WEBTOON Entertainment Reports 2.8% Revenue Decline in Q2 2026

WEBTOON Entertainment Inc. reported a decline in financial performance for the second quarter of 2026, with total revenue of $338.5 million, a decrease of 2.8% compared to $348.3 million in the same period last year. For the first half of 2026, revenue also fell by 2.2% to $659.3 million from $674.0 million in the prior year. The decrease in revenue was primarily attributed to unfavorable foreign currency exchange rates, which negatively impacted reported figures by approximately $27.9 million for the quarter. On a constant currency basis, revenue would have increased by 5.2% for the quarter and 2.8% for the six months.

The company's cost of revenue decreased by 4.1% to $250.3 million for the quarter, reflecting a shift towards higher-margin revenue streams and reduced transaction fees. Marketing expenses rose by 23.4% to $38.3 million, driven by increased spending on user acquisition and brand promotion. General and administrative expenses remained relatively stable, increasing slightly by 0.6% to $65.4 million. Despite these efforts, WEBTOON reported an operating loss of $15.6 million for the quarter, a significant increase from the $8.8 million loss in the same period last year.

In terms of user engagement, WEBTOON's monthly active users (MAU) reached approximately 156.9 million, a modest increase of 0.5% year-over-year. Monthly paying users (MPU) grew by 1.8% to 7.5 million, with a paying ratio of 4.8%. The company noted that the increase in MPU was driven by successful content recommendation initiatives. However, the average revenue per paying user (ARPPU) decreased by 5.7% to $11.7, attributed to a shift in the paying user base towards areas generating lower average revenue.

Strategically, WEBTOON has made significant moves, including a commitment of $40 million as a limited partner in the NW Webcomic Adaptation Fund, aimed at investing in adaptations of its webcomic intellectual property. Additionally, the company announced plans to acquire a controlling interest in RI Games Holdings Inc., a game developer focused on creating games based on webcomic content, for approximately $100 million. This acquisition is expected to enhance WEBTOON's content offerings and expand its market presence.

Looking ahead, WEBTOON anticipates continued challenges from foreign currency fluctuations and competitive pressures in the digital content space. The company remains focused on enhancing user engagement and monetization strategies while navigating the complexities of its international operations. Management expressed optimism about future growth opportunities, particularly through strategic investments and content adaptations, which are expected to drive revenue in the coming quarters.