WEBTOON Entertainment (WBTN) investor relations material

Executive summary

• Revenue for Q1 2026 was $320.9 million, down 1.5% year-over-year, mainly due to foreign exchange headwinds and lower IP Adaptations revenue, but constant currency revenue grew 0.2% to $326.4 million, driven by Paid Content growth.

• Net loss improved to $8.8 million from $22.0 million in Q1 2025, reflecting lower costs, improved operating efficiency, and higher gross profit.

• Adjusted EBITDA surged 132% year-over-year to $9.5 million, with margin rising to 3.0% from 1.3%.

• Cash and cash equivalents totaled $594.9 million at quarter-end, boosted by a $32.8 million private placement, with no debt.

• Strategic investments continue in the creator ecosystem and CANVAS platform for long-term growth.

Financial highlights

• Paid Content revenue grew 0.5% to $261.4 million; Advertising revenue was flat at $39.7 million; IP Adaptations revenue fell 22.8% to $19.8 million.

• Cost of revenue decreased 6.4% to $237.8 million, reflecting a shift to higher-margin streams and lower creator commissions.

• Marketing expenses declined 3.2% to $30.5 million due to a focus on high-retention channels.

• General and administrative expenses dropped 9.2% to $60.6 million, mainly from lower stock-based compensation.

• Cash outflow from operations was $11.8 million, improved from $18.7 million outflow year-over-year.

Outlook and guidance

• Management expects continued focus on user conversion, monetization, and ongoing investments in personalization and content.

• Q2 2026 revenue expected to grow 1.7%-4.6% on constant currency, reaching $332-$342 million; Adjusted EBITDA guidance for Q2: $0.0-$5.0 million, margin of 0.0%-1.5%.

• Existing cash is expected to cover working capital needs for at least the next 12 months, but future capital needs may require additional financing.