WEBTOON Entertainment Inc. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenue for the third quarter of 2026 was $362.8 million, a 4.0% decrease compared to $378.0 million in the prior year period.
• Revenue on a constant currency basis was $378.6 million, representing a 0.2% increase year-over-year.
• Net loss was $7.5 million, an improvement from a net loss of $11.1 million in the prior year quarter.
• Adjusted EBITDA was $2.2 million, down from $5.1 million in the prior year quarter.
• Adjusted EBITDA margin was 0.6%, compared to 1.4% in the prior year quarter.
• Diluted loss per share was $0.06, compared to $0.09 in the prior year quarter.
• Adjusted Earnings Per Share (Adjusted EPS) was $0.02, compared to $0.04 in the prior year quarter.
• Cash and cash equivalents stood at approximately $548.4 million as of September 30, 2026, with no debt outstanding.
• Net cash provided by operating activities was $6.2 million for the quarter, down from $16.5 million in the prior year quarter.
• Contract liabilities increased to $101.4 million as of September 30, 2026, from $89.9 million as of December 31, 2025.

Guidance and Future Outlook:

• For the fourth quarter of 2026, the Company expects revenue growth on a constant currency basis of 9.0% to 12.0%, translating to revenue between $371 million and $381 million based on current FX rates.
• Adjusted EBITDA for the fourth quarter is expected to range from $0.0 million to $5.0 million, representing a margin of 0.0% to 1.3%.
• The fourth quarter outlook includes expected revenue and contributions from RI Games Holdings Inc. following the anticipated second closing of the transaction.
• Management expressed confidence in a return to double-digit revenue growth in the fourth quarter.

Business Segments and Product Lines:

• Paid Content revenue declined, contributing to the overall revenue decrease, though it grew on a constant currency basis.
• IP Adaptations revenue declined significantly, driving the reported revenue decrease.
• Advertising revenue grew, partially offsetting declines in Paid Content and IP Adaptations.
• Korea revenue increased 10.8% year-over-year to $169.3 million, with constant currency growth of 13.5%.
• Japan revenue decreased 18.0% year-over-year to $147.3 million, with constant currency revenue decreasing 11.4%.
• Rest of World revenue increased 1.3% year-over-year to $46.2 million.
• Global Paid Content Average Revenue Per Paying User (ARPPU) was $12.3, a 0.8% decrease, while ARPPU on a constant currency basis was $13.0, a 4.2% increase.
• Korea ARPPU increased 17.6% year-over-year to $9.4, with constant currency ARPPU increasing 21.1% to $9.7.
• Japan ARPPU decreased 5.8% year-over-year to $22.3, with constant currency ARPPU increasing 1.8% to $24.0.
• Rest of World ARPPU remained flat at $6.8.

Market and Competitive Landscape:

• The Company operates approximately 159 million monthly active users across its IP & Creator Ecosystem.
• The ecosystem includes WEBTOON, Wattpad, WEBTOON Productions, Studio N, Studio LICO, WEBTOON Unscrolled, LINE MANGA, and eBookJapan.
• Content partners include Warner Bros. Animation, Discord, HYBE, and Duolingo.
• Adaptations are available on Netflix, Prime Video, and Crunchyroll.

Risks and Challenges:

• Forward-looking statements note risks including weakness in the economy, market trends, and geopolitical factors.
• Risks include the inability to attract, retain, or incentivize creators and users.
• Potential failure to effectively operate in highly competitive markets or diversify monetization strategies.
• Risks associated with the proposed acquisition of RI Games Holdings Inc., including failure to complete the transaction or integrate successfully.
• Exposure to legal proceedings, regulatory investigations, and intellectual property claims.
• Risks related to the use of AI and potential conflicts of interest with majority stockholder NAVER Corporation.

Management Commentary and Tone:

• Junkoo Kim, Founder and CEO, stated the Company delivered reported revenue and Adjusted EBITDA within guidance ranges while investing with discipline.
• Kim highlighted a three-pronged strategy: strengthening reader discovery and engagement on-platform, turning IP into global franchises off-platform, and extending reach through collaborations.
• Management expressed confidence in the strategy's ability to position the company for durable, long-term growth.

Other Key Points:

• The Company has approximately $13.3 million of short-term deposits included in prepaid expenses and other current assets.
• The acquisition of RI Games Holdings Inc. is anticipated to close with a second transaction, contributing to Q4 2026 results.
• The Company hosts a conference call and webcast on November 9, 2026, to discuss results.
• Non-GAAP measures including Adjusted EBITDA, Adjusted EBITDA Margin, and Adjusted EPS are used to assess performance, excluding items such as stock-based compensation, restructuring fees, and fair value adjustments.