WEBTOON Entertainment Inc.

Non-GAAP Financial Measures

This Proxy Statement includes information on Adjusted EBITDA, Adjusted EBITDA Margin, revenue on a constant currency basis, revenue growth on a constant currency basis and Rule of %, which are non-GAAP financial measures.

We define Adjusted EBITDA as EBITDA with further adjustments to eliminate the effects of loss on equity method investments, effect of applying the valuation method of fair value through profit or loss, impairment of goodwill, non-cash stock-based compensation and certain other non-recurring costs. We define EBITDA as net income (loss) before interest income, interest expense, income tax expense and depreciation and amortization. We believe that Adjusted EBITDA provides useful information to investors regarding our performance, as it removes the impact of certain items that are not representative of our ongoing business, such as certain non-cash charges and variable charges. We define Adjusted EBITDA Margin as Adjusted EBITDA divided by revenue. We define revenue on a constant currency basis as revenue adjusted to remove the impact of foreign currency rate fluctuations and the impact of deconsolidated and transferred operations. We calculate revenue on a constant currency basis in a given period by applying the average currency exchange rates in the comparable period of the prior year to the local currency revenue in the current period. We define revenue growth on a constant currency basis as period-over-period growth rates of revenue, adjusted to remove the impact of foreign currency rate fluctuations and the impact of deconsolidated and transferred operations. We calculate revenue growth (as a percentage) on a constant currency basis by determining the increase in current period revenue over prior period revenue, where current period foreign currency revenue is translated using prior period average currency exchange rates. We define Rule of % as the sum of the year-over-year revenue growth rate on a constant currency basis and Adjusted EBITDA Margin. Adjusted EBITDA, Adjusted EBITDA Margin, revenue on a constant currency basis, revenue growth on a constant currency basis and Rule of % are non-GAAP financial measures and are not intended to be substitutes for any GAAP financial measures. They should be considered in addition to, and not as substitutes for, or in isolation from, measures prepared in accordance with GAAP, such as net income (loss), net income (loss) margin or revenue growth rate.

Using Adjusted EBITDA as a performance measure has material limitations as compared to consolidated net income (loss), or other financial measures as defined under GAAP, as it excludes certain recurring items, which may be meaningful to investors. Adjusted EBITDA excludes interest expense and interest income; however, as we have borrowed money to finance transactions and operations, or invested available cash to generate interest income, interest expense and interest income are elements of our cost structure and can affect our ability to generate revenue and returns for our stockholders. Further, Adjusted EBITDA excludes depreciation and amortization; however, as we use capital and intangible assets to generate revenue, depreciation and amortization are necessary elements of our costs and ability to generate revenue. Finally, Adjusted EBITDA excludes income taxes; however, as we are organized as a corporation, the payment of taxes is a necessary element of our operations. Any measure, including Adjusted EBITDA, that excludes interest expense, depreciation and amortization and income taxes has material limitations as compared to net income. When using Adjusted EBITDA as a performance measure, management compensates for these limitations by comparing Adjusted EBITDA to net loss in each period, to allow for the comparison of the performance of the underlying core operations with the overall performance of the company on a full-cost, after-tax basis.

You are also encouraged to evaluate our calculation of Adjusted EBITDA and Adjusted EBITDA Margin, and the reasons we consider these adjustments appropriate for supplemental analysis. In evaluating this measure, you should be aware that, in the future, we may incur expenses that are the same as or similar to some of the adjustments in our presentation of Adjusted EBITDA. Our presentation of Adjusted EBITDA and Adjusted EBITDA Margin should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. There can be no assurance that we will not modify the presentation of this measure in the future, and any such modification may be material. Adjusted EBITDA and Adjusted EBITDA Margin have their limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP. Some of these limitations include:

•Adjusted EBITDA does not include the interest expense and the cash requirements necessary to service interest or principal payments on our debt;

•Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash requirements for replacement of assets that are being depreciated or amortized;

•Adjusted EBITDA excludes the impact of charges and receipts resulting from matters we do not find indicative of our ongoing operations; and

•Other companies in our industry may calculate Adjusted EBITDA and Adjusted EBITDA Margin differently than we do.

We believe providing revenue and revenue growth rate on a constant currency basis helps our investors better understand our underlying performance because they exclude the effects of foreign currency volatility and impacts of deconsolidated and transferred operations that are not indicative of our actual results of operations. Adjusting revenue to remove the effects of foreign currency rate fluctuations, deconsolidation, and transfer of operations results in non-GAAP measures that management uses to help make informed decisions by removing the volatility caused by foreign currency rate fluctuations and the impact of deconsolidated and transferred operations, allowing us to assess whether the business is fundamentally healthy and growing. Additionally, these metrics support management in efficiently allocating resources and determining priorities by providing a basis for evaluating the competitiveness and growth potential of the business itself. It is for these reasons that management believes these non-GAAP metrics add value, but they have their limitations as analytical tools for not reflecting all the amounts associated with our results of operations as determined in accordance with GAAP, and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP.

Rule of % is a non-GAAP measure that management uses to understand our underlying performance and help make informed decisions. As Rule of % is calculated based on other non-GAAP measures such as Adjusted EBITDA Margin and revenue growth rate on a constant currency basis, there can be no assurance that we will not modify the presentation of this measure in the future. Rule of % has its limitations as an analytical tool based on the limitations of Adjusted EBITDA Margin and revenue growth rate on a constant currency basis, and you should not consider it in isolation or as substitute for analysis of our results as reported under GAAP.

The following table presents a reconciliation of net loss to Adjusted EBITDA and net loss margin to Adjusted EBITDA Margin for the period presented.

1. Represents impairment losses on goodwill for Wattpad Corp., Wattpad WEBTOON Studios Corp, Munpia Inc. and Jakga Company Inc.

2. Represents non-cash stock-based compensation expense related to the Company’s equity incentive plan and stock-based compensation plans of NAVER Corp., Munpia Inc. and LOCUS Inc.

3. Represents unrealized net loss of financial assets measured at fair value through profit or loss, which include the Company’s equity investments in entities including NAVER Z Co., Ltd., Contents First Inc. and Clova Games Inc.

4. Represents non-recurring expenses that we do not consider representative of the operating performance of the business. Other costs are comprised of the following expenses associated with (i) financial advisory fees, (ii) consulting fees, (iii) severance fees and (iv) office relocation fee.

5. Represents our proportionate share of recognized losses associated with our investments accounted for using the equity method.

The following table presents a reconciliation of revenue to revenue on a constant currency basis for each of the periods presented.

The following table presents a reconciliation of revenue growth rate to Rule of % for the period presented.