WEBTOON Q3 revenue misses analyst estimates on lower Paid Content and IP Adaptations
WBTN•WEBTOON Q3 revenue fell 4% year over year to $362.78 million, below the $373.72 million analyst estimate, while adjusted EPS of $0.02 beat expectations. The company expects Q4 revenue of $371 million to $381 million and adjusted EBITDA of $0 to $5 million.
1. Quarterly results
WEBTOON Entertainment reported Q3 revenue of $362.78 million, down 4% year over year and below the $373.72 million analyst estimate. Adjusted EPS was $0.02, beating the expected loss of $0.07. The company reported a net loss of $7.47 million and operating loss of $9.23 million.
2. Revenue drivers
The company attributed the revenue decline to lower Paid Content and IP Adaptations, partly offset by higher Advertising. Lower adjusted EBITDA reflected higher foreign currency losses. The smaller net loss was mainly due to higher gross profit and an income tax benefit, partly offset by increased marketing investment and higher foreign currency losses.
3. Q4 outlook
WEBTOON expects Q4 revenue of $371 million to $381 million, up 9% to 12% in constant currency, and adjusted EBITDA of $0 to $5 million, with a margin of 0.0% to 1.3%. The outlook includes expected revenue from RI Games Holdings Inc. after the anticipated transaction closing.
