Leading webcomics platform sees mixed fortunes in global markets amid expansion hurdles and post-IPO cost increases

(Webtoon)
(Webtoon)

Webtoon Entertainment Inc., the global arm of South Korea's webcomics platform Naver Webtoon, posted mixed financial results for the fourth quarter of 2024 during Tuesday's earnings call. The company reported revenue growth of 5.6 percent to $352.8 million while net losses widened to $102.6 million, up from $95.3 million last year.

Revenue growth looks more favorable at 10.4 percent when adjusted for currency fluctuations. This growth came primarily from paid content and advertising services, though these gains could not offset mounting operational expenses.

The company's earnings report shows a downturn in profitability measures. Adjusted EBITDA — a key indicator of operational performance — swung to a $3.5 million loss from a $10.4 million gain in the fourth quarter of 2023. Higher administrative costs associated with its June 2024 public listing and increased marketing expenses contributed to this decline.

For the full year, Webtoon Entertainment generated $1.35 billion in revenue, a 5.1 percent increase from 2023. Annual losses reached $152.9 million, worsening from the previous year's $144.8 million deficit.

Japan emerged as the company's most promising market, now representing nearly half of total revenue. Japanese operations grew by 18.9 percent with Line Manga becoming the top-grossing non-gaming app in the country during the second half of 2024.

Though the fourth quarter revenue grew 6.6 percent on-year on a constant currency basis, the company cited "political turbulence" as causing temporary engagement issues. During this period, Korean monthly active users decreased slightly by 0.5 percent to 24.5 million.

This likely refers to the recent controversy surrounding "Another World Pong Pong Man," a webtoon that passed Naver's screening process despite allegations of misogynistic content. The series sparked nationwide boycotts, particularly among young women, after its September debut.

International markets showed downward trends with a 3.3 percent revenue decline. A ban on Wattpad — a storytelling platform for writers acquired by Naver in 2021 — in one unspecified country substantially impacted user numbers in this segment.

Looking forward, the company projects modest revenue growth between 1.7 and 4.8 percent for the first quarter of 2025, estimating $318-328 million based on current exchange rates. The earnings report cited unfavorable currency exchange rates and delays in Korean IP adaptation projects as near-term obstacles.


moonkihoon@heraldcorp.com