WEBTOON Entertainment Inc. Reports Fourth Quarter and Full Year 2024 Financial Results

Full Year 2024 Revenue Growth of 5.1%; Robust Year-Over-Year Revenue Growth on a Constant Currency Basis of 13.0%

Net Loss of $152.9 Million; Adjusted EBITDA of $67.9 Million Represented a 685% Increase Year-Over-Year

Strong Balance Sheet With Cash And Cash Equivalents of Approximately $572 Million and No Debt

LOS ANGELES, Feb. 25, 2025 (GLOBE NEWSWIRE) -- WEBTOON Entertainment Inc. (Nasdaq: WBTN) ("WEBTOON Entertainment” or "the Company”), a leading global entertainment company and home to some of the world's largest storytelling platforms, today announced results for its fourth quarter and full year ended December 31, 2024. More information about these results can be found in the Company's shareholder letter on the investor relations section of its website.

Fourth Quarter 2024 Highlights (vs. Fourth Quarter 2023)

• Total revenue of $352.8 million grew 5.6% driven by growth in Paid Content and Advertising, partially offset by our exposure to weaker foreign currencies.
• Revenue on a constant currency basis was $368.9 million, growing 10.4%, driven by growth in Paid Content and Advertising, partially offset by a decline in IP Adaptations.
• Net Loss was $102.6 million, compared to $95.3 million in the prior year, driven by higher general & administrative expenses due to costs associated with being a public company, higher marketing expense, and higher impairment losses on goodwill.
• Adjusted EBITDA loss was $3.5 million, compared to a gain of $10.4 million in the prior year as a result of actuarial losses on retiree benefits, a non-cash, non-operating expense based on a third-party evaluation, as well as the effects of currency translation and lower gross profit in Korea due to a shift in revenue mix. Actuarial loss had an approximately $6 million impact to Adjusted EBITDA in the fourth quarter. Adjusted EBITDA margin was (1.0)%, compared to 3.1% in the prior year.
• Diluted loss per share was $0.72, compared to a loss per share of $0.62 in the prior year.
• Adjusted loss per share was $0.03, compared to Adjusted EPS of $0.09 in the prior year.  

Full Year 2024 Highlights (vs. Full Year 2023)

• Total revenue of $1.35 billion grew 5.1% driven by growth in Paid Content and Advertising, partially offset by our exposure to weaker foreign currencies.
• Revenue on a constant currency basis was $1.44 billion, growing 13.0%, driven by growth across all revenue streams - Paid Content, Advertising, and IP Adaptations.
• Net Loss was $152.9 million, compared to $144.8 million in the prior year, driven by higher general & administrative expenses due to costs associated with being a public company and higher impairment losses on goodwill.
• Adjusted EBITDA of $67.9 million and Adjusted EBITDA Margin of 5.0% both increased from the prior year as a result of strong gross profit and effective cost controls.
• Diluted loss per share was $1.21, compared to a loss per share of $1.06 in the prior year.
• Adjusted EPS of $0.57 increased from $0.08 in the prior year.
• Cash and cash equivalents of approximately $572 million plus another $26 million of short-term deposits included in Other current assets.

Junkoo Kim, Founder and CEO, said, "2024 was an exciting year for WEBTOON Entertainment as we became a public company, expanding the global influence of our creators and IP. We're proud to have delivered strong financial results in 2024 that prove our strategy is working, including revenue growth on a constant currency basis of 13%, driven by growth across all revenue streams - Paid Content, Advertising, and IP Adaptations - as well as record Adjusted EBITDA of $67.9 million, a growth rate of over 600%.”

Kim continued, "As we look to 2025, we remain committed to driving further innovation on our platform, introducing new features to enhance usability, expanding monetization opportunities for our creators, and improving content discovery. I am confident we have the right strategy to continue powering our global flywheel, positioning us well to drive further growth in 2025 and deliver long-term value for our shareholders.”

First Quarter 2025 Outlook

For the first quarter 2025, the Company expects:

• Revenue growth on a constant currency basis in the range of 1.7% - 4.8%. This represents revenue in the range of $318-$328 million, based on current FX rates.
• Adjusted EBITDA in the range of $0.5-$5.5 million, representing an Adjusted EBITDA Margin in the range of 0.2% - 1.7%.

Conference Call & Webcast Details

As previously disclosed, the Company will host a webcast and conference call on February 25, 2025, at 4:30 p.m. Eastern Time, to discuss the Company's financial results for its fourth quarter and full year ended December 31, 2024.

A live webcast of the conference call will be available online at https://ir.webtoon.com/.

For those unable to listen to the live webcast, an archived version will be available at the same location for up to one year.  

About WEBTOON Entertainment Inc.

WEBTOON Entertainment is a leading global entertainment company and home to some of the world's largest storytelling platforms. As the global leader and pioneer of the mobile webcomic format, WEBTOON Entertainment has transformed comics and visual storytelling for fans and creators.

With its CANVAS UGC platform empowering anyone to become a creator, and a growing roster of superstar WEBTOON Originals creators and series, WEBTOON Entertainment's passionate fandoms are the new face of pop culture. WEBTOON Entertainment's adaptations are available on Netflix, Prime Video, Crunchyroll and other screens around the world, and the company's content partners include Discord, HYBE and DC Comics, among many others.

With approximately 160 million monthly active users, WEBTOON Entertainment's IP & Creator Ecosystem of aligned brands and platforms include WEBTOON, Wattpad - the world's leading webnovel platform - Wattpad WEBTOON Studios, Studio N, Studio LICO, WEBTOON Unscrolled, LINE Manga and eBookJapan, among others.

Forward Looking Statements

This release contains forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, and involves risks, assumptions and uncertainties that could cause actual results to differ materially from those expressed or implied by forward-looking statements. Forward-looking statements cover all matters which are not historical facts and include, without limitation, statements or guidance regarding or relating to our future financial position, results of operations and growth, plans and objectives for future capabilities, ability to attract users in both our core and underpenetrated geographies, ability to grow Paid Content, Advertising and IP Adaptations businesses, our financial condition and liquidity, and other statements concerning the success of our business and strategies. Forward-looking statements may be identified by the use of words such as "anticipate,” "intend,” "plan,” "goal,” "seek,” "believe,” "project,” "estimate,” "expect,” "strategy,” "future,” "likely,” "may,” "should,” "will” and similar references to future periods. Forward-looking statements speak only as of the date on which they are made. They are not assurances of future performance and are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Therefore, you should not place undue reliance on any of these forward-looking statements. Although we believe that the forward-looking statements contained in this release are based on reasonable assumptions, you should be aware that many factors could cause actual results to differ materially from those in such forward-looking statements, including, but not limited to: weakness in the economy, market trends, uncertainty and other conditions in the markets in which we operate, and other geopolitical or macroeconomic factors beyond our control; inability to attract, empower, properly support or incentivize our creators; inability to retain, attract and engage with our users; inability to anticipate, understand and appropriately respond to market trends and changing user preferences; failure to retain or increase our paying users; failure to effectively operate in highly competitive markets; inability to innovate and expand our Advertising business; inability to continue to diversify our monetization strategy or to increase revenues from IP Adaptations; failure to control our content-related costs; exposure to significant legal proceedings and regulatory investigations which may result in significant expenses, fines and reputational damage; failure to provide a safe online environment for children; exposure to claims that we violated third parties' intellectual property rights; failure to obtain, maintain, protect or enforce our proprietary and intellectual property rights; rise of conflicts of interests with NAVER Corporation, our majority stockholder; and other risks and uncertainties set forth under the caption "Risk Factors” in our final prospectus filed with the U.S. Securities and Exchange Commission (the "SEC”) on June 27, 2024 pursuant to Rule 424(b)(4), in the Quarterly Report on Form 10-Q for the quarter ended September 30, 2024 filed by the Company with the SEC on November 12, 2024, and in other filings we make with the SEC in the future.

Additionally, forward-looking statements regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. Other than in accordance with our legal or regulatory obligations, we undertake no obligations to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Non-GAAP Financial Measures & Definitions

This release contains certain financial information that is not presented in conformity with U.S. GAAP. These non-GAAP measures include Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Earnings Per Share (Adjusted EPS), revenue on a constant currency basis and revenue growth on a constant currency basis.

We believe that these non-GAAP measures provide users of the Company's financial information with additional meaningful information to assist in understanding financial results and assessing the Company's performance from period to period. Management believes these measures are important indicators of operations because they exclude items that may not be indicative of our core operating results and provide a better baseline for analyzing trends in our underlying businesses, and they are consistent with how business performance is planned, reported and assessed internally by management and the board of directors of the Company. Our non-GAAP financial measures should not be considered in isolation, or as substitutes for, financial information prepared in accordance with GAAP. Non-GAAP measures have limitations as they do not reflect all the amounts associated with our results of operations as determined in accordance with GAAP, and should only be used to evaluate our results of operations in conjunction with the corresponding or the most directly comparable GAAP measures. We strongly encourage investors and shareholders to review our financial statements and publicly filed reports in their entirety and not to rely on any single financial measure.

A reconciliation is provided at the end of this release for each historical non-GAAP financial measure to the most directly comparable financial measure stated in accordance with U.S. GAAP. We encourage investors and shareholders to review the related U.S. GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable U.S. GAAP financial measures, and not to rely on any single financial measure to evaluate our business. We do not provide a reconciliation of forward-looking non-GAAP financial measures to the most directly comparable U.S. GAAP financial measures on a forward-looking basis because we are unable to predict with reasonable certainty or without unreasonable effort non-recurring items that may arise in the future.

Adjusted EBITDA: We define Adjusted EBITDA as net income (loss), adjusted to remove the impact of interest income, interest expense, income tax expense (credit) and depreciation and amortization, with further adjustments to eliminate the effects of loss on equity method investments, effect of applying the valuation method of fair value through profit or loss, impairment of goodwill, non-cash stock-based compensation and certain other non-recurring costs.

Adjusted EBITDA Margin: We define Adjusted EBITDA Margin as Adjusted EBITDA divided by revenue.

Adjusted Earnings Per Share (Adjusted EPS): We define Adjusted Earnings Per Share as Earnings Per Share before interest expense, interest income, income tax expense and depreciation and amortization with further adjustments to eliminate the effects of loss on equity method investments, effect of applying the valuation method of fair value through profit or loss, impairment of goodwill, non-cash stock-based compensation and certain other non-recurring costs. We calculate Adjusted Earnings Per Share by making the adjustments described herein from Net Income (Loss) and dividing by basic and diluted weighted average shares of common stock outstanding, respectively, for the applicable period.

Revenue on a Constant Currency Basis: We define revenue on a constant currency basis as revenue adjusted to remove the impact of foreign currency rate fluctuations and the impact of deconsolidated and transferred operations. We calculate revenue on a constant currency basis in a given period by applying the average currency exchange rates in the comparable period of the prior year to the local currency revenue in the current period. We calculate revenue on a constant currency basis in each of our revenue streams - Paid Content, Advertising and IP Adaptations - using the same method as laid out herein.

Revenue Growth on a Constant Currency Basis: We define revenue growth on a constant currency basis as period-over-period growth rates of revenue, adjusted to remove the impact of foreign currency rate fluctuations and the impact of deconsolidated and transferred operations. We calculate revenue growth (as a percentage) on a constant currency basis by determining the increase in current period revenue over prior period revenue, where current period foreign currency revenue is translated using prior period average currency exchange rates.

Financial Statements

WEBTOON Entertainment Inc.

Consolidated Balance Sheets

(in thousands of USD, except share and per share data)

1. Includes amounts due from related parties of $61,081 and $63,723 as of December 31, 2024 and December 31, 2023, respectively.
2. Includes amounts due from related parties of $9,258 and $- as of December 31, 2024 and December 31, 2023, respectively.
3. Includes amounts due from related parties of $32,073 and $15,876 as of December 31, 2024 and December 31, 2023, respectively.
4. Includes amounts due from related parties of $17,173 and $6,713 as of December 31, 2024 and December 31, 2023, respectively.
5. Includes amounts due to related parties of $5,562 and $- as of December 31, 2024 and December 31, 2023, respectively.
6. Includes amounts due to related parties of $- and as of $3,800 December 31, 2024 and December 31, 2023, respectively.
7. Includes amounts due to related parties of $3,506 and $6,426 as of December 31, 2024 and December 31, 2023, respectively.
8. Includes amounts due to related parties of $- and $16,160 as of December 31, 2024 and December 31, 2023, respectively.
9. Includes amounts due to related parties of $9,519 and $14,852 as of December 31, 2024 and December 31, 2023, respectively.

WEBTOON Entertainment Inc.

Consolidated Statements of Operations and Comprehensive Loss

(unaudited)

(in thousands of USD, except share and per share data)