Webtoon Entertainment continues to tread water financially since the company went public last June. For the quarter ended March 31, revenue inched up 0.3%, to $325.7 million, while the company’s net loss jumped to $22 million, compared to net income of $6.2 million in the quarter ended March 31, 2024.
As it has since it went public, the company attributed the sluggish sales growth in part to currency fluctuations, while the loss was blamed in part on higher general and administrative costs since going public, along with higher marketing expenses. Excluding the impact of exchange rates, sales were up 5.3%, to $343.8 million, with all three business lines posting increases.
Any way you look at the numbers, Webtoon’s paid content business remained by far its largest segment. On a reported basis, revenue in the segment fell 2.5%, to $260.2 million. Excluding the impact of exchange rates, sales were up 2.8%, to $274.2 million.
The company’s two newer businesses, while much smaller, had faster growth rates. Advertising revenue was up 13.6% on a reported basis, to $39.9 million, and increased 13.6% excluding currency fluctuations, to $42 million. Reported sales from IP adaptations increased 11.8% in the quarter, to $25.8 million, and jumped 20.7%, to $27.6 million, excluding the impact of exchange rates.
In a prepared statement, Webtoon founder and CEO Junkoo Kim cited the product enhancements Webtoon has made to its English-language platform as a highlight of the first quarter. Those include improved AI-powered discovery features, whose goal “is to allow users to spend more time enjoying a story and less time searching for one,” Kim said.
Webtoon’s financial forecast for the second quarter was given using constant currency, and predicts that sales will increase between 2.2% and 5.2% over the second quarter of 2024—a slower increased than the 5.3% gain reported in constant currencies in the first period. And investors appear to continue to struggle over how to evaluate the Korean-based company. Webtoon’s stock price closed May 13 at $9.85 per share—far off from its $23 per share price when the company went public almost a year ago.
