WEBTOON Entertainment Inc.

Previous wording

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 wording

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 adjusted their methodology for identifying and counting web users for all of their services. This change only affected MAU in Korea. All the other regions are continuing to report their metrics in the same way as previous quarters. A table reconciling previously reported MAU in Korea for fiscal quarters in 2024 to MAU in Korea using the new methodology was provided in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, filed with the SEC on May 14, 2025. This Report compares MAU in Korea to the prior period applying the new methodology for all reported periods.

Previous wording

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 wording

As of the quarter ended June 30, 2025, our global MAU was approximately 156.1 million. The global MAU decreased by approximately 7.6% compared to June 30, 2024, primarily due to declines of MAU in Korea and ROW.

Previous wording

•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 wording

•In Korea, our MAU was approximately 23.0 million as of the quarter ended June 30, 2025, compared to MAU of 25.8 million as of the same quarter of 2024.

Previous 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.

Current wording

•In Japan, our MAU have reached 22.6 million as of the quarter ended June 30, 2025, compared to MAU of 22.0 million as of the same quarter of 2024, largely attributable to growth in eBookJapan.

Previous wording

•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 wording

•In Rest of World, our MAU was 110.5 million as of the quarter ended June 30, 2025, which declined from 121.1 million as of the comparable prior year period. The decrease was primarily attributable to government bans on Wattpad in certain countries, as well as the impact of a Wattpad security upgrade which unintentionally affected search engine indexing, causing a dip in search traffic.

Previous wording

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 wording

As of the quarter ended June 30, 2025, our global MPU was 7.4 million with a paying ratio of 4.7%, which is an increase of 0.1% compared to the paying ratio for the quarter ended June 30, 2024, of 4.6%. By geographic regions, Korea, Japan, and Rest of World contributed 46.4%, 30.8% and 22.8% of global MPU, respectively.

Previous wording

•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 wording

•In Korea, our MPU have decreased to around 3.4 million with a paying ratio of 14.9%, compared to MPU of 3.7 million and a paying ratio of 14.5% as of the quarter ended June 30, 2024. While our MPU decreased from the comparable quarter of 2024, our paying ratio increased approximately 0.4% from the comparable quarter of 2024.

Previous 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.

Current wording

•In Japan, our MPU have reached 2.3 million with a paying ratio of 10.0%, compared to MPU of 2.2 million and a paying ratio of 10.2% as of the quarter ended June 30, 2024.

Previous wording

•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 wording

•In Rest of World, our MPU is 1.7 million with a paying ratio of 1.5% compared to MPU of 1.8 million and a paying ratio of 1.5% in the prior year's comparable quarter.

Previous wording

We view ARPPU to be an indicator of both the strength of engagement and Paid Content monetization on our platform. Units are in U.S. dollar.

Current wording

We view ARPPU to be an indicator of both the strength of engagement and Paid Content monetization on our platform. Units are in U.S. dollars.

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 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.

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 June 30, 2025, our ARPPU has increased to $12.4, or 11.1% 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, as app users are more engaged and present better monetization opportunities.

Previous wording

•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 wording

•In Korea, our ARPPU for the quarter ended June 30, 2025 has increased to $7.9, or 5.0% increase compared to the same quarter of 2024. On a constant currency basis, our ARPPU increased by 8.3%.

Previous 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.

Current wording

•In Japan, our ARPPU for the quarter ended June 30, 2025 has increased to $23.7, or 11.8% increase compared to the same quarter of 2024.

Previous 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.

Current wording

•In Rest of World, our ARPPU for the quarter ended June 30, 2025 has increased to $6.6, or 2.2% growth compared to the same quarter of 2024.

Previous wording

Consolidated Statements of Operations and Comprehensive Loss

Current wording

Condensed Consolidated Statements of Operations and Comprehensive Loss

Previous 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.

Current wording

The following table sets forth our condensed consolidated statements of operations for the three and six months ended June 30, 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 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.

Previous wording

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 wording

Marketing expense increased by $7.6 million, or 32.5%, for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024, as we continue to invest in marketing to drive growth.

Previous 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.

Current wording

General and administrative expenses decreased by $73.7 million, or 53.2%, for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024. The decrease in general and administrative expenses was largely driven by a decrease of approximately $43.2 million in stock compensation expense during the three months ended June 30, 2025, compared to the three months ended June 30, 2024. Additional drivers were the impact of a one-time bonus of $30.0 million granted to the CEO for a successful IPO, and increased consulting fees during the quarter ended June 30, 2024, which did not occur during the three months ended June 30, 2025.

Previous 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.

Current wording

Interest income increased by $2.9 million, or 140.3%, for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024. The increase was primarily due to interest income earned on the proceeds from our IPO.

Previous 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.

Current wording

Income on equity method investment, net, increased by $0.4 million, or 322.5%, for the three months ended June 30, 2025, as compared to the three months ended June 30, 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 $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.

Current wording

Other income (loss), net, decreased by $3.7 million, or (159.9%), for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024. This decrease was driven by losses on certain transactions due to changes in foreign currency exchange rates.

Previous wording

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 wording

Income tax expense decreased by $2.7 million, or 143.6%, for the three months ended June 30, 2025, compared to the three months ended June 30, 2024. The decrease was primarily attributable to the change in position from income before income tax during the three months ended June 30, 2024, to loss before income tax in the three months ended June 30, 2025, for the entities included in our effective tax rate. 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.

Previous 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.

Current wording

(1)Represents non-cash 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 to our unaudited Condensed Consolidated Financial Statements in this Report for further details on the amounts included within.

Previous 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.

Current wording

(2)Represents non-recurring expenses that we do not consider representative of the operating performance of the business. For the three and six months ended June 30, 2025, these amounts include legal fees and advisory fees. For the three and six months ended June 30, 2024, these amounts were comprised of a $30.0 million one-time CEO bonus and legal and advisory fees related to the IPO.

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 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.

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 June 30, 2025, we had $581.5 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 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

We may, in the future, enter into arrangements to acquire or invest in complementary businesses, products and technologies, including intellectual property rights, which may require us to seek additional financing. To the extent additional funds are necessary to meet our liquidity needs as we continue to execute our business strategy, we anticipate that they will be obtained through the incurrence of indebtedness, the issuance of additional equity or a combination of these potential sources of funds. Such financing, may however, not be available to us on favorable terms, or at all. In particular, high inflation and interest rates have resulted, and may continue to result, in significant disruption of global financial markets, reducing our ability to access capital. If we are unable to raise additional funds on commercially reasonable terms or at all, our business, financial condition and results of operations could be adversely affected. See “Risk Factors—Risks Related to Our Business, Industry and Operations—We may require additional capital to support our business in the future, and this capital might not be available on reasonable terms, if at all.”

Current wording

We may, in the future, enter into arrangements to acquire or invest in complementary businesses, products and technologies, including intellectual property rights, which may require us to seek additional financing. To the extent additional funds are necessary to meet our liquidity needs as we continue to execute our business strategy, we anticipate that they will be obtained through the incurrence of indebtedness, the issuance of additional equity or a combination of these potential sources of funds. Such financing, may however, not be available to us on favorable terms, or at all. In particular, high inflation and interest rates have resulted, and may continue to result, in significant disruption of global financial markets, reducing our ability to access capital. If we are unable to raise additional funds on commercially reasonable terms or at all, our business, financial condition and results of operations could be adversely affected. See “Risk Factors—Risks Related to Our Business, Industry and Operations—We may require additional capital to support our business in the future, and this capital might not be available on reasonable terms, if at all.” in the Annual Report.

Previous 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.

Current wording

For the six months ended June 30, 2025, net cash used in operating activities was $13.0 million, which primarily consisted of net loss of $25.9 million, adjusted for certain non-cash items of $40.3 million. The non-cash items included stock-based compensation of $25.5 million, depreciation and amortization of approximately $16.8 million, and operating lease expense of $4.5 million, which was partially offset by a gain of $3.6 million on foreign currency, net. The net cash outflow from changes in our operating assets and liabilities was primarily due to a decrease in our accrued expenses, an increase in our other assets, and a decrease in accounts payable, which was partially offset by an increase in contract liabilities.

Previous 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.

Current wording

For the six months ended June 30, 2025, net cash provided by investing activities was $5.7 million, consisting of proceeds from maturities of short-term investments of approximately $32.3 million, which was primarily offset by payment made for short-term investments of $16.6 million, and purchases of intangible assets of $4.5 million.

Previous wording

For the three months ended March 31, 2025, net cash provided by financing was minimal, and related to exercise of stock options.

Current wording

For the six months ended June 30, 2025, net cash provided by financing was minimal, and related to exercise of stock options.

Previous 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.

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 Condensed 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 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.

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. Description of Business and Summary of Significant Accounting Policies in the accompanying notes to 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.