Webtoon Revenue Reaches $362.8 Million in Third Quarter, Falls 4%
Key Facts
Webtoon Entertainment reported revenue of $362.8 million in the third quarter ended September 30, 2026, down 4.0% year over year, in results that reflected a divergence between advertising performance and a decline in intellectual property adaptations. The company said revenue rose 0.2% to $378.6 million excluding the effect of foreign exchange rates, indicating that currency movements reduced reported dollar value compared with constant-currency growth. According to the company, the performance reflected growth in paid content and advertising, partly offset by lower intellectual property adaptation revenue. Adjusted earnings per share were $0.02, compared with $0.04 in the same period a year earlier. Diluted loss per share narrowed to $0.06 from $0.09 a year earlier.
Advertising was a leading source of growth, with revenue rising 26.2% year over year to $49.682 million. By contrast, intellectual property adaptation revenue fell 27.5% to $37.579 million, a decline that limited the effect of expansion in advertising activity. The figures put two revenue sources on opposite trajectories during the quarter, while total reported revenue remained below its level a year earlier. On a constant-currency basis, Webtoon said total revenue grew 0.2%, driven by paid content and advertising. The company said lower intellectual property adaptation revenue offset part of that growth.
By region, revenue in Korea rose 10.8% to $169.307 million, while revenue in Japan fell 18.0% to $147.293 million. The comparison shows that growth in the Korean market was not enough to offset the decline in Japan, which had generated more revenue in the year-earlier period. The decline in Japan is consistent with the overall weakness in intellectual property adaptation revenue, although the company did not break out each market's contribution to that decrease in the figures provided. Regional performance was therefore mixed, with year-over-year expansion in Korea and contraction in Japan. The gap makes the revenue mix by market a key factor in understanding the quarter's results.
Net loss improved to $7.5 million from $11.1 million in the third quarter of the previous year. The company attributed the improvement primarily to higher gross profit and a tax benefit, partly offset by increased marketing investment and higher foreign exchange losses. But adjusted earnings before interest, taxes, depreciation and amortization fell to $2.2 million from $5.1 million, and its margin declined to 0.6% from 1.4%. Webtoon said higher foreign exchange losses contributed to the decline in this measure. The results reflect an improvement in net loss alongside lower adjusted operating profitability.
Net cash from operating activities was $6.2 million during the quarter, compared with $16.5 million a year earlier. This means operating cash flow remained positive but was below its level in the year-earlier period, alongside a decline in adjusted earnings before interest, taxes, depreciation and amortization. At the end of September, the company reported about $548.4 million in cash and cash equivalents and said it had no debt. These figures provide a picture of liquidity at quarter-end alongside revenue and profitability results. The company did not say in the reported statements that free cash flow had reached breakeven.
Webtoon expects constant-currency revenue growth of between 9.0% and 12.0% in the fourth quarter of 2026, equivalent to revenue of between $371 and $381 million at current exchange rates. It also set a range for adjusted earnings before interest, taxes, depreciation and amortization of between zero and $5.0 million. The chief executive said the company was confident it would return to double-digit revenue growth in the fourth quarter, making the guidance an indicator of expected improvement after the third quarter's year-over-year decline. The outlook includes expected revenue and contributions from R.I. Games Holdings after the anticipated second closing of the deal. The third-quarter results call was scheduled for November 9, 2026, at 4:30 p.m. Eastern Time.