WEBTOON Entertainment (WBTN) Q2 2024 earnings summary

Executive summary

• Revenue for Q2 2024 was $321.0M, flat year-over-year, but grew 11.1% on a constant currency basis, led by strong growth in Japan and Rest of World, offset by FX headwinds and deconsolidation impacts.

• Net loss widened to $76.6M, primarily due to IPO-related and one-time stock-based compensation expenses, including a $30M CEO bonus.

• IPO completed in June 2024, raising $281.7M net, with an additional $50M from a private placement and $26.8M from over-allotment in July, unlocking new capital for global expansion and technology investment.

• Global monthly active users (MAU) remained stable at ~170M, with Japan MAU up and Korea MAU slightly down.

• Expanded executive team and launched AI-driven personalized recommendation model to support global growth and user engagement.

Financial highlights

• Q2 2024 revenue: $321.0M (+0.1% YoY); constant currency revenue: $350.3M (+11.1%); Paid Content $260.7M (+1.0%), Advertising $40.4M (-3.6%), IP Adaptations $19.8M (-3.7%).

• Adjusted EBITDA reached $22.4M (7.0% margin), up from a loss of $0.9M last year, driven by cost control and operational efficiency.

• Net loss margin was -23.9%; adjusted EPS was $0.20, compared to a loss of $0.01 last year; reported EPS was a loss of $0.70.

• Gross profit was $83.1M, with gross margin expanding to 25.9%.

• Cash and cash equivalents rose to $572.3M as of June 30, 2024; total liquidity $826.4M; no material debt.

Outlook and guidance

• Q3 2024 revenue expected to grow 12.5%-14.5% year-over-year on a constant currency basis, or $332-$338M, with adjusted EBITDA projected between -$7.7M and -$10.0M.

• Management expects continued growth in Japan and Rest of World, with ongoing FX volatility and seasonality impacting results.

• Sufficient liquidity for at least the next 12 months; future capital needs may be met through debt or equity if required.