WEBTOON revenue falls 4.0% but edges up once currency is stripped out

What happened

WEBTOON Entertainment Inc. (NASDAQ: WBTN) said third-quarter revenue fell 4.0% to $362.8 million, but rose 0.2% at constant currency. The gap is currency translation, so the underlying revenue trend is flat rather than shrinking.

Constant-currency revenue was $378.6 million. That figure strips out currency swings and deconsolidated operations. OptimistFi calculates that reported revenue fell $15.3 million from $378.0 million in the third quarter of 2025, while constant-currency revenue rose $0.6 million. The filing's reconciliation puts the currency effect at $15.9 million.

WEBTOON also narrowed its net loss, reported lower Adjusted EBITDA and guided to faster growth in the fourth quarter. The results cover the quarter ended Sept. 30, 2026.

Where revenue grew and shrank

Advertising was the standout. Advertising revenue rose 26.2% to $49.7 million, or 30.1% at constant currency. Paid Content, the largest line, fell 3.9% to $275.5 million but grew 1.0% at constant currency.

IP Adaptations revenue fell 27.5% to $37.6 million. It fell 27.0% at constant currency, so currency did not drive that drop.

By region, Korea revenue rose 10.8% to $169.3 million. Japan fell 18.0% to $147.3 million, or 11.4% at constant currency.

Profit and cash

Net loss narrowed to $7.5 million from $11.1 million a year earlier. Diluted loss per share was $0.06 against $0.09. The filing credits higher gross profit and an income tax benefit, partly offset by more marketing spending and higher foreign currency losses. Marketing expense was $39.1 million, up from $35.2 million. The operating loss narrowed to $9.2 million from $14.9 million, so the improvement is not only the tax benefit.

Adjusted EBITDA fell to $2.2 million from $5.1 million. The filing blames mainly higher foreign currency losses. Adjusted EBITDA Margin was 0.6%, down from 1.4%, and Adjusted EPS was $0.02 against $0.04. The measure adds back $7.7 million of stock-based compensation. Before those adjustments, EBITDA was a loss of $5.7 million.

Cash and cash equivalents were about $548.4 million with no debt, plus $13.3 million of short-term deposits. Cash was $581.8 million at Dec. 31, 2025. Operating activities provided $6.2 million in the quarter, down from $16.5 million. Over nine months they used $11.9 million, versus $3.6 million provided a year earlier.

Why it matters

OptimistFi has argued that WEBTOON is a call option on turning a large mobile storytelling community into a scalable IP and advertising platform. It also holds that the evidence still shows a business searching for profitable growth. The quarter splits along that line. Advertising growth supports the platform leg, while the steep fall in IP Adaptations cuts against the IP leg. The result is mixed.

The profit base is thin. Adjusted EBITDA is positive but the net loss continues, and nine-month operating cash flow was negative. Part of the narrower net loss came from a tax benefit. That is weaker evidence of profitable growth than an operating gain would be.

What's next

For the fourth quarter, WEBTOON expects constant-currency revenue growth of 9.0% to 12.0%. It says that equals revenue of $371-$381 million at current FX rates. It also expects Adjusted EBITDA of $0.0-$5.0 million, a margin of 0.0% to 1.3%.

CEO Junkoo Kim said the company is confident in a return to double-digit revenue growth in the fourth quarter. The outlook includes expected revenue and contributions from RI Games Holdings Inc. after an anticipated second closing of that transaction. The company lists failure to complete the acquisition on time, or at all, among its risks. WEBTOON scheduled a webcast and call for 4:30 p.m. Eastern on Nov. 9.

Fourth-quarter results will test whether growth lands inside the guided range and Adjusted EBITDA stays at or above zero. Growth below the range, or a deal that does not close on time, would weaken the case.