WEBTOON Entertainment Faces Rising Losses: What Q4 2024 Means for the Future
Discover how our company achieved a remarkable 5.1% revenue growth, hitting $1.35 billion this year! Dive into the details!
WEBTOON Entertainment Reports Revenue Growth Amid Rising Losses
Company's total revenue increased by 5.1% year-over-year, reaching US$1.35 billion
© WEBTOON Entertainment
WEBTOON Entertainment, the U.S. subsidiary of Naver WEBTOON, has reported a notable increase in operating losses for 2024, despite steady revenue growth. The company recorded an operating loss of US$100.7 million, a staggering 177% increase compared to the previous year. Additionally, net losses rose by 5.6% to US$152.9 million.
Key Factors Behind the Losses
During the 2024 annual earnings call, COO David Lee attributed these losses to:
- Increased IPO-related expenses
- Higher marketing costs
- Goodwill impairment in the web novel sector
Despite these challenges, WEBTOON's total revenue grew by 5.1% year-over-year, reaching US$1.35 billion.
Japan Emerges as a Major Market
Japan has now become WEBTOON Entertainment's highest-grossing market, surpassing South Korea with $648.2 million in revenue. The Monthly Active Users (MAU) in Japan reached 21.9 million, reflecting a 3.5% increase from the previous year. Revenue from other international markets (excluding Korea and Japan) also saw double-digit growth, totaling US$182.7 million, up from US$159 million last year.
CEO Kim Jun-ku emphasized Japan's significance, stating, “Japan is our largest and fastest-growing market. Thanks to successful exports of Korean WEBTOON IPs, we achieved the No.1 ranking in the non-gaming sector for revenue in Japan during the second half of last year.”
Revenue Breakdown
- Paid content sales increased by 5.3% worldwide.
- Advertising revenue grew by 14.2%.
- However, revenue from the IP business saw an 8.3% decline, slowing overall IP expansion efforts.
Q4 2023 Performance
In the fourth quarter of 2023, WEBTOON Entertainment reported an operating loss of $27.7 million. However, quarterly revenue increased by 5.6% year-over-year to $352.8 million. Key highlights include:
- Paid content revenue grew by 6.7%.
- Advertising revenue surged by 22.1%, particularly in South Korea and Japan.
Political Impact on Engagement
During the earnings call, David Lee noted that South Korea's political instability had a temporary impact on user engagement in Q4 2023, but it was not factored into Q4 results or Q1 2024 projections.
Future Outlook
WEBTOON Entertainment anticipates continued revenue growth in Q1 2024, forecasting total revenue between US$318-328 million, reflecting a 1.7% to 4.8% increase at constant exchange rates. The company remains optimistic about future growth, focusing on:
- Expansion in Japan and international markets
- Enhanced monetization strategies
- Further IP development
Source: YNA (Kyung-yoon Kim)