Webtoon Entertainment, the U.S.-based parent of Naver Webtoon, reported weaker second-quarter results as the Korean won depreciated.
The company said preliminary second-quarter revenue reached $338.5 million (about 508 billion won, based on a quarterly average exchange rate of 1,500.736 won to the dollar), the company said on the 10th local time. The figure marked a 2.8% decline from a year earlier.
By segment, paid content revenue — the amount readers pay for webtoons and web novels — fell 4% to $263.9 million. Intellectual property (IP) business revenue also declined 2.6% to $27.4 million. Advertising revenue rose 4.2% to $47.1 million.
Excluding the effect of currency swings, however, revenue on a constant-currency basis rose 5.2% to $366.4 million. The company said all three segments grew when measured in the currencies of its key markets, South Korea and Japan. Korean revenue in particular climbed 20% year-on-year on a constant-currency basis.
The company's losses widened, driven in part by higher marketing spending. Net loss grew 2.7 times to $14.6 million from $3.9 million a year earlier.
Second-quarter monthly active users (MAU) totaled 156.9 million, up 0.5% from the same period last year. Monthly paying users (MPU) rose 1.8% to 7.5 million. Growth was especially clear in South Korea, where MAU reached 24.3 million (up 5.9%) and MPU reached 3.8 million (up 10.4%). The company said the number of titles read per user increased as it enhanced its artificial intelligence (AI)-based content recommendations and customer relationship management (CRM) system.
Webtoon Entertainment laid out AI-driven content innovation within its platform and expansion of external IP businesses as its growth strategy. In May it began piloting an AI automatic translation feature on Canvas, its global amateur creator platform, and plans to expand the pool of eligible creators within the year. In South Korea, it launched byUs, an AI story chat that lets users create stories through conversations with webtoon characters. It plans to launch the service in Japan within the year.
Beyond the platform, the company is pursuing IP expansion more aggressively. It plans to set up a $100 million (about 142 billion won) IP expansion fund with Naver to co-invest in animation, live-action video and games. Webtoon Entertainment also said it had signed a strategic investment agreement on the 10th to acquire a 60% stake in RI Games Holdings, a developer of games based on webtoon IP. Starting with developing the popular webtoon "The Legendary Moonlight Sculptor" as an action massively multiplayer online role-playing game (MMORPG), the company plans to release games based on other titles as well.
Junkoo Kim, founder and chief executive of Webtoon Entertainment, said innovations such as the byUs AI story chat and automatic translation are drawing deeper user engagement on the platform. He added that the company is refining its IP strategy by expanding direct investment in IP so that it can capture more of the long-term value its ecosystem creates.
