Webtoon Entertainment Posts KRW 23.4 Billion Q2 Loss... Operating Loss Expands 77% on Marketing Spend, Strong Dollar

Revenue Decreases by 2.8% Year-on-Year to 507.9 Billion Won

In the second quarter of this year, Webtoon Entertainment, the U.S. headquarters of Naver Webtoon, reported an operating loss that expanded by 77.7% year-on-year, due to increased marketing investments and the impact of a strong U.S. dollar.

On August 10 (local time), Webtoon Entertainment announced its provisional results, stating that second-quarter revenue reached $338.47 million (507.9 billion won, based on the average quarterly exchange rate of 1,500.74 won per dollar), a 2.8% decrease compared to the same period last year.

The operating loss also increased to $15.57 million (23.4 billion won), which is 77.7% higher than last year’s operating loss of $8.76 million for the same period. Net loss widened to $14.58 million (21.9 billion won), compared to $3.9 million a year earlier.

By segment, paid content revenue, generated through purchases of webtoons, web novels, and similar products, fell by 4.0%. Intellectual property (IP) business revenue also dropped by 2.6%. Advertising revenue, however, increased by 4.2%, driven by growth in Korea and other markets.

According to Webtoon Entertainment, sales declined in part due to the exchange rate, but on a constant currency basis, all segments—including paid content, advertising, and IP business—showed growth. In particular, Korean sales increased by 20.0% year-on-year on a constant currency basis. Paid content sales in Korea exhibited strong growth, attributed to the introduction of artificial intelligence (AI) recommendations, customer relationship management (CRM) systems, and a new badge rating system.

A Webtoon Entertainment spokesperson commented, “The Korean and Japanese businesses account for 90% of our overall revenue, making us highly sensitive to currency fluctuations. For paid content sales, growth was 4.3% year-on-year on a constant currency basis.”

In the second quarter, monthly active users (MAU) reached 156.9 million, up 0.5% from the same period last year. The number of monthly paying users (MPU) rose by 1.8% to 7.5 million. While MPU decreased in Japan and other markets, the number of paying users in Korea surged by 10.4% from 3.4 million to 3.8 million.

During a conference call on the same day, David Lee, Chief Financial Officer (CFO) of Webtoon Entertainment, said, “MAU for English webtoons continues to grow by over 3%, and the number of paying users is also increasing significantly. In mature markets like Korea, we are focusing on improving cost efficiency, while in markets with significant growth potential such as North America, we are making investments aimed at expanding our user base.”

Webtoon Entertainment plans to move beyond just IP licensing, actively expanding its IP through adaptations such as animation and games. Together with NAVER, the company is preparing to establish a $100 million adaptation fund to further drive IP expansion.

Junkoo Kim, CEO of Webtoon Entertainment, said, “This quarter, we made progress on two strategic priorities designed to further strengthen the flywheel of the webtoon ecosystem. We are driving user engagement through innovative platforms such as the AI-powered StoryChat 'BIAS' and 'automatic translation.'”

Kim further stated, “We are consistently experimenting with AI-driven initiatives such as short animation, and by increasing direct investments in IP, we are upgrading our IP strategy to secure more long-term value generated by our ecosystem.”

This content was produced with the assistance of AI translation services.