WEBTOON Entertainment Reports $152.9 Million Net Loss Despite 5.1% Revenue Growth

WEBTOON Entertainment Inc. reported a net loss of $152.9 million for the year ended December 31, 2024, compared to a net loss of $144.8 million in 2023. Total revenue increased by 5.1% to $1.35 billion, driven by a 5.3% rise in Paid Content revenue to $1.08 billion and a 14.2% increase in Advertising revenue to $166.1 million. However, IP Adaptations revenue decreased by 8.3% to $99.4 million. The increase in general and administrative expenses, up 57.5% to $332.0 million, was attributed to stock-based compensation expense, a one-time CEO bonus, and increased public company costs.

Significant changes compared to the previous fiscal year included a 1.5% decrease in global monthly active users (MAU) to 166 million, primarily due to decreases in the Rest of World segment, partially offset by growth in Japan. Monthly paying users (MPU) reached 7.7 million, resulting in a slightly increased paying ratio of 4.6%. Paid Content Average Revenue per Paying User (ARPPU) increased by 6.2% to $11.7. The company noted that the decrease in Rest of World MAU was largely due to a government ban on Wattpad in one country.

Strategic developments during the year included the completion of the initial public offering (IPO) in June 2024, raising net proceeds of approximately $319.7 million. The company also acquired Wattpad Corp. from NAVER in June 2023 and completed the merger of its subsidiaries Line Digital Frontier Corporation and eBook Initiative Japan Co., Ltd. in September 2024. The company highlighted its ongoing efforts to improve its AI-based personalized content recommendation capabilities and shift users from web to app usage.

Operationally, WEBTOON's global MAU was 166 million as of December 31, 2024, with Korea, Japan, and Rest of World contributing 14.6%, 13.2%, and 72.2% respectively. The company employed approximately 1,800 full-time employees globally as of December 31, 2024. The company also detailed its competitive landscape, noting competition from various social media, over-the-top, gaming, and video streaming platforms, as well as other web-comic and web-novel platforms in different geographic regions. The company also disclosed several material weaknesses in its internal control over financial reporting, and outlined its ongoing remediation efforts.

Looking ahead, WEBTOON stated that it does not anticipate paying any cash dividends in the foreseeable future and intends to use future earnings for working capital, operations, and business growth. The company acknowledged various risks, including competition, reliance on creators, user engagement, international expansion challenges, and cybersecurity threats, as detailed in the "Risk Factors" section of the filing. The company is involved in securities litigation related to its IPO, the outcome of which is uncertain.