Financial Data and Key Metrics Changes - The company reported a net loss of $22 million in the quarter compared to a net income of $6.2 million in the prior year, driven by higher general and administrative expenses and marketing costs [13] - Adjusted EBITDA was $4.1 million in the quarter, down from $22.2 million in the same quarter of the previous year [26] - Revenue grew 5.3% on a constant currency basis, but reported revenue was roughly flat year over year [12] Business Line Data and Key Metrics Changes - Paid content revenue grew 2.8% on a constant currency basis year over year, driven by strength in Japan, offset by declines in Korea and the rest of the world [17] - Advertising revenue increased by 13.6% on a constant currency basis, with strong performance in Korea and Japan, but a decline in the rest of the world [18] - IP Adaptation revenue saw a 20.7% increase year over year on a constant currency basis, with significant growth in Japan [19] Market Data and Key Metrics Changes - In Korea, revenue grew 3.6% year over year on a constant currency basis, primarily driven by advertising and IP adaptations [20] - Japan posted revenue growth of 9.4% on a constant currency basis, with all revenue streams contributing positively [22] - The rest of the world experienced a revenue decline of 4% year over year on a constant currency basis [24] Company Strategy and Development Direction - The company is focused on building a local creator ecosystem in Japan and expanding its cross-border strategy by taking Japanese content to other markets [6] - Investments are being made in the English language platform to enhance user experience and engagement [7][10] - The company aims to leverage its flywheel of creators, content, and users to generate profitable growth over the long term [31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the business model despite potential market downturns, citing a low average revenue per paying user [10] - The company anticipates revenue growth in the range of 2.2% to 5.2% for the second quarter of 2025 [29] - Management is closely monitoring market health and believes in the long-term growth potential of newer markets [35] Other Important Information - The company faced challenges with a security upgrade affecting search engine indexing, which contributed to a decline in web MAU [14] - The gross profit for the quarter was $71.6 million, resulting in a gross margin of 22%, down from 25.2% in the prior year [25] - The company is making significant changes to its English language web comic app to improve user engagement [60] Q&A Session Summary Question: User growth initiatives and investment cadence - Management highlighted strong long-term growth signs in newer markets, particularly a 19% increase in English-speaking platform MAU [35] Question: Importance of local content in local markets - Management emphasized the significance of local creator IP and partnerships to enhance global reach and engagement [39] Question: MAU decline in Korea and future growth potential - Management noted that while Korea has high penetration, constant currency revenue growth of 3.6% indicates potential for future growth [46] Question: Update on advertising revenue in North America - Management stated that North America advertising is still in early stages, with a focus on building foundational products for future growth [49] Question: Impact of global franchises on monetization - Management clarified that global franchises have historically contributed positively to the core paid content margin structure [53] Question: Security update on Wattpad and user impact - Management confirmed that Wattpad's issues significantly impacted total MAU declines, but it is not a major contributor to paid content revenue [66] Question: Engagement levels of licensed IP in the U.S. - Management indicated that engagement levels depend on the specific IP, but there is potential for licensed IP to drive user engagement [85]

Financial Data and Key Metrics Changes - The company reported a net loss of $22 million in Q1 2025 compared to a net income of $6.2 million in the prior year, primarily due to higher general and administrative expenses and increased marketing costs [13] - Adjusted EBITDA decreased to $4.1 million from $22.2 million year-over-year, with adjusted earnings per share dropping to $0.03 from $0.20 [26][27] - Revenue growth was 5.3% on a constant currency basis, but reported revenue was roughly flat year-over-year due to tough comparisons from Q1 2024 [12] Business Line Data and Key Metrics Changes - Paid content revenue grew by 2.8% on a constant currency basis, driven by strength in Japan, but was offset by declines in Korea and the rest of the world [16] - Advertising revenue increased by 13.6% on a constant currency basis, with strong performance in Korea and Japan, while the rest of the world saw a decline [17] - IP Adaptation revenue surged by 20.7% year-over-year on a constant currency basis, with significant growth in Japan [18] Market Data and Key Metrics Changes - In Japan, revenue grew by 9.4% on a constant currency basis, with all revenue streams contributing positively [22] - Korea experienced a revenue growth of 3.6% on a constant currency basis, driven by advertising and IP adaptations, despite a decline in paid content [20] - The rest of the world saw a revenue decline of 4% year-over-year, with significant drops in paid content and advertising [23] Company Strategy and Development Direction - The company is focused on expanding its presence in Japan and leveraging local content to drive growth in other markets [6] - Investments are being made in the English language platform to enhance user experience and engagement, with a focus on onboarding and content discovery [7][11] - The company aims to maintain a resilient business model that can withstand potential market downturns, emphasizing the value of microtransactions and free content [9][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate current macroeconomic uncertainties and highlighted the importance of ongoing investments in marketing and infrastructure [30] - The company anticipates revenue growth in Q2 2025 in the range of 2.2% to 5.2% on a constant currency basis, with adjusted EBITDA expected between $500,000 and $5.5 million [27][29] - Management remains optimistic about long-term growth prospects, particularly in newer markets and through product innovations [36] Other Important Information - The company is addressing a security issue that affected Wattpad, which contributed to a decline in MAU in the rest of the world [14][63] - A change in methodology by Nabor for measuring MAU in Korea has impacted reported metrics, but the company believes this will not affect long-term growth potential [21][44] Q&A Session Summary Question: User growth initiatives and investment cadence - Management highlighted strong long-term growth signs in newer markets, particularly a 19% increase in English-speaking platform MAU, driven by content flow and product innovation [35] Question: Importance of local content in local markets - Management emphasized the significance of local creator IP and the ability to publish globally, showcasing successful adaptations and partnerships [39] Question: MAU decline in Korea and future growth potential - Management noted that while Korea has high penetration, the focus should be on constant currency revenue growth, which was positive despite MAU fluctuations [44] Question: Update on advertising revenue in North America - Management indicated that North America remains a significant opportunity, with ongoing investments in product and selling organization to drive future growth [47] Question: Impact of global franchises on monetization - Management stated that global franchises enhance the core paid content margin structure and attract a larger audience [52] Question: Changes to the English app and product rollout - Management confirmed extensive product innovations based on global learnings, with promising results from AB testing indicating significant potential for user engagement [56][72] Question: Security update on Wattpad and user impact - Management clarified that Wattpad's issues primarily affected MAU but did not significantly impact paid content revenue, and they are working to resolve these issues [63] Question: Engagement of licensed IP in the U.S. market - Management noted that engagement levels depend on the specific IP, but there is potential for licensed IP to drive user engagement and attract new users [81]

Financial Performance - Total revenue for Q1 2025 was $325.7 million, a decline of 0.3% year-over-year, with a constant currency growth of 5.3% to $343.8 million[6] - Net loss for Q1 2025 was $22.0 million, compared to a net income of $6.2 million in the prior year, attributed to higher general and administrative expenses and increased marketing costs[6] - Adjusted EBITDA for Q1 2025 was $4.1 million, down from $22.2 million in the prior year, resulting in an adjusted EBITDA margin of 1.3% compared to 6.8%[6] - The company reported a diluted loss per share of $0.17, compared to diluted earnings per share of $0.06 in the prior year[6] - Operating loss for the same period was $26,634 thousand, compared to an operating income of $14,188 thousand in the prior year[24] - Net loss attributable to WEBTOON Entertainment Inc. was $22,389 thousand for Q1 2025, compared to a net income of $6,192 thousand in Q1 2024[24] - Total comprehensive loss for Q1 2025 was $15,540 thousand, compared to a total comprehensive loss of $22,465 thousand in Q1 2024[24] - Net income for Q1 2025 was a loss of $21,969,000 compared to a profit of $6,233,000 in Q1 2024[34] - Net income margin decreased to (6.7)% in Q1 2025 from 1.9% in Q1 2024[34] - Adjusted EBITDA margin fell to 1.3% in Q1 2025 compared to 6.8% in Q1 2024[34] Cash and Debt Position - Cash and cash equivalents stood at approximately $550.1 million, with no debt reported[6] - Cash and cash equivalents at the end of Q1 2025 were $550,136 thousand, down from $572,402 thousand at the beginning of the year[29] Revenue Breakdown - Paid content revenue decreased by 2.5% to $260,226 thousand in Q1 2025 from $266,855 thousand in Q1 2024[33] - Advertising revenue increased by 7.8% to $39,898 thousand in Q1 2025, compared to $36,996 thousand in Q1 2024[33] Future Guidance - The company expects revenue growth on a constant currency basis in the range of 2.2%-5.2%, translating to revenue between $335 million and $345 million for Q2 2025[7] - Adjusted EBITDA guidance for Q2 2025 is projected to be between $0.5 million and $5.5 million, indicating an adjusted EBITDA margin of 0.1%-1.6%[7] User Engagement and Content Expansion - WEBTOON Entertainment has approximately 150 million monthly active users, indicating a strong user engagement within its ecosystem[10] - Major global franchises such as 'Godzilla' and 'Sonic the Hedgehog' have been added to the platform, expanding the content library[3] Marketing and Expenses - The company incurred marketing expenses of $31,543 thousand in Q1 2025, significantly higher than $19,478 thousand in Q1 2024[24] - Stock-based compensation expense increased significantly to $17,035,000 in Q1 2025 from $2,226,000 in Q1 2024[34] Other Financial Metrics - The average revenue per paying user (ARPPU) in Korea decreased by 5.3% to $7.5 in Q1 2025 from $7.9 in Q1 2024[33] - Interest income for Q1 2025 was $(5,113,000), compared to $(1,235,000) in Q1 2024, indicating a worsening in interest income[34] - Depreciation and amortization expenses were $8,437,000 in Q1 2025, slightly down from $9,035,000 in Q1 2024[34] - Weighted average shares outstanding increased to 129,598,942 in Q1 2025 from 109,505,160 in Q1 2024[34]

Core Insights - WEBTOON Entertainment reported first quarter results for 2025, with total revenue of $325.7 million, a slight decline of 0.3% year-over-year, but a growth of 5.3% on a constant currency basis [1][6][3] - The company experienced a net loss of $22.0 million, compared to a net income of $6.2 million in the previous year, attributed to increased general and administrative expenses and higher marketing costs [1][6][3] - Adjusted EBITDA was $4.1 million, down from $22.2 million in the prior year, with an adjusted EBITDA margin of 1.3% compared to 6.8% in the previous year [1][6][3] Financial Performance - Total revenue of $325.7 million showed a decline of 0.3%, driven by a decrease in Paid Content revenue, partially offset by growth in Advertising and IP Adaptations [6][3] - Revenue on a constant currency basis was $343.8 million, reflecting a growth of 5.3%, supported by all three revenue streams: Paid Content, Advertising, and IP Adaptations [6][3] - The company reported a diluted loss per share of $0.17, compared to diluted earnings per share of $0.06 in the prior year [6][3] Operational Highlights - The CEO highlighted the implementation of product enhancements on the English-language platform, including AI-powered discovery features, aimed at improving user experience [3] - Major global franchises such as 'Godzilla' and 'Sonic the Hedgehog' were introduced to the platform, indicating a strategy to expand the content library [3] - The company maintains a strong balance sheet with cash and cash equivalents of approximately $550.1 million and no debt [1][6] Future Outlook - For the second quarter of 2025, the company expects revenue growth on a constant currency basis in the range of 2.2%-5.2%, translating to revenue between $335 million and $345 million [7] - Adjusted EBITDA is projected to be in the range of $0.5 million to $5.5 million, representing an adjusted EBITDA margin of 0.1%-1.6% [7]

Core Viewpoint - WEBTOON Entertainment Inc. plans to report its first quarter 2025 financial results on May 13, 2025, after market close, followed by a conference call to discuss the results [1]. Company Overview - WEBTOON Entertainment is a leading global entertainment company known for its storytelling platforms and is a pioneer in the mobile webcomic format [3]. - The company has transformed comics and visual storytelling, catering to both fans and creators [3]. User Engagement and Content Ecosystem - WEBTOON Entertainment boasts approximately 160 million monthly active users, indicating a strong user engagement [5]. - The company's IP & Creator Ecosystem includes various aligned brands and platforms such as WEBTOON, Wattpad, and several studios, enhancing its content offerings [5]. Partnerships and Adaptations - WEBTOON adaptations are available on major streaming platforms like Netflix, Prime Video, and Crunchyroll, showcasing the company's reach in the entertainment industry [4]. - The company collaborates with notable content partners, including Discord, HYBE, and DC Comics, to expand its influence and content diversity [4].

Core Viewpoint - Kuehn Law, PLLC is investigating potential breaches of fiduciary duties by officers and directors of WEBTOON Entertainment Inc. (NASDAQ: WBTN) towards shareholders [1] Financial Performance Issues - WEBTOON insiders allegedly caused the company to misrepresent or fail to disclose a deceleration in advertising revenue growth [2] - The company also reportedly experienced a deceleration in revenue from IP adaptations [2] - There was exposure to weaker foreign currencies that offset revenue growth [2] - As a result of these issues, positive statements regarding the company's business, operations, and prospects were deemed materially misleading or lacking a reasonable basis [2]

User Growth - The company reported a significant increase in monthly active users (MAU), reaching 10 million, representing a 25% year-over-year growth[21] - The company reported a significant increase in Monthly Active Users (MAU), averaging over 10 million users in the last quarter, reflecting a growth of 15% year-over-year[24] - Monthly Paying Users (MPU) increased to 2 million, indicating a 30% rise compared to the previous year, reflecting improved monetization strategies[24] - Monthly Paying Users (MPU) reached 2 million, indicating a paying ratio of 20% compared to MAU, which is an increase from 18% in the previous quarter[24] - The management anticipates continued growth in the creator community, aiming to onboard 5,000 new professional creators by the end of the fiscal year[26] Revenue Growth - The company anticipates a revenue growth of 20% for the next fiscal year, driven by new product launches and market expansion efforts[26] - The average revenue per paying user (ARPPU) rose to $15, a 10% increase from the last quarter, showcasing enhanced user engagement with paid content[24] - The Average Revenue per Paying User (ARPPU) for Paid Content was reported at $15, showing a 10% increase from the last quarter[24] - New product launches, including the "Fast Pass" and "Daily Pass," are expected to drive additional revenue, with projections estimating a 30% increase in Paid Content sales[26] - The company is committed to enhancing its advertising business, with a goal to increase advertising revenue by 15% in the next quarter[26] Monetization Strategies - The paying ratio improved to 20%, indicating a stronger conversion of users to paying customers[24] - The company is committed to diversifying its monetization strategies, including increasing revenues from intellectual property adaptations by 25%[26] - The company is focusing on diversifying its monetization strategy, particularly through IP Adaptations, with a target to increase revenue from this segment by 40% in the upcoming year[26] Market Expansion - The company plans to expand its presence in international markets, targeting a 15% increase in user base outside of its primary market[26] - The company plans to expand its offerings in new geographic markets, aiming for a 25% increase in user engagement by the end of the next fiscal year[26] Investment and Acquisitions - Investment in new technologies and product development is expected to exceed $50 million in the upcoming year, focusing on enhancing user experience and content offerings[26] - A strategic acquisition of a content platform is in progress, which is projected to enhance the company's content library and user engagement metrics[26] - Future acquisitions are being considered to strengthen market position, with a focus on companies that can enhance user engagement and content offerings[26] Future Outlook and Challenges - Future growth is contingent on maintaining a safe online environment and complying with evolving regulatory standards, which may impact operational costs[29] - The company has experienced a historical growth rate of 20% annually, but management cautions that future performance may vary due to market competition and user retention challenges[28]

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]