WEBTOON Entertainment (WBTN) Q2 2026 earnings summary

Executive summary

• Revenue for Q2 2026 was $338.5 million, down 2.8% year-over-year but up 5.2% on a constant currency basis, with growth across paid content, advertising, and IP adaptations.

• Adjusted EBITDA reached $5.5 million, exceeding guidance but down from $9.7 million in the prior year due to increased marketing investment.

• Net loss widened to $15.2 million from $3.9 million year-over-year, primarily due to higher income tax expense and marketing spend.

• Strategic direction includes deeper AI integration, scaling off-platform IP adaptation, and new investments in gaming, including a staged acquisition of RI Games Holdings and a $100 million IP adaptation fund.

• Global MAU reached 156.9 million, up 0.5% year-over-year, with MPU up 1.8% to 7.5 million and a paying ratio of 4.8%.

Financial highlights

• Gross margin expanded by nearly 100 basis points to 26% in Q2, driven by lower content and transaction costs.

• Paid Content revenue was $263.9 million (down 4.0% YoY), Advertising $47.1 million (up 4.2%), IP Adaptations $27.4 million (up 2.0%).

• Adjusted EPS was $0.04, down from $0.07 in the prior year.

• Cash and cash equivalents stood at $583.1 million, with no material debt.

• Marketing expenses rose 23.4% to $38.3 million, focused on user acquisition and growth markets.

Outlook and guidance

• Q3 2026 revenue expected between $358 million and $368 million, representing 0.7%-3.3% growth on a constant currency basis.

• Adjusted EBITDA for Q3 forecasted in the range of $0 million-$5 million, with margin of 0%-1.4%.

• Management reiterated expectation to return to double-digit revenue growth by year-end, with Q4 exit run rate as the target.

• Liquidity is expected to be sufficient for at least the next 12 months.