WEBTOON Entertainment Inc.
For the period ended Jun 30, 2026. Filed Aug 10, 2026.
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.
Jun 30, 2026 · Filed Aug 10, 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 2026-03-31; filed 2026-05-11.
0001997859-26-000072
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-10.
0001997859-26-000089
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 123 previous paragraphs and 128 current paragraphs.
76 unchanged; 29 reworded; 20 added; 16 removed; 2 previous and 3 current paragraphs rearranged.
Tables are not compared: 12 previous and 20 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 (20)
Current report
•In Rest of World, our MAU was 110.7 million as of the quarter ended June 30, 2026, which increased from 110.5 million as of the comparable prior year period. This increase was primarily attributable to content, product and marketing initiatives, including brand marketing campaigns related to major IP, which contributed to user acquisition.
Current report
•In Korea, our ARPPU for the quarter ended June 30, 2026, has increased to $8.3, or a 5.0% increase compared to the same quarter of 2025.
Current report
•In Japan, our ARPPU for the quarter ended June 30, 2026, has decreased to $22.1, or a 6.7% decrease compared to the same quarter of 2025.
Current report
Revenue decreased by $9.8 million, or 2.8% for the three months ended June 30, 2026, as compared to the three months ended June 30, 2025. This decrease was primarily attributable to unfavorable foreign currency exchange rates.
Current report
Marketing expense increased by $7.3 million, or 23.4%, for the three months ended June 30, 2026, as compared to the three months ended June 30, 2025, primarily due to increased marketing spend to acquire users and drive traffic across our offerings.
Current report
Comparison of the Six Months Ended June 30, 2026 and June 30, 2025
Current report
Revenue
Current report
Revenue decreased by $15 million, or 2.2% for the six months ended June 30, 2026, as compared to the six months ended June 30, 2025. This decrease was primarily attributable to unfavorable foreign currency exchange rates.
Current report
Marketing expense increased by $6.2 million, or 10.0%, for the six months ended June 30, 2026, as compared to the six months ended June 30, 2025, primarily due to increased marketing spend to acquire users and drive traffic across our offerings.
Current report
General and administrative expenses decreased by $5.7 million, or 4.4%, for the six months ended June 30, 2026, as compared to the six months ended June 30, 2025. The decrease was primarily driven by a $3.9 million decrease in stock-based compensation expense due to timing of grants and a decrease in non-labor expenses.
Current report
Interest income decreased by $1.2 million, or 11.6%, for the six months ended June 30, 2026, as compared to the six months ended June 30, 2025. The decrease was attributable to lower interest rates as compared to the six months ended June 30, 2025.
Current report
Gain (loss) on equity method investment, net, increased by $0.6 million, or (974.2%), for the six months ended June 30, 2026, as compared to the six months ended June 30, 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.
Current report
Income Tax Expense
Current report
Income tax expense increased by $(7.9) million, or 460.3%, for the six months ended June 30, 2026, compared to the six months ended June 30, 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.
Current report
In July 2026, we committed $40.0 million as a 40% limited partner in NW Webcomic Adaptation Fund, L.P. (the “Fund”), a content investment fund co-sponsored with N Investment Co., Ltd., a wholly-owned subsidiary of NAVER Corporation. The Fund is not consolidated in our financial statements; we account for our interest as an equity method investment. As of the date of this filing, we have funded $10 million of this commitment, with the remaining $30 million payable in three equal annual installments of $10 million on each of the first three anniversaries of the initial closing. Under the partnership agreement, our obligation to fund capital for the repayment of Fund indebtedness is unconditional, and our maximum exposure under this commitment is $30.0 million, net of amounts funded. We intend to fund capital contributions from existing cash and cash equivalents and do not expect this commitment to materially affect our near-term liquidity.
Current report
In addition, on August 6, 2026, subsequent to the balance sheet date, we entered into the RI Games Holdings Agreements with the Seller and other parties thereto, as applicable, pursuant to which we agreed to acquire up to 9,000 shares of common stock of RI Games Holdings, a South Korea-based game developer, for aggregate consideration of KRW 150,000,003,000 (approximately $100 million). We entered into the RI Games Holdings Agreements to acquire a controlling interest in RI Games Holdings and to provide additional equity funding to RI Games Holdings following that acquisition. See Note 19. Subsequent Eventsfor more information on the transactions described above.
Current report
In the short term, under the RI Games Purchase Agreement, we expect to pay KRW 49,983,334,333 (approximately $33.2 million) in cash at the first closing. The second closing purchase price of KRW 100,016,668,667 (approximately $66.5 million), also payable in cash, may become due within the next twelve months, depending on when the applicable conditions are satisfied, including a specified commercial launch milestone.
Current report
Under the RI Games Shareholders Agreement, from and after the second closing until June 30, 2030, we may be required to subscribe for newly issued shares of RI Games Holdings for up to KRW 50 billion (approximately $33.2 million) in cash. If specified revenue thresholds are achieved, we may also be required to purchase the Seller’s remaining 6,000 shares for no less than KRW 100,000,002,000 (approximately $66.5 million), of which no less than KRW 50 billion (approximately $33.2 million) is payable in cash and the balance in shares of our common stock, and to fund a further capital increase in cash up to a specified maximum. These requirements arise from and after the second closing; if the second closing does not occur by a specified outside date for reasons not attributable to the Seller, the RI Games Shareholders Agreement would terminate automatically, other than certain provisions that survive in accordance with those terms, and substantially all of these requirements would lapse, except for such obligations that have accrued prior to the termination.
Current report
Substantially all of these amounts are contingent on events that may not occur, and the amount of the additional capital increase is not determinable at this time. We expect to fund them from cash and cash equivalents on hand and cash generated from operations. We do not expect these commitments to materially affect our liquidity. The obligations are denominated in Korean won and have been translated at the 60-day average of Hana Bank’s end-of-day rate through August 6, 2026. U.S. dollar amounts will vary with exchange rates.
Current report
Net cash used in operating activities increased $5.1 million for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. The increase was primarily driven by a $20.1 million increase in cash used in receivables, primarily due to the timing of billings, a $10.1 million increase in cash used for other assets, a smaller increase in other liabilities, which provided $7.5 million less cash than in the prior year, and a $5.8 million decrease in non-cash stock-based compensation expense. These were partially offset by a $14.1 million favorable change in income tax receivable, a $14.0 million reduction in cash outflows for accrued expenses, an $8.3 million increase in cash provided by contract liabilities, and a $3.5 million reduction in cash outflows for accounts payable.
Removed paragraphs (16)
Previous 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.
Previous 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.
Previous 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.
Previous report
Cost of Revenue
Previous report
Marketing
Previous report
General and Administrative Expenses
Previous report
Interest Income
Previous report
Other Income (Loss), Net
Previous 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.
Previous report
Cost of Revenue
Previous report
Marketing
Previous 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.
Previous report
General and Administrative Expenses
Previous report
Interest Income
Previous report
Other Income (Loss), Net
Previous 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.
Reworded paragraphs (29)
Previous wording
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 wording
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 starting from our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, filed with the SEC on May 11, 2026, we have excluded such users from our MAU calculation 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.
Previous 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.
Current wording
As of the quarter ended June 30, 2026, our global MAU was approximately 156.9 million. The global MAU increased by approximately 0.5% compared to June 30, 2025.
Previous 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.
Current wording
•In Korea, our MAU was approximately 24.3 million as of the quarter ended June 30, 2026, compared to MAU of 23.0 million as of the same quarter of 2025.
Previous 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.
Current wording
•In Japan, our MAU was 21.8 million as of the quarter ended June 30, 2026, compared to MAU of 22.6 million as of the same quarter of 2025.
Previous wording
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 wording
While MAU increased 0.5% year-over-year, MPU grew by approximately 1.8%. This shift reflects the success of our content recommendation initiatives, which are driving higher conversion through better relevance.
Previous 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.
Current wording
As of the quarter ended June 30, 2026, our global MPU was 7.5 million with a paying ratio of 4.8%, which is an increase of 0.1% compared to the paying ratio for the quarter ended June 30, 2025 of 4.7%. By geographic regions, Korea, Japan, and Rest of World contributed 50.4%, 27.4% and 22.2% 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 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.
Current wording
•In Korea, our MPU have increased to around 3.8 million with a paying ratio of 15.5%, compared to MPU of 3.4 million and a paying ratio of 14.9% as of the quarter ended June 30, 2025.
Previous 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.
Current wording
•In Japan, our MPU have reached 2.1 million with a paying ratio of 9.4%, compared to MPU of 2.3 million and a paying ratio of 10.0% as of the quarter ended June 30, 2025.
Previous 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.
Current wording
•In Rest of World, our MPU is 1.7 million with a paying ratio of 1.5%, which has remained similar to the prior year's comparable quarter.
Previous wording
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 wording
Engagement is a key aspect to drive our monetization. For the quarter ended June 30, 2026, our ARPPU decreased to $11.7, or a 5.7% 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.
Previous 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.
Current wording
•In Rest of World, our ARPPU for the quarter ended June 30, 2026, has increased to $6.9, or a 4.4% increase compared to the same quarter of 2025, primarily driven by reader habituation in paying to view content.
Previous 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.
Current wording
The following table sets forth our condensed consolidated statements of operations for the three and six months ended June 30, 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.
Previous wording
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 wording
General and administrative expenses increased by $0.4 million, or 0.6%, for the three months ended June 30, 2026, as compared to the three months ended June 30, 2025. The increase was primarily driven by a $2.9 million increase in stock-based compensation expense due to timing of grants, which was partially offset by decreases in other general and administrative costs.
Previous 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.
Current wording
Interest income decreased by $0.4 million, or 8.7%, for the three months ended June 30, 2026, as compared to the three months ended June 30, 2025. The decrease was attributable to lower interest rates as compared to the second quarter of 2025.
Previous 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.
Current wording
Gain (loss) on equity method investment, net, increased by $0.5 million, or 94.9%, for the three months ended June 30, 2026, as compared to the three months ended June 30, 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
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 wording
Other income (loss), net, increased by $3.8 million, or (280.8%), for the three months ended June 30, 2026, as compared to the three months ended June 30, 2025. The change was primarily attributable to a $0.4 million increase in net foreign currency income, and a $3.4 million increase in net unrealized gain on financial assets measured at fair value during the three months ended June 30, 2026 as compared to the three months ended June 30, 2025.
Previous 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.
Current wording
Income tax benefit decreased by $7.8 million, or 933.8%, for the three months ended June 30, 2026, compared to the three months ended June 30, 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
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 wording
On a constant currency basis, our revenue increased 18.8 million, or 2.8%, primarily due to increases in Paid Content revenue and Advertising revenue. We estimate that foreign exchange fluctuations had a total negative impact of approximately $33.4 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.
Previous wording
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 wording
Our cost of revenue decreased by $26.9 million, or 5.2%, for the six months ended June 30, 2026, as compared to the six months ended June 30, 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 decrease in stock-based compensation expense due to timing of grants, and a decrease in total sales commissions and content fees paid to creators.
Previous wording
$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 wording
Other income (loss), net, decreased by $0.8 million, or 64.2%, for the six months ended June 30, 2026, as compared to the six months ended June 30, 2025. The change was primarily attributable to a $1.7 million increase in net unrealized gain on financial assets measured at fair value, which was offset by a $1.7 million increase in net foreign currency losses and a $0.6 million increase in net periodic benefit costs during the six months ended June 30, 2026 as compared to the six months ended June 30, 2025.
Previous 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.
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 (Gain) 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
(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 wording
(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 June 30, 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) professional fees and severance costs directly related to the strategic restructuring initiative of our Wattpad business; and (iii) a penalty, and related professional fees, arising from a resolved regulatory matter concerning foreign exchange transaction reporting. For the six months ended June 30, 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; (iii) professional fees and severance costs directly related to the strategic restructuring initiative of our Wattpad business; and (iv) a penalty, and related professional fees, arising from a resolved regulatory matter concerning foreign exchange transaction reporting. For the three and six months ended June 30, 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.
Previous wording
(3)Represents unrealized net loss (gain) of financial assets measured at FVPL, which include the Company's equity investments.
Current wording
(3)Represents unrealized net (gain) loss of financial assets measured at FVPL, which include the Company's equity investments.
Previous wording
(4)Represents our proportionate share of recognized losses 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.
Current wording
(4)Represents our proportionate share of recognized gains or losses 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.
Previous wording
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 wording
Cash and cash equivalents, along with the proceeds generated from the issuance of equity securities, constitute our main liquidity sources. At June 30, 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.
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, 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.
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, 2026, we had $583.1 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 acquisitions and strategic investments, repayment of debt, 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,” in the Annual Report.
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, however, may 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, 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.
Current wording
For the six months ended June 30, 2026, net cash used in investing activities was $10.3 million, compared to $5.7 million net cash provided by investing activities for the six months ended June 30, 2025. The increase in net cash used was primarily attributable to a reduction in proceeds from the maturities of short-term investments.
Previous 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.
Current wording
For the six months ended June 30, 2026, net cash provided by financing was $33.0 million compared to $0.2 million during the six months ended June 30, 2025, primarily driven by proceeds of $32.7 million from the issuance of common stock related to a private placement during the first quarter of 2026.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
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 report — wording carried from elsewhere
On a constant currency basis, our revenue increased by $18.1 million, or 5.2%, primarily due to increases in Paid Content revenue and Advertising revenue. We estimate that foreign exchange fluctuations had a total negative impact of approximately $27.9 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 — wording carried from elsewhere
Our cost of revenue decreased by $10.7 million, or 4.1%, for the three months ended June 30, 2026, as compared to the three months ended June 30, 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, and a decrease in total sales commissions and content fees paid to creators.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Gain (Loss) on Equity Method Investment, Net
Previous report — wording carried elsewhere
Gain (Loss) on Equity Method Investment, Net