Core Points - Webtoon Entertainment Inc. experienced an 81% surge in stock price, marking its largest single-day increase since its IPO, following a partnership announcement with The Walt Disney Company [1] - The agreement includes the adaptation of 100 Disney-branded comics into Webtoon’s English app and the co-creation of original webcomics [1] - Webtoon reported quarterly earnings that exceeded analyst expectations, with adjusted earnings per share of $0.07 and revenue of $348 million, surpassing the Wall Street average estimates [1] Company Insights - Webtoon’s CEO David Lee indicated that the partnership is mutually beneficial, enhancing Webtoon’s comic resources with popular works while allowing Disney to reach younger audiences [1] - Webtoon’s Chief Strategy Officer Yongsoo Kim emphasized the goal of introducing legendary stories to a new generation of mobile comic enthusiasts [2] - Despite the stock price increase, Webtoon’s current price remains below the $21 IPO price due to previous underwhelming performance [2] Analyst Commentary - Morgan Stanley analyst Matthew Cost highlighted the partnership with Disney as an attractive development that could significantly expand user growth in the English market [2] - The key concern raised by analysts is whether Disney's audience will remain engaged with Webtoon for original content or only return for familiar brand content [2]

[PART I-FINANCIAL INFORMATION](index=7&type=section&id=PART%20I-FINANCIAL%20INFORMATION) This section presents the unaudited condensed consolidated financial statements and management's discussion and analysis for WEBTOON Entertainment Inc. [Item 1. Unaudited Financial Statements](index=7&type=section&id=Item%201.%20Unaudited%20Financial%20Statements.) This section presents the unaudited condensed consolidated financial statements for WEBTOON Entertainment Inc. as of June 30, 2025, including balance sheets, statements of operations, statements of stockholders' equity, and statements of cash flows. [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets increased to **$2.01 billion**, total liabilities grew to **$411.8 million**, and total equity rose to **$1.56 billion**. Condensed Consolidated Balance Sheet Highlights (As of June 30, 2025 vs. Dec 31, 2024) | Metric | June 30, 2025 (in thousands USD) | December 31, 2024 (in thousands USD) | | :--- | :--- | :--- | | **Total Assets** | **$2,009,759** | **$1,935,334** | | Total current assets | $862,018 | $836,372 | | Goodwill, net | $685,690 | $665,275 | | **Total Liabilities** | **$411,802** | **$378,873** | | Total current liabilities | $339,848 | $313,224 | | **Total Equity** | **$1,560,280** | **$1,519,881** | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) For Q2 2025, revenue grew to **$348.3 million**, and net loss significantly reduced to **$3.9 million** from **$76.6 million** in Q2 2024, primarily due to decreased general and administrative expenses. Statement of Operations Summary (Three Months Ended June 30) | Metric | 2025 (in thousands USD) | 2024 (in thousands USD) | | :--- | :--- | :--- | | Revenue | $348,271 | $320,972 | | Cost of revenue | $(260,992) | $(237,915) | | General and administrative expenses | $(64,972) | $(138,705) | | Operating income (loss) | $(8,763) | $(79,096) | | **Net income (loss)** | **$(3,883)** | **$(76,568)** | | Basic & Diluted EPS | $(0.03) | $(0.70) | Statement of Operations Summary (Six Months Ended June 30) | Metric | 2025 (in thousands USD) | 2024 (in thousands USD) | | :--- | :--- | :--- | | Revenue | $673,978 | $647,716 | | Cost of revenue | $(515,088) | $(482,300) | | General and administrative expenses | $(131,674) | $(187,398) | | Operating income (loss) | $(35,397) | $(64,908) | | **Net income (loss)** | **$(25,852)** | **$(70,335)** | | Basic & Diluted EPS | $(0.21) | $(0.64) | [Condensed Consolidated Statements of Stockholders' Equity](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Total stockholders' equity increased from **$1.52 billion** at the start of 2025 to **$1.56 billion** by June 30, driven by foreign currency adjustments and equity-based compensation. - Total equity attributable to WEBTOON Entertainment Inc. increased from **$1.47 billion** on January 1, 2025, to **$1.51 billion** on June 30, 2025[27](index=27&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash used in operating activities was **$13.0 million**, with cash and cash equivalents increasing by **$9.1 million** to **$581.5 million**. Cash Flow Summary (Six Months Ended June 30) | Activity | 2025 (in thousands USD) | 2024 (in thousands USD) | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $(12,951) | $22,394 | | Net cash provided by (used in) investing activities | $5,711 | $(7,306) | | Net cash provided by (used in) financing activities | $229 | $336,053 | | **Net increase (decrease) in cash** | **$9,144** | **$340,560** | | **Cash and cash equivalents at end of period** | **$581,546** | **$572,305** | [Notes to the Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) Detailed notes cover revenue disaggregation, geographical markets, legal proceedings, and stock-based compensation, with Paid Content and Japan as key revenue drivers. Revenue by Stream (Three Months Ended June 30) | Revenue Stream | 2025 (in thousands USD) | 2024 (in thousands USD) | | :--- | :--- | :--- | | Paid Content | $274,913 | $260,709 | | Advertising | $45,220 | $40,419 | | IP Adaptations | $28,138 | $19,844 | | **Total** | **$348,271** | **$320,972** | Revenue by Geography (Three Months Ended June 30) | Geography | 2025 (in thousands USD) | 2024 (in thousands USD) | | :--- | :--- | :--- | | Korea | $125,746 | $118,067 | | Japan | $177,881 | $156,221 | | Rest of World | $44,644 | $46,684 | | **Total** | **$348,271** | **$320,972** | - The company is facing a putative class action lawsuit filed on September 5, 2024, alleging that the IPO Registration Statement was materially false and misleading, and the company intends to defend the case vigorously[63](index=63&type=chunk) - Total stock-based compensation expense was **$25.5 million** for the six months ended June 30, 2025, a significant decrease from **$57.7 million** in the same period of 2024[67](index=67&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=28&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) Management discusses key business metrics, financial results, and liquidity, highlighting a decrease in global MAU but growth in ARPPU and significant reduction in net loss for Q2 2025. [Key Business Metrics](index=28&type=section&id=Key%20Business%20Metrics) Global MAU decreased by **7.6%** to **156.1 million** in Q2 2025, while Global MPU remained stable, and Paid Content ARPPU grew **11.1%** to **$12.4**. Key Operating Metrics (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Global MAU | 156.1 million | ~168.9 million | -7.6% | | - Korea MAU | 23.0 million | 25.8 million | -10.9% | | - Japan MAU | 22.6 million | 22.0 million | +2.7% | | - ROW MAU | 110.5 million | 121.1 million | -8.8% | | Global MPU | 7.4 million | ~7.7 million | -3.9% | | Paying Ratio | 4.7% | 4.6% | +0.1 ppt | | Global ARPPU | $12.4 | ~$11.16 | +11.1% | [Results of Operations](index=31&type=section&id=Results%20of%20Operations) Q2 2025 revenue increased **8.5%** to **$348.3 million**, and operating loss significantly narrowed to **$8.8 million** due to a **53.2%** decrease in G&A expenses. Comparison of Operations (Three Months Ended June 30) | Metric (in thousands USD) | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | Revenue | $348,271 | $320,972 | 8.5% | | Operating income (loss) | $(8,763) | $(79,096) | (88.9%) | | Net income (loss) | $(3,883) | $(76,568) | (94.9%) | - The decrease in G&A expenses for Q2 2025 was largely driven by a **$43.2 million** decrease in stock compensation expense and the non-recurrence of a **$30.0 million** one-time CEO bonus related to the successful IPO in 2024[154](index=154&type=chunk) [Non-GAAP Financial Measures](index=35&type=section&id=Non-GAAP%20Financial%20Measures) Adjusted EBITDA for Q2 2025 was **$9.7 million**, with a **2.8%** margin, while constant currency revenue grew **5.5%** year-over-year. Reconciliation of Net Loss to Adjusted EBITDA (Three Months Ended June 30) | Metric (in thousands USD) | 2025 | 2024 | | :--- | :--- | :--- | | Net income (loss) | $(3,883) | $(76,568) | | EBITDA | $(1,216) | $(67,778) | | **Adjusted EBITDA** | **$9,662** | **$20,351** | | Adjusted EBITDA Margin | 2.8% | 6.3% | - On a constant currency basis, total revenue for the three months ended June 30, 2025, was **$338.7 million**, representing a **5.5%** increase over the prior year period[184](index=184&type=chunk) [Liquidity and Capital Resources](index=38&type=section&id=Liquidity%20and%20Capital%20Resources) The company held **$581.5 million** in cash and cash equivalents as of June 30, 2025, supported by IPO proceeds, and believes it has sufficient liquidity for the next 12 months. - The company completed its IPO on June 28, 2024, receiving net proceeds of approximately **$281.7 million**, and an additional **$50 million** from a concurrent private placement[185](index=185&type=chunk)[186](index=186&type=chunk) - As of June 30, 2025, the company had **$581.5 million** in cash and cash equivalents[188](index=188&type=chunk) Cash Flow Summary (Six Months Ended June 30) | Activity (in thousands USD) | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $(12,951) | $22,394 | | Net cash provided by (used in) investing activities | $5,711 | $(7,306) | | Net cash provided by (used in) financing activities | $229 | $336,053 | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=40&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) This section refers to the company's Annual Report for a detailed discussion of its market risks, indicating no material changes since that filing. - The company's disclosures about market risk are referenced from its Annual Report on Form 10-K[196](index=196&type=chunk) [Item 4. Controls and Procedures](index=40&type=section&id=Item%204.%20Controls%20and%20Procedures.) Management concluded that disclosure controls were ineffective as of June 30, 2025, due to material weaknesses in accounting resources and period-end financial reporting processes, with remediation ongoing. - Management concluded that disclosure controls and procedures were not effective as of June 30, 2025, due to material weaknesses in internal control over financial reporting[197](index=197&type=chunk) - Identified material weaknesses include: * Lacking a sufficient complement of resources with appropriate accounting knowledge and experience[198](index=198&type=chunk) * Ineffective design and maintenance of controls related to the period-end financial reporting and disclosure process[199](index=199&type=chunk) - Remediation efforts are ongoing, including onboarding U.S. GAAP and SEC reporting specialists and strengthening financial closing and reporting controls[201](index=201&type=chunk) [PART II-OTHER INFORMATION](index=42&type=section&id=PART%20II-OTHER%20INFORMATION) This section covers legal proceedings, risk factors, equity sales, defaults, mine safety, other information, and exhibits. [Item 1. Legal Proceedings](index=42&type=section&id=Item%201.%20Legal%20Proceedings.) The company is involved in class action and shareholder derivative lawsuits alleging misleading IPO statements, which it intends to vigorously defend. - A putative class action lawsuit was filed on September 5, 2024, against the company, its directors, and IPO underwriters, alleging violations of the Securities Act of 1933 related to the IPO Registration Statement[206](index=206&type=chunk) - A shareholder derivative lawsuit was filed on November 15, 2024, against the company's directors based on similar allegations as the class action, which has been stayed pending the motion to dismiss in the class action case[207](index=207&type=chunk) [Item 1A. Risk Factors](index=42&type=section&id=Item%201A.%20Risk%20Factors.) There have been no material changes to the company's risk factors since the filing of its Annual Report on Form 10-K. - No material changes to the risk factors previously disclosed in the Annual Report have occurred[208](index=208&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=42&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) There were no unregistered sales of equity securities during the period. - None[209](index=209&type=chunk) [Item 3. Defaults Upon Senior Securities](index=42&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities.) There were no defaults upon senior securities during the period. - None[209](index=209&type=chunk) [Item 4. Mine Safety Disclosures](index=42&type=section&id=Item%204.%20Mine%20Safety%20Disclosures.) This item is not applicable to the company. - Not Applicable[209](index=209&type=chunk) [Item 5. Other Information](index=42&type=section&id=Item%205.%20Other%20Information.) There is no other information to report for the period. - None[210](index=210&type=chunk) [Item 6. Exhibits](index=43&type=section&id=Item%206.%20Exhibits.) This section lists the exhibits filed with the Form 10-Q, including corporate governance documents and officer certifications. - Exhibits filed include: * Amended and Restated Certificate of Incorporation and By-Laws[211](index=211&type=chunk) * Certifications by the Principal Executive Officer and Principal Financial Officer[211](index=211&type=chunk) * Interactive Data Files (Inline XBRL)[211](index=211&type=chunk)

| (0) WBTN WEBTOON Entertainment | | | | --- | --- | --- | | 9.360 ↑ +0.220 +2.41% | | | | 13.120 + 3.760 +40.17% | | 盘前价 08/13 05:20 美东 | | 一 24 24 4 8 8 8 8 | | ● 快捷交易 | | 最高价 9.415 | | 开盘价 9.220 成交量 131.74万 | | 最低价 9.090 | 昨收价 9.140 | 成交额 1576.17万 | | 平均价 11.964 | 市盈率TM 亏损 | 总市值 12.19亿 … | | 振 幅 3.56% | 市盈率(静) 亏损 | 总股本 1.3亿 | | 换手率 7.52% | 市净率 0.830 | 流通值 1.64亿 | | 52周最高 14.690 | 委 比 99.70% | 流通股 1750.99万 | | 52周最低 6.750 | 量 比 2.79 | 色 手 1股 | | 历史最高 25.660 | 股息TIM -- | | | 历史最低 6.750 | 股息率TIM -- | | Webt ...

Core Insights - Webtoon Entertainment (WBTN) reported revenue of $348.27 million for Q2 2025, marking an 8.5% year-over-year increase and a surprise of +2.06% over the Zacks Consensus Estimate of $341.26 million [1] - The earnings per share (EPS) for the quarter was $0.07, down from $0.20 a year ago, with an EPS surprise of +250% compared to the consensus estimate of $0.02 [1] Financial Performance Metrics - Monthly Active Users (MAU) totaled 156.1 million, slightly below the average estimate of 159.76 million [4] - MAU in Japan was 22.6 million, compared to the estimated 23 million [4] - MAU in the Rest of World segment reached 110.5 million, exceeding the estimate of 109.6 million [4] - Monthly Paying Users (MPU) in Korea were 3.4 million, slightly below the estimate of 3.49 million [4] - MPU in Japan was 2.3 million, compared to the average estimate of 2.43 million [4] - Total Monthly Paying Users were 7.4 million, compared to the estimate of 7.59 million [4] - Paying Ratio in Korea was 14.9%, exceeding the estimate of 14.3% [4] - Paying Ratio in Japan was 10%, below the estimate of 10.6% [4] - Paying Ratio in the Rest of World was 1.5%, matching the estimate [4] Revenue Breakdown - Paid Content Revenue was reported at $274.91 million, slightly above the estimate of $274.35 million [4] - Revenue from IP Adaptations was $28.14 million, exceeding the average estimate of $23.8 million [4] - Advertising Revenue reached $45.22 million, surpassing the estimate of $43.65 million [4] Stock Performance - Webtoon shares have returned -2.3% over the past month, while the Zacks S&P 500 composite increased by +2% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market [3]

Core Viewpoint - Webtoon Entertainment (WBTN) reported quarterly earnings of $0.07 per share, exceeding the Zacks Consensus Estimate of $0.02 per share, but down from $0.20 per share a year ago [1][2] Financial Performance - The earnings surprise for the quarter was +250.00%, with the company having surpassed consensus EPS estimates in all four quarters over the past year [2] - Webtoon generated revenues of $348.27 million for the quarter ended June 2025, which was 2.06% above the Zacks Consensus Estimate and an increase from $320.97 million year-over-year [3] Stock Performance - Webtoon shares have declined approximately 32.7% since the beginning of the year, contrasting with the S&P 500's gain of 8.4% [4] - The current Zacks Rank for Webtoon is 3 (Hold), indicating expected performance in line with the market in the near future [7] Future Outlook - The consensus EPS estimate for the upcoming quarter is $0.03 on revenues of $373.35 million, and for the current fiscal year, it is $0.17 on revenues of $1.43 billion [8] - The Internet - Software industry, to which Webtoon belongs, is currently ranked in the top 39% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [9]

Financial Data and Key Metrics Changes - Revenue grew by 5.5% on a constant currency basis and reported revenue was up 8.5% compared to the prior year [10] - Net loss decreased to $3.9 million from $76.6 million in the previous year, primarily due to lower general and administrative expenses [10][23] - Adjusted EBITDA was $9.7 million, down from $20.4 million in the same quarter of 2024 [11][22] - Adjusted earnings per share was $0.07 compared to $0.18 in the prior year [23] Business Line Data and Key Metrics Changes - Paid content revenue grew by 2% on a constant currency basis, driven by strength in Japan, while declines were noted in Korea and the rest of the world [14] - Advertising revenue increased by 10.2% on a constant currency basis, with growth in Korea and Japan, but a decline in the rest of the world [15] - IP Adaptations revenue surged by 42.6% year on year on a constant currency basis, with significant contributions from Korea [16] Market Data and Key Metrics Changes - In Korea, revenue grew by 9.2% year over year on a constant currency basis, with MAU decreasing by 11.1% [18] - Japan saw revenue growth of 5.7% year over year, with MAU increasing by 2.8% [19] - The rest of the world experienced a revenue decline of 4.4% year over year, driven by declines in paid content and advertising [20] Company Strategy and Development Direction - The company is focusing on enhancing user experience through significant product updates and expanding its library with popular titles [6][7] - A partnership with Disney was announced to bring iconic comics to the platform, which is expected to drive user growth and engagement [7][31] - The company aims to maintain investment in marketing to drive future growth while improving product offerings [24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing strong user engagement and the potential for monetization through new content and platform upgrades [9][24] - The company anticipates revenue growth in Q3 2025 in the range of 9.4% to 12.2% on a constant currency basis [24] - Management acknowledged challenges from external factors, such as government bans affecting user metrics, but remains focused on long-term growth strategies [12][68] Other Important Information - The company is experiencing a decline in overall MAU, primarily due to the impact of Wattpad, but is optimistic about future growth in this area [12][68] - Gross profit for the quarter increased by 5.1% to $87.3 million, with a gross margin of 25.1% [21] Q&A Session Summary Question: Impact of Disney partnership on user growth and monetization - Management highlighted the strategic significance of the Disney collaboration, emphasizing the potential for accelerated user growth and engagement without immediate financial impact [31][32] Question: Marketing arrangements related to the Disney partnership - Management noted the importance of reaching Gen Z consumers and attracting new users, but did not disclose specific marketing arrangements [34][35] Question: User trends and onboarding process impact - Management discussed the new onboarding process and product updates aimed at increasing user engagement and ARPU, with promising early results [39][40] Question: Advertising outlook for Q3 and beyond - Management indicated strong growth in advertising revenue, particularly in Korea and Japan, while acknowledging the need for foundational work in North America [44][46] Question: Strategy for user-generated content alongside established IP - Management stated that the collaboration with established IP complements the creator ecosystem, enhancing user acquisition and engagement [49][51] Question: Drivers of Q3 revenue growth and sustainability - Management clarified that the Q3 guidance does not include short-term impacts from the Disney collaboration, focusing instead on strong fundamentals in paid content and advertising [55][56] Question: Exclusivity of new original web comic series from Disney - Management expressed excitement about both original and existing series, noting that the collaboration acknowledges Webtoon as a leader in the format [60][62] Question: Advertising business performance excluding Wattpad impact - Management acknowledged the challenges posed by Wattpad but remains optimistic about the long-term potential of the rest of the world advertising market [68]

[Financial and Operational Highlights](index=1&type=section&id=Financial%20and%20Operational%20Highlights) WEBTOON Entertainment reported strong Q2 2025 results, exceeding revenue and Adjusted EBITDA guidance. Revenue grew 8.5% to $348.3 million (5.5% on a constant currency basis), driven by growth in all segments. The company significantly narrowed its Net Loss to $3.9 million from $76.6 million a year ago, primarily due to lower G&A expenses. However, Adjusted EBITDA decreased to $9.7 million. The company maintains a strong balance sheet with $581.5 million in cash and no debt Q2 2025 Key Financial Metrics (vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $348.3M | $321.0M | +8.5% | | Revenue (Constant Currency) | $338.7M | $321.0M | +5.5% | | Net Loss | ($3.9M) | ($76.6M) | +94.9% | | Adjusted EBITDA | $9.7M | $20.4M | -52.5% | | Diluted Loss Per Share | ($0.03) | ($0.70) | +95.7% | | Adjusted EPS | $0.07 | $0.18 | -61.1% | - The company maintains a strong liquidity position with approximately **$581.5 million** in cash and cash equivalents and no debt on its balance sheet[1](index=1&type=chunk)[4](index=4&type=chunk) - A new strategic collaboration was announced with Disney to bring iconic comics from Marvel, Star Wars, Disney Studios, and 20th Century Studios to WEBTOON's vertical-scroll format[5](index=5&type=chunk) [Management Commentary and Outlook](index=1&type=section&id=Management%20Commentary%20and%20Outlook) Management expressed satisfaction with the strong Q2 results, which surpassed guidance. The CEO highlighted growth across all three revenue streams (Paid Content, Advertising, and IP Adaptations) and emphasized platform investments, such as updates to the English-language app, to drive user engagement. The company provided a positive outlook for Q3 2025, forecasting continued revenue growth and positive Adjusted EBITDA - CEO Junkoo Kim stated that both revenue and Adjusted EBITDA came in above the top end of the company's guidance range for the quarter[3](index=3&type=chunk) - Growth was driven by all three revenue streams: Paid Content, Advertising, and IP Adaptations[3](index=3&type=chunk)[4](index=4&type=chunk) - The company is investing in platform enhancements, such as updates to its English-language webcomic app, to improve content discovery and drive deeper user engagement[3](index=3&type=chunk)[5](index=5&type=chunk) Third Quarter 2025 Outlook | Metric | Guidance Range | | :--- | :--- | | Revenue Growth (Constant Currency) | 9.4% - 12.2% | | Revenue (at current FX rates) | $380M - $390M | | Adjusted EBITDA | $2.0M - $7.0M | | Adjusted EBITDA Margin | 0.5% - 1.8% | [Financial Statements](index=5&type=section&id=Financial%20Statements) The consolidated financial statements provide a detailed view of WEBTOON's financial position and performance. The balance sheet shows an increase in total assets to $2.01 billion, supported by strong cash reserves. The statement of operations reflects an 8.5% year-over-year revenue increase in Q2 and a significantly narrowed net loss. The cash flow statement indicates cash used in operations for the first six months of 2025, a reversal from the cash provided in the same period of 2024, alongside positive cash flow from investing activities [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, the company's balance sheet remains robust with total assets of $2.01 billion, up from $1.94 billion at the end of 2024. Cash and cash equivalents increased slightly to $581.5 million. Total liabilities grew to $411.8 million, while total equity increased to $1.56 billion Selected Balance Sheet Data (in thousands USD) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $581,546 | $572,402 | | Total current assets | $862,018 | $836,372 | | Total assets | $2,009,759 | $1,935,334 | | Total current liabilities | $339,848 | $313,224 | | Total liabilities | $411,802 | $378,873 | | Total equity | $1,560,280 | $1,519,881 | [Consolidated Statements of Operations](index=8&type=section&id=Consolidated%20Statements%20of%20Operations) For the second quarter ended June 30, 2025, revenue increased 8.5% YoY to $348.3 million. The company recorded a net loss of $3.9 million, a substantial improvement from a $76.6 million net loss in Q2 2024. This improvement was primarily driven by a significant reduction in general and administrative expenses, which fell from $138.7 million to $65.0 million YoY Q2 Statement of Operations Highlights (in thousands USD) | Account | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Revenue | $348,271 | $320,972 | | Cost of revenue | ($260,992) | ($237,915) | | General and administrative expenses | ($64,972) | ($138,705) | | Operating income (loss) | ($8,763) | ($79,096) | | Net income (loss) | ($3,883) | ($76,568) | | Diluted loss per share | ($0.03) | ($0.70) | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash used in operating activities was $13.0 million, a decrease from $22.4 million provided by operating activities in the prior-year period. Net cash provided by investing activities was $5.7 million, compared to $7.3 million used in the prior year. Financing activities were minimal, and the company's cash balance increased by $9.1 million during the period Six-Month Cash Flow Summary (in thousands USD) | Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | ($12,951) | $22,394 | | Net cash provided by (used in) investing activities | $5,711 | ($7,306) | | Net cash provided by (used in) financing activities | $229 | $336,053 | | Effect of exchange rate changes | $16,155 | ($10,581) | | **Net increase in cash** | **$9,144** | **$340,560** | [Non-GAAP Financial Measures and Reconciliations](index=3&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliations) This section defines the non-GAAP metrics used by management, such as Adjusted EBITDA and Revenue on a Constant Currency Basis, to assess performance. It provides detailed reconciliations of these measures to their nearest GAAP equivalents. For Q2 2025, constant currency revenue growth was 5.5%. Adjusted EBITDA was $9.7 million, reconciled from a net loss of $3.9 million by adding back items like stock-based compensation and restructuring costs [Definitions of Non-GAAP Measures](index=3&type=section&id=Definitions%20of%20Non-GAAP%20Measures) The company uses several non-GAAP measures to provide additional insight into its financial performance. Key metrics include Adjusted EBITDA, which excludes items like stock-based compensation; Adjusted EPS, which makes similar adjustments to earnings per share; and Revenue on a Constant Currency Basis, which removes the impact of foreign currency fluctuations - **Adjusted EBITDA:** Defined as net income (loss) adjusted for interest, taxes, depreciation, amortization, stock-based compensation, and other non-recurring costs[17](index=17&type=chunk) - **Adjusted EPS:** Calculated by adjusting Net Income (Loss) for the same items as Adjusted EBITDA and dividing by weighted average shares outstanding[19](index=19&type=chunk)[20](index=20&type=chunk) - **Revenue on a Constant Currency Basis:** Revenue adjusted to remove the impact of foreign currency rate fluctuations, calculated by applying prior year average exchange rates to current period local currency revenue[21](index=21&type=chunk) [Reconciliation of Revenue to Constant Currency Basis](index=11&type=section&id=Reconciliation%20of%20Revenue%20to%20Constant%20Currency%20Basis) In Q2 2025, reported total revenue was $348.3 million. After adjusting for a negative $9.5 million impact from foreign currency fluctuations, the revenue on a constant currency basis was $338.7 million, representing 5.5% YoY growth. IP Adaptations showed the strongest constant currency growth at 42.6%, followed by Advertising at 10.2% and Paid Content at 2.0% Q2 2025 Revenue to Constant Currency Reconciliation (in thousands USD) | Description | Amount | Growth vs. Q2 2024 | | :--- | :--- | :--- | | Total Revenue (GAAP) | $348,271 | 8.5% | | Effects of foreign currency rate fluctuations | ($9,543) | N/A | | **Revenue on a Constant Currency Basis** | **$338,728** | **5.5%** | [Reconciliation of Net Loss to Adjusted EBITDA](index=12&type=section&id=Reconciliation%20of%20Net%20Loss%20to%20Adjusted%20EBITDA) For Q2 2025, the company reconciled its Net Loss of $3.9 million to an Adjusted EBITDA of $9.7 million. Key adjustments included adding back $8.4 million in depreciation and amortization, $8.5 million in stock-based compensation, and $1.5 million in restructuring and IPO-related costs. This resulted in an Adjusted EBITDA Margin of 2.8%, down from 6.3% in the prior year Q2 2025 Net Loss to Adjusted EBITDA Reconciliation (in thousands USD) | Description | Amount | | :--- | :--- | | Net income (loss) | ($3,883) | | Depreciation and amortization | $8,407 | | Stock-based compensation expense | $8,463 | | Restructuring and IPO-related costs | $1,476 | | Other adjustments | ($3,391) | | **Adjusted EBITDA** | **$9,662** |

Core Insights - WEBTOON Entertainment reported strong second quarter results, with revenue and Adjusted EBITDA exceeding the top end of guidance ranges [1][3] - Total revenue for the second quarter was $348.3 million, reflecting an 8.5% increase year-over-year, while revenue growth on a constant currency basis was 5.5% [1][6] - The company experienced a net loss of $3.9 million, a significant improvement compared to a net loss of $76.6 million in the same quarter last year [1][6] Financial Performance - Adjusted EBITDA for the second quarter was $9.7 million, down from $20.4 million in the prior year, resulting in an Adjusted EBITDA margin of 2.8% compared to 6.3% [1][6] - The diluted loss per share was $0.03, compared to a diluted loss per share of $0.70 in the prior year [6] - Cash and cash equivalents stood at approximately $581.5 million, with no debt reported [1][6] Revenue Breakdown - Revenue growth was driven by all three revenue streams: Paid Content, Advertising, and IP Adaptations [3][6] - Paid Content revenue was $274.9 million, up 5.4% year-over-year, while Advertising revenue increased by 11.9% to $45.2 million [6][35] - IP Adaptations revenue saw a significant increase of 41.8%, reaching $28.1 million [6][35] Strategic Initiatives - The company announced a strategic collaboration with Disney to bring iconic comics from Marvel, Star Wars, and other franchises to its platform [4] - Recent updates to the English-language webcomic app aim to enhance user experience and engagement [3] Outlook - For the third quarter of 2025, the company expects revenue growth on a constant currency basis to be in the range of 9.4%-12.2%, translating to revenue between $380 million and $390 million [7]

Core Insights - WEBTOON Entertainment Inc. plans to report its second quarter 2025 financial results on August 12, 2025, after market close [1] - A conference call will be held at 4:30 p.m. ET 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 for fans and creators [3] - WEBTOON Entertainment's CANVAS UGC platform allows anyone to become a creator, contributing to a diverse range of content [4] User Engagement and Partnerships - The company boasts approximately 150 million monthly active users across its platforms [5] - Its ecosystem includes WEBTOON, Wattpad, WEBTOON Productions, and other brands, enhancing its reach in the digital storytelling space [5] - WEBTOON Entertainment has partnerships with major platforms like Netflix, Prime Video, and Crunchyroll, as well as collaborations with brands such as Discord, HYBE, and DC Comics [4]

Summary of WEBTOON Entertainment (WBTN) FY Conference Call Company Overview - WEBTOON Entertainment operates as a global storytelling hub with a significant user base of 153 million active users, primarily outside Asia, despite its origins in South Korea [5][6][12] - The company has a diverse set of brands, including Line Manga, and has achieved significant market penetration in Japan, where it is the number one consumer app [10][11] Financial Performance - In 2024, WEBTOON reported GAAP revenue of $1.35 billion, with a 13% growth in constant currency [8][9] - The company achieved a 4.2% growth in total company MAU and a 19% growth in web comic app MAU in North America [9][10] - The average revenue per user (ARPU) is approximately $14 in South Korea, $23 in Japan, and around $6 to $8 in the rest of the world [34][40] User Engagement and Content Creation - Users spend an average of 30 to 60 minutes daily on the platform, exploring user-generated content from over 24 million creators [6][7] - The platform has successfully transformed amateur creators into professionals, with average earnings of nearly $50,000 per year, and top creators earning up to $1 million annually [7][8] - The company has a unique revenue-sharing model, having distributed $2.8 billion to creators, which fosters a strong creator ecosystem [15][27] Business Model and Monetization - WEBTOON's monetization strategy includes microtransactions for content access, with prices ranging from $0.15 to $0.70 per episode [17][41] - The company has a dual revenue model, with approximately 12% of revenue coming from advertising and 8% from crossover IP [43] - The ad model is still in its early stages outside Korea, with plans for significant growth in North America as the company builds its ad capabilities [46][47] Market Expansion and Growth Strategy - The company is focused on geographic expansion, particularly in North America and Japan, where it has seen rapid growth [16][36] - WEBTOON aims to leverage its unique content and creator ecosystem to capture a larger share of the global market, with a specific focus on the 18 to 25 demographic [32][38] - The addressable market is substantial, with plans to increase penetration in the rest of the world, which currently stands at less than 5% [35][28] Competitive Landscape - WEBTOON positions itself as a unique player in the market, claiming no direct competition due to its extensive creator ecosystem and global reach [66][72] - The company differentiates itself from competitors like Kakao and Pikuma by allowing creators to publish globally and providing a supportive revenue-sharing model [68][70] IPO and Future Outlook - The recent IPO was motivated by the desire to transition from a subsidiary of a South Korean tech company to a globally recognized entity, enhancing its operational capabilities and market presence [58][59] - The management expresses confidence in the company's long-term growth potential, emphasizing the importance of patience and strategic execution in building the business [60][65] Key Takeaways - WEBTOON is a rapidly growing global storytelling platform with a strong user base and creator ecosystem - The company has demonstrated solid financial performance and user engagement metrics - Future growth will be driven by geographic expansion, enhanced monetization strategies, and leveraging its unique content offerings