WEBTOON Entertainment Inc.
For the period ended Mar 31, 2025. Filed May 14, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 14, 2025
WBTN$9.67+2.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-12.
0000950170-24-125430
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-14.
0001997859-25-000067
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 136 previous paragraphs and 123 current paragraphs.
65 unchanged; 32 reworded; 26 added; 38 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 22 previous and 14 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (26)
Current report
Overview
Current report
Starting January 1, 2025, NAVER adjusted their methodology for measuring MAU in Korea. Korea is the only region where NAVER serves as a source of our MAU data. NAVER recently adjusted their methodology for identifying and counting web users for all of their services. This change only affects MAU in Korea. All the other regions are reporting their metrics in the same way as previous quarters. Please see the table below for reconciliation with previously reported MAU in Korea.
Current report
As of the quarter ended March 31, 2025, our global MAU was approximately 153 million. The global MAU decreased by approximately 10.5% compared to March 31, 2024, primarily due to declines of MAU in Korea and ROW.
Current report
•In Korea, our MAU was approximately 24.2 million as of the quarter ended March 31, 2025, compared to MAU of 27.0 million as of the same quarter of 2024. Our IP adaptation of "Marry My Husband,” a web-comic series, was released during the quarter ended March 31, 2024, which increased traffic to our offerings in Korea during the quarter ended March 31, 2024, as compared to the quarter ended March 31, 2025.
Current report
•In Rest of World, our MAU was 107.3 million as of the quarter ended March 31, 2025, which declined from 123.2 million as of the comparable prior year period. The decrease was primarily attributable to a government ban on Wattpad in one country, as well as the impact of a Wattpad security upgrade which unintentionally affected search engine indexing, causing a temporary dip in search traffic. We anticipate that the impact from the decrease in search traffic will affect our results for the second quarter of 2025.
Current report
As of the quarter ended March 31, 2025, our global MPU reached 7.4 million with a paying ratio of 4.8%, which is an increase of 0.3% compared to the paying ratio for the quarter ended March 31, 2024 of 4.5%. By geographic regions, Korea, Japan, and Rest of World contributed 46.6%, 30.5% and 22.9% of global MPU, respectively.
Current report
•In Korea, our MPU have decreased to around 3.4 million with a paying ratio of 14.2%, compared to MPU of 3.8 million and a paying ratio of 14.2% as of the quarter ended March 31, 2024. While our MPU decreased for the quarter, our paying ratio remained constant from the prior year.
Current report
•In Rest of World, our MPU is 1.7 million with a paying ratio of 1.6% compared to 1.5% in the prior year's comparable quarter. While ROW's MPU has decreased approximately 5.9%, the paying ratio has increased approximately 0.1% as of the quarter ended March 31, 2025.
Current report
•In Korea, our ARPPU for the quarter ended March 31, 2025 has decreased to $7.5, or 5.3% decrease compared to the same quarter of 2024. On a constant currency basis, our ARPPU increased by 6.7%.
Current report
Cost of Revenue
Current report
Marketing
Current report
General and Administrative Expenses
Current report
Interest Income
Current report
Interest Expense
Current report
Other Income (Loss), Net
Current report
Cost of Revenue
Current report
Our cost of revenue increased by $9.7 million, or 4.0%, for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024. This increase was primarily attributable to a $4.5 million increase in stock-based compensation.
Current report
Marketing
Current report
Marketing expense increased by $12.1 million, or 61.9%, for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, as we continue to invest in marketing to drive growth.
Current report
General and Administrative Expenses
Current report
Interest Income
Current report
Interest Expense
Current report
Interest expense was not material for either the three months ended March 31, 2025, or the three months ended March 31, 2024. We did not have any debt as of the three months ended March 31, 2025.
Current report
Other Income (Loss), Net
Current report
Income tax expense decreased by $4.1 million, or 61.8%, for the three months ended March 31, 2025, compared to the three months ended March 31, 2024. The decrease was primarily attributable to the change in position from income before income tax during the three months ended March 31, 2024, to loss before income tax in the three months ended March 31, 2025. See Note 8. Income Taxes in the accompanying notes to our unaudited condensed consolidated financial statements included in this Report for more information on our taxes.
Current report
For the three months ended March 31, 2025, net cash provided by financing was minimal, and related to exercise of stock options.
Removed paragraphs (38)
Previous report
Item 2. Management’s Discussion and Anal ysis of Financial Condition and Results of Operations.
Previous report
Our Powerful Global Flywheel
Previous report
Our creators, users and content drive a powerful community flywheel. By creating and publishing new and diverse content, creators on our platform help drive the scale of our user base. In turn, users build relationships with creators through real-time feedback and praise on content; fandoms built around popular characters, storylines or in-story universes; and monetary support through payments for access to content. This attracts new creators to our platform, who expand our community and deepen engagement with fans, which leads to an even stronger feedback loop and encourages more content creation. We further amplify this flywheel through other monetization models, including advertising and IP Adaptations. Finally, our platform is underpinned by our foundational technology and artificial intelligence, enabling content creation and discovery and recommendation. The result is increased user engagement, creator prosperity and, ultimately, WEBTOON success.
Previous report
As of the quarter ended September 30, 2024, our global MAU have reached approximately 170 million. The global MAU was positively impacted by an increase in the Japan MAU, which was offset by slight decreases in the Korea and ROW MAU. Importantly, while we saw a decrease in our overall MAU, we increased users on our app globally as compared to the quarter ended September 30. 2023. Shifting users to our app is a strategic focus as we find app users to be more engaged and we believe we are able to monetize app use more effectively. By geographic regions, Korea, Japan, and Rest of World contributed 15.0%, 13.5%, and 71.5% of global MAU, respectively. We typically see higher activity in the third quarter of the calendar year due to the seasonal impact of global vacation and our users’ holiday schedules, although the impact of seasonality varies across geographies:
Previous report
In Korea, our MAU have reached 25.0 million as of the quarter ended September 30, 2024, compared to MAU of 26.6 million as of the same quarter of 2023. Our user base in Korea is highly engaged and well-educated, and our cohorts have demonstrated deeper engagement and levels of consumption over time. While user metrics in Korea declined on a year-over-year basis, MAU improved sequentially from the second quarter as a result of improvements implemented on the platform.
Previous report
In Rest of World, our MAU have reached 119.3 million as of the quarter ended September 30, 2024, which declined from 127.3 million as of the same quarter of 2023. The decline was primarily attributable to decline in web users. We do not monetize web users in North America, which is why we are laser-focused on converting users to the app. The MAU for the Rest of World is a relatively larger portion compared to Korea and Japan as it includes Wattpad, which has a massive global user base of approximately 87.1 million as of the quarter ended September 30, 2024. Roughly a third of the decline was isolated to one country where the government banned a number of global content sites, including Wattpad. We expect to see a full quarter impact from this ban in the fourth quarter of fiscal year 2024. Within Rest of World, WEBTOON North America MAU were 7.4 million as of the quarter ended September 30, 2024.
Previous report
As of the quarter ended September 30, 2024, our global MPU reached 7.9 million with a paying ratio of 4.7%, which is a slight decrease compared to the paying ratio for the quarter ended September 30, 2023. By geographic regions, Korea, Japan, and Rest of World contributed 49.4%, 29.1% and 21.5% of global MPU, respectively. While we have seen slight declines in MPU from the comparable periods in the prior year, we have seen an upward trend in MPU in sequential quarters as a result of improvements implemented on the platform. Paying ratio varies due to the user’s ability and propensity to pay across different regions and different product offerings.
Previous report
In Japan, our MPU have reached 2.3 million with a paying ratio of 10.3%, compared to MPU of 2.0 million and a paying ratio of 9.4% as of the quarter ended September 30, 2023. Successful execution of our conversion strategies globally has brought particularly strong growth in Japan.
Previous report
In Rest of World, our MPU is 1.7 million with a paying ratio of 1.4%, which has remained the same as of the quarter ended September 30, 2023, reflecting our current strategic plans and marketing discipline to focus on select markets for long-term value creation. Our paying ratio is relatively lower as compared to Korea or Japan due to the inclusion of Wattpad. Wattpad has a different monetization model that primarily focuses on advertising and the business is in its early stage of monetizing its content. We plan to continue to leverage our successful pattern of engagement to drive monetization, especially as we have seen our top engaged users in North America reading a similar number of episodes to users in more mature markets.
Previous report
In Korea, our ARPPU for the quarter ended September 30, 2024 has increased to $7.9, or 3.9% increase compared to the same quarter of 2023, which was primarily a result of the successful rollout of our AI-driven personalized recommendation model.
Previous report
Impairment Losses on Goodwill
Previous report
Impairment losses on goodwill primarily consist of recognized losses resulting from our annual goodwill impairment test. See Note 5. Goodwill, net in the accompanying notes to our unaudited condensed consolidated financial statements included in this Report for more information.
Previous report
Revenue increased by $30.2 million, or 9.5% for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023, primarily driven by strong growth in Paid Content and advertising, partially offset by the Company's exposure to weaker foreign currencies including the Korean won ("KRW") and Japanese yen ("JPY").
Previous report
This translates to a double-digit revenue growth of 13.5%, when removing the effects of deconsolidation, transfer of SERIES ON operations, and foreign currency rate fluctuations, with growth drivers across all revenue streams globally. See “—Non-GAAP Financial Measures – Use of Constant Currency.”
Previous report
Our cost of revenue increased by $10.9 million, or 4.4%, for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. While this increase in cost of revenue was due to the overall increase of our revenue as percentages of revenues, costs decreased during the three months ended September 30, 2024, as compared to the three months ended September 30, 2023, due to changes in our mix of gross profit margin as we expand our geographical mix.
Previous report
There was no material change in marketing expenses for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023.
Previous report
Interest expense was similar for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023.
Previous report
Income tax benefit increased by $15.8 million, or 266.8%, for the three months ended September 30, 2024, compared to the three months ended September 30, 2023. The increase is primarily attributable to the change in valuation allowance upon the completion of the LDF-eBIJ Merger. See Note 1. Description of Business and Summary of Significant Accounting Policiesin the accompanying notes to our unaudited condensed consolidated financial statements included in this Report for more information on this common control transaction.
Previous report
Comparison of the Nine Months Ended September 30, 2024 and September 30, 2023
Previous report
Revenue
Previous report
Revenue increased by $46.9 million, or 4.9%, for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. The main drivers were increases in Paid Content revenue of $37.1 million, or 4.8%, primarily related to the particularly strong growth in Japan with popularity of LINE MANGA, and increases of $12.4 million, or 11.5%, in advertising revenue, which was largely driven by nearly 100% year-over-year growth in Japan. Such increases were largely offset by declines in Korea.
Previous report
IP Adaptations revenue decreased by $2.6 million, or 4.0%, for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023, primarily attributable to the disposition of LOCUS and its subsidiaries. See Note 14. Dispositionin the accompanying notes to our unaudited condensed consolidated financial statements included in this Report for more information on the disposition of LOCUS.
Previous report
Our cost of revenue increased by $9.2 million, or 1.3%, for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023, due to overall increases in commissions and fees paid to creators, associated with higher revenues.
Previous report
Marketing expenses decreased by $19.8 million, or 20.8%, for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. These decreases were a result of increased efficiencies with our marketing, as we reported higher revenue on similar levels of marketing spend from last year on a global basis.
Previous report
General and administrative expenses increased by $98.5 million, or 63.3%, for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. The increase in general and administrative expenses was largely driven by stock compensation expense of approximately $68.3 million, a one-time bonus of $30.0 million granted to the CEO for a successful IPO, and increased labor costs associated with the IPO.
Previous report
Interest income increased by $7.5 million, or 327.9%, for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. The increase was primarily driven by higher balances due to proceeds from the IPO and higher interest rates compared to the prior year.
Previous report
(Loss) Income on Equity Method Investment, Net
Previous report
(Loss) income on equity method investment, net, decreased by $3.6 million, or 142.1%, for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2024. The overall amount of losses increased across multiple equity method investee entities, including StudioToon and YLAB Corporation.
Previous report
Other income (loss), net, increased by $15.4 million, or 556.0%, for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. This increase was primarily attributable to gains related to fluctuations in foreign currency exchange rates, and was partially offset by the loss from disposal of subsidiaries on June 30, 2023, which resulted from deconsolidation of LOCUS and its subsidiaries. See Note 14. Dispositionin the accompanying notes to our unaudited condensed consolidated financial statements included in this Report for more information on the disposition of LOCUS.
Previous report
Income Tax Benefit (Expense)
Previous report
Income tax benefit increased by $20.8 million, or 106.8%, for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023, which was primarily attributable to a net discrete tax benefit of $12.1 million, which primarily resulted from a change in valuation allowance upon completion of the LDF-eBIJ Merger. During the nine months ended
Previous report
September 30, 2023 we recorded a discrete tax expense of $10.7 million due to audit payments made by its Korean subsidiary with respect to a tax audit assessment made by the Korean tax authority in 2023.
Previous report
Adjusted EBITDA was impacted by $7.3 million and $(1.5) million due to fluctuations in foreign currency exchange rates during the three and nine months ended September 30, 2024, respectively, as compared to $(3.0) million and $(8.1) million during the three and nine months ended September 30, 2023, respectively.
Previous report
For the nine months ended September 30, 2023, net cash used in investing activities was $45.1 million, consisting primarily of a payment made for short-term investments, payments on our loan receivable, as well as purchases of intangible assets, and property, plant and equipment, partially offset by proceeds from maturities of short-term investments.
Previous report
For the nine months ended September 30, 2024, net cash provided by financing activities was $353.7 million, consisting primarily of $293.0 million in proceeds from the IPO, net of underwriting discounts and commissions, $50.0 million in proceeds from issuance of common stock related to private placement, and $26.8 million in proceeds, net of underwriting discounts and commissions, from the exercise of the over-allotment option by the underwriters in connection with the IPO.
Previous report
For the nine months ended September 30, 2023, net cash used in financing activities was $6.4 million, consisting primarily of repayment of short-term borrowings and payment of contingent consideration related to a business acquisition, which was partially offset by a capital contribution to a non wholly owned subsidiary from a limited partner.
Previous report
Recent Accounting Pronouncements
Previous report
See Note 1. Description of Business and Summary of Significant Accounting Policiesin the accompanying notes to our unaudited condensed consolidated financial statements included in this Report for more information.
Reworded paragraphs (32)
Previous wording
This Management’s Discussion and Analysis of Financial Condition and Results of Operation should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes to those statements included in this Report and our audited consolidated financial statements and the related notes and the discussion under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for the year ended December 31, 2023 included in our final prospectus filed with the U.S. Securities and Exchange Commission (the “SEC”) on June 27, 2024 pursuant to Rule 424(b)(4) (the “IPO Prospectus”). In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results and timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed under the sections entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in this Report.
Current wording
This Management’s Discussion and Analysis of Financial Condition and Results of Operation should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes to those statements included in this Report and our audited consolidated financial statements and the related notes and the discussion under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for the year ended December 31, 2024, included in the Annual Report. In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results and timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed under the sections entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in this Report.
Previous wording
WEBTOON is a global storytelling platform where a vibrant community of creators and users discover, create, and share new content. WEBTOON empowers its community by enabling creators to participate economically in their own creations and by offering consumers an endless library of content.
Current wording
WEBTOON is a global storytelling platform where a vibrant community of creators and users discover, create and share new content. We have pioneered a cultural movement by revolutionizing the storytelling format and democratizing content creation and publication. WEBTOON empowers creators, by enabling them to participate economically in their own creation, and users, by offering an endless library of content.
Previous wording
In Japan, our MAU have reached 22.5 million as of the quarter ended September 30, 2024, compared to MAU of 21.6 million as of the same quarter of 2023, largely attributable to growth of LINE Manga, partially offset by eBIJ. As Q3 is seasonally the highest quarter for comic consumption in Japan, we capitalized on this opportunity by launching new original titles. In addition, we continued to optimize and improve our existing AI-based personalized content recommendation capabilities and targeted advertising.
Current wording
•In Japan, our MAU have reached 21.9 million as of the quarter ended March 31, 2025, compared to MAU of 21.1 million as of the same quarter of 2024, largely attributable to growth in eBookJapan.
Previous wording
In Korea, our MPU have decreased to around 3.9 million with a paying ratio of 15.4%, compared to MPU of 4.2 million and a paying ratio of 16.0% as of the quarter ended September 30, 2023.
Current wording
•In Japan, our MPU have reached 2.2 million with a paying ratio of 10.3%, compared to MPU of 2.1 million and a paying ratio of 10.1% as of the quarter ended March 31, 2024.
Previous wording
Engagement is a key aspect to drive our monetization. Our ARPPU has increased over time as our users explored more titles and purchased more episodes behind our paywall. For the quarter ended September 30, 2024, our ARPPU has increased to $12.1, or 11.0% growth compared to the same quarter of 2023. The growth in ARPPU was driven primarily by our strategic effort to shift users from web to the app. Our ARPPU growth was partially offset by MAU declines, which is an indicator that our strategy is working.
Current wording
Engagement is a key aspect to drive our monetization. Our ARPPU has increased over time as our users explored more titles and purchased more episodes behind our paywall. For the quarter ended March 31, 2025, our ARPPU has increased to $11.8, or 2.8% growth compared to the same quarter of 2024. The growth in ARPPU was driven primarily by our strategic effort to shift users from web to the app.
Previous wording
In Japan, our ARPPU for the quarter ended September 30, 2024 has increased to $23.1, or 4.5% increase compared to the same quarter of 2023. As mentioned earlier, third quarter is seasonally the highest quarter for comic consumption in Japan.
Current wording
•In Japan, our ARPPU for the quarter ended March 31, 2025 has increased to $22.3, or 0.6% increase compared to the same quarter of 2024.
Previous wording
In Rest of World, our ARPPU for the quarter ended September 30, 2024 has increased to $6.7, or 11.7% growth compared to the same quarter of 2023, primarily driven by reader habituation in paying to view content.
Current wording
•In Rest of World, our ARPPU for the quarter ended March 31, 2025 has increased to $6.5, or 3.5% growth compared to the same quarter of 2024.
Previous wording
Historically, while the magnitude and timing varies across regions, we experienced higher levels of user engagement and monetization in the third quarter of the calendar year primarily as a result of increased use of our platform during the global vacation and holiday schedules of our users. In addition, many advertisers allocate the largest portion of their budgets to the fourth quarter of the calendar year to coincide with increased holiday purchasing. As we continue to diversify our sources of revenue, and in particular increase revenue from advertising, the seasonal impacts may be more pronounced in the fourth quarter in the future or different altogether.
Current wording
Historically, while the magnitude and timing varies across regions, we experience higher levels of user engagement and monetization in the third quarter of the calendar year primarily as a result of increased use of our platform during the global vacation and holiday schedules of our users. In addition, many advertisers allocate the largest portion of their budgets to the fourth quarter of the calendar year to coincide with increased holiday purchasing. As we continue to diversify our sources of revenue, and in particular increase revenue from advertising, the seasonal impacts may be more pronounced in the fourth quarter in the future or different altogether.
Previous wording
Cost of revenue consists of Paid Content creator revenue shared with creators, app store fees and other variable costs. Creator revenue share includes commissions payable to creators or publishers based on revenue generated from Paid Content. App store fees include platform fees payable to companies that provide users with the ability to download the mobile application through application stores and make purchases directly through such application (such as Google and Apple) and certain other payment-related costs. These expenses are lower in Korea where more people buy Coins through our website as opposed to purchases made through mobile applications. Other variable costs include, among other things, costs directly associated with our IP Adaptations business, including payroll and related personal expenses, amortization and production costs.
Current wording
Cost of revenue consists of Paid Content creator revenue shared with creators, app store fees and other variable costs. Creator revenue share includes commissions payable to creators or publishers based on revenue generated from Paid Content. App store fees include platform fees payable to companies that provide users with the ability to download the mobile application through application stores and make purchases directly through such applications (such as Google and Apple) and certain other payment-related costs. These expenses are lower in Korea where more people buy Coins through our website as opposed to purchases made through mobile applications. Other variable costs include, among other things, costs directly associated with our IP Adaptations business, including payroll and related personal expenses, amortization and production costs.
Previous wording
Interest expense primarily consists of interest related to our outstanding debt obligations, including both short-term borrowings and long-term debt. See Note 7. Debtin the accompanying notes to our unaudited condensed consolidated financial statements included in this Report for more information.
Current wording
Interest expense primarily consists of interest related to our outstanding debt obligations, including both short-term borrowings and long-term debt.
Previous wording
Income (loss) on equity method investment, net, includes recognized income (loss) associated with our investments accounted for using the equity method. See Note 15. Equity Method Investmentsin the accompanying notes to our unaudited condensed consolidated financial statements included in this Report for more information.
Current wording
Income (loss) on equity method investment, net, includes recognized income (loss) associated with our investments accounted for using the equity method. See Note 14. Equity Method Investments in the accompanying notes to our unaudited condensed consolidated financial statements included in this Report for more information.
Previous wording
The following table sets forth our consolidated statement of operations for the three and nine months ended September 30, 2024 and 2023, respectively. We have derived this data from our unaudited condensed consolidated statements of operations and comprehensive loss. The information for each of the periods presented has been prepared on the same basis as our audited annual consolidated financial statements and, in the opinion of management, reflects all adjustments of a normal, recurring nature that are necessary for the fair statement of the results of operations for the period. This data should be read in conjunction with our audited consolidated financial statements in the IPO Prospectus and unaudited condensed consolidated financial statements included in this Report. Historical results are not necessarily indicative of the results that may be expected in the future.
Current wording
The following table sets forth our consolidated statement of operations for the three months ended March 31, 2025 and 2024, respectively. We have derived this data from our unaudited condensed consolidated statements of operations and comprehensive loss. The information for each of the periods presented has been prepared on the same basis as our audited annual consolidated financial statements and, in the opinion of management, reflects all adjustments of a normal, recurring nature that are necessary for the fair statement of the results of operations for the period. This data should be read in conjunction with our audited consolidated financial statements in the Annual Report, and unaudited condensed consolidated financial statements included in this Report. Historical results are not necessarily indicative of the results that may be expected in the future.
Previous wording
Interest expense was relatively flat for the nine months ended September 30, 2024 and 2023. The slight decrease was due to lower balances on our short-term borrowings during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023.
Current wording
Revenue remained relatively flat for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024.
Previous wording
General and administrative expenses increased by $21.0 million, or 45.8%, for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. The increase in general and administrative expenses was largely driven by increases of approximately $9.3 million in stock compensation expense, of approximately $6.1 million in consulting fees, and increases in salaries due to the increased headcount during the three months ended September 30, 2024, as compared to the three months ended September 30, 2023.
Current wording
General and administrative expenses increased by $18.0 million, or 37.0%, for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024. The increase in general and administrative expenses was largely driven by increases of approximately $10.4 million in stock compensation expense, and higher salaries due to the increased headcount associated with being a public company, during the three months ended March 31, 2025, as compared to the three months ended March 31, 2024.
Previous wording
Interest income increased by $5.6 million, or 613.3%, for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. The increase was primarily due to interest income earned on the proceeds from our IPO.
Current wording
Interest income increased by $3.9 million, or 314.0%, for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024. The increase was primarily due to interest income earned on the proceeds from our IPO.
Previous wording
Income (loss) on equity method investment, net, decreased by $1.2 million, or 113.1%, for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. See Note 15. Equity Method Investmentsin the accompanying notes to our unaudited condensed consolidated financial statements included in this Report for more information on the Company's equity method investments.
Current wording
Loss on equity method investment, net, decreased by $0.5 million, or 45.9%, for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024. See Note 14. Equity Method Investments in the accompanying notes to our unaudited condensed consolidated financial statements included in this Report for more information on the Company's equity method investments.
Previous wording
Other income (loss), net, increased by $12.5 million, or 1736.3%, for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. This increase was driven by gains on certain transactions due to changes in foreign currency exchange rates.
Current wording
Other income (loss), net, increased by $4.1 million, or 285.8%, for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024. This increase was driven by gains on certain transactions due to changes in foreign currency exchange rates.
Previous wording
In addition to our results determined in accordance with GAAP, our management and board of directors also consider EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin, revenue on a constant currency basis, and revenue growth on a constant currency basis, ARPPU on a constant currency basis and ARPPU growth on a constant currency basis. We believe that these non-GAAP financial measures provide investors with additional useful information in evaluating our performance. Our non-GAAP financial measures should not be considered in isolation, or as substitutes for, financial information prepared in accordance with GAAP. Non-GAAP measures have limitations as they do not reflect all the amounts associated with our results of operations as determined in accordance with GAAP, and should only be used to evaluate our results of operations in conjunction with the corresponding GAAP measures.
Current wording
In addition to our results determined in accordance with GAAP, our management and our board of directors also consider EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin, revenue on a constant currency basis, and revenue growth on a constant currency basis, ARPPU on a constant currency basis and ARPPU growth on a constant currency basis. We believe that these non-GAAP financial measures provide investors with additional useful information in evaluating our performance. Our non-GAAP financial measures should not be considered in isolation, or as substitutes for, financial information prepared in accordance with GAAP. Non-GAAP measures have limitations as they do not reflect all the amounts associated with our results of operations as determined in accordance with GAAP, and should only be used to evaluate our results of operations in conjunction with the corresponding GAAP measures.
Previous wording
We define EBITDA as net income(loss) before interest income, interest expense, income tax expense and depreciation and amortization. Starting with the third quarter of 2024, our calculation of EBITDA has been revised to adjust for interest income in addition to interest expense. In prior periods, we only adjusted for interest expense because interest income amounts were insignificant. Prior comparable periods have now been recast to conform to the current presentation. Likewise, starting with the third quarter of 2024, EBITDA margin is calculated by adjusting for interest income in addition to interest expense and prior comparable periods have been recast to conform to the current presentation. 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 (“FVPL”), impairment of goodwill, non-cash stock-based compensation and certain other non-recurring costs. We believe that EBITDA and Adjusted EBITDA provide 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. EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP financial measures and are not intended to be substitutes for any GAAP financial measures. They should be considered in addition to, not as substitutes for, or in isolation from, measures prepared in accordance with GAAP, such as consolidated net income (loss) or consolidated net income (loss) margin.
Current wording
We define EBITDA as net income(loss) before interest income, interest expense, income tax expense and depreciation and amortization. Starting with the third quarter of 2024, our calculation of EBITDA has been revised to adjust for interest income in addition to interest expense. In prior periods, we only adjusted for interest expense because interest income amounts were insignificant. Prior comparable periods have now been recast to conform to the current presentation. Likewise, EBITDA margin is calculated by adjusting for interest income in addition to interest expense and prior comparable periods have been recast to conform to the current presentation. 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 (“FVPL”), impairment of goodwill, non-cash stock-based compensation and certain other non-recurring costs. We believe that EBITDA and Adjusted EBITDA provide 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. EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP financial measures and are not intended to be substitutes for any GAAP financial measures. They should be considered in addition to, not as substitutes for, or in isolation from, measures prepared in accordance with GAAP, such as consolidated net income (loss) or consolidated net income (loss) margin.
Previous wording
The following table presents a reconciliation of net loss to EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin for each of the periods presented. Effective for the quarter ended September 30, 2024, and going forward, the Company revised its calculation of EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin to exclude the impact of interest income. The presentation for the three months ended September 30, 2023, and the nine months ended September 30, 2023, conforms to the current presentation.
Current wording
The following table presents a reconciliation of net loss to EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin for each of the periods presented.
Previous wording
Represents non-cash stock-based compensation expense related to WEBTOON’s equity incentive plan and stock-based compensation plans of NAVER and Munpia.
Current wording
(1)Represents stock-based compensation expense related to WEBTOON’s equity incentive plan and stock-based compensation plans of NAVER and Munpia, including amounts which are cash settled. See Note 7. Stock-Based Compensationin the accompanying notes in this Report for further details on the amounts included within.
Previous wording
Represents non-recurring expenses that we do not consider representative of the operating performance of the business. For the three months ended September 30, 2024, these amounts include legal fees for restructuring of our business as a result of the IPO, and advisory fees for one-time implementation of software required as a result of the IPO. For the nine months ended September 30, 2024, these amounts also include a $30.0 million one-time CEO bonus, legal and advisory fees related to the IPO, and certain strategic restructuring expenses which primarily include severance.
Current wording
(2)Represents non-recurring expenses that we do not consider representative of the operating performance of the business. For the three months ended March 31, 2025, these amounts include legal fees and advisory fees. For the three months ended March 31, 2024, these amounts were comprised of financial advisory fees, consulting fees, severance fees, and office relocation fee.
Previous wording
Represents unrealized net loss (gain) of financial assets measured at FVPL, which include the Company's equity investments.
Current wording
(3)Represents unrealized net loss (gain) of financial assets measured at FVPL, which include the Company's equity investments.
Previous wording
Represents our proportionate share of recognized losses associated with our investments accounted for using the equity method. See Note 15. Equity Method Investments in the accompanying notes to our unaudited condensed consolidated financial statements included in this Report.
Current wording
(4)Represents our proportionate share of recognized losses associated with our investments accounted for using the equity method. See Note 14. Equity Method Investments in the accompanying notes to our unaudited condensed consolidated financial statements included in this Report.
Previous wording
Totals may not foot due to rounding.
Current wording
(5)Totals may not foot due to rounding.
Previous wording
We provide revenue, including period-over-period growth rates, adjusted to remove the impact of foreign currency rate fluctuations and the impact of deconsolidated and transferred operations, which we refer to as revenue on a constant currency basis. 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 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. In addition to adjustments for foreign currency exchange fluctuations, we have also adjusted revenue to exclude the impact of deconsolidation of Jakga and LOCUS and its subsidiaries, and the transfer of SERIES ON, one of our offerings, from NAVER WEBTOON to NAVER to improve comparability between the two periods. We calculate revenue (including growth rates) on a constant currency basis in each of our revenue streams - Paid Content, Advertising and IP Adaptations - using the same method as laid out herein. See Note 14. Dispositionin the accompanying notes to our unaudited condensed consolidated financial statements included in this Report for more information.
Current wording
We provide revenue, including period-over-period growth rates, adjusted to remove the impact of foreign currency rate fluctuations and the impact of deconsolidated and transferred operations, which we refer to as revenue on a constant currency basis. 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 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. In addition to adjustments for foreign currency exchange fluctuations, we have also adjusted revenue to exclude the impact of deconsolidation of Jakga to improve comparability between the two periods. We calculate revenue (including growth rates) on a constant currency basis in each of our revenue streams - Paid Content, Advertising and IP Adaptations - using the same method as laid out herein. See Note 13. Disposition in the accompanying notes to our unaudited condensed consolidated financial statements included in this Report for more information.
Previous wording
On June 28, 2024, we completed our initial public offering (“IPO”) in which we issued and sold 15,000,000 shares of common stock at a public offering price of $21.00 per share. We received net proceeds of approximately $281.7 million from the IPO, after deducting underwriting discounts and commissions and offering expenses payable by us.
Current wording
On June 28, 2024, we completed our IPO in which we issued and sold 15,000,000 shares of common stock at a public offering price of $21.00 per share. We received net proceeds of approximately $281.7 million from the IPO, after deducting underwriting discounts and commissions and offering expenses payable by us.
Previous wording
Historically, we have relied primarily upon cash generated from operations and cash provided by NAVER through capital contributions to finance our operations, repay or repurchase indebtedness, finance acquisitions and fund our capital expenditures. NAVER does not have any contractual obligation to provide additional capital to us and therefore there can be no assurance that NAVER will continue to provide additional capital in the form of debt or equity investment in the future to enable us to operate our business. As of September 30, 2024, we had $585.5 million of cash and cash equivalents, which were primarily invested in short-term, highly liquid investments with original maturities of three months or less from the date of purchase and are mainly comprised of bank deposits. We believe that our existing cash and cash equivalent balances will be sufficient to support our working capital requirements for at least the next 12 months based on our current operating plans. However, our future capital requirements will depend on many factors, including our growth rate, sales and marketing activities and other factors affecting our business, including those described in the section entitled “Risk Factors” in this Report. Our expected primary uses of our capital on short-and long-term bases are for repayment of debt, interest payments, working capital, capital expenditures, geographic expansion and other general corporate purposes.
Current wording
Historically, we have relied primarily upon cash generated from operations and cash provided by NAVER through capital contributions to finance our operations, repay or repurchase indebtedness, finance acquisitions and fund our capital expenditures. NAVER does not have any contractual obligation to provide additional capital to us and therefore there can be no assurance that NAVER will continue to provide additional capital in the form of debt or equity investment in the future to enable us to operate our business. As of March 31, 2025, we had $550.1 million of cash and cash equivalents, which were primarily invested in short-term, highly liquid investments with original maturities of three months or less from the date of purchase and are mainly comprised of bank deposits. We believe that our existing cash and cash equivalent balances will be sufficient to support our working capital requirements for at least the next 12 months based on our current operating plans. However, our future capital requirements will depend on many factors, including our growth rate, sales and marketing activities and other factors affecting our business, including those described in the section entitled “Risk Factors” in the Annual Report. Our expected primary uses of our capital on short-and long-term bases are for repayment of debt, interest payments, working capital, capital expenditures, geographic expansion and other general corporate purposes.
Previous wording
For the nine months ended September 30, 2024, net cash provided by operating activities was $26.5 million, which primarily consisted of net loss of $50.3 million, adjusted for certain non-cash items of $76.9 million. The non-cash items primarily consisted of stock based compensation of $72.1 million and depreciation and amortization of approximately $28.0 million, which was offset by a decrease of $23.7 million in deferred tax expense and a $5.1 million gain on debt and equity securities. The net cash inflow from changes in our operating assets and liabilities were primarily due to an increase in accrued expenses and contract liabilities.
Current wording
For the three months ended March 31, 2025, net cash provided by operating activities was $18.7 million, which primarily consisted of net loss of $22.0 million, adjusted for certain non-cash items of $25.9 million. The non-cash items primarily consisted of stock based compensation of $18.3 million and depreciation and amortization of approximately $8.4 million, which was offset by a gain of $2.8 million gain on foreign currency, net. The net cash outflow from changes in our operating assets and liabilities were primarily due to a decrease in our accounts payable, and decrease in accrued expenses, offset by decrease in account receivables.
Previous wording
For the nine months ended September 30, 2024, net cash used in investing activities was $11.2 million, consisting primarily of purchases of short term investments, intangible assets, and equity method investments , partially offset by proceeds from maturities of short-term investments .
Current wording
For the three months ended March 31, 2025, net cash used in investing activities was $8.0 million, consisting primarily of payments made for short-term investments, purchases of debt and equity securities and intangible assets, which was offset by proceeds from maturities of short-term investments.
Previous wording
Our condensed consolidated financial statements and the related notes thereto included in this Report are prepared in accordance with GAAP. The preparation of our condensed consolidated financial statements in conformity with GAAP requires us to make estimates and judgments that affect the amounts reported in those consolidated financial statements and the accompanying notes. Although we believe that the estimates we use are reasonable, due to the inherent uncertainty involved in making those estimates, actual results reported in future periods could differ from those estimates.
Current wording
Our unaudited condensed consolidated financial statements and the related notes thereto included in this Report are prepared in accordance with GAAP. The preparation of our unaudited condensed consolidated financial statements in conformity with GAAP requires us to make estimates and judgments that affect the amounts reported in those consolidated financial statements and the accompanying notes. Although we believe that the estimates we use are reasonable, due to the inherent uncertainty involved in making those estimates, actual results reported in future periods could differ from those estimates.
Previous wording
There have been no material changes to our critical accounting policies and estimates as described in the IPO Prospectus.
Current wording
There have been no material changes to our critical accounting policies and estimates as described in the Annual Report. Refer to Note 1 of the unaudited condensed consolidated financial statements for recently adopted and issued accounting pronouncements, if any, since the filing of our Annual Report for the year ended December 31, 2024.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
For the nine months ended September 30, 2023, net cash provided by operating activities was $7.5 million, which primarily consisted of net loss of $49.5 million, adjusted for certain non-cash items of $43.7 million, and net cash provided by changes in operating assets and liabilities of $13.4 million. The non-cash items primarily consisted of depreciation and amortization, operating lease expense, and loss on foreign currency, net. The net cash inflow from changes in our operating assets and liabilities were primarily due to higher collections of receivables, as well as a increase in accrued expenses and contract liabilities.