WEBTOON Entertainment Inc. (Nasdaq: WBTN) (“WEBTOON” or “the
Company”), a leading global entertainment company and home to some
of the world’s largest storytelling platforms, today announced
results for its third quarter ending September 30, 2024. More
information about this quarter’s results can be found in the
Company’s shareholder letter on the investor relations section of
its website.
Third Quarter 2024 Highlights (vs. 3Q 2023)
- Total revenue of $347.9 million grew 9.5% driven by strong
growth in Paid Content and Advertising, partially offset by our
exposure to weaker foreign currencies.
- Revenue on a constant currency basis was $360.4 million,
growing 13.5%, driven by growth across all revenue streams – Paid
Content, Advertising and IP Adaptations – and regions.
- Net Income of $20.0 million was primarily due to notably
improved gross profit, expansion of interest income on cash assets,
and an income tax benefit.
- Adjusted EBITDA of $28.9 million and Adjusted EBITDA Margin of
8.3% both increased from the prior year as a result of strong gross
profit and effective cost controls, including a focus on higher
returning marketing spend.
- Diluted EPS of $0.15 increased from a loss per share of $0.10
in the prior year.
- Adjusted EPS of $0.22 increased from $0.03 in the prior
year.
Junkoo Kim, Founder and CEO said, “In our first full quarter as
a public company, WEBTOON delivered strong financial results,
achieving revenue growth of 9.5% on a reported basis, double-digit
revenue growth on a constant currency basis and solid
profitability. We continued to focus on deepening engagement from
our user base and driving further scale globally while maturing and
streamlining our operations.”
Kim continued, “Looking ahead, I see significant opportunities
to further accelerate growth across WEBTOON, underpinned by our
amazing creator community, robust pipeline of up-and-coming
entertainment projects, and exciting product improvements. I am
confident in our ability to achieve our fourth quarter financial
targets and deliver long-term value for our shareholders as we
continue powering our global flywheel and executing against our
strategic initiatives.”
Fourth Quarter 2024 Outlook
For the fourth quarter 2024, the Company expects:
- Revenue growth on a constant currency basis in the range of
10.3%-13.3%. This represents revenue in the range of $375-$385
million, assuming FX rates remain relatively stable with the end of
Q3.
- Adjusted EBITDA in the range of $9-$14 million, representing an
Adjusted EBITDA Margin in the range of 2.4%-3.6%.
Conference Call & Webcast DetailsAs
previously disclosed, the Company will host a webcast and
conference call on November 7, 2024, at 5:00 p.m. Eastern Time, to
discuss the Company’s financial results for the quarter ended
September 30, 2024.
A live webcast of the conference call will be available online
at https://ir.webtoon.com/.
For those unable to listen to the live webcast, an archived
version will be available at the same location for up to one
year.
About WEBTOON Entertainment Inc.
WEBTOON Entertainment Inc. (“WEBTOON”) is a leading global
entertainment company and home to some of the world's largest
storytelling platforms. As the global leader and pioneer of the
mobile webcomic format, WEBTOON has transformed comics and visual
storytelling for fans and creators.
With its CANVAS UGC platform empowering anyone to become a
creator, and a growing roster of superstar WEBTOON Originals
creators and series, WEBTOON’s passionate fandoms are the new face
of pop culture. WEBTOON adaptations are available on Netflix, Prime
Video, Crunchyroll and other screens around the world, and the
company’s content partners include Discord, HYBE and DC Comics,
among many others.
With approximately 170 million monthly active users, WEBTOON’s
IP & Creator Ecosystem of aligned companies include WEBTOON,
Wattpad – the world’s leading webnovel platform – Wattpad WEBTOON
Studios, Studio N, Studio LICO, WEBTOON Unscrolled, LINE Manga and
eBookJapan, among others.
Forward Looking Statements
This release contains forward-looking statements within the
meaning of the safe harbor provisions of the U.S. Private
Securities Litigation Reform Act of 1995, and involves risks,
assumptions and uncertainties that could cause actual results to
differ materially from those expressed or implied by
forward-looking statements. Forward-looking statements cover all
matters which are not historical facts and include, without
limitation, statements or guidance regarding or relating to our
future financial position, results of operations and growth, plans
and objectives for future capabilities, ability to attract users in
both our core and underpenetrated geographies, and other statements
concerning the success of our business and strategies.
Forward-looking statements may be identified by the use of words
such as “anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,”
“project,” “estimate,” “expect,” “strategy,” “future,” “likely,”
“may,” “should,” “will” and similar references to future periods.
Forward-looking statements speak only as of the date on which they
are made. They are not assurances of future performance and are
based only on our current beliefs, expectations and assumptions
regarding the future of our business, future plans and strategies,
projections, anticipated events and trends, the economy and other
future conditions. Therefore, you should not place undue reliance
on any of these forward-looking statements. Although we believe
that the forward-looking statements contained in this release are
based on reasonable assumptions, you should be aware that many
factors could cause actual results to differ materially from those
in such forward-looking statements, including but not limited to:
weakness in the economy, market trends, uncertainty and other
conditions in the markets in which we operate, and other
geopolitical or macroeconomic factors beyond our control; inability
to attract, empower, properly support or incentivize our creators;
inability to retain, attract and engage with our users; inability
to anticipate, understand and appropriately respond to market
trends and changing user preferences; failure to retain or increase
our paying users; failure to effectively operate in highly
competitive markets; inability to innovate and expand our
Advertising business; inability to continue to diversify our
monetization strategy or to increase revenues from IP Adaptations;
failure to control our content-related costs; exposure to
significant legal proceedings and regulatory investigations which
may result in significant expenses, fines and reputational damage;
failure to provide a safe online environment for children; exposure
to claims that we violated third parties’ intellectual property
rights; failure to obtain, maintain, protect or enforce our
proprietary and intellectual property rights; rise of conflicts of
interests with NAVER Corporation, our majority stockholder; and
other risks and uncertainties set forth under the caption “Risk
Factors” in our final prospectus filed with the U.S. Securities and
Exchange Commission (the “SEC”) on June 27, 2024 pursuant to Rule
424(b)(4), in the Quarterly Report on Form 10-Q for the quarter
ended June 30, 2024 filed by the Company with the SEC on August,
12, 2024, and in other filings we make with the SEC in the
future.
Additionally, forward-looking statements regarding past trends
or activities should not be taken as a representation that such
trends or activities will continue in the future. Other than in
accordance with our legal or regulatory obligations, we undertake
no obligations to publicly update or revise any forward-looking
statement, whether as a result of new information, future events or
otherwise.
Non-GAAP Financial Measures &
Definitions
This release contains certain financial information that is not
presented in conformity with U.S. GAAP. These non-GAAP measures
include Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Earnings
Per Share (Adjusted EPS), revenue on a constant currency basis and
revenue growth on a constant currency basis.
We believe that these non-GAAP measures provide users of the
Company’s financial information with additional meaningful
information to assist in understanding financial results and
assessing the Company’s performance from period to period.
Management believes these measures are important indicators of
operations because they exclude items that may not be indicative of
our core operating results and provide a better baseline for
analyzing trends in our underlying businesses, and they are
consistent with how business performance is planned, reported and
assessed internally by management and the board of directors of the
Company. Our non-GAAP financial measures should not be considered
in isolation, or as substitutes for, financial information prepared
in accordance with GAAP. Non-GAAP measures have limitations as they
do not reflect all the amounts associated with our results of
operations as determined in accordance with GAAP, and should only
be used to evaluate our results of operations in conjunction with
the corresponding or the most directly comparable GAAP measures. We
strongly encourage investors and shareholders to review our
financial statements and publicly filed reports in their entirety
and not to rely on any single financial measure.
A reconciliation is provided at the end of this release for each
historical non-GAAP financial measure to the most directly
comparable financial measure stated in accordance with U.S. GAAP.
We encourage investors and shareholders to review the related U.S.
GAAP financial measures and the reconciliation of these non-GAAP
financial measures to their most directly comparable U.S. GAAP
financial measures, and not to rely on any single financial measure
to evaluate our business. We do not provide a reconciliation of
forward-looking non-GAAP financial measures to the most directly
comparable U.S. GAAP financial measures on a forward-looking basis
because we are unable to predict with reasonable certainty or
without unreasonable effort non-recurring items that may arise in
the future.
Adjusted EBITDA: We define Adjusted EBITDA as net income (loss),
adjusted to remove the impact of interest income, interest expense,
income tax expense (benefit) and depreciation and amortization,
with further adjustments to eliminate the effects of loss on equity
method investments, effect of applying the valuation method of fair
value through profit or loss, impairment of goodwill, non-cash
stock-based compensation and certain other non-recurring costs.
Starting with the third quarter of 2024, our calculation of EBITDA
has been revised to adjust for interest income in addition to
interest expense. In prior periods, we only adjusted for interest
expense because interest income amounts were insignificant. Prior
comparable periods have now been recast to conform to the current
presentation. Likewise, starting with the third quarter of 2024,
EBITDA margin is calculated by adjusting for interest income in
addition to interest expense and prior comparable periods have been
recast to conform to the current presentation.
Adjusted EBITDA Margin: We define Adjusted EBITDA Margin as
Adjusted EBITDA divided by revenue.
Adjusted Earnings Per Share (Adjusted EPS): We define Adjusted
Earnings Per Share as Earnings Per Share before interest expense,
interest income, income tax expense and depreciation and
amortization with further adjustments to eliminate the effects of
loss on equity method investments, effect of applying the valuation
method of fair value through profit or loss, impairment of
goodwill, non-cash stock-based compensation and certain other
non-recurring costs. We calculate Adjusted Earnings Per Share by
making the adjustments described herein from Net Income (Loss) and
dividing by basic and diluted weighted average shares of common
stock outstanding, respectively, for the applicable period. Similar
to Adjusted EBITDA and Adjusted EBITDA Margin, prior comparable
periods have been recast to conform to the current presentation of
Adjusted EPS.
Revenue on a Constant Currency Basis: We define revenue on a
constant currency basis as revenue adjusted to remove the impact of
foreign currency rate fluctuations and the impact of deconsolidated
and transferred operations. We calculate revenue on a constant
currency basis in a given period by applying the average currency
exchange rates in the comparable period of the prior year to the
local currency revenue in the current period. We calculate revenue
on a constant currency basis in each of our revenue streams – Paid
Content, Advertising and IP Adaptations – using the same method as
laid out herein.
Revenue Growth on a Constant Currency Basis: We define revenue
growth on a constant currency basis as period-over-period growth
rates of revenue, adjusted to remove the impact of foreign currency
rate fluctuations and the impact of deconsolidated and transferred
operations. We calculate revenue growth (as a percentage) on a
constant currency basis by determining the increase in current
period revenue over prior period revenue, where current period
foreign currency revenue is translated using prior period average
currency exchange rates.
|
WEBTOON Entertainment Inc.Condensed
Consolidated Balance Sheets(unaudited)(in
thousands of USD, except share and per share data) |
|
|
|
|
|
|
|
|
As of |
|
|
|
|
September 30, 2024 |
|
|
December 31, 2023 |
|
| Assets |
|
|
|
|
|
|
| Current
assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
585,516 |
|
|
$ |
231,745 |
|
| Receivables1, net of allowance
for credit losses of $3,233 and $1,049 at September 30, 2024 and
December 31, 2023 respectively |
|
|
189,930 |
|
|
|
171,776 |
|
| Asset held for sale |
|
|
— |
|
|
|
6,827 |
|
| Other current assets, net2 |
|
|
105,959 |
|
|
|
82,479 |
|
| Total current
assets |
|
|
881,404 |
|
|
|
492,827 |
|
| Property and equipment, net |
|
|
8,333 |
|
|
|
11,692 |
|
| Operating lease right-of-use
assets |
|
|
17,418 |
|
|
|
29,472 |
|
| Debt and equity securities |
|
|
78,507 |
|
|
|
91,233 |
|
| Intangible assets, net |
|
|
197,663 |
|
|
|
219,502 |
|
| Goodwill, net |
|
|
759,672 |
|
|
|
779,176 |
|
| Equity method investments |
|
|
83,824 |
|
|
|
64,222 |
|
| Deferred tax assets |
|
|
14,888 |
|
|
|
24,045 |
|
| Other non-current assets,
net3 |
|
|
84,032 |
|
|
|
64,436 |
|
| Total
assets |
|
$ |
2,125,741 |
|
|
$ |
1,776,605 |
|
| Liabilities and
equity |
|
|
|
|
|
|
| Current
liabilities: |
|
|
|
|
|
|
| Accounts payable4 |
|
$ |
111,095 |
|
|
$ |
127,427 |
|
| Accrued expenses5 |
|
|
95,965 |
|
|
|
62,782 |
|
| Short-term borrowings and current
portion of long-term debt6 |
|
|
— |
|
|
|
4,252 |
|
| Current portion of operating
lease liabilities7 |
|
|
6,096 |
|
|
|
9,945 |
|
| Contract liabilities8 |
|
|
107,507 |
|
|
|
76,722 |
|
| Income tax payables - corporate
tax |
|
|
7,179 |
|
|
|
9,459 |
|
| Consumption taxes payables |
|
|
8,701 |
|
|
|
7,339 |
|
| Provisions and defined pension
benefits |
|
|
4,477 |
|
|
|
5,564 |
|
| Other current liabilities |
|
|
12,934 |
|
|
|
12,584 |
|
| Total current
liabilities |
|
|
353,953 |
|
|
|
316,074 |
|
| Non-current
liabilities: |
|
|
|
|
|
|
| Long-term operating lease
liabilities9 |
|
|
11,206 |
|
|
|
19,238 |
|
| Defined severance benefits |
|
|
20,005 |
|
|
|
23,361 |
|
| Deferred tax liabilities |
|
|
26,607 |
|
|
|
61,134 |
|
| Other non-current
liabilities |
|
|
3,262 |
|
|
|
9,322 |
|
| Total
liabilities |
|
$ |
415,032 |
|
|
$ |
429,129 |
|
| Commitments and
Contingencies |
|
|
|
|
|
|
| Redeemable
non-controlling interest in subsidiary |
|
$ |
41,849 |
|
|
$ |
41,429 |
|
| Stockholders'
equity: |
|
|
|
|
|
|
| Common stock, $0.0001 par value
(2,000,000,000 authorized, 128,313,144 shares and 109,505,150
shares issued and outstanding as of September 30, 2024 and December
31, 2023, respectively) |
|
$ |
13 |
|
|
$ |
11 |
|
| Preferred stock, $0.0001 par
value (100,000,000 authorized, no shares and - shares issued and
outstanding as of September 30, 2024 and December 31, 2023,
respectively) |
|
|
— |
|
|
|
— |
|
| Additional paid-in capital |
|
|
2,093,511 |
|
|
|
1,667,246 |
|
| Accumulated other comprehensive
loss |
|
|
(64,578 |
) |
|
|
(54,824 |
) |
| Accumulated deficit |
|
|
(414,232 |
) |
|
|
(363,292 |
) |
| Total stockholders'
equity attributable to WEBTOON Entertainment Inc. |
|
|
1,614,714 |
|
|
|
1,249,141 |
|
| Non-controlling interests in
consolidated subsidiaries |
|
|
54,146 |
|
|
|
56,906 |
|
| Total
equity |
|
|
1,668,860 |
|
|
|
1,306,047 |
|
| Total liabilities,
redeemable non-controlling interest, and equity |
|
$ |
2,125,741 |
|
|
$ |
1,776,605 |
|
| |
|
|
|
|
|
|
|
|
- Includes amounts due from related parties of $64,412 and
$63,723 as of September 30, 2024 and December 31, 2023,
respectively.
- Includes amounts due from related parties of $14,749 and $– as
of September 30, 2024 and December 31, 2023,
respectively.
- Includes amounts due from related parties of $34,502 and
$15,876 as of September 30, 2024 and December 31, 2023,
respectively.
- Includes amounts due to related parties of $21,134 and $6,713
as of September 30, 2024 and December 31, 2023,
respectively.
- Includes amounts due to related parties of $7,510 and $– as of
September 30, 2024 and December 31, 2023,
respectively.
- Includes amounts due to related parties of $– and as of $3,800
September 30, 2024 and December 31, 2023,
respectively.
- Includes amounts due to related parties of $3,134 and $6,426 as
of September 30, 2024 and December 31, 2023,
respectively.
- Includes amounts due to related parties of $– and $16,160 as of
September 30, 2024 and December 31, 2023,
respectively.
- Includes amounts due to related parties of $8,927 and $14,852
as of September 30, 2024 and December 31, 2023,
respectively.
|
WEBTOON Entertainment Inc.Condensed
Consolidated Statements of Operations and Comprehensive
Loss(unaudited)(in thousands of USD,
except share and per share data) |
| |
|
|
|
|
|
|
| |
|
Three Months Ended |
|
|
Nine Months Ended |
|
| |
|
September 30, 2024 |
|
|
September 30, 2023 |
|
|
September 30, 2024 |
|
|
September 30, 2023 |
|
|
Revenue1 |
|
$ |
347,915 |
|
|
$ |
317,764 |
|
|
$ |
995,631 |
|
|
$ |
948,684 |
|
| Cost of revenue2 |
|
|
(256,534 |
) |
|
|
(245,666 |
) |
|
|
(738,834 |
) |
|
|
(729,591 |
) |
| Marketing3 |
|
|
(32,719 |
) |
|
|
(33,066 |
) |
|
|
(75,645 |
) |
|
|
(95,452 |
) |
| General and administrative
expenses4 |
|
|
(66,747 |
) |
|
|
(45,779 |
) |
|
|
(254,145 |
) |
|
|
(155,617 |
) |
| Operating
loss |
|
|
(8,085 |
) |
|
|
(6,747 |
) |
|
|
(72,993 |
) |
|
|
(31,976 |
) |
| Interest income |
|
|
6,512 |
|
|
|
913 |
|
|
|
9,790 |
|
|
|
2,288 |
|
| Interest expense |
|
|
— |
|
|
|
(18 |
) |
|
|
(44 |
) |
|
|
(59 |
) |
| Income (loss) on equity method
investments, net |
|
|
(138 |
) |
|
|
1,056 |
|
|
|
(1,070 |
) |
|
|
2,539 |
|
| Other income (loss), net5 |
|
|
11,798 |
|
|
|
(721 |
) |
|
|
12,644 |
|
|
|
(2,773 |
) |
| Income (loss) before
income tax |
|
|
10,087 |
|
|
|
(5,517 |
) |
|
|
(51,673 |
) |
|
|
(29,981 |
) |
| Income tax benefit (expense) |
|
|
9,899 |
|
|
|
(5,934 |
) |
|
|
1,324 |
|
|
|
(19,512 |
) |
| Net income
(loss) |
|
|
19,986 |
|
|
|
(11,451 |
) |
|
|
(50,349 |
) |
|
|
(49,493 |
) |
| Net income (loss) attributable to
WEBTOON Entertainment Inc. |
|
|
19,753 |
|
|
|
(11,175 |
) |
|
|
(50,940 |
) |
|
|
(48,854 |
) |
| Net income (loss) attributable to
non-controlling interests and redeemable non-controlling
interests |
|
|
233 |
|
|
|
(276 |
) |
|
|
591 |
|
|
|
(639 |
) |
| Other comprehensive
income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
| Foreign currency translation
adjustments, net of tax |
|
|
39,570 |
|
|
|
(17,173 |
) |
|
|
(9,605 |
) |
|
|
(51,778 |
) |
| Share of other comprehensive loss
of equity method investments, net of tax |
|
|
(140 |
) |
|
|
(53 |
) |
|
|
(149 |
) |
|
|
(909 |
) |
| Total other comprehensive
income (loss), net of tax |
|
|
39,430 |
|
|
|
(17,226 |
) |
|
|
(9,754 |
) |
|
|
(52,687 |
) |
| Total comprehensive
income (loss) |
|
$ |
59,416 |
|
|
$ |
(28,677 |
) |
|
$ |
(60,103 |
) |
|
$ |
(102,180 |
) |
| Total comprehensive income (loss)
attributable to WEBTOON Entertainment Inc. |
|
|
59,183 |
|
|
|
(28,401 |
) |
|
|
(60,694 |
) |
|
|
(101,541 |
) |
| Total comprehensive income
(loss) attributable to non-controlling interests and redeemable
non-controlling interests |
|
|
233 |
|
|
|
(276 |
) |
|
|
591 |
|
|
|
(639 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Weighted average shares
outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
128,327,971 |
|
|
|
109,505,150 |
|
|
|
116,023,733 |
|
|
|
109,505,150 |
|
|
Diluted |
|
|
130,817,876 |
|
|
|
109,505,150 |
|
|
|
116,023,733 |
|
|
|
109,505,150 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income (loss) per share
attributable to WEBTOON Entertainment Inc. |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.15 |
|
|
$ |
(0.10 |
) |
|
$ |
(0.44 |
) |
|
$ |
(0.44 |
) |
|
Diluted |
|
$ |
0.15 |
|
|
$ |
(0.10 |
) |
|
$ |
(0.44 |
) |
|
$ |
(0.44 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Includes amounts earned from related parties of $21,744 and
$15,452 for the three months ended September 30, 2024, and
September 30, 2023, respectively and $55,911 and $62,226 for
the nine months ended September 30, 2024, and
September 30, 2023, respectively.
- Includes amounts incurred from related parties of $27,318 and
$3,143 for the three months ended September 30, 2024, and
September 30, 2023, respectively and $67,780 and $10,286 for
the nine months ended September 30, 2024 and
September 30, 2023, respectively.
- Includes amounts incurred from related parties of $(1,920) and
$60 for the three months ended September 30, 2024, and
September 30, 2023, respectively and $(4,861) and $157 for the
nine months ended September 30, 2024 and September 30,
2023, respectively.
- Includes amounts incurred from related parties of $9,285 and
$7,533 for three months ended September 30, 2024, and
September 30, 2023, respectively and $23,666 and $23,576 for
the nine months ended September 30, 2024 and
September 30, 2023, respectively.
- Includes amounts earned from related parties of $456 and $298
for three months ended September 30, 2024 and
September 30, 2023, respectively and $3,135 and $51 for the
nine months ended September 30, 2024 and September 30,
2023, respectively.
|
WEBTOON Entertainment Inc.Condensed
Consolidated Statements of Cash
Flows(unaudited)(in thousands of
USD) |
| |
|
|
|
| |
|
For the Nine Months Ended |
|
| |
|
September 30, 2024 |
|
|
September 30, 2023 |
|
| Operating
activities: |
|
|
|
|
|
|
|
Net Loss |
|
$ |
(50,349 |
) |
|
$ |
(49,493 |
) |
| Adjustments to reconcile
net loss to cash provided by operating activities: |
|
|
|
|
|
|
| Provision for bad debt
expense |
|
|
2,482 |
|
|
|
667 |
|
| Depreciation and
amortization |
|
|
27,953 |
|
|
|
27,943 |
|
| Operating lease expense |
|
|
8,013 |
|
|
|
9,210 |
|
| Loss on foreign currency,
net |
|
|
(616 |
) |
|
|
8,138 |
|
| Deferred tax expense |
|
|
(23,698 |
) |
|
|
(1,787 |
) |
| Gain on debt and equity
securities, net |
|
|
(5,143 |
) |
|
|
(886 |
) |
| Loss (gain) on equity method
investments, net |
|
|
1,069 |
|
|
|
(2,539 |
) |
| Contingent consideration
liability |
|
|
(3,713 |
) |
|
|
(1,797 |
) |
| Stock-based compensation |
|
|
72,114 |
|
|
|
4,331 |
|
| Gain on disposal of right-of-use
assets |
|
|
(1,883 |
) |
|
|
— |
|
| Other non-cash items |
|
|
336 |
|
|
|
379 |
|
| Changes in operating
assets and liabilities |
|
|
|
|
|
|
| Changes in receivables, net of
allowance |
|
|
(25,706 |
) |
|
|
6,278 |
|
| Changes in other assets |
|
|
(46,334 |
) |
|
|
(9,210 |
) |
| Changes in accounts payable |
|
|
2,109 |
|
|
|
3,088 |
|
| Changes in accrued expenses |
|
|
30,299 |
|
|
|
17,710 |
|
| Changes in contract
liabilities |
|
|
34,348 |
|
|
|
16,674 |
|
| Changes in other liabilities |
|
|
12,256 |
|
|
|
(10,790 |
) |
| Changes in operating lease
liabilities |
|
|
(7,318 |
) |
|
|
(8,083 |
) |
| Payment of severance benefits,
net of cash transferred |
|
|
320 |
|
|
|
(2,314 |
) |
| Net cash provided by
operating activities |
|
$ |
26,539 |
|
|
$ |
7,519 |
|
| Investing
activities: |
|
|
|
|
|
|
| Proceeds from maturities of
short-term investments |
|
|
63,205 |
|
|
|
7,691 |
|
| Proceeds from sale of debt and
equity securities |
|
|
2,975 |
|
|
|
— |
|
| Purchases of property and
equipment |
|
|
(1,313 |
) |
|
|
(9,837 |
) |
| Proceeds from sale of equity
method investments |
|
|
5,963 |
|
|
|
— |
|
| Payment made for short-term
investments |
|
|
(68,369 |
) |
|
|
(22,645 |
) |
| Payment made for loan
receivable |
|
|
(178 |
) |
|
|
(12,035 |
) |
| Purchases of intangible
assets |
|
|
(7,678 |
) |
|
|
(8,096 |
) |
| Purchases of equity method
investments |
|
|
(5,792 |
) |
|
|
(685 |
) |
| Disposal of businesses, net of
cash disposed |
|
|
(361 |
) |
|
|
2,008 |
|
| Other investing activities |
|
|
318 |
|
|
|
(1,472 |
) |
| Net cash used in
investing activities |
|
$ |
(11,230 |
) |
|
$ |
(45,071 |
) |
| Financing
activities: |
|
|
|
|
|
|
| Proceeds from issuance of common
stock upon initial public offering, net of underwriting discounts
and commissions |
|
|
292,950 |
|
|
|
— |
|
| Proceeds from issuance of common
stock related to private placement |
|
|
50,000 |
|
|
|
— |
|
| Proceeds from stock option
exercise |
|
|
574 |
|
|
|
— |
|
| Capital contribution to a
non-wholly owned subsidiary from a limited partner |
|
|
— |
|
|
|
3,257 |
|
| Proceeds from exercise of
over-allotment, net of underwriting discounts and commissions |
|
|
26,786 |
|
|
|
— |
|
| Payments of initial public
offering costs |
|
|
(11,154 |
) |
|
|
— |
|
| Repayments of short-term
borrowings |
|
|
(3,639 |
) |
|
|
(6,733 |
) |
| Payment of contingent
consideration related to business acquisition |
|
|
(1,849 |
) |
|
|
(2,923 |
) |
| Net cash provided by
(used in) financing activities |
|
$ |
353,668 |
|
|
$ |
(6,399 |
) |
| Effect of exchange rate changes
on cash and cash equivalents |
|
|
(15,206 |
) |
|
|
(11,514 |
) |
| Cash and cash
equivalents: |
|
|
|
|
|
|
| Net increase (decrease) in cash
and cash equivalents |
|
|
353,771 |
|
|
|
(55,465 |
) |
| Cash and cash equivalents at
beginning of the year |
|
|
231,745 |
|
|
|
279,709 |
|
| Cash and cash equivalents
at end of the year |
|
$ |
585,516 |
|
|
$ |
224,244 |
|
| Supplemental
disclosure: |
|
|
|
|
|
|
| Income taxes paid |
|
$ |
23,683 |
|
|
$ |
18,440 |
|
| Interest paid |
|
|
85 |
|
|
|
88 |
|
| Reclassification of deferred
offering costs to additional paid-in capital upon IPO |
|
|
11,215 |
|
|
|
— |
|
| Deferred offering costs not yet
paid |
|
|
270 |
|
|
|
— |
|
| Reclassification of debt and
equity securities to equity method investments |
|
|
19,422 |
|
|
|
— |
|
| |
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP
Measures
In addition to adjustments for foreign exchange
fluctuations, we have also further adjusted revenue to exclude the
impacts of deconsolidated and transferred operations to show growth
or loss exclusive of these changes ("Revenue on a Constant Currency
Basis"). Revenue on a Constant Currency Basis is a Non-GAAP metric
that management believes adds value but has its limitations as an
analytical tool, and you should not consider it in isolation or as
substitutes for analysis of our results as reported under GAAP.
The following table presents a reconciliation of revenue to
revenue on a constant currency basis, and ARPPU to ARPPU on a
constant currency basis, respectively, for each of the periods
presented.
|
|
|
Three Months Ended September 30, |
|
|
|
Nine Months Ended September 30, |
|
|
| (in
thousands of USD, except percentages) |
|
2024 |
|
|
2023 |
|
|
Change |
2024 |
|
|
2023 |
|
Change |
|
Total Revenue |
|
$ |
347,915 |
|
|
$ |
317,764 |
|
|
9.5% |
$ |
995,631 |
|
|
$ |
948,684 |
|
4.9% |
|
Effect of deconsolidated and transferred operations |
|
|
- |
|
|
|
(349 |
) |
|
-100.0% |
|
(145 |
) |
|
|
(12,423 |
) |
-98.8% |
|
Effects of foreign currency rate fluctuations |
|
|
12,442 |
|
|
|
- |
|
|
N/A |
|
70,637 |
|
|
|
- |
|
N/A |
| Revenue on a Constant Currency
Basis |
|
|
360,357 |
|
|
|
317,415 |
|
|
13.5% |
|
1,066,123 |
|
|
|
936,261 |
|
13.9% |
|
Paid Content Revenue |
|
|
285,228 |
|
|
|
261,833 |
|
|
8.9% |
|
812,791 |
|
|
|
775,654 |
|
4.8% |
|
Effect of deconsolidated and transferred operations |
|
|
- |
|
|
|
(324) |
|
|
-100.0% |
|
(120 |
) |
|
|
(6,087 |
) |
-98.0% |
|
Effects of foreign currency rate fluctuations |
|
|
9,452 |
|
|
|
- |
|
|
N/A |
|
58,617 |
|
|
|
- |
|
N/A |
| Paid Content Revenue on a
Constant Currency Basis |
|
|
294,680 |
|
|
|
261,509 |
|
|
12.7% |
|
871,288 |
|
|
|
769,567 |
|
13.2% |
|
Advertising Revenue |
|
|
43,384 |
|
|
|
35,924 |
|
|
20.8% |
|
120,800 |
|
|
|
108,374 |
|
11.5% |
|
Effects of foreign currency rate fluctuations |
|
|
1,260 |
|
|
|
- |
|
|
N/A |
|
6,085 |
|
|
|
- |
|
N/A |
| Advertising Revenue on a
Constant Currency Basis |
|
|
44,644 |
|
|
|
35,924 |
|
|
24.3% |
|
126,885 |
|
|
|
108,374 |
|
17.1% |
|
IP Adaptations Revenue |
|
|
19,303 |
|
|
|
20,007 |
|
|
-3.5% |
|
62,040 |
|
|
|
64,656 |
|
-4.0% |
|
Effect of deconsolidated and transferred operations |
|
|
- |
|
|
|
(25 |
) |
|
-100.0% |
|
(26 |
) |
|
|
(6,336 |
) |
-99.6% |
|
Effects of foreign currency rate fluctuations |
|
|
1,729 |
|
|
|
- |
|
|
N/A |
|
5,935 |
|
|
|
- |
|
N/A |
| IP Adaptations Revenue on a
Constant Currency Basis |
|
$ |
21,032 |
|
|
$ |
19,982 |
|
|
5.3% |
$ |
67,949 |
|
|
$ |
58,320 |
|
16.5% |
| Paid
Content Average Revenue Per Paying User ("ARPPU") |
|
|
|
|
|
|
|
|
|
|
Korea Paid Content Revenue |
|
$ |
91,401 |
|
|
$ |
96,701 |
|
|
-5.5% |
$ |
266,282 |
|
|
$ |
299,167 |
|
-11.0% |
|
Korea ARPPU |
|
|
7.89 |
|
|
|
7.61 |
|
|
3.7% |
|
7.76 |
|
|
|
8.09 |
|
-4.1% |
|
Effect of deconsolidated and transferred operations |
|
|
- |
|
|
|
(0.03 |
) |
|
-100.0% |
|
- |
|
|
|
(0.17 |
) |
-100.0% |
|
Effects of foreign currency rate fluctuations |
|
|
0.36 |
|
|
|
- |
|
|
N/A |
|
0.42 |
|
|
|
- |
|
N/A |
|
Korea ARPPU on a Constant Currency Basis |
|
|
8.25 |
|
|
|
7.58 |
|
|
8.8% |
|
8.18 |
|
|
|
7.92 |
|
3.2% |
| Japan Paid Content
Revenue |
|
|
159,933 |
|
|
|
134,029 |
|
|
19.3% |
|
444,399 |
|
|
|
395,771 |
|
12.3% |
| Japan ARPPU |
|
|
23.06 |
|
|
|
22.05 |
|
|
4.6% |
|
22.15 |
|
|
|
22.59 |
|
-1.9% |
|
Effects of foreign currency rate fluctuations |
|
|
0.76 |
|
|
|
- |
|
|
N/A |
|
2.20 |
|
|
|
- |
|
N/A |
|
Japan ARPPU on a Constant Currency Basis |
|
|
23.82 |
|
|
|
22.05 |
|
|
8.0% |
|
24.35 |
|
|
|
22.59 |
|
7.8% |
| Rest of World Paid Content
Revenue |
|
|
33,893 |
|
|
|
31,102 |
|
|
9.0% |
|
102,111 |
|
|
|
80,716 |
|
26.5% |
| Rest of World ARPPU |
|
|
6.69 |
|
|
|
5.96 |
|
|
12.3% |
|
6.47 |
|
|
|
4.98 |
|
29.9% |
|
Effect of deconsolidated and transferred operations |
|
|
- |
|
|
|
- |
|
|
N/A |
|
- |
|
|
|
- |
|
N/A |
|
Effects of foreign currency rate fluctuations |
|
|
- |
|
|
|
- |
|
|
N/A |
|
- |
|
|
|
- |
|
N/A |
|
Rest of World ARPPU on a Constant Currency Basis |
|
$ |
6.69 |
|
|
$ |
5.96 |
|
|
12.3% |
$ |
6.47 |
|
|
$ |
4.98 |
|
29.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1ARPPU is calculated by taking Paid Content revenue and dividing
it by the number of MPU for such month, averaged over each month in
the given period. ARPPU on a constant currency basis is calculated
by dividing Paid Content revenue on a constant currency basis by
the number of MPU for such month, averaged over each month in the
given period. Where each metric is country specific, the numerator
is Paid Content revenue on a constant currency basis by country and
the denominator is users by country.
The following table presents a reconciliation of net loss to
EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin for each of the
periods presented.
|
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
| (in
thousands of USD, except percentages) |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|
Net income (loss) |
|
$ |
19,986 |
|
|
$ |
(11,451 |
) |
|
$ |
(50,349 |
) |
|
$ |
(49,493 |
) |
|
Interest income |
|
|
(6,512 |
) |
|
|
(913 |
) |
|
|
(9,790 |
) |
|
|
(2,288 |
) |
|
Interest expense |
|
|
— |
|
|
|
18 |
|
|
|
44 |
|
|
|
59 |
|
|
Income tax (benefit) expense |
|
|
(9,899 |
) |
|
|
5,934 |
|
|
|
(1,324 |
) |
|
|
19,512 |
|
|
Depreciation and amortization |
|
|
10,003 |
|
|
|
9,179 |
|
|
|
27,953 |
|
|
|
27,943 |
|
| EBITDA |
|
$ |
13,578 |
|
|
$ |
2,767 |
|
|
$ |
(33,466 |
) |
|
$ |
(4,267 |
) |
| Loss (gain) on equity method
investments, net(1) |
|
|
138 |
|
|
|
(1,056 |
) |
|
|
1,070 |
|
|
|
(2,539 |
) |
| Loss (gain) on fair value
instruments, net(2) |
|
|
- |
|
|
|
213 |
|
|
|
(5,143 |
) |
|
|
(887 |
) |
| Stock-based compensation
expense(3) |
|
|
12,262 |
|
|
|
1,232 |
|
|
|
68,305 |
|
|
|
4,332 |
|
| IPO-related, legal, restructuring
and advisory costs(4) |
|
|
2,925 |
|
|
|
8 |
|
|
|
40,645 |
|
|
|
1,636 |
|
| Adjusted
EBITDA(5) |
|
$ |
28,903 |
|
|
$ |
3,164 |
|
|
$ |
71,411 |
|
|
$ |
(1,725 |
) |
| Net income (loss) margin |
|
|
5.7 |
% |
|
|
-3.6 |
% |
|
|
-5.1 |
% |
|
|
-5.2 |
% |
| Adjusted EBITDA Margin |
|
|
8.3 |
% |
|
|
1.0 |
% |
|
|
7.2 |
% |
|
|
-0.2 |
% |
| Weighted average shares
outstanding (Basic) |
|
|
128,327,971 |
|
|
|
109,505,150 |
|
|
|
116,023,733 |
|
|
|
109,505,150 |
|
| Weighted average shares
outstanding (Diluted) |
|
|
130,817,876 |
|
|
|
109,505,150 |
|
|
|
116,023,733 |
|
|
|
109,505,150 |
|
| EPS
(Diluted) |
|
|
0.15 |
|
|
|
(0.10 |
) |
|
|
(0.43 |
) |
|
|
(0.45 |
) |
|
Interest income |
|
|
(0.05 |
) |
|
|
(0.01 |
) |
|
|
(0.08 |
) |
|
|
(0.02 |
) |
|
Interest expense |
|
|
- |
|
|
|
0.00 |
|
|
|
0.00 |
|
|
|
0.00 |
|
|
Income tax (benefit) expense |
|
|
(0.08 |
) |
|
|
0.05 |
|
|
|
(0.01 |
) |
|
|
0.18 |
|
|
Depreciation and amortization |
|
|
0.08 |
|
|
|
0.08 |
|
|
|
0.24 |
|
|
|
0.26 |
|
|
Loss (gain) on equity method investments, net(1) |
|
|
0.00 |
|
|
|
(0.01 |
) |
|
|
0.01 |
|
|
|
(0.02 |
) |
|
Loss (gain) on fair value instruments, net(2) |
|
|
- |
|
|
|
0.00 |
|
|
|
(0.04 |
) |
|
|
(0.01 |
) |
|
Stock-based compensation expense(3) |
|
|
0.09 |
|
|
|
0.01 |
|
|
|
0.59 |
|
|
|
0.04 |
|
|
IPO-related, legal, restructuring and advisory costs(4) |
|
|
0.02 |
|
|
|
0.00 |
|
|
|
0.35 |
|
|
|
0.01 |
|
| Adjusted EPS
(Diluted) |
|
|
0.22 |
|
|
|
0.03 |
|
|
|
0.62 |
|
|
|
(0.02 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Represents our proportionate share of recognized losses
associated with our investments accounted for using the equity
method.
(2) Represents unrealized net loss (gain) of financial assets
measured at FVPL, which include the Company's equity
investments.
(3) Represents non-cash stock-based compensation expense related
to WEBTOON’s equity incentive plan and stock-based compensation
plans of NAVER and Munpia.
(4) Represents non-recurring expenses that we do not consider
representative of the operating performance of the business. For
the nine months ended September 30, 2024, these amounts include a
$30.0 million one-time CEO bonus and legal and advisory fees
related to the IPO.
(5) Totals may not foot due to rounding.
Contact InformationInvestor
Relations Soohwan Kim, CFA investor@webtoon.com
Edelman Smithfield for WEBTOON Hunter Stenback
& Ashley FirlanwebtoonIR@edelmansmithfield.com WEBTOON
Entertainment Kiel Hume & Lauren
Hopkinsonwebtoonpress@webtoon.com
WEBTOON Entertainment (NASDAQ:WBTN)
Historical Stock Chart
From Dec 2024 to Jan 2025
WEBTOON Entertainment (NASDAQ:WBTN)
Historical Stock Chart
From Jan 2024 to Jan 2025
