WEBTOON Entertainment Inc.
For the period ended Mar 31, 2026. Filed May 11, 2026.
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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, 2026 · Filed May 11, 2026
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 2025-09-30; filed 2025-11-13.
0001997859-25-000115
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-11.
0001997859-26-000072
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 118 previous paragraphs and 123 current paragraphs.
72 unchanged; 19 reworded; 32 added; 27 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 20 previous and 12 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 (32)
Current report
We strive to detect and minimize unauthorized access to our platform, fake user accounts and fraudulent accounts created by bots that inflate user activity and we have decided to exclude such users from our MAU calculation, starting from the quarter ended March 31, 2026, to ensure the accuracy and consistency of our MAU reporting. In the previous comparable period, amounts related to such activity were immaterial to our reported results.
Current report
•In Rest of World, our MAU was 100.0 million as of the quarter ended March 31, 2026, which declined from 107.3 million as of the comparable prior year period. In addition, while we expected to see reduced automated web traffic in the first quarter of 2026 as we disclosed in our Annual Report, in March 2026, we saw a spike in automated web traffic in certain non-core markets, which we have excluded from our MAU calculation.
Current report
While MAU declined 5.9% year-over-year, MPU grew by approximately 2.2%. This shift reflects the success of our content recommendation initiatives, which are driving higher conversion through better relevance.
Current report
Engagement is a key aspect to drive our monetization. For the quarter ended March 31, 2026, our ARPPU decreased to $11.6, or a 1.7% decline, compared to the same quarter of 2025. The reduction in ARPPU stemmed primarily from a substantial redistribution of the paying user base to areas generating less average revenue per paying user, a factor that overshadowed the organic increases in monetization within each distinct market. We continue to focus on driving users to the app, as well as converting them to paying users, by advancing our personalization tools.
Current report
•In Korea, our ARPPU for the quarter ended March 31, 2026, has increased to $7.8, or a 4.0% increase compared to the same quarter of 2025.
Current report
•In Japan, our ARPPU for the quarter ended March 31, 2026, has increased to $22.5, or a 0.9% increase compared to the same quarter of 2025.
Current report
Cost of Revenue
Current report
Marketing
Current report
General and Administrative Expenses
Current report
Interest Income
Current report
Interest Expense
Current report
Interest expense primarily consists of interest related to our outstanding debt obligations, including both short-term borrowings and long-term debt.
Current report
Gain (Loss) on Equity Method Investment, Net
Current report
Other Income (Loss), Net
Current report
Revenue decreased by $4.8 million, or 1.5% for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025. This decrease was primarily driven by significant foreign exchange headwinds and timing-related volatility in our IP Adaptations, partially offset by organic growth in Paid Content. Although we experienced a decline in advertising revenue from NAVER, this was offset by revenue from other partners.
Current report
On a constant currency basis, our revenue increased $0.7 million, or 0.2%. We estimate that foreign exchange fluctuations had a total negative impact of approximately $5.5 million on our reported revenue for the quarter. Refer to the Non-GAAP Financial Measures section of this report for a quantitative reconciliation and a description of how we calculate these measures.
Current report
Cost of Revenue
Current report
Our cost of revenue decreased by $16.3 million, or 6.4%, for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025. The decrease was primarily attributable to a shift in the revenue mix to higher margin revenue streams, a reduction in third party transaction fees, a $3.2 million decrease in stock-based compensation expense due to timing of grants, and a decrease in total sales commissions and content fees paid to creators, reflecting lower revenue during the period.
Current report
Marketing
Current report
Marketing expense decreased by $1.0 million, or 3.2%, for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, primarily due to a strategic shift toward high-retention acquisition channels and a reduction in lower-efficiency promotional spend.
Current report
General and Administrative Expenses
Current report
General and administrative expenses decreased by $6.1 million, or 9.2%, for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025. The decrease was primarily driven by a $6.8 million decrease in stock-based compensation expense due to timing of grants, which was partially offset by increases in other general and administrative costs. We expect our stock-based compensation expense to increase in the second quarter of 2026.
Current report
Interest Income
Current report
Gain (Loss) on Equity Method Investment, Net
Current report
Other Income (Loss), Net
Current report
Other income (loss), net, decreased by $4.7 million, or (175.1%), for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025. The change was primarily attributable to a $2.1 million increase in net foreign currency losses, a $1.7 million increase in net unrealized loss on financial assets measured at fair value, and a
Current report
$0.9 million increase in net periodic benefit costs during the three months ended March 31, 2026 as compared to the three months ended March 31, 2025.
Current report
(2)Represents specific costs that are discrete to the periods presented and are not indicative of our core ongoing operations. For the three months ended March 31, 2026, these amounts were comprised of (i) non-routine legal and professional fees associated with the defense of the 2024 IPO-related shareholder litigation, which are outside the ordinary course of business; (ii) one-time advisory fees related to the Purchase Agreement that do not qualify as equity issuance costs; and (iii) professional fees directly related to the strategic restructuring initiative of our Wattpad business. For the three months ended March 31, 2025, these amounts included (i) non-routine legal and professional fees associated with the defense of the 2024 IPO-related shareholder litigation, which are outside the ordinary course of business, and (ii) professional service fees associated with the initial implementation of Sarbanes-Oxley (“SOX”) compliance and IPO readiness.
Current report
Cash and cash equivalents, along with the proceeds generated from the issuance of equity securities, constitute our main liquidity sources. By March 31, 2026, our principal liquidity was derived from the residual net proceeds of our 2024 Initial Public Offering (IPO), a subsequent private placement, and a strategic equity investment secured in the first quarter of 2026.
Current report
On January 8, 2026, we entered into a Securities Purchase Agreement (the “Purchase Agreement”) with a wholly owned indirect subsidiary of The Walt Disney Company (“Disney”), pursuant to which Disney purchased 2,666,757 shares of our common stock, par value $0.0001 per share (the “Shares”), representing an approximately 2% equity interest in the Company, for an aggregate purchase price of $32.8 million. The Shares were issued in a private placement in reliance on the exemption provided by Section 4(a)(2) of the Securities Act, as a transaction not involving a public offering. We received net proceeds of approximately $32.5 million, after deducting underwriting discounts and commissions and offering expenses payable by us.
Current report
Net cash used in operating activities improved by $6.8 million for the three months ended March 31, 2026, primarily driven by a $13.2 million reduction in net loss, along with $6.8 million and $8.9 million decreases in cash outflows for the settlement of accounts payable and contract liabilities, respectively. These improvements were partially offset by a $12.4 million increase in cash used for receivables, driven by the timing of billings and increased prepayments for content or services. Additionally, the year-over-year improvement was moderated by a $10.6 million reduction in non-cash stock-based compensation and fluctuations in gains on foreign currency transactions.
Current report
For the three months ended March 31, 2026, net cash used in investing activities was $6.7 million, compared to $8.0 million for the three months ended March 31, 2025. The decrease in net cash used was primarily attributable to a reduction in purchases of marketable securities, largely offset by increased capital expenditures related to facility preparations.
Removed paragraphs (27)
Previous 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 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 report
•In Rest of World, our MAU was 105.5 million as of the quarter ended September 30, 2025, which declined from 119.3 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. We fully resolved the search engine indexing issue during the quarter and saw sequential stability in Wattpad MAU in the second half of the quarter as a result.
Previous report
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, 2025, our ARPPU has increased to $12.4, 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, as app users are more engaged and present better monetization opportunities.
Previous report
•In Korea, our ARPPU for the quarter ended September 30, 2025 has increased to $8.0, or 1.3% increase compared to the same quarter of 2024.
Previous report
•In Japan, our ARPPU for the quarter ended September 30, 2025 has increased to $23.6, or 2.4% increase compared to the same quarter of 2024.
Previous report
Revenue increased 8.7% for the three months ended September 30, 2025, as compared to the three months ended September 30, 2024. The primary driver of the increase was the success of the IP Adaptation My Daughter is a Zombie, which was offset by a decrease in advertising revenue due to declines in the volume of ads from an ecommerce advertising partner.
Previous report
Our cost of revenue increased by $38.7 million, or 15.1%, for the three months ended September 30, 2025, as compared to the three months ended September 30, 2024. Our cost of revenue, as a percentage of revenue, has increased due to the higher attribution of free coins to cost of revenue. In addition, we have invested in labor to further improve our platform and drive growth.
Previous report
Marketing expense increased by $2.4 million, or 7.5%, for the three months ended September 30, 2025, as compared to the three months ended September 30, 2024, as we continue to invest in marketing to drive growth.
Previous report
General and administrative expenses decreased by $4.3 million, or 6.4%, for the three months ended September 30, 2025, as compared to the three months ended September 30, 2024. The decrease in general and administrative expenses was largely driven by a decrease of approximately $4.4 million in stock compensation expense during the three months ended September 30, 2025, compared to the three months ended September 30, 2024.
Previous report
Other income (loss), net, decreased by $13.7 million, or (116.0%), for the three months ended September 30, 2025, as compared to the three months ended September 30, 2024. This decrease was driven by losses on certain transactions due to changes in foreign currency exchange rates.
Previous report
Comparison of the Nine Months Ended September 30, 2025 and September 30, 2024
Previous report
Revenue
Previous report
Revenue increased by $56.4 million, or 5.7%, for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024. The primary driver was an increase in IP Adaptations revenue of $43.5 million, or 70.2%, followed by increases of $9.2 million and $3.7 million in Paid Content and Advertising, respectively.
Previous report
Our cost of revenue increased by $71.5 million, or 9.7%, for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024, due to the higher attribution of free coins to cost of revenue, investments in labor to further improve our platform to drive growth, and overall increases in commissions and fees paid to creators, primarily associated with higher revenues.
Previous report
Marketing expenses increased by $22.1 million, or 29.3%, for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024. These increases were a result of our continued investment in marketing to drive growth.
Previous report
General and administrative expenses decreased by $60.0 million, or 23.6%, for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024. The decrease in general and administrative expenses was largely driven by a decrease in stock compensation expense of approximately $37.2 million during the nine months ended September 30, 2025, and a one-time bonus of $30.0 million granted to the CEO for a successful IPO during the nine months ended September 30, 2024, which did not occur during the nine months ended September 30, 2025.
Previous report
Interest income increased by $4.9 million, or 49.8%, for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024. 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
Income (loss) on equity method investment, net, increased by $2.7 million, or 253.9%, for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024. See Note 15. 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 report
Other income (loss), net, increased by $13.2 million, or (104.7%), for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024. This increase was attributable to gains related to certain transactions due to changes in foreign currency exchange rates.
Previous report
Income Tax Benefit (Expense)
Previous report
Income tax expense increased by $3.7 million, or 276.8%, for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024. The increase was primarily driven by the LDF valuation allowance release during the nine months ended September 30, 2024 due to the LDF-eBIJ Merger and offset by the change in jurisdictional profits and losses. See Note 9. Income Taxes in the accompanying notes to our unaudited Condensed Consolidated Financial Statements included in this Report for more information on our taxes.
Previous report
(2)Represents non-recurring expenses that we do not consider representative of the operating performance of the business. For the three and nine months ended September 30, 2025, these amounts include legal fees and advisory fees. For the three and nine months ended September 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 report
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 report
Also, immediately subsequent to the closing of the IPO, we issued and sold 2,380,952 shares of common stock to NAVER U.Hub Inc., a wholly-owned subsidiary of NAVER, in a private placement at $21.00 per share and received $50 million in proceeds.
Previous report
On July 26, 2024, the underwriters partially exercised the over-allotment option to purchase 1,371,549 shares of common stock at $21.00 per share, which was closed on July 30, 2024. We received net proceeds of approximately $26.8 million therefrom, after deducting underwriting discounts and commissions and offering expenses payable by us.
Previous report
For the nine months ended September 30, 2025, net cash provided by operating activities was $3.6 million, which primarily consisted of net loss of $36.9 million, adjusted for certain non-cash items of $60.3 million. The non-cash items included stock-based compensation of $35.1 million, depreciation and amortization of approximately $24.8 million, and operating lease expense of $7.2 million, which was partially offset by a gain of $2.5 million on foreign currency, net, and a gain on equity method investments, net, of $1.6 million. 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 an increase in accounts payable, which was partially offset by an decrease in other liabilities and contract liabilities.
Previous report
For the nine months ended September 30, 2025, net cash used in investing activities was $5.0 million, consisting of proceeds from maturities of short-term investments of approximately $32.5 million, which was primarily offset by payment made for short-term investments of $17.4 million, purchases of intangible assets of $7.2 million, purchases of property and equity of $7.0 million and purchases of debt and equity securities of $6.7 million.
Reworded paragraphs (19)
Previous wording
As of the quarter ended September 30, 2025, our global MAU was approximately 155.4 million. The global MAU decreased by approximately 8.5% compared to September 30, 2024, primarily due to declines of MAU in Korea and ROW.
Current wording
As of the quarter ended March 31, 2026, our global MAU was approximately 144.3 million. The global MAU decreased by approximately 5.9% compared to March 31, 2025, primarily due to a decrease of MAU in ROW.
Previous wording
•In Korea, our MAU was approximately 24.6 million as of the quarter ended September 30, 2025, compared to MAU of 28.1 million as of the same quarter of 2024.
Current wording
•In Korea, our MAU was approximately 23.1 million as of the quarter ended March 31, 2026, compared to MAU of 24.2 million as of the same quarter of 2025.
Previous wording
•In Japan, our MAU have reached 25.3 million as of the quarter ended September 30, 2025, compared to MAU of 22.5 million as of the same quarter of 2024, largely attributable to growth in eBookJapan and increased investments in marketing.
Current wording
•In Japan, our MAU was 21.1 million as of the quarter ended March 31, 2026, compared to MAU of 21.9 million as of the same quarter of 2025.
Previous wording
As of the quarter ended September 30, 2025, our global MPU was 7.7 million with a paying ratio of 5.0%, which is an increase of 0.3% compared to the paying ratio for the quarter ended September 30, 2024, of 4.6%. By geographic regions, Korea, Japan, and Rest of World contributed 47.8%, 30.1% and 22.1% of global MPU, respectively.
Current wording
During the first quarter of 2026, we navigated foreign exchange headwinds. As of the quarter ended March 31, 2026, our global MPU was 7.5 million with a paying ratio of 5.2%, which is an increase of 0.4% compared to the paying ratio for the quarter ended March 31, 2025 of 4.8%. By geographic regions, Korea, Japan, and Rest of World contributed 49.5%, 27.4% and 23.1% of global MPU, respectively. Paying ratio varies due to the user’s ability and propensity to pay across different regions and different product offerings.
Previous wording
•In Korea, our MPU have decreased to around 3.7 million with a paying ratio of 14.9%, compared to MPU of approximately 3.9 million and a paying ratio of 13.8% as of the quarter ended September 30, 2024. While our MPU decreased from the comparable quarter of 2024, our paying ratio increased approximately 1.2% from the comparable quarter of 2024.
Current wording
•In Korea, our MPU have increased to around 3.7 million with a paying ratio of 16.1%, compared to MPU of 3.4 million and a paying ratio of 14.2% as of the quarter ended March 31, 2025.
Previous wording
•In Japan, our MPU have reached 2.3 million with a paying ratio of 9.1%, compared to MPU of 2.3 million and a paying ratio of 10.3% as of the quarter ended September 30, 2024.
Current wording
•In Japan, our MPU have reached 2.1 million with a paying ratio of 9.8%, compared to MPU of 2.2 million and a paying ratio of 10.3% as of the quarter ended March 31, 2025.
Previous wording
•In Rest of World, our MPU is 1.7 million with a paying ratio of 1.6% compared to MPU of 1.7 million and a paying ratio of 1.4% in the prior year's comparable quarter.
Current wording
•In Rest of World, our MPU is 1.7 million with a paying ratio of 1.7%, which has remained similar to the prior year's comparable quarter.
Previous wording
•In Rest of World, our ARPPU for the quarter ended September 30, 2025 has increased to $6.8, or 1.4% growth compared to the same quarter of 2024.
Current wording
•In Rest of World, our ARPPU for the quarter ended March 31, 2026, has increased to $6.8, or a 4.4% increase compared to the same quarter of 2025, primarily driven by reader habituation in paying to view content.
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 Investments in the accompanying notes to our unaudited Condensed Consolidated Financial Statements included in this Report for more information.
Current wording
Gain (loss) on equity method investment, net, includes recognized gain (loss) associated with our investments accounted for using the equity method. See Note 16. Equity Method Investments in the accompanying notes to our unaudited Condensed Consolidated Financial Statements included in this Report for more information.
Previous wording
Other income, net, primarily consists of gains or losses on valuation of debt and equity securities, net, income or loss on foreign currency, net, retirement benefit, net, and other non-operating income or loss, net.
Current wording
Other income (loss), net, primarily consists of gains or losses on valuation of debt and equity securities, net, income or loss on foreign currency, net, retirement benefit, net, and other non-operating income or loss, net.
Previous wording
Income tax expense primarily includes income taxes in certain federal, state, local, and foreign jurisdictions in which we conduct our business, primarily in the U.S., Korea, Japan and Canada. Foreign jurisdictions have different statutory tax rates from those in the U.S. Additionally, certain of our foreign earnings may also be taxable in the U.S. Accordingly, our effective tax rate will vary depending on the relative proportion of foreign to domestic income, use of tax credits, changes in the valuation of our deferred tax assets and liabilities, and changes in tax laws. See Note 9. Income Taxesin the accompanying notes to our unaudited Condensed Consolidated Financial Statements included in this Report for more information.
Current wording
Income tax benefit (expense) primarily includes income taxes in certain federal, state, local, and foreign jurisdictions in which we conduct our business, primarily in the U.S., Korea, Japan and Canada. Foreign jurisdictions have different statutory tax rates from those in the U.S. Additionally, certain of our foreign earnings may also be taxable in the U.S. Accordingly, our effective tax rate will vary depending on the relative proportion of foreign to domestic income, use of tax credits, changes in the valuation of our deferred tax assets and liabilities, and changes in tax laws. See Note 11. Income Taxesin 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 condensed consolidated statements of operations for the three and nine months ended September 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. 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 consolidated statement of operations for the three months ended March 31, 2026 and 2025, 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. 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 income decreased by $1.9 million, or (28.8%), for the three months ended September 30, 2025, as compared to the three months ended September 30, 2024. The decrease was primarily due to lower interest rates.
Current wording
Interest income decreased by $0.7 million, or 14.5%, for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025. The decrease was attributable to lower interest rates as compared to the first quarter of 2025.
Previous wording
Income (loss) on equity method investment, net, increased by $1.8 million, or 1338.4%, for the three months ended September 30, 2025, as compared to the three months ended September 30, 2024. See Note 15. 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
Gain (loss) on equity method investment, net, decreased by $0.1 million, or 21.6%, for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025. See Note 16. 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
Income tax benefit (expense) decreased by $10.5 million, or 106.3%, for the three months ended September 30, 2025, compared to the three months ended September 30, 2024. The decrease was primarily driven by the LDF valuation allowance release in the prior year due to the LDF-eBIJ Merger. See Note 9. 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 increased by $0.1 million, or 4.9%, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025. See Note 11. 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
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.
Current wording
We define EBITDA as net income(loss) before interest income, interest expense, income tax benefit (expense) and depreciation and amortization. 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
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 14. Disposition in 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. 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.
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, 2025, we had $584.6 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 March 31, 2026, we had $594.9 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, 2025, net cash provided by financing was minimal, and primarily related to exercise of stock options, and a small amount of proceeds from short-term borrowings.
Current wording
For the three months ended March 31, 2026, net cash provided by financing was $32.7 million, related to proceeds from issuance of common stock related to a private placement.