Financial Data and Key Metrics Changes - Adjusted EBITDA for Q3 2025 was $5.1 million, down from $28.9 million in the same quarter of 2024 [10][18] - Total revenue reached $378 million, an increase of 8.7% year-over-year, or 9.1% on a constant currency basis [4][10] - Net loss for the quarter was $11.1 million compared to a net income of $20 million in the prior year [10][19] - Adjusted earnings per share was $0.04, down from $0.22 in the prior year [20] Business Line Data and Key Metrics Changes - Revenue from paid content grew by 0.8% on a constant currency basis, driven by strength in Japan and the rest of the world, but offset by a decline in Korea [12] - Advertising revenue decreased by 8.9% on a constant currency basis, with declines in Korea and the rest of the world [13] - IP adaptations revenue increased by 171.8% year-on-year on a constant currency basis, driven by theatrical releases in Korea [14] Market Data and Key Metrics Changes - In Korea, revenue grew by 22.2% year-over-year on a constant currency basis, despite a decline in advertising [15] - Japan's revenue growth was 2% year-over-year, with MAU increasing by 12.6% [16] - The rest of the world saw a revenue decline of 0.7% year-over-year, primarily due to advertising declines [17] Company Strategy and Development Direction - The company is focusing on expanding its partnership with Disney to develop a new digital comics platform featuring over 35,000 comics [5][6] - The launch of video episodes aims to enhance user engagement and attract new users [6][7] - The company plans to co-produce 10 fan-favorite WEBTOON series with Warner Bros. Animation for global distribution [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver growth despite challenges, citing strong partnerships and product innovations [21] - The guidance for Q4 2025 anticipates a revenue decline of 5.1% to 2.3% on a constant currency basis, with expected revenue between $330 million and $340 million [20] - Management highlighted the importance of IP adaptations for user engagement and revenue growth [9][38] Other Important Information - The company is experiencing a decline in overall MAU by 8.5%, primarily due to issues with Wattpad [11][31] - Gross profit for the quarter declined by 9.4%, resulting in a gross margin of 21.9% compared to 26.3% in the prior year [18] Q&A Session Summary Question: Can you elaborate on the long-term vision of the Disney partnership? - Management indicated that the collaboration with Disney is still in early stages and aims to create original stories while maintaining the fundamental margin structure of the business [24][25] Question: What early engagement or monetization metrics are you seeing with video episodes? - Management noted that it is too early to provide specific metrics but expressed optimism about the potential of video episodes to enhance user engagement [26][27] Question: Any updates on the Warner partnership and its economic terms? - Management stated that while they are excited about the partnership with Warner Bros. Animation, they are not ready to disclose specific economic terms yet [28][30] Question: How should we think about web novel users going forward? - Management acknowledged that Wattpad is a significant driver of MAU declines but emphasized its importance as a source of IP [31][33] Question: Can you discuss the drivers of the Q4 guidance? - Management explained that the anticipated revenue decline is primarily due to the timing of IP adaptations and not a fundamental business health issue [36][38]