WEBTOON’s second quarter results were well received by the market, driven by higher-than-expected revenue and a significant improvement in profitability compared to last year. Management attributed the quarter’s strength to new product features and high-profile content partnerships, particularly in English-speaking markets. CEO Junkoo Kim specifically highlighted the rollout of major Japanese manga titles and platform upgrades that increased user engagement. The company also cited ongoing expansion of its content library, with a focus on attracting both new and existing readers.
Is now the time to buy WBTN? Find out in our full research report (it’s free).
WEBTOON (WBTN) Q2 CY2025 Highlights:
- Revenue: $348.3 million vs analyst estimates of $340.9 million (8.5% year-on-year growth, 2.2% beat)
- EPS (GAAP): -$0.03 vs analyst estimates of -$0.21 (84.1% beat)
- Adjusted EBITDA: $9.66 million vs analyst estimates of $3.67 million (2.8% margin, significant beat)
- Revenue Guidance for Q3 CY2025 is $385 million at the midpoint, above analyst estimates of $376.2 million
- EBITDA guidance for Q3 CY2025 is $4.5 million at the midpoint, below analyst estimates of $8.45 million
- Operating Margin: -2.5%, up from -24.6% in the same quarter last year
- Monthly Active Users: 156.1 million, down 10.2 million year on year
- Market Capitalization: $2.00 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From WEBTOON’s Q2 Earnings Call
- Eric James Sheridan (Goldman Sachs) asked about the Disney partnership’s impact on user growth and monetization. CFO David Lee explained that while the deal is strategically important, financial benefits are expected over several years, not in the immediate quarters.
- Unidentified Analyst (Deutsche Bank) inquired about marketing arrangements within the Disney collaboration. Lee reiterated the focus on attracting Gen Z users and confirmed that further details on marketing efforts would be shared in the future.
- Unidentified Analyst (Evercore ISI) asked about the balance between licensed IP and user-generated content. Lee and Chief Strategy Officer Yongsoo Kim stated that major IP partnerships are designed to complement—rather than compete with—the creator ecosystem, with opportunities for original content development tied to popular franchises.
- Unidentified Analyst (JPMorgan) pressed for clarity on the drivers behind Q3’s revenue acceleration. Lee highlighted ongoing product investments and the ramp-up of IP adaptation projects as key drivers, emphasizing that recent partnerships are not factored into near-term guidance.
- Andrew Jordan Marok (Raymond James) asked about Rest of World advertising trends outside of the Wattpad impact. Lee noted that while Wattpad’s challenges have weighed on overall MAU and ad revenue, advertiser appetite in these regions remains promising for the long term.
Catalysts in Upcoming Quarters
In upcoming quarters, the StockStory team will be watching (1) the rollout and early engagement metrics of Disney and Dark Horse Comics content on WEBTOON’s English app, (2) the effectiveness of new onboarding and personalization features in sustaining user growth, and (3) the normalization of user trends in impacted geographies, particularly as the effects of government bans and technical issues on Wattpad subside. Progress with new IP adaptation projects and advertising momentum in emerging markets will also be critical to monitor.
WEBTOON currently trades at $15.30, up from $9.36 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free).
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