Webtoon Entertainment Faces $26.6M Q1 Loss as Weak Yen and Won Impact Earnings
Discover how the company's first-year revenue decline since going public impacts its future prospects and what analysts are saying.
WEBTOON Entertainment Reports First Revenue Decline Since Going Public
Company marks 1st year-on-year revenue drop since going public in June 2023
Photo caption: © WEBTOON Entertainment
Company Reports a Significant Turnaround
WEBTOON Entertainment released its financial results for the first quarter of 2025 on May 13, revealing a notable downturn. The company posted an operating loss of US$26.63 million, a stark contrast to the operating profit of US$14.19 million in the same period last year.
Additionally, the firm reported a net loss of US$21.97 million. Its adjusted EBITDA stood at US$4.1 million. Revenue for the quarter was US$325.71 million, which is a 0.3% decrease year-over-year—the first time since its IPO in June 2023 that revenue has declined compared to the previous year.
Highlights Despite Challenges
While overall revenue dipped, WEBTOON highlighted strong performances in specific areas:
- Advertising revenue increased by 7.8%
- IP (Intellectual Property) adaptations revenue grew by 11.8%
These positive signs suggest areas of resilience amid the broader financial downturn.
Strategic Updates and Regional Performance
North America
A recent revamp of the global WEBTOON app—featuring AI-powered recommendations and short-form video previews—led to a 19% rise in monthly active users in North America.
Japan
Japan remains WEBTOON’s top market, generating 50% of the first-quarter revenue. According to founder and CEO Junkoo Kim, monthly active users in Japan increased by 3.7% year-over-year to 21.9 million.
The average revenue per paying user (ARPPU) in Japan is US$22.3, far higher than Korea (US$7.5) and other regions (US$6.5). Notably, LINE Manga, WEBTOON’s Japanese app, ranked No.1 by revenue across all app stores in Japan during Q1.
Currency Impact
The company pointed out that fluctuations in the Korean won and Japanese yen affected revenue numbers. When adjusted for these currency effects, the revenue would have reflected a 5.3% year-over-year increase.
Summary
Despite the revenue decline, WEBTOON continues to see growth in advertising and IP expansion. Strategic app updates and regional strengths underscore the company’s ongoing efforts to adapt and thrive.
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