Given the increased marketing expense, where is the money being spent (Korea, Japan, Rest of World) and what LTV to CAC targets are being pursued?

Marketing spend is diversified. Korea has efficient, steady-state marketing due to high penetration. Hyper-growth markets like Japan and Rest of World (sub-20% and sub-10% penetration respectively) receive intentional investment for longer LTV timeframes, with positive results seen in English webcomic MAU and paid user growth. “We manage a diversified portfolio where we have efficient spend in mature markets like Korea, but we intentionally are investing on the forward curve because we think adoption will grow in places like North America.”

What specific actions are being taken to return Japan to growth, and is the double-digit revenue growth target for Q4 a full-quarter or exit-rate expectation?

The double-digit growth target is for exiting Q4, not the full quarter. Japan's priorities include stronger local content (e.g., Studio White, KADOKAWA), greater engagement (CRM), and distribution partnerships (Lawson). Korea's 20% constant currency growth and global advertising growth (11% overall, >20% in Rest of World) are key drivers for the Q4 target. “We absolutely are strongly committed to the double-digit growth and believe we'll deliver it in the most important ways on platform by the end of Q4.”

What prompted the more proactive IP commercialization approach, and what is the capital/OpEx intensity of standing up this strategy over the next 2-3 years?

The strategy leverages proven IP from the platform. The RI Games investment provides majority control but allows independent operation, partnering with an icon in gaming. The IP Adaptation Fund, in partnership with NAVER, allows for capital leverage without full consolidation risk. The company aims for efficient IP provision through partnerships and selective ownership for high-upside opportunities like Studio N. “The IP Adaptation Fund is a clever way to address your second question because while we leverage partnership with another, in this case, NAVER for capital, we don't have to consolidate for the vagaries of quarter-to-quarter episodic changes in revenue as we aggressively bet on commercializing our proven IP.”

WBTN

WEBTOON Entertainment (WBTN) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Communication Services· Aug 10, 2026

Source: earnings call transcript

Executive summary

WEBTOON Entertainment Q2 FY26 — Strategic AI and IP Adaptation Investments Drive Future Growth

WEBTOON Entertainment reported a solid quarter with constant currency revenue growth, driven by strong performance in Korea and advertising, despite increased marketing investments impacting profitability. The company is strategically investing in AI-powered initiatives to enhance its core platform and scaling its Off-Platform IP adaptation business through new partnerships and a dedicated fund, aiming to return to double-digit revenue growth by year-end.

Highlights

Revenue grew 5.2% year-over-year on a constant currency basis to $338.5 million.
Korea revenue grew an impressive 20% year-over-year on a constant currency basis, driven by double-digit growth in paid content and advertising.
Global MPU grew 1.8% year-over-year, primarily driven by strong growth in Korea.
Advertising revenue grew 11.5% year-over-year on a constant currency basis, with Rest of World advertising up over 20%.
Gross margin expanded by almost 100 basis points to 26%.

Concerns

Net loss increased to $14.6 million from $3.9 million in the prior year, driven by higher income tax expense and marketing investment.
Adjusted EBITDA declined to $5.5 million from $9.7 million in the prior year, primarily due to increased marketing investment.
Japan revenue declined 6.7% year-over-year on a constant currency basis, despite triple-digit growth in IP adaptations.
Global app MAU declined 8.0% year-over-year, and webcomic app MAU declined 1.5% year-over-year.
Q3 FY26 revenue guidance of $358 million to $368 million represents modest 0.7% to 3.3% growth on a constant currency basis.

Guidance & targets

Category	Target	Timeline	Confidence
Q3 FY26 Revenue	$358 million to $368 million high materiality	Q3 · FY26	High
Q3 FY26 Revenue Growth (constant currency)	0.7% to 3.3% high materiality	Q3 · FY26	High
Q3 FY26 Adjusted EBITDA	$0 million to $5 million high materiality	Q3 · FY26	High
Q3 FY26 Adjusted EBITDA Margin	0% to 1.4% high materiality	Q3 · FY26	High
Return to double-digit revenue growth	double-digit revenue growth high materiality	Q4 · FY26	High
New Disney digital comics platform launch	before the end of this year medium materiality	FY26	High
Disney original series launch	later this year medium materiality	FY26	High
AI-powered Auto-Translation program expansion	expand later this year to a broader group of CANVAS creators low materiality	FY26	High
byUs service expansion	expand this service to Japan later this year low materiality	FY26	High
RI Games Holdings game launches	multiple games over the next 4 years medium materiality	FY26-FY29	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Korea Revenue growth driven by double-digit growth in paid content and advertising, partially offset by a single-digit decline in IP adaptations. Strong MAU, MPU, and ARPU growth. MAU: 24.3 millionMAU growth YoY: 5.9%MPU: 3.8 millionMPU growth YoY: 10.4%Paying ratio: 15.5%Paying ratio increase YoY: 64 bpsARPU growth YoY (constant currency): 14.8%	—	20%	—	—
Japan Revenue decline due to single-digit declines in paid content and advertising, despite triple-digit growth in IP adaptations. MAU declined YoY but increased sequentially. MPU and paying ratio declined YoY. MAU: 21.8 millionMAU decline YoY: 3.3%MPU: 2.1 millionMPU decline YoY: 9.5%Paying ratio: 9.4%Paying ratio decline YoY: 65 bpsARPU (constant currency): $24.40ARPU growth YoY (constant currency): 2.9%	—	-6.7%	—	—
Rest of World Revenue growth driven by single-digit growth in paid content and double-digit growth in advertising and IP adaptations. MAU growth was modest, MPU declined slightly, and paying ratio was flat. MAU: 110.7 millionMAU growth YoY: 0.2%MPU: 1.7 millionMPU decline YoY: 0.6%Paying ratio: 1.5%Paying ratio change YoY: relatively flatARPU (reported and constant currency): $6.90ARPU growth YoY (reported and constant currency): 4.4%	—	11.1%	—	—

Product announcements

Product	Type	Timeline
AI-powered Auto-Translation program	launch	beta launched May; expanding later this year
byUs	launch	introduced this quarter in Korea; planning to expand to Japan later this year
Cuts Make	launch	recently launched in Korea

Deals & partnerships

RI Games Holdings Investment to turn proven IP into immersive gaming experiences.

Strategic investment to build an adaptation pipeline extending IP across multiple formats, particularly games. Founded by Kevin Han (Redice Studio, Solo Leveling).

NAVER Establishment of a $100 million IP Adaptation Fund. $100 million

Limited partnership agreement entered in July to invest in IP adaptations, evolving beyond licensing to secure stronger IP rights and gain more control over adaptation slate.

Disney Collaboration for original series and new digital comics platform.

Excited to introduce an original series later this year and launch a new digital comics platform before the end of this year.

Marvel Collaboration on original digital comics series.

Announced collaborations for 'Tony's Girl,' 'That Time Deadpool Fell Into WEBTOON ... and Found the Longest Title of All Time!!!,' and 'X-Men Korea.'

Studio White Content partnership to strengthen local content in Japan.

Significant partnership aimed at returning Japan's growth through stronger local content.

KADOKAWA Agreement to feature spin-off content in Japan.

Agreement to feature the spin-off of Ryo Mizuno's fantasy series 'Record of Lodoss War' as an example of local content initiatives in Japan.

Lawson Distribution partnership in Japan.

Partnership in Japan to enhance distribution.

Risks & headwinds

Increased net loss Q2 FY26

Net loss of $14.6 million in Q2 FY26 compared to $3.9 million in Q2 FY25

Mitigation:Strategic marketing investments are expected to drive long-term adoption and growth in hyper-growth markets.

Decline in Adjusted EBITDA Q2 FY26

Adjusted EBITDA of $5.5 million in Q2 FY26 compared to $9.7 million in Q2 FY25, resulting in margin decline from 2.8% to 1.6%

Mitigation:Primarily due to increased marketing investment, which is a deliberate strategy for future growth. Cross-border content distribution and growth in higher-margin businesses like advertising are expected to support future profitability.

Japan revenue decline Q2 FY26

Revenue declined 6.7% year-over-year on a constant currency basis

Mitigation:Focus on returning Japan to growth through stronger local content, greater engagement, and distribution partnerships, including agreements with Studio White, KADOKAWA, and Lawson.

Overall app MAU and webcomic app MAU decline Q2 FY26

App MAU declined 8.0% YoY and webcomic app MAU declined 1.5% YoY

Mitigation:Company is focusing on driving users to its app and converting them to paying users, with MPU growth of 1.8% and English platform webcomic app MAU increasing 3.7%.

What to watch in Q3 FY26

Double-digit revenue growth exit rate

Q4 FY26 exit

Current Q3 FY26 guidance: 0.7% to 3.3% constant currency growth

Target double-digit revenue growth

Why it matters

This is a key management commitment for the company's growth trajectory and investment thesis.

We continue to expect we will return to double-digit revenue growth by the end of the year.

Find out whether WBTN delivers this. Inve re-checks your case every morning.

Q&A highlights

What are the average daily minutes users spend on the platform, and is there a separate engagement number for paying users?

Users typically spend approximately 30 minutes per day on the platform. While a separate engagement number for paying users is not disclosed, their habit formation and access to multiple episodes via micro-payments drive paid content, which is reflected in ARPU growth.

“We say typically that it averages approximately 30 minutes per day. But the reality is for those who have habituated, we know that, that number can be larger for the heavier users.”

asked by Kunal Madhukar · answered by David Lee

2 min read 5 chapters

Detailed narrative

Strategic Direction and AI Integration

WEBTOON is introducing a new strategic direction focused on AI-powered initiatives to strengthen and expand its core on-platform business, alongside scaling its Off-Platform IP adaptation business. Key AI initiatives include an Auto-Translation program, launched in beta for English language CANVAS creators in May, and 'byUs,' an AI interactive stories chat service introduced in Korea, with plans to expand to Japan.

The company also launched 'Cuts Make,' an AI-powered short-form animation tool in Korea, which saw new content rise 136% and creators grow 188% in its first week.

Off-Platform IP Adaptation Strategy

The company is making a more deliberate and aggressive bet on commercializing its proven IP off-platform. This includes a strategic investment in RI Games Holdings, aiming to develop and launch multiple games based on proven IP over the next four years.

Additionally, WEBTOON, in partnership with NAVER, established a $100 million IP Adaptation Fund to secure stronger IP rights and gain more control over its growing adaptation slate, moving beyond a licensing-only model to capture more value from global hits.

Japan Market Focus and Growth Initiatives

Japan's revenue declined 6.7% year-over-year on a constant currency basis, primarily due to single-digit declines in paid content and advertising, despite triple-digit growth in IP adaptations. Management is focused on returning Japan to growth through stronger local content, greater engagement, and distribution partnerships.

Initiatives include partnerships with Studio White and KADOKAWA for local content, and with Lawson for distribution, alongside leveraging CRM and deeper engagement strategies.

Marketing Investment and Profitability

The company increased its marketing investments, leading to a decline in adjusted EBITDA to $5.5 million from $9.7 million in the prior year and an increased net loss of $14.6 million. Marketing spend was $38 million, up approximately 11%. This investment is strategically allocated, with efficient spend in mature markets like Korea and intentional forward investment in hyper-growth markets like North America and Rest of World, where penetration is lower, targeting longer LTV timeframes.

Engagement and Monetization Trends

Global MAU increased 0.5% year-over-year, reaching 156 million. While app MAU and webcomic app MAU declined, MPU grew 1.8%, driven by Korea. English platform webcomic app MAU increased 3.7%. ARPU increased 2.5% on a constant currency basis. The company emphasizes ARPU as a measure of deep engagement, particularly in mature markets like Korea, where high market penetration correlates with strong ARPU growth.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.