Webtoon posts modest revenue rise while confronting slower user growth and new IP strategy

Webtoon Entertainment’s second-quarter letter highlighted a 5.2% rise in currency-adjusted revenue and adjusted EBIDITA of $5.5 million, surpassing its prior outlook. Despite this, unadjusted revenue of $338.5 million slipped 2.8% from the previous year. Growth remained robust in its home market, with Korean revenue up 20% in constant currency and user metrics improving, while the United States showed incremental gains from a smaller base.

Conversely, Japan, the firm’s top revenue source, posted a 6.7% drop in constant-currency revenue and declines in both monthly active and paid users, reflecting broader market saturation. In response, Webtoon announced a $100 million IP Adaptation Fund with Naver and a partnership with RI Games Holdings to develop games, signaling a move toward co-owned intellectual property. The platform is also enhancing its Canvas service with AI-aided translation to broaden creator reach, though AI adoption has drawn criticism from some creators. With $583 million in cash and no debt, the company faces higher marketing costs and flat global MAU growth, betting that monetization and IP investments will sustain its valuation.