User Metrics - As of March 31, 2025, the global Monthly Active Users (MAU) decreased by approximately 10.5% year-over-year to around 153 million, primarily due to declines in Korea and the Rest of World[117]. - In Korea, MAU was approximately 24.2 million, down from 27.0 million in the same quarter of 2024, while Japan's MAU increased to 21.9 million from 21.1 million[118][119]. - The Rest of World MAU declined to 107.3 million from 123.2 million, attributed to a government ban on Wattpad and a temporary dip in search traffic due to a security upgrade[120]. Paying Users - The global Monthly Paying Users (MPU) reached 7.4 million with a paying ratio of 4.8%, an increase of 0.3% compared to the previous year[122]. - In Korea, MPU decreased to around 3.4 million with a constant paying ratio of 14.2%, while Japan's MPU increased to 2.2 million with a paying ratio of 10.3%[123]. Revenue Metrics - Revenue is derived from three streams: Paid Content, Advertising, and IP Adaptations, with Paid Content being the primary source[129][130]. - Revenue for the three months ended March 31, 2025, was $325,707 thousand, a slight decrease of 0.3% compared to $326,744 thousand in the same period of 2024[141]. - Paid content revenue decreased by 2.5% to $260,226 thousand from $266,855 thousand year-over-year[142]. - Advertising revenue increased by 7.8% to $39.90 million, and IP Adaptations revenue rose by 11.8% to $25.58 million[166]. - Total revenue for the same period was $325.71 million, a slight decrease of 0.3% from $326.74 million in 2024, while revenue on a constant currency basis increased by 5.3% to $343.84 million[166]. Expenses - Marketing expenses include user acquisition costs and loyalty campaigns, which are essential for brand promotion[132]. - General and administrative expenses encompass all operating costs excluding cost of revenue and marketing, including platform maintenance and stock-based compensation[133]. - Marketing expenses increased significantly by $12,065 thousand, or 61.9%, reaching $31,543 thousand for the three months ended March 31, 2025[145]. - General and administrative expenses rose by $18,009 thousand, or 37.0%, totaling $66,702 thousand, driven by increased stock compensation and headcount costs[146]. Profitability - Net loss attributable to WEBTOON Entertainment Inc. was $22,389 thousand for the three months ended March 31, 2025, compared to a net income of $6,192 thousand in the same period of 2024, representing a decline of 461.6%[141]. - For the three months ended March 31, 2025, the company reported a net loss of $21.97 million compared to a net income of $6.23 million in the same period of 2024[158]. - Adjusted EBITDA for Q1 2025 was $4.08 million, down from $22.16 million in Q1 2024, resulting in an adjusted EBITDA margin of 1.3% compared to 6.8% in the prior year[158]. Cash and Financing - As of March 31, 2025, the company had cash and cash equivalents of $550.1 million, which are primarily invested in short-term, highly liquid investments[170]. - The company completed its IPO on June 28, 2024, raising approximately $281.7 million in net proceeds from the sale of 15 million shares at $21.00 per share[167]. - Net cash used in operating activities for Q1 2025 was $18.65 million, compared to net cash provided of $23.86 million in Q1 2024[173]. - The company plans to use its capital for debt repayment, working capital, capital expenditures, and geographic expansion[171]. - The company may seek additional financing for future acquisitions or investments, which could be affected by current market conditions[172]. Other Financial Metrics - Interest income surged by $3,878 thousand, or 314.0%, to $5,113 thousand, primarily due to interest earned on IPO proceeds[147]. - Interest expense was minimal at $2 thousand for the three months ended March 31, 2025, a decrease of 93.9% from $33 thousand in the same period of 2024[148]. - Loss on equity method investments decreased by $483 thousand, or 45.9%, to $569 thousand compared to $1,052 thousand in the prior year[149]. - Other income increased by $4,107 thousand, or 285.8%, to $2,670 thousand, attributed to gains from foreign currency transactions[151]. - Income tax expense decreased by $4,121 thousand, or 61.8%, to $2,547 thousand, reflecting a shift from income to loss before income tax[152]. - The company reported a significant increase in foreign currency effects, contributing $18.13 million to revenue adjustments in Q1 2025[166].
Webtoon Entertainment Inc.(WBTN) - 2025 Q1 - Quarterly Report