Turned to Loss Due to Strong Dollar
Revenue Would Have Risen 5.3% with Last Year’s Exchange Rate
Line Manga Achieves No. 1 in Total App Market Revenue in Japan
Webtoon Entertainment, the operator of Naver Webtoon, saw its first-quarter performance hit by the strong US dollar. Webtoon Entertainment, headquartered in the United States, is listed on the Nasdaq market.
On May 13 (local time), Webtoon Entertainment announced in a regulatory filing that its operating loss for the first quarter of this year amounted to $26.63 million (approximately 38.7 billion KRW, based on the average quarterly exchange rate of 1,451.20 KRW per USD). This marks a shift to an operating loss compared to the same period last year, when the company posted an operating profit of $14.19 million.
During the same period, revenue was $325.71 million (approximately 472.7 billion KRW), down 0.3% from the same period last year, while net loss totaled $21.97 million (about 3.19 billion KRW).
Webtoon Entertainment explained that its performance was affected by the strong dollar. The company’s main markets are South Korea and Japan (where it operates Line Manga), but both the Korean won and Japanese yen weakened against the dollar. As Webtoon Entertainment calculates its revenue in dollars, this currency trend dampened its growth momentum.
According to Webtoon Entertainment, if the exchange rate from the first quarter of last year had been applied, revenue would have reached $343.8 million, a 5.3% increase compared to the same period last year.
By business segment, advertising and intellectual property (IP) businesses showed robust growth, particularly in the South Korean and Japanese markets, maintaining an upward trend despite the strong dollar. Compared to the same period last year, advertising revenue rose 7.8% to $39.9 million, and IP business revenue grew 11.8% to $25.6 million. However, paid content revenue declined by 2.5% year-on-year to $260.2 million.
By region, growth was especially notable in the Japanese market, where Webtoon Entertainment operates Line Manga. Line Manga ranked first in total app market revenue in Japan for the first quarter, and its monthly active users (MAU) increased by 3.7% from the previous quarter to 21.9 million. The average revenue per paying user (ARPPU) in Japan was $22.3 per month, higher than in South Korea ($7.5) and other countries ($6.5).
In North America and other global markets, the MAU for the Webtoon app rose 19% year-on-year following a revamp. The global Webtoon app (excluding South Korea and Japan) recently added artificial intelligence (AI) recommendations and short-form video features. Since the app’s revamp, the number of episodes viewed per user in the test group increased by 9%.
Jun Koo Kim, CEO of Webtoon Entertainment and Naver Webtoon, said, "All business segments, including paid content, advertising, and IP business, achieved balanced growth based on constant exchange rates, delivering results that met market expectations." He added, "We will continue to introduce a wider variety of storytelling content so that more readers can enjoy our works."
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