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    WBTN
    Earnings call· Jun 2026(Q2 FY26)

    WEBTOON Entertainment Q2 FY26 earnings call WBTN

    Aug 10, 2026 Source

    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

    5

    • 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

    5

    • 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

    10
    CategoryTargetConfidence
    Q3 FY26 Revenue
    $358 million to $368 million
    high materiality
    High
    Q3 FY26 Revenue Growth (constant currency)
    0.7% to 3.3%
    high materiality
    High
    Q3 FY26 Adjusted EBITDA
    $0 million to $5 million
    high materiality
    High
    Q3 FY26 Adjusted EBITDA Margin
    0% to 1.4%
    high materiality
    High
    Return to double-digit revenue growth
    double-digit revenue growth
    high materiality
    High
    New Disney digital comics platform launch
    before the end of this year
    medium materiality
    High
    Disney original series launch
    later this year
    medium materiality
    High
    AI-powered Auto-Translation program expansion
    expand later this year to a broader group of CANVAS creators
    low materiality
    High
    byUs service expansion
    expand this service to Japan later this year
    low materiality
    High
    RI Games Holdings game launches
    multiple games over the next 4 years
    medium materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    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%——

    Operational metrics

    33
    Adjusted EPS
    $0.04vs $0.07 in prior year
    Q2 FY26

    Adjusted EPS for the quarter.

    Adjusted EPS
    $0.07
    Q2 FY25

    Adjusted EPS for the prior year quarter.

    Global MAU growth
    0.5%YoY
    Q2 FY26

    Global Monthly Active Users increased.

    Gross profit
    $88.1 millionup 1% YoY
    Q2 FY26

    Gross profit for the quarter.

    Gross margin
    26%expanded almost 100 bps YoY
    Q2 FY26

    Gross margin for the quarter.

    G&A expenses
    $65.4 millionroughly in line YoY
    Q2 FY26

    Total General & Administrative expenses.

    Interest income
    $4.5 millionvs $4.9 million in prior year
    Q2 FY26

    Interest income for the quarter.

    Interest income
    $4.9 million
    Q2 FY25

    Interest income for the prior year quarter.

    Depreciation and amortization
    $7.3 millionvs $8.4 million in prior year
    Q2 FY26

    Depreciation and amortization expenses.

    Depreciation and amortization
    $8.4 million
    Q2 FY25

    Depreciation and amortization expenses for the prior year quarter.

    Net loss
    $14.6 millionvs $3.9 million in prior year
    Q2 FY26

    Net loss for the quarter.

    Net loss
    $3.9 million
    Q2 FY25

    Net loss for the prior year quarter.

    GAAP loss per share
    $0.11vs $0.03 in prior year
    Q2 FY26

    GAAP loss per share for the quarter.

    GAAP loss per share
    $0.03
    Q2 FY25

    GAAP loss per share for the prior year quarter.

    Cash balance
    $583 million
    Q2 FY26

    Cash balance at the end of the quarter.

    Korea market penetration
    50%
    Q2 FY26

    Market penetration in Korea.

    Revenue growth
    5.2%YoY constant currency
    Q2 FY26

    Total revenue growth on a constant currency basis.

    Adjusted EBITDA
    $5.5 millionvs $9.7 million in prior year
    Q2 FY26

    Adjusted EBITDA for the quarter.

    Adjusted EBITDA
    $9.7 million
    Q2 FY25

    Adjusted EBITDA for the prior year quarter.

    Adjusted EBITDA margin
    1.6%vs 2.8% in prior year
    Q2 FY26

    Adjusted EBITDA margin for the quarter.

    Adjusted EBITDA margin
    2.8%
    Q2 FY25

    Adjusted EBITDA margin for the prior year quarter.

    Marketing investment
    $38 millionup approximately 11%
    Q2 FY26

    Marketing expenses for the quarter.

    App MAU decline
    8.0%YoY
    Q2 FY26

    Overall app Monthly Active Users decline.

    Webcomic app MAU decline
    1.5%YoY
    Q2 FY26

    Webcomic app Monthly Active Users decline.

    MPU growth
    1.8%
    Q2 FY26

    Monthly Paying Users growth.

    English platform webcomic app MAU growth
    3.7%YoY
    Q2 FY26

    English platform webcomic app Monthly Active Users growth.

    Paid content revenue growth
    4.3%constant currency
    Q2 FY26

    Revenue growth from paid content.

    ARPU increase
    2.5%constant currency
    Q2 FY26

    Average Revenue Per User increase.

    Advertising revenue growth
    11.5%constant currency
    Q2 FY26

    Advertising revenue growth.

    Rest of World advertising revenue growth
    over 20%constant currency
    Q2 FY26

    Advertising revenue growth in Rest of World.

    IP adaptations business revenue growth
    4.2%YoY constant currency
    Q2 FY26

    Revenue growth from IP adaptations business.

    Average daily minutes on platform
    approximately 30 minutes
    Q2 FY26

    Average time users spend on the platform daily.

    Short-term deposits
    $11 million
    Q2 FY26

    Short-term deposits included in other current assets.

    Industry KPIs

    3
    MetricValueDetails
    Family dap dau0.5%%
    Advertising revenue by segment11.5%%
    Ai feature adoption monetization136%%

    Product announcements

    3
    ProductTypeDetails
    AI-powered Auto-Translation programlaunch
    byUslaunch
    Cuts Makelaunch

    Deals & partnerships

    7
    RI Games HoldingsInvestment 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).

    NAVEREstablishment 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.

    DisneyCollaboration 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.

    MarvelCollaboration 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 WhiteContent partnership to strengthen local content in Japan.

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

    KADOKAWAAgreement 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.

    LawsonDistribution partnership in Japan.

    Partnership in Japan to enhance distribution.

    Risks & headwinds

    4
    Increased net lossQ2 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 EBITDAQ2 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 declineQ2 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 declineQ2 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

    5

    Double-digit revenue growth exit rate

    Q4 FY26 exit
    CurrentQ3 FY26 guidance: 0.7% to 3.3% constant currency growth
    Targetdouble-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.

    Q&A highlights

    5

    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 read5 chapters

    Detailed Narrative

    01

    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.

    02

    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.

    03

    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.

    04

    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.

    05

    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.

    AI-generated summary of the company’s earnings call. Not investment advice.