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WEBTOON Entertainment Reports Increased Losses in Q4 2024

WEBTOON Entertainment, the U.S. subsidiary of Naver WEBTOON, reported a significant increase in operating losses in 2024 while maintaining steady revenue growth. The company posted an operating loss of US$100.7 million, marking a 177% increase in loss compared to the previous year. Net losses also rose by 5.6% to US$152.9 million.

During the 2024 annual earnings call, David Lee, COO of WEBTOON Entertainment, attributed the losses to increased IPO-related expenses, higher marketing costs, and goodwill impairment in the web novel sector. Despite high exchange rates negatively impacting financial performance, the company's total revenue increased by 5.1% year-over-year, reaching US$1.35 billion.

Japan became WEBTOON Entertainment's highest-grossing market, surpassing South Korea, with $648.2 million in revenue. The Monthly Active Users (MAU) in Japan reached 21.9 million, reflecting a 3.5% increase from the previous year. Revenue from all other international markets (excluding Korea and Japan) grew by double digits, totaling US$182.7 million, up from US$159 million in the previous year. Kim Jun-ku, CEO of WEBTOON Entertainment, highlighted Japan's importance, stating, "Japan is our largest and fastest-growing market. Thanks to successful exports of Korean WEBTOON IPs, we achieved the No.1 ranking in the non-gaming sector for revenue in Japan during the second half of last year."

Paid content sales increased by 5.3% worldwide, and advertising revenue grew by 14.2%. However, the IP business revenue saw an 8.3% decline, slowing down overall IP expansion efforts.

In the fourth quarter of 2023, WEBTOON Entertainment reported an operating loss of $27.7 million. However, quarterly revenue increased by 5.6% year-over-year to $352.8 million. Paid content revenue grew by 6.7%, while advertising revenue, particularly in South Korea and Japan, surged by 22.1%.

During the earnings call, David Lee also commented on South Korea's political instability, stating that domestic political turmoil had a temporary impact on user engagement in Q4 2023 but was not factored into Q4 results or Q1 2024 projections.

WEBTOON Entertainment expects to continue revenue growth in Q1 2024, forecasting total revenue between US$318-328 million, reflecting a 1.7% to 4.8% increase at constant exchange rates.

WEBTOON Entertainment remains optimistic about future growth, leveraging expansion in Japan and international markets, enhanced monetization strategies, and further IP development.

Source: YNA (Kyung-yoon Kim)