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]

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

Financial Data and Key Metrics Changes - The company reported a net loss of $22 million in the quarter compared to a net income of $6.2 million in the prior year, driven by higher general and administrative expenses and marketing costs [13] - Adjusted EBITDA was $4.1 million in the quarter, down from $22.2 million in the same quarter of the previous year [26] - Revenue grew 5.3% on a constant currency basis, but reported revenue was roughly flat year over year [12] Business Line Data and Key Metrics Changes - Paid content revenue grew 2.8% on a constant currency basis year over year, driven by strength in Japan, offset by declines in Korea and the rest of the world [17] - Advertising revenue increased by 13.6% on a constant currency basis, with strong performance in Korea and Japan, but a decline in the rest of the world [18] - IP Adaptation revenue saw a 20.7% increase year over year on a constant currency basis, with significant growth in Japan [19] Market Data and Key Metrics Changes - In Korea, revenue grew 3.6% year over year on a constant currency basis, primarily driven by advertising and IP adaptations [20] - Japan posted revenue growth of 9.4% on a constant currency basis, with all revenue streams contributing positively [22] - The rest of the world experienced a revenue decline of 4% year over year on a constant currency basis [24] Company Strategy and Development Direction - The company is focused on building a local creator ecosystem in Japan and expanding its cross-border strategy by taking Japanese content to other markets [6] - Investments are being made in the English language platform to enhance user experience and engagement [7][10] - The company aims to leverage its flywheel of creators, content, and users to generate profitable growth over the long term [31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the business model despite potential market downturns, citing a low average revenue per paying user [10] - The company anticipates revenue growth in the range of 2.2% to 5.2% for the second quarter of 2025 [29] - Management is closely monitoring market health and believes in the long-term growth potential of newer markets [35] Other Important Information - The company faced challenges with a security upgrade affecting search engine indexing, which contributed to a decline in web MAU [14] - The gross profit for the quarter was $71.6 million, resulting in a gross margin of 22%, down from 25.2% in the prior year [25] - The company is making significant changes to its English language web comic app to improve user engagement [60] Q&A Session Summary Question: User growth initiatives and investment cadence - Management highlighted strong long-term growth signs in newer markets, particularly a 19% increase in English-speaking platform MAU [35] Question: Importance of local content in local markets - Management emphasized the significance of local creator IP and partnerships to enhance global reach and engagement [39] Question: MAU decline in Korea and future growth potential - Management noted that while Korea has high penetration, constant currency revenue growth of 3.6% indicates potential for future growth [46] Question: Update on advertising revenue in North America - Management stated that North America advertising is still in early stages, with a focus on building foundational products for future growth [49] Question: Impact of global franchises on monetization - Management clarified that global franchises have historically contributed positively to the core paid content margin structure [53] Question: Security update on Wattpad and user impact - Management confirmed that Wattpad's issues significantly impacted total MAU declines, but it is not a major contributor to paid content revenue [66] Question: Engagement levels of licensed IP in the U.S. - Management indicated that engagement levels depend on the specific IP, but there is potential for licensed IP to drive user engagement [85]

Core Insights - WEBTOON Entertainment reported first quarter results for 2025, with total revenue of $325.7 million, a slight decline of 0.3% year-over-year, but a growth of 5.3% on a constant currency basis [1][6][3] - The company experienced a net loss of $22.0 million, compared to a net income of $6.2 million in the previous year, attributed to increased general and administrative expenses and higher marketing costs [1][6][3] - Adjusted EBITDA was $4.1 million, down from $22.2 million in the prior year, with an adjusted EBITDA margin of 1.3% compared to 6.8% in the previous year [1][6][3] Financial Performance - Total revenue of $325.7 million showed a decline of 0.3%, driven by a decrease in Paid Content revenue, partially offset by growth in Advertising and IP Adaptations [6][3] - Revenue on a constant currency basis was $343.8 million, reflecting a growth of 5.3%, supported by all three revenue streams: Paid Content, Advertising, and IP Adaptations [6][3] - The company reported a diluted loss per share of $0.17, compared to diluted earnings per share of $0.06 in the prior year [6][3] Operational Highlights - The CEO highlighted the implementation of product enhancements on the English-language platform, including AI-powered discovery features, aimed at improving user experience [3] - Major global franchises such as 'Godzilla' and 'Sonic the Hedgehog' were introduced to the platform, indicating a strategy to expand the content library [3] - The company maintains a strong balance sheet with cash and cash equivalents of approximately $550.1 million and no debt [1][6] Future Outlook - For the second quarter of 2025, the company expects revenue growth on a constant currency basis in the range of 2.2%-5.2%, translating to revenue between $335 million and $345 million [7] - Adjusted EBITDA is projected to be in the range of $0.5 million to $5.5 million, representing an adjusted EBITDA margin of 0.1%-1.6% [7]

Financial Data and Key Metrics Changes - WEBTOON reported revenue of $1.35 billion, growing 5% on a reported basis and 13% on a constant currency basis [10] - The company reported a net loss of $153 million, primarily due to noncash expenses, but achieved record adjusted EBITDA of $67.9 million, an increase of over 600% compared to 2023 [10] - Gross profit for Q4 was $82.3 million, up from $76.4 million in the prior year, representing a growth of 7.7% [39] - Adjusted EBITDA loss for Q4 was $3.5 million compared to a profit of $10.4 million in the prior year [41] Business Line Data and Key Metrics Changes - Paid Content revenue grew 10.9% year-over-year on a constant currency basis in Q4, with full-year growth of 12.6% [27] - Advertising revenue increased by 27.4% in Q4 on a constant currency basis, driven by growth in Korea and Japan [29] - IP Adaptation revenue declined by 6.9% year-over-year in Q4, but was up 6.7% for the full year on a constant currency basis [30] Market Data and Key Metrics Changes - In Korea, revenue grew 6.6% year-over-year on a constant currency basis in Q4, driven by Paid Content and Advertising [32] - Japan posted revenue growth of 18.9% in Q4 on a constant currency basis, with a full-year growth of 25.8% [35] - The Rest of the World saw a revenue decline of 3.3% year-over-year in Q4, but a full-year growth of 14.9% [37] Company Strategy and Development Direction - WEBTOON is focused on building a local creator ecosystem in Japan and investing in content studios globally to enhance its content pipeline [12][14] - The company aims to democratize storytelling and expand its global IP and creator ecosystem [17] - Management emphasized the importance of product innovation and marketing investments to drive long-term growth [61][66] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the fundamental health of the business and the growth potential in key markets like Japan and English-speaking countries [56][46] - The company anticipates facing FX headwinds in Q1 and is investing in infrastructure ahead of product improvements expected in the latter half of 2025 [44] - Management highlighted the impact of political turbulence in Korea on MAU and payer trends but believes these issues will not persist beyond the guided period [74][83] Other Important Information - The total company MAU decreased by approximately 3.7% in Q4, with a slight decline in app MAU but a 6.7% increase in webcomic app MAU [24][25] - The company is focused on improving user engagement through AI-driven personalization and revamped onboarding experiences [63][64] Q&A Session Summary Question: Sustainability of growth in Japan and full-year outlook - Management is confident in the sustainability of growth in Japan and believes the IP slate will drive future performance despite some short-term challenges [51][56] Question: Investments in users and creators - Management highlighted ongoing investments in marketing and product innovation to enhance user engagement and drive long-term growth [61][66] Question: AI recommendation engine impact - The AI personalization engine has driven a 2% increase in engagement per user, with expectations for significant long-term growth potential [72] Question: Impact of political disruption in Korea - Management noted that political turmoil affected MAU and payer trends but expects these issues to resolve in the near term [74][83] Question: Advertising business scaling - Advertising continues to show strong growth, with opportunities for further expansion in English-speaking markets and Rest of World [94] Question: Content supply and monetization - Management expressed confidence in the robustness of the content engine and highlighted the importance of local content creation in Japan [106][110]