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WEBTOON Entertainment Inc. (WBTN)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 delivered above guidance on both revenue and adjusted EBITDA; total revenue was $348.3M (+8.5% y/y; +5.5% ccy) and adjusted EBITDA was $9.7M (2.8% margin), with gross margin improving sequentially to 25.1% from 22.0% in Q1 .
  • Versus S&P Global consensus, revenue beat ($348.3M vs $341.2M*) and adjusted EPS beat ($0.07 vs $0.02*), while GAAP EBITDA missed relative to EBITDA consensus (actual GAAP EBITDA negative vs $3.7M*); note the company emphasizes non-GAAP adjusted EBITDA ($9.7M) which exceeded its Q2 guidance range .
  • Segment trends: Paid Content rose 5.4% y/y to $274.9M, Advertising grew 11.9% to $45.2M, and IP Adaptations surged 41.8% to $28.1M, all reported; Japan remained the growth engine, Korea improved on ads/IP, and Rest of World was pressured by Wattpad bans and indexing recovery .
  • Q3 guidance implies acceleration: revenue $380–$390M (+9.4%–12.2% ccy) and adjusted EBITDA $2–$7M (0.5%–1.8% margin); management highlighted no near-term financial impact from the new Disney collaboration, positioning it as a mid- to long-term growth catalyst .

What Went Well and What Went Wrong

What Went Well

  • Above-guidance execution: “both revenue and Adjusted EBITDA coming in above the top end of our guidance ranges” (CEO) .
  • Product improvements driving engagement: English-language webcomic app MAU up 19% for the second consecutive quarter; revamped onboarding, Home, Search, and “New & Hot” features supported discovery and activity .
  • Strategic IP expansion: Announced multi-year collaboration with Disney to bring ~100 comics from Disney, Marvel, 20th Century Studios, and Star Wars; also expanded Dark Horse partnership and saw strong reception for “Beneath the Trees Where Nobody Sees” .

What Went Wrong

  • Wattpad headwinds: MAU down 7.6% y/y globally, driven by government bans in two countries and slower re-indexing after security upgrades; Rest of World MAU down 8.7% y/y .
  • Margin compression y/y: adjusted EBITDA margin fell to 2.8% from 6.3% y/y (though improved q/q), reflecting investment in marketing and mix shifts; gross margin down y/y to 25.1% (from 25.9%), up q/q .
  • Japan IP adaptations variability: Japan IP revenue declined on a constant currency basis due to milestone timing; management flagged quarter-to-quarter fluctuations tied to recognition triggers .

Financial Results

Consolidated P&L vs prior year and prior quarter

MetricQ2 2024Q1 2025Q2 2025
Revenue ($USD Millions)$321.0 $325.7 $348.3
Revenue Growth (y/y, reported)—-0.3% +8.5%
Revenue Growth (ccy)—+5.3% +5.5%
Gross Profit ($USD Millions)$83.1 $71.6 $87.3
Gross Margin (%)25.9% 22.0% 25.1%
GAAP Diluted EPS ($)($0.70) ($0.17) ($0.03)
Adjusted EPS ($)$0.18 $0.03 $0.07
Adjusted EBITDA ($USD Millions)$20.4 $4.1 $9.7
Adjusted EBITDA Margin (%)6.3% 1.3% 2.8%

Segment revenue breakdown

Segment Revenue ($USD Millions)Q2 2024Q1 2025Q2 2025
Paid Content$260.7 $260.2 $274.9
Advertising$40.4 $39.9 $45.2
IP Adaptations$19.8 $25.6 $28.1

KPIs and regional metrics

KPI / RegionQ2 2024Q1 2025Q2 2025
Global MAU (M)168.9 153.3 156.1
Global MPU (M)7.8 7.4 7.4
Paying Ratio (%)4.6% 4.8% 4.7%
Global ARPPU ($)$11.2 $11.8 $12.4
Korea MAU (M)25.8 24.2 23.0
Korea MPU (M)3.7 3.4 3.4
Korea Paying Ratio (%)14.5% 14.2% 14.9%
Korea ARPPU ($)$7.5 $7.5 $7.9
Japan MAU (M)22.0 21.9 22.6
Japan MPU (M)2.2 2.2 2.3
Japan Paying Ratio (%)10.2% 10.3% 10.0%
Japan ARPPU ($)$21.2 $22.3 $23.7
Rest of World MAU (M)121.1 107.3 110.5
Rest of World MPU (M)1.8 1.7 1.7
Rest of World Paying Ratio (%)1.5% 1.6% 1.5%
Rest of World ARPPU ($)$6.5 $6.5 $6.6

Estimates vs Actuals (S&P Global)

MetricConsensus (Q2 2025)Actual (Q2 2025)Surprise
Revenue ($USD)$341.2M*$348.3M +$7.1M (beat)*
Primary EPS ($)$0.02*$0.07 +$0.05 (beat)*
EBITDA ($USD)$3.7M*($1.2M) GAAP EBITDA -$4.9M (miss; GAAP)*

Values retrieved from S&P Global.
Note: Company emphasizes non-GAAP adjusted EBITDA of $9.7M , which exceeded its Q2 guidance range ; S&P EBITDA consensus appears on a GAAP basis.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD)Q2 2025$335–$345M Actual $348.3M Beat vs guidance
Adjusted EBITDA ($USD)Q2 2025$0.5–$5.5M Actual $9.7M Beat vs guidance
Revenue (ccy growth %)Q3 20252.2%–5.2% (Q2 guide for Q2) 9.4%–12.2% (Q3 guide) Raised vs prior quarter’s growth outlook
Revenue ($USD)Q3 2025N/A$380–$390M New
Adjusted EBITDA ($USD)Q3 2025N/A$2–$7M (0.5%–1.8% margin) New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4’24, Q1’25)Current Period (Q2’25)Trend
Product/AI discoveryAI-driven recommendations and “Highlights” previews; binge unlock tests Revamped onboarding, Home, Search, “New & Hot” video discovery; early engagement gains; English app MAU +19% Building momentum; sequential impact growing
Advertising/videoAds growth in Korea/Japan; new formats (Rewarded Video, Offerwall) +10.2% ccy globally; video used to access paid episodes; groundwork in North America for ’26+ Strength in Asia; US foundation phase
IP AdaptationsRobust pipeline incl. anime; milestone timing variability +42.6% ccy; Korea boosted by “Remarried Empress”; Japan pipeline of ~20 anime Accelerating pipeline; quarter-to-quarter variability
Regional trendsJapan leadership; Korea mixed; ROW impacted by Wattpad ban Japan +5.7% ccy; Korea +9.2% ccy; ROW -4.4% ccy; Wattpad bans and indexing lag Japan strong; Korea improving; ROW pressured
Regulatory/legalAnti-piracy (“Toon Radar”); Wattpad government ban Continued Wattpad bans in two countries; indexing lag persists Persistent but expected to lap in Q3

Management Commentary

  • “We are pleased to report strong second quarter results, with both revenue and Adjusted EBITDA coming in above the top end of our guidance ranges.” — Junkoo Kim, CEO .
  • “English-language platform posted increased user activity, with English platform webcomic app MAU increasing 19% for the second consecutive quarter.” .
  • “WEBTOON Entertainment and Disney will bring around 100 blockbuster comics to WEBTOON… starting with an all-new dedicated section on our global English-language app.” .
  • CFO detail on growth drivers: “Advertising posted 10.2% revenue growth… IP Adaptations… +42.6%… Korea benefited from revenue recognition of ‘The Remarried Empress.’” — David Lee .
  • On Q3 guidance philosophy: “We are not incorporating any short term financial benefit [from Disney]… deliberate choice to grow English-speaking webcomic app MAU paired with product rollout.” — David Lee .

Q&A Highlights

  • Disney collaboration: Management underscored breadth of IP (Marvel, Star Wars, etc.), Gen Z reach, and multi-year horizon; no near-term inclusion in Q3 guide; unit economics not materially deviating from history .
  • Product/onboarding: New onboarding, Home, Search, “New & Hot” trailer-style videos aim to boost discovery and habituation; testing shows promise across user cohorts; focus on US as largest addressable market .
  • Advertising outlook: Double-digit ccy growth in Korea/Japan; video ads as gateway to paid content; US build-out in early days, with expected financial returns in 2026 and beyond .
  • Creator ecosystem and originals: Collaboration complements UGC/Originals; potential to develop original series using Disney IP; WEBTOON recognized as category leader for vertical scroll .
  • Rest of World ads and Wattpad: ROW ads ex-Wattpad showing promise; bans expected to lap in Q3; indexing effects temporal; ROW a mid- to long-term driver .

Estimates Context

  • Revenue and adjusted EPS beat consensus; low EPS coverage (only one estimate) suggests limited Street participation, which can amplify surprises. EBITDA miss versus S&P’s GAAP EBITDA consensus contrasts with management’s non-GAAP adjusted EBITDA beat; investors should anchor on the company’s adjusted EBITDA for operating performance, but note GAAP volatility from items like stock-based compensation and other/non-operating items .
  • Consensus levels and actuals: Revenue $341.2M* vs $348.3M; Primary EPS $0.02* vs $0.07; EBITDA $3.7M* vs GAAP EBITDA ($1.2M). Values retrieved from S&P Global.

Key Takeaways for Investors

  • Narrative shift to engagement-led growth in English markets is working (English app MAU +19% again); expect continued ARPPU accretion and monetization as product improvements mature .
  • Japan remains the core growth driver (Paid Content and Ads), with strengthening IP Adaptations pipeline; Korea improving via ads/IP despite MAU softness; ROW should stabilize as Wattpad bans lap in Q3 .
  • Near-term financials won’t reflect Disney collaboration, but multi-year scope across iconic franchises is a clear medium-term catalyst for user acquisition, engagement, and brand visibility .
  • Q3 guide signals acceleration (ccy growth +9.4%–12.2%); management deliberately invests in marketing and product to capture US opportunity, limiting near-term margins but potentially expanding lifetime value .
  • Traders: Expect stock narrative to focus on Disney tie-up, English app momentum, and Q3 acceleration; quarter-to-quarter IP revenue recognition can create print volatility—watch pipeline milestones .
  • PMs: Monitor mix-driven margin dynamics (ads/IP higher margin over time), ARPPU trajectory, and progress on US ad monetization foundations; reconcile GAAP vs non-GAAP profitability given SBC and other items .
  • Risk checks: Wattpad regulatory exposure, search indexing timing, and Japan IP milestone timing introduce variability; management expects some normalization in Q3 and ongoing pipeline strength .
Citations: All factual statements and figures are cited inline per cell/point.
S&P Global disclaimer: Values marked with * are retrieved from S&P Global.