WEBTOON Entertainment Inc. reported third‑quarter 2025 results that included a $378.04 million revenue total, up 8.7% year‑over‑year and 9.1% on a constant‑currency basis. Adjusted earnings before interest, taxes, depreciation and amortization reached $5.1 million, a margin of 1.4% that represents a sharp decline from the 8.3% margin recorded in Q3 2024. Net loss for the quarter was $11.1 million, a swing from the $3.9 million loss in Q2 2025, while the company’s cash balance stood at $584.6 million with no debt.
Revenue growth was driven primarily by a 168.7% year‑over‑year jump in IP adaptations and a 171.8% increase in paid‑content revenue, offset by a decline in advertising revenue. The company’s gross margin fell to 21.9% from 26.3% in the prior year, reflecting higher content‑production costs and increased marketing spend to support the expanding paid‑content portfolio.
Margin compression was largely attributable to higher operating expenses, including a $2.3 million increase in income‑tax expense and significant investments in product development and market expansion. The adjusted EBITDA margin contraction from 8.3% to 1.4% signals that the company is still in a growth‑investment phase, with profitability being temporarily suppressed by these outlays.
Looking ahead, WEBTOON guided for a 5.1%–2.3% decline in constant‑currency revenue for Q4 2025 and an adjusted EBITDA loss ranging from $6.5 million to $1.5 million. The guidance reflects management’s concern over a potential slowdown in advertising demand and the timing of IP‑adaptation milestones, while still maintaining confidence in the long‑term upside of its paid‑content and partnership initiatives.
Management emphasized the company’s strategic focus on expanding its paid‑content ecosystem and deepening its partnership with Disney, which is developing a new digital comics platform featuring Marvel and Star Wars titles. CEO Junkoo Kim highlighted the company’s “continued momentum” and confidence in long‑term growth, while CFO David Lee noted that the current loss is driven by “higher other income and a higher income‑tax expense.” Investors reacted negatively to the revenue miss and cautious Q4 outlook, despite the EPS meeting consensus estimates of $0.04.
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