal, restructuring, and advisory costs of $2,925,000 for the three months ended September 30, 2024[28] User Engagement and Market Strategy - WEBTOON has approximately 170 million monthly active users, indicating a strong user engagement[8] - The company is focused on expanding its creator community and enhancing product offerings to drive future growth[3] - WEBTOON's adaptations are available on major platforms like Netflix and Prime Video, showcasing its market expansion strategy[7]