User Metrics - As of September 30, 2025, global Monthly Active Users (MAU) decreased by approximately 8.5% year-over-year to 155.4 million, with notable declines in Korea and Rest of World[126] - In Korea, MAU was approximately 24.6 million, down from 28.1 million in the same quarter of 2024, reflecting a significant decline[126] - Japan's MAU increased to 25.3 million, up from 22.5 million year-over-year, driven by growth in eBookJapan and increased marketing investments[127] - Rest of World MAU decreased to 105.5 million from 119.3 million, primarily due to government bans on Wattpad and a security upgrade affecting search traffic[128] Revenue and Financial Performance - Revenue for the three months ended September 30, 2025, increased by 8.7% to $378,041,000 compared to $347,915,000 in the same period of 2024[150] - Revenue for the nine months ended September 30, 2025, increased by 5.7% to $1,052,019,000 compared to $995,631,000 in the same period of 2024[160] - Total revenue for Q3 2025 was $378.0 million, an increase of 8.7% compared to $347.9 million in Q3 2024[181] - Paid content revenue reached $286.8 million in Q3 2025, a slight increase of 0.6% from $285.2 million in Q3 2024[181] - Advertising revenue decreased by 9.3% to $39.4 million in Q3 2025, down from $43.4 million in Q3 2024[181] - IP adaptations revenue surged by 168.7% to $51.9 million in Q3 2025, compared to $19.3 million in Q3 2024[181] User Monetization - Global Monthly Paying Users (MPU) reached 7.7 million with a paying ratio of 5.0%, an increase of 0.3% compared to the previous year[131] - In Korea, MPU decreased to around 3.7 million, but the paying ratio increased to 14.9%, up from 13.8% year-over-year[132] - Average Revenue per Paying User (ARPPU) increased to $12.4, reflecting a 2.8% growth compared to the same quarter of 2024, driven by a strategic shift from web to app[135] - ARPPU in Japan reached $23.6, a 2.4% increase year-over-year, indicating strong monetization in that market[136] Expenses and Losses - Cost of revenue rose by 15.1% to $295,267,000 for the three months ended September 30, 2025, up from $256,534,000 in 2024[152] - Marketing expenses increased by 7.5% to $35,166,000 for the three months ended September 30, 2025, compared to $32,719,000 in 2024[153] - General and administrative expenses decreased by 6.4% to $62,486,000 for the three months ended September 30, 2025, down from $66,747,000 in 2024[154] - Net loss for the three months ended September 30, 2025, was $11,050,000, a decrease of 155.3% compared to a net income of $19,986,000 in 2024[150] - The company reported a net loss of $36.9 million for the nine months ended September 30, 2025, adjusted for non-cash items totaling $60.3 million[188] Cash Flow and Investments - Net cash provided by operating activities for the nine months ended September 30, 2025, was $3.6 million, down from $26.5 million in the same period of 2024[187] - As of September 30, 2025, the company had $584.6 million in cash and cash equivalents, primarily invested in short-term, highly liquid investments[185] - For the nine months ended September 30, 2025, net cash used in investing activities was $5.0 million, with significant payments for intangible assets and property[189] Future Outlook - The company anticipates future capital requirements will depend on growth rate and sales activities, with potential needs for additional financing[186] - The company believes that non-GAAP measures like Adjusted EBITDA and revenue on a constant currency basis provide useful insights into performance by excluding foreign currency volatility[179] - The company emphasizes that non-GAAP measures should not be considered in isolation from GAAP measures, as they have limitations[171]
Webtoon Entertainment Inc.(WBTN) - 2025 Q3 - Quarterly Report