WEBTOON Entertainment Inc

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GLOSSARY

As used in this Annual Report on Form 10-K (this “Annual Report”), unless stated otherwise or the context otherwise requires:

•“amateur creator(s)” means creators who do not currently monetize their content as Paid Content on our platform as they are subject to our standard terms and conditions without Paid Content revenue sharing provisions. Amateur creators may monetize through other methods, including advertising if they meet certain viewership and subscriber thresholds.

•“Coins” means our in-app currency, which our users can purchase, earn by completing certain advertisement-associated actions or receive during in-app promotional events.

•“creators” means individuals who upload content to our platform and whose content remains available on our platform. Total creators include both amateur and professional creators.

•“Daily Pass” means a digital pass that provides users with access to locked episodes primarily from a series that is no longer publishing new episodes.

•“eBookJapan” means our eBook (including digital manga, which is manga in a digital format), web-comic and web-novel offering in Japan dedicated to professional creators.

•“episode” means a periodically uploaded chapter or installment of a web-comic or web-novel title.

•“Fast Pass” means a digital pass that provides users with early access to upcoming episodes for ongoing series of content on our platform, which must be purchased with Coins.

•“IP Adaptations” means adaptations of certain content on our offerings into other media formats such as film, streaming series, games and merchandise.

•“LINE MANGA” means our web-comic and digital manga offering in Japan dedicated to both amateur and professional creators.

•“manga” means a style of Japanese comic books and graphic novels typically presented in print format.

•“MAU” or “monthly active users” means users who visited our offerings at least once in the applicable calendar month, averaged over each month in the given period.

•“MPU” or “monthly paying users” means users who have paid to access Paid Content in the applicable calendar month, averaged over each month in the given period.

•“Munpia” means, as context requires, Munpia Inc., one of our wholly-owned subsidiaries in Korea, or Munpia, the namesake web-novel offering and web-novel creator community in Korea run by Munpia Inc.

•“NAVER” means NAVER Corporation, a global information communications technology (ICT) company and our parent, and its subsidiaries and affiliates, excluding WEBTOON, unless context otherwise requires.

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•“NAVER SERIES” means our eBook, web-comic and web-novel offering in Korea dedicated to professional creators.

•“NAVER WEBTOON” means NAVER WEBTOON Ltd., one of our wholly-owned subsidiaries in Korea that operates our offerings including WEBTOON and WEBTOON Korea.

•“offering” means our mobile applications, websites or specific sections within such applications and websites where our creators post content, including WEBTOON, WEBTOON Korea, LINE MANGA, NAVER SERIES, eBookJapan, Munpia and Wattpad.

•“Paid Content” means content on our offerings that our users need to pay to access, including through the use of Coins.

•“Paid Content Average Revenue per Paying User” or “ARPPU” means the average Paid Content revenue in a given month divided by the number of monthly paying users for such month, averaged over each month in the given period.

•“Paying ratio” means, with respect to a given period, the ratio of MPU divided by MAU.

•“Paying user” means, with respect to a given period, a user who has paid to access Paid Content on our platform.

•“professional creator(s)” means creators who monetize through Paid Content on our platform under formal creator agreements with Paid Content revenue sharing provisions.

•“title” means a sequential web-comic or web-novel story that is comprised of episodes.

•“Wattpad” means, as context requires, Wattpad Corp., one of our wholly-owned subsidiaries in Canada which was acquired by NAVER in May 2021 and subsequently acquired by us from NAVER in June 2023, or Wattpad, the namesake global web-novel offering with a global community of creators who are mostly amateur creators that is run by Wattpad Corp.

•“web-comics” means digitally created and serialized stories expressed through vertical, continuous and graphical content.

•“web-novels” means digitally created, serialized and text-based stories.

•“WEBTOON” means, as context requires, WEBTOON Entertainment Inc., a Delaware corporation, and its consolidated subsidiaries, or WEBTOON, the namesake global web-comic offering run by NAVER WEBTOON.

•“WEBTOON Korea” means NAVER WEBTOON, our web-comic offering in Korea

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report contains forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements do not relate strictly to historical or current facts and reflect management’s assumptions, views, plans objectives and projections about the future. Forward-looking statements may be identified by the use of words such as “anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,” “project,” “estimate,” “expect,” “strategy,” “future,” “likely,” “may,” “should,” “will” and similar references to future periods. Examples of forward-looking statements include, among others, statements we make regarding:

•expected operating results, such as revenue growth and earnings;

•economic and industry trends;

•the demand for our platform in general;

•our ability to continue to attract and empower creators to create engaging content;

•our ability to grow and retain our user base and strengthen our brand;

•our ability to increase engagement with users and strengthen our community;

•our ability to attract and retain our senior management team or key personnel;

•our ability to continue to innovate and expand our advertising business;

•our ability to increase paying ratio and strengthen our monetization capability;

•our ability to increase revenues from our intellectual property operations;

•our beliefs about and objectives for future operation;

•future acquisitions or investments;

•our ability to continue to grow across our current markets and expand into new markets;

•our ability to continue to innovate and enhance our offerings;

•the functionality and economics of our platform on mobile operating systems;

•our ability to maintain the security and availability of our platform;

•our ability to obtain, maintain, protect and enhance our intellectual property;

•the increased expenses associated with being a public company;

•our business model and expectations and management of future growth, including expansion in international markets and expenditures associated with such growth; and

•our ability to compete with existing and new competitors in existing and new markets.

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Because forward-looking statements are based on current beliefs, expectations and assumptions regarding future events, they are subject to risks, uncertainties and changes that are difficult to predict and many of which are outside of our control. You should realize that if underlying assumptions prove inaccurate, or known or unknown risks or uncertainties materialize, our actual results and financial condition could vary materially from expectations and projections expressed or implied in our forward-looking statements. Risks and uncertainties include:

•we have experienced rapid growth in recent periods, and our historical growth rates may not be indicative of our future performance;

•our growth depends on our ability to attract and empower creators and our ability to properly support and incentivize our creators to create compelling, engaging and interactive content;

•our growth depends on our ability to retain, attract and engage with our users, and our ability to anticipate, understand and respond appropriately to market trends and rapidly changing user preferences in a timely manner;

•if we fail to retain or increase our paying users or if we fail to maintain or continue to increase our paying ratio, our business, financial condition or results of operations could be adversely affected;

•we operate in highly competitive markets, and we face significant competition to attract and empower our creators and users;

•maintaining and enhancing the market recognition and reputation of our brands is a critical component of our relationship with creators, users and other third parties;

•our growth depends on our ability to innovate and expand our advertising business and to develop effective advertising products;

•we intend to continue to diversify our monetization strategy and increase revenues from IP Adaptations, which may not be successful;

•we intend to continue to expand our presence in existing and into new geographic markets and execute upon our growth initiatives, and our international expansion efforts may not be successful;

•we face a variety of risks associated with conducting business around the world, and these risks will increase as we continue to expand our presence into new geographic markets;

•our future growth depends on our ability to continue innovating our platform to offer attractive features and safe and civil experiences for our creators and users;

•we depend on effectively operating with mobile operating systems, hardware, technologies, products, standards and networks that we do not control, and changes to any of these or our platform could adversely affect our user retention, growth, engagement and monetization;

•we have a history of net losses, and we anticipate increasing expenses in the future, and we may not achieve or maintain profitability;

•if we fail to control our content-related costs, the expenses we incur may exceed the increase in revenues;

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•the future success of our business relies heavily on our sales and marketing efforts, and if we fail to maintain sales and marketing efficiency, the marketing expenses we incur as we grow may exceed the increase in revenues;

•we are, and could become, subject to significant legal proceedings and regulatory investigations that may result in significant expenses, fines and reputational damage;

•the success of our growth strategy depends on our ability to provide a safe online environment for children;

•we are subject to complex and evolving federal, state and international laws, regulations, rules, standards and contractual obligations regarding privacy, data protection and cybersecurity, which could result in investigations, claims, changes to our business practices, increased cost of operations and declines in user growth, retention or engagement, any of which could adversely affect our business;

•claims by others that we infringe, misappropriate or otherwise violate their intellectual property rights through the activities of our creators or users or the content on our platform could subject us to liability;

•our defenses to claims of infringement, misappropriation or other violations of third-party intellectual property rights are costly and may not be successful;

•failure to obtain, maintain, protect and enforce our proprietary and intellectual property rights could adversely affect our business;

•there are special risks involved with investing in companies operating in Korea, including the possibility of restrictions being imposed by the Korean government in emergency circumstances, accounting and corporate disclosure standards that differ from those in other jurisdictions, and the risk of direct or vicarious criminal liability for executive officers of our Korean affiliates;

•NAVER WEBTOON’s transactions with its subsidiaries and affiliates may be restricted under Korean fair trade regulations;

•NAVER controls a significant percentage of our voting power and may have interests that conflict with the interests of other stockholders; and

•we are “controlled company” and, as a result, qualify for exemptions from certain corporate governance requirements.

You should also carefully read the risk factors described in the section entitled “Risk Factors” in this Annual Report for a description of the material risks that could, among other things, cause our actual results to differ materially from those expressed or implied in our forward-looking statements. You should understand that it is not possible to predict or identify all such factors and you should not consider the risks described above to be a complete statement of all potential risks and uncertainties. Any forward-looking statement made by us in this Annual Report is based only on information currently available to us and speaks only as of the date on which it is made. We do not undertake to publicly update any forward-looking statement that may be made from time to time, whether as a result of new information or future events or developments, except as required by law.

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