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]

Core Insights - WEBTOON Entertainment Inc. reported a total revenue of $347.9 million for Q3 2024, reflecting a year-over-year growth of 9.5%, with a constant currency growth of 13.5% to $360.4 million [2][3] - The company achieved a net income of $20 million and an adjusted EBITDA of $28.9 million, indicating significant year-over-year increases [2][3] - The CEO expressed confidence in future growth opportunities, supported by a strong creator community and a robust pipeline of entertainment projects [3] Financial Performance - Total revenue for Q3 2024 was $347.9 million, up 9.5% from $317.8 million in Q3 2023, driven by growth in Paid Content and Advertising [2][3] - Revenue on a constant currency basis was $360.4 million, representing a 13.5% increase, with contributions from all revenue streams and regions [2][3] - Net income was $20 million, attributed to improved gross profit, increased interest income, and an income tax benefit [2][3] - Adjusted EBITDA reached $28.9 million, with an adjusted EBITDA margin of 8.3%, both showing increases from the previous year [2][3] Earnings Per Share - Diluted EPS for Q3 2024 was $0.15, a recovery from a loss of $0.10 per share in the prior year [2] - Adjusted EPS increased to $0.22 from $0.03 in the previous year, reflecting improved profitability [2] Fourth Quarter Outlook - For Q4 2024, the company anticipates revenue growth on a constant currency basis between 10.3% and 13.3%, translating to revenue expectations of $375 million to $385 million [4] - Adjusted EBITDA is projected to be in the range of $9 million to $14 million, with an adjusted EBITDA margin of 2.4% to 3.6% [4] Company Overview - WEBTOON is recognized as a leading global entertainment company, specializing in mobile webcomics and storytelling platforms [6][7] - The company boasts approximately 170 million monthly active users and has partnerships with major content platforms like Netflix and Prime Video [8]

Core Viewpoint - A class action lawsuit has been filed against WEBTOON Entertainment, Inc. for alleged violations of federal securities laws related to its IPO on June 27, 2024 [1][2]. Group 1: Lawsuit Details - The lawsuit seeks to recover damages for investors who purchased Webtoon securities during the IPO [2]. - The Complaint alleges that the Registration Statement contained materially false and misleading statements and failed to disclose adverse facts about the Company's business and operations [3]. - Specific allegations include a deceleration in advertising revenue growth, deceleration in IP adaptations revenue, and exposure to weaker foreign currencies that offset revenue growth [3]. Group 2: Next Steps for Investors - Investors who suffered losses in Webtoon have until November 5, 2024, to request to be appointed as lead plaintiff in the case [4]. - The law firm representing the investors operates on a contingency fee basis, meaning they will only collect fees if the case is successful [5]. Group 3: Law Firm Background - Bronstein, Gewirtz & Grossman, LLC is a nationally recognized firm specializing in securities fraud class actions and has recovered hundreds of millions of dollars for investors [6].

Core Viewpoint - WEBTOON Entertainment Inc. is facing a class action securities lawsuit due to alleged securities fraud that has adversely affected its investors [1][2]. Group 1: Lawsuit Details - The lawsuit aims to recover losses for investors who purchased WEBTOON common stock during its June 2024 initial public offering [2]. - The complaint alleges that the company made false statements and concealed critical information regarding its financial performance, including a deceleration in advertising revenue growth and IP adaptations revenue [3]. - The lawsuit also claims that the company faced exposure to weaker foreign currencies, which negatively impacted revenue growth, leading to misleading positive statements about its business prospects [3]. Group 2: Next Steps for Investors - Investors who suffered losses in WEBTOON Entertainment Inc. have until November 4, 2024, to request to be appointed as lead plaintiff in the lawsuit [4]. - Participation in the lawsuit does not require any out-of-pocket costs or fees for class members [4]. Group 3: Legal Representation - Levi & Korsinsky, LLP has a strong track record in securities litigation, having secured hundreds of millions of dollars for shareholders over the past 20 years [5]. - The firm is recognized as one of the top securities litigation firms in the United States, ranking in ISS Securities Class Action Services' Top 50 Report for seven consecutive years [5].

Core Viewpoint - Rosen Law Firm is reminding purchasers of WEBTOON Entertainment Inc. common stock about the lead plaintiff deadline for a class action lawsuit related to the company's IPO in June 2024 [1] Group 1: Class Action Details - Investors who purchased WEBTOON common stock may be entitled to compensation without any out-of-pocket fees through a contingency fee arrangement [2] - A class action lawsuit has already been filed, and interested parties must move the Court to serve as lead plaintiff by November 4, 2024 [3] - The lawsuit claims that WEBTOON's Registration Statement contained materially false and misleading statements regarding its business operations and prospects [5] Group 2: Allegations Against WEBTOON - The lawsuit alleges that WEBTOON experienced a deceleration in advertising revenue growth and intellectual property adaptations revenue [5] - It is claimed that WEBTOON faced exposure to weaker foreign currencies, which offset revenue growth [5] - The positive statements made by the defendants about WEBTOON's business were deemed materially misleading and lacked a reasonable basis [5] Group 3: Rosen Law Firm's Credentials - Rosen Law Firm has a strong track record in securities class actions, having achieved the largest securities class action settlement against a Chinese company at the time [4] - The firm was ranked No. 1 by ISS Securities Class Action Services for the number of securities class action settlements in 2017 and has consistently ranked in the top 4 since 2013 [4] - In 2019, the firm secured over $438 million for investors, showcasing its capability in recovering significant amounts for clients [4]

LOS ANGELES, Nov. 4, 2024 /PRNewswire/ -- The Schall Law Firm, a national shareholder rights litigation firm, announces the filing of a class action lawsuit against WEBTOON Entertainment Inc. ("Webtoon" or "the Company") (NASDAQ: WBTN) for violations of the federal securities laws.Investors who purchased the Company's securities pursuant and/or traceable to the Company's Offering Documents in connection with its initial public offering ("IPO") conducted on or about June 27, 2024, are encouraged to contact t ...

Core Viewpoint - The Gross Law Firm has issued a notice to shareholders of WEBTOON Entertainment Inc. regarding a class action lawsuit related to misleading statements made by the company during its initial public offering in June 2024 [1][2]. Group 1: Allegations - The lawsuit alleges that WEBTOON Entertainment Inc. made materially false and misleading statements, failing to disclose a deceleration in advertising revenue growth [2]. - The company also allegedly did not disclose a deceleration in revenue from IP adaptations and exposure to weaker foreign currencies, which negatively impacted revenue growth [2]. - As a result of these issues, the positive statements made by the defendants about the company's business and prospects were deemed materially misleading [2]. Group 2: Class Action Details - The class period for the lawsuit is tied to the shares purchased during the registration statement and prospectus issued in connection with the June 2024 IPO [1]. - Shareholders are encouraged to register for the class action by the deadline of November 4, 2024, to potentially be appointed as lead plaintiffs [3]. - Once registered, shareholders will receive updates through a portfolio monitoring software regarding the status of the case [3]. Group 3: Law Firm Background - The Gross Law Firm is a nationally recognized class action law firm dedicated to protecting the rights of investors who have suffered losses due to deceit and illegal business practices [4]. - The firm aims to ensure that companies adhere to responsible business practices and seeks recovery for investors affected by misleading statements that inflated stock prices [4].

User Metrics - As of June 30, 2024, global Monthly Active Users (MAU) reached approximately 170 million, with contributions of 14.0% from Korea, 13.2% from Japan, and 72.8% from the Rest of World[134]. - Global Monthly Paying Users (MPU) reached 7.8 million with a paying ratio of 4.7%, showing a slight increase compared to the previous year[138]. - In Korea, MPU decreased to around 3.7 million with a paying ratio of 16.1%, compared to 4.0 million and 16.2% in the same quarter of 2023[139]. - In Japan, MPU increased to 2.2 million with a paying ratio of 10.2%, up from 1.9 million and 8.9% in the same quarter of 2023[139]. - In the Rest of World, MPU remained at 1.8 million with a paying ratio of 1.5%, consistent with the previous year[140]. Revenue Metrics - Revenue for the three months ended June 30, 2024, was $320,972 thousand, a slight increase of 0.1% compared to $320,663 thousand in 2023[159]. - Revenue for the six months ended June 30, 2024, increased by $16,796 thousand, or 2.7%, totaling $647,716 thousand compared to $630,920 thousand in 2023[167]. - Paid Content revenue increased by 1.0% to $260,709 thousand for the three months ended June 30, 2024, driven by strong growth in Japan[160]. - Advertising revenue increased by $5.0 million, or 6.9%, for the six months ended June 30, 2024, compared to the same period in 2023, driven by growth in Japan and ROW, offset by declines in Korea[168]. - Advertising revenue decreased by 3.6% to $40,419,000 for the three months ended June 30, 2024, compared to $41,938,000 in the same period of 2023[187]. User Engagement and Monetization - The company experienced higher user engagement and monetization in the third quarter due to global vacation and holiday schedules[145]. - Average Revenue per Paying User (ARPPU) for the quarter ended June 30, 2024, increased to $11.2, reflecting a 1.4% growth year-over-year[142]. - ARPPU in Korea decreased to $7.5, a 9.9% decline year-over-year, while in Japan it decreased to $21.2, a 5.7% decline[143]. - ARPPU in the Rest of World increased to $6.5, marking a 30.2% growth compared to the same quarter of 2023[144]. Expenses and Income - Marketing expenses decreased by $9,694 thousand, or 29.2%, for the three months ended June 30, 2024, due to improved marketing efficiency[163]. - General and administrative expenses surged by $85,236 thousand, or 159.4%, primarily due to stock compensation expenses and a one-time bonus related to the IPO[163]. - Interest income rose by $1,025 thousand, or 100.7%, for the three months ended June 30, 2024, totaling $2,043 thousand[164]. - Net income (loss) for the three months ended June 30, 2024, was $(76,568) thousand, a significant increase in loss of 287.7% compared to $(19,750) thousand in 2023[159]. - Other income (loss), net, improved by $8,373 thousand, or 137.5%, for the three months ended June 30, 2024, totaling $2,283 thousand[165]. Cash Flow and Financial Position - Net cash provided by operating activities for the six months ended June 30, 2024, was $22,394,000, a significant improvement from a net cash used of $40,663,000 in 2023[195]. - Net cash provided by financing activities for the six months ended June 30, 2024, was $336,053,000, primarily due to proceeds from the IPO and a private placement[200]. - As of June 30, 2024, the company had $572.3 million in cash and cash equivalents, sufficient to support working capital requirements for at least the next 12 months[191]. - The company reported a net loss of $70.3 million for the six months ended June 30, 2024, adjusted for non-cash items of $68.8 million[196]. Future Outlook - The company anticipates future capital requirements will depend on growth rate, sales and marketing activities, and other business factors[192]. - The company may seek additional financing for future acquisitions or investments in complementary businesses and technologies[194]. - The company provides revenue and growth rates on a constant currency basis to exclude the impact of foreign currency fluctuations and deconsolidated operations[182]. Investment Portfolio - The company's investment portfolio is primarily composed of cash on hand and short-term, highly liquid investments with original maturities of three months or less[209]. - The company does not expect an immediate 10% increase or decrease in interest rates to materially affect the fair value of its investment portfolio[209]. - The company has not entered into derivative or hedging transactions but may consider doing so if exposure to foreign currency exchange rate fluctuations increases[208].

[Q2 2024 Financial Results Overview](index=1&type=section&id=Q2%202024%20Financial%20Results%20Overview) [Performance Highlights](index=1&type=section&id=Performance%20Highlights) WEBTOON reported flat revenue at $321.0 million but achieved 11.1% constant currency growth, with a net loss of $76.6 million due to IPO costs, yet a healthy Adjusted EBITDA of $22.4 million Q2 2024 Key Financial and Operational Metrics (vs. Q2 2023) | Metric | Q2 2024 | Q2 2023 | Change | Constant Currency Change | | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | $321.0M | $320.7M | 0.1% | 11.1% | | **Net Loss** | ($76.6M) | ($19.7M) | N/A | N/A | | **Adjusted EBITDA** | $22.4M | ($0.9M) | N/A | N/A | | **Diluted EPS** | ($0.70) | ($0.18) | N/A | N/A | | **Adjusted EPS** | $0.20 | ($0.01) | N/A | N/A | | **MAU** | 166.3M | 167.7M | (0.8%) | N/A | | **MPU** | 7.8M | 7.8M | (0.4%) | N/A | - The **significant net loss** was primarily driven by **one-time IPO-related costs** and **stock-based compensation expenses**[1](index=1&type=chunk)[2](index=2&type=chunk)[9](index=9&type=chunk) - Revenue growth was negatively impacted by **weaker foreign currencies**, particularly the Korean won and Japanese yen, while on a **constant currency basis**, all revenue streams showed strong growth: **Paid Content (+11.5%)**, **Advertising (+2.3%)**, and **IP Adaptations (+24.9%)**[2](index=2&type=chunk)[4](index=4&type=chunk) - **LINE MANGA's performance** in Japan was a major highlight, achieving **1 consumer app status** in June and driving a **record number of Monthly Paying Users (MPU)** and a **record paying ratio** for the company in that region[1](index=1&type=chunk)[5](index=5&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) CEO Junkoo Kim highlighted the successful IPO and robust Q2 performance, expressing confidence in future growth through market expansion, advertising, and IP adaptations - The company **successfully went public in June**, marking a new chapter after nearly two decades of innovation in the webcomic format[2](index=2&type=chunk) - Management is **confident** in its ability to **generate long-term shareholder value** by leveraging its **global flywheel for growth**[3](index=3&type=chunk) - **Key future growth strategies** include: **expanding reach in underpenetrated markets**, **seizing the large advertising opportunity**, and **inspiring more IP Adaptations** worldwide[3](index=3&type=chunk) [Detailed Financial & Operational Performance](index=4&type=section&id=Detailed%20Financial%20%26%20Operational%20Performance) Q2 2024 revenue was flat at $321.0 million (11.1% constant currency growth), with a net loss of $76.6 million due to increased G&A expenses, but achieved a positive Adjusted EBITDA of $22.4 million - **Paid Content revenue growth** was driven by successful user conversion strategies, with **double-digit constant currency growth** in Japan and Rest of World, and **MPU in Japan grew 15.5% YoY**[5](index=5&type=chunk) - **Advertising revenue in Korea declined** due to a **strategic diversification** away from parent company NAVER Corporation, which partially offset **strong growth in Japan and Rest of World**[6](index=6&type=chunk) - **IP Adaptations revenue** showed **strong underlying growth of 24.9% on a constant currency basis**, reflecting the company's focus on strengthening its content flywheel[7](index=7&type=chunk) - **General & administrative expenses increased significantly to $138.7 million from $53.5 million** in Q2 2023, primarily due to **one-time IPO and stock-based compensation expenses**[8](index=8&type=chunk) - Despite a reported **net loss of $76.6 million**, the company achieved a **positive Adjusted EBITDA of $22.4 million**, a **significant improvement from a loss of $0.9 million** in the prior year[9](index=9&type=chunk) [Balance Sheet](index=4&type=section&id=Balance%20Sheet) As of June 30, 2024, WEBTOON maintained a strong financial position with $826.4 million in total liquidity, including $572.3 million in cash, and no material debt Balance Sheet Highlights (as of June 30, 2024) | Item | Amount | | :--- | :--- | | **Total Liquidity** | $826.4 million | | **Cash and Cash Equivalents** | $572.3 million | | **Material Debt** | None | [Third Quarter 2024 Outlook](index=5&type=section&id=Third%20Quarter%202024%20Outlook) For Q3 2024, WEBTOON projects 12.5%-14.5% constant currency revenue growth, targeting $332-$338 million in revenue and an Adjusted EBITDA of ($10.0)-($7.7) million Q3 2024 Guidance | Metric | Guidance Range | | :--- | :--- | | **Revenue Growth (Constant Currency)** | 12.5% - 14.5% | | **Revenue** | $332M - $338M | | **Adjusted EBITDA** | ($10.0M) - ($7.7M) | | **Adjusted EBITDA Margin** | (2.8%) - (2.1%) | [Financial Statements](index=9&type=section&id=Financial%20Statements) [Condensed Consolidated Balance Sheets](index=9&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The unaudited condensed consolidated balance sheets as of June 30, 2024, show a significant increase in cash and cash equivalents to $572.3 million, primarily due to the IPO Selected Balance Sheet Items (in thousands USD) | Account | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | **Total Assets** | $2,029,217 | $1,776,605 | | Cash and cash equivalents | $572,305 | $231,745 | | Goodwill, net | $741,307 | $779,176 | | **Total Liabilities** | $418,342 | $429,129 | | **Total Equity** | $1,569,169 | $1,306,047 | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=12&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) The unaudited condensed consolidated statements of operations show Q2 2024 revenue at $321.0 million, with a significant operating loss of $79.1 million and a net loss of $76.6 million Statement of Operations Highlights - Three Months Ended June 30 (in thousands USD) | Account | 2024 | 2023 | | :--- | :--- | :--- | | **Revenue** | $320,972 | $320,663 | | Cost of revenue | ($237,915) | ($239,518) | | General and administrative expenses | ($138,705) | ($53,469) | | **Operating Loss** | ($79,096) | ($5,466) | | **Net Loss** | ($76,568) | ($19,750) | | **Diluted Loss Per Share** | ($0.70) | ($0.18) | [Condensed Consolidated Statements of Cash Flows](index=13&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For H1 2024, net cash from operating activities was $22.4 million, a significant improvement, with financing activities providing $336.1 million from IPO proceeds, resulting in $572.3 million cash Cash Flow Summary - Six Months Ended June 30 (in thousands USD) | Activity | 2024 | 2023 | | :--- | :--- | :--- | | **Net cash provided by (used in) operating activities** | $22,394 | ($40,663) | | **Net cash used in investing activities** | ($7,306) | ($25,475) | | **Net cash provided by (used in) financing activities** | $336,053 | ($8,744) | | **Net increase (decrease) in cash** | $340,560 | ($80,215) | | **Cash and cash equivalents at end of period** | $572,305 | $199,494 | [Non-GAAP Financial Measures](index=6&type=section&id=Non-GAAP%20Financial%20Measures) [Definitions of Key Metrics & Non-GAAP Measures](index=6&type=section&id=Definitions%20of%20Key%20Metrics%20%26%20Non-GAAP%20Measures) This section defines key business metrics like MAU and MPU, and non-GAAP measures such as Adjusted EBITDA and constant currency revenue, for enhanced operational insight - **MAU (Monthly Active Users)** is defined based on **each device logged in** and **each offering accessed**, meaning a **single individual can be counted multiple times**[19](index=19&type=chunk) - **Adjusted EBITDA** is defined as **Net Income (Loss) adjusted for interest, taxes, depreciation, amortization**, and further adjusted for items like **stock-based compensation** and **other non-recurring costs**[24](index=24&type=chunk) - **Revenue on a Constant Currency Basis** is calculated by applying the **average currency exchange rates from the prior year's comparable period** to the current period's local currency revenue to **remove the impact of foreign exchange fluctuations**[27](index=27&type=chunk) [Reconciliation of Non-GAAP Measures](index=14&type=section&id=Reconciliation%20of%20Non-GAAP%20Measures) This section provides detailed reconciliations of GAAP to non-GAAP measures, including constant currency revenue by segment and Net Loss to Adjusted EBITDA, with specific adjustments for Q2 2024 Reconciliation of Reported Revenue to Constant Currency Revenue (Q2 2024, in thousands USD) | Metric | As Reported | FX Impact | Constant Currency | YoY Growth (CC) | | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | $320,972 | $29,333 | $350,305 | 11.1% | | Paid Content | $260,709 | $24,479 | $285,188 | 11.5% | | Advertising | $40,419 | $2,484 | $42,903 | 2.3% | | IP Adaptations | $19,844 | $2,369 | $22,213 | 24.9% | Reconciliation of Net Loss to Adjusted EBITDA (Q2 2024, in thousands USD) | Item | Amount | | :--- | :--- | | **Net Loss** | **($76,568)** | | Interest, Tax, D&A | $10,833 | | Stock-based compensation expense | $53,817 | | Restructuring and IPO-related costs | $36,204 | | Other adjustments | ($1,892) | | **Adjusted EBITDA** | **$22,394** |