WEBTOON Entertainment (WBTN) Q1 2026 earnings summary

Executive summary

• Revenue for Q1 2026 was $320.9 million, down 1.5% YoY, but up 0.2% on a constant currency basis, mainly due to FX headwinds and lower IP Adaptations revenue, partially offset by Paid Content growth.

• Net loss narrowed to $8.8 million from $22.0 million YoY, reflecting improved gross profit, lower costs, and operating efficiency.

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

• Major investments in creator support, including the unified global Canvas platform and AI-powered translation, aim to boost global content distribution and monetization.

• Collaboration with Disney progressing, with five new titles launched and a $32.8 million private placement completed, representing a 2% equity stake.

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.

• Gross margin expanded by 390 basis points to 25.9% YoY, with gross profit at $83 million.

• Adjusted EBITDA: $9.5 million, up from $4.1 million; margin at 3.0%.

• Net loss: $8.8 million vs. $22.0 million YoY; Adjusted EPS: $0.07 vs. $0.03 YoY.

• Cash and cash equivalents totaled $594.9 million at quarter-end, boosted by the Disney private placement.

Outlook and guidance

• Q2 2026 revenue expected to grow 1.7%-4.6% YoY constant currency, to $332-$342 million.

• Q2 Adjusted EBITDA guidance: $0-$5 million (margin 0.0%-1.5%).

• Double-digit revenue growth targeted by Q4 2026, driven by paid content, advertising, and IP adaptations.

• Continued focus on innovation, creator ecosystem expansion, and content diversification.

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