WEBTOON Entertainment Inc. Common Stock 2026 Q2 Earnings Call
Review the key takeaways and the transcript of this earnings call.
- WEBTOON Entertainment reported second quarter 2026 revenue of $338.5 million, a 2.8% decline year over year but a 5.2% increase on a constant currency basis.
- Adjusted EBITDA was $5.5 million, exceeding the high end of guidance, compared to $9.7 million in the prior year quarter.
- Net loss was $14.6 million, driven by higher income tax expense and marketing investment, compared to a net loss of $3.9 million in the prior year.
- Global monthly active users (MoU) increased 0.5% year over year, with growth in Korea offset by declines in Japan and rest of world.
- Korea revenue grew 20% year over year on a constant currency basis, driven by double-digit growth in paid content and advertising.
- Japan revenue declined 6.7% year over year on a constant currency basis, with triple-digit growth in IP adaptations offset by declines in paid content and advertising.
- Rest of world revenue grew 11.1% year over year on a constant currency basis, driven by growth in paid content, advertising, and IP adaptations.
- Paid content revenue grew 4.3% on a constant currency basis, advertising revenue grew 11.5%, and IP adaptation revenue grew 4.2% year over year on a constant currency basis.
- Gross margin expanded by nearly 100 basis points to 26% in Q2 2026.
- Adjusted EPS was $0.04 compared to $0.07 in the prior year quarter.
- Cash balance was $583 million with an additional $11 million in short-term deposits.
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Transcript
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I would now like to turn the call over to Soohwan Kim, Vice President of Investor Relations. Mr. Kim, please go ahead.
Good afternoon, and thank you for joining us. As a reminder, our remarks today will include forward-looking statements, including those regarding our future plans, objectives, expected performance, and our guidance for the next quarter. Actual results may vary materially from stated statements. Information concerning risks, uncertainties, and other factors that could cause these results to differ is included in our SEC filings, including those in the Risk Factors section of our filings with the SEC. These forward-looking statements represent our outlook only as of the date of this call. We undertake no obligation to revise or update any forward-looking statements. Additionally, the matters we will discuss today will include both GAAP and non-GAAP financial measures. Reconciliations of any non-GAAP financial measures to the most directly comparable GAAP measures are set forth in our earnings press release.
Non-GAAP financial measures should be considered in addition to, and not as a substitute for, GAAP measures. Joining me today on the call are Junkoo Kim, founder and CEO, Yongsoo Kim, president, and David Lee, CFO. With that, I will now turn the call over to our founder and CEO, Junkoo Kim.
Thank you, everyone, for joining us today. I will begin by providing a brief overview of the quarter, and Yongsoo will share more detail on a few strategic investments we announced today. David will then walk through our financial results in more detail. As always, I encourage you to read our shareholder letter, which is available on our investor relations website. We delivered another solid quarter, with revenue of $338.5 million and adjusted EBITDA of $5.5 million, reflecting continued execution across the business, and I am proud of the progress we are making. This quarter, we are introducing a new strategic direction that we believe will power our flywheel into the future. This includes further investment in AI-powered initiatives that strengthen and expand our core on-platform business, which I will share in more detail.
We are also scaling our off-platform IP adaptation business to create greater franchise value and bring more fans back to our global platform. Yongsoo will share more on this in a moment. Turning to AI. This quarter, we took meaningful steps to further integrate AI across our platform with features designed to strengthen our flywheel by expanding audience reach, deepening engagement, and creating new opportunities for creators. Fandoms are built on connection and shared passion, and our AI initiatives are designed to further strengthen this sense of community. A great example is our AI-powered auto translation program. By making it easier for stories to reach readers across languages, we can help creators expand their global audience and give users access to more content in their native language.
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