Webtoon Entertainment, the U.S. headquarters of Naver Webtoon, maintained its revenue growth in the third quarter of this year when excluding the impact of exchange rates, driven by increases in paid content and advertising revenue. However, overall revenue declined due to investments in the Japanese and North American markets and poor performance in its intellectual property (IP) business, although operating losses were reduced compared to the previous year.
On November 9, Webtoon Entertainment announced that its third-quarter revenue was $362.78 million, a 4.0% decrease from the same period last year. However, when adjusted for currency fluctuations, revenue was $378.60 million, reflecting a 0.2% increase year-over-year.
By business segment, paid content revenue was $275.51 million, down 3.9% from the previous year, but up 1.0% at constant exchange rates. Notably, paid content revenue in Korea grew by 23.7% year-over-year, supporting overall performance. The growth was attributed to a diverse range of genres and enhancements in reader engagement features such as recommendation systems and fan scores.
Advertising revenue increased by 26.2% to $49.68 million compared to the same period last year, with a 30.1% rise at constant exchange rates. This growth was driven by diversifying advertising categories and client bases in Korea, as well as collaborations with global companies like Capcom and food brand Bibigo.
In contrast, IP business revenue fell to $37.58 million, a 27.5% decrease year-over-year, and also down 27.0% at constant exchange rates. Despite growth in paid content and advertising, the decline in IP business revenue limited overall revenue growth.
Profitability improved, with an operating loss of $9.23 million, a 38.0% reduction from the $14.88 million loss reported in the same quarter last year. The net loss also decreased to $7.47 million from $11.05 million in the previous year. Adjusted EBITDA was positive at $2.21 million.
Webtoon Entertainment plans to continue investing to expand its creative ecosystem and user base in the Japanese and North American markets. CEO Kim Jun-gu stated, "In the third quarter, our revenue and adjusted EBITDA fell within guidance, and we continued to invest for growth. I am confident that we will recover to double-digit revenue growth in the fourth quarter."
* This article has been translated by AI.
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