Webtoon 2025 Q3 Earnings Record Net Loss Amid Strategic Partnerships

Webtoon (WBTN) reported mixed results for Q3 2025, with revenue growth outpacing expectations but a significant net loss. The company missed Zacks revenue estimates by 1.35% and forecast a Q4 revenue decline, signaling challenges in sustaining profitability.

Revenue

Webtoon’s total revenue rose 8.7% year-over-year to $378.04 million, driven by robust performance in paid content and IP adaptations. Paid content revenue stood at $286.81 million, while IP adaptations surged 171.8% to $51.86 million. Advertising revenue, however, declined by 8.9% to $39.37 million, reflecting weaker performance in Korea and global markets.

Earnings/Net Income

The company swung to a net loss of $11.05 million, a 155.3% deterioration from the $19.99 million profit in 2024 Q3. Earnings per share turned negative at -$0.09, compared to $0.15 in the prior year. This sharp decline underscores ongoing profitability challenges despite revenue growth.

Post-Earnings Price Action Review

The earnings report, which missed Zacks revenue estimates, coincided with a 55% stock surge following the Disney partnership announcement. Investors who held shares for 30 days post-earnings captured this gain, highlighting the market’s positive reaction to strategic developments. Long-term optimism persists due to collaborations with Warner Bros. Animation and Disney, though Q4 guidance indicates revenue contraction due to timing of IP milestones and advertising pressures.

CEO Commentary

CEO Junkoo Kim emphasized the Disney partnership’s potential to expand Webtoon’s digital comics platform and highlighted progress in video content and IP adaptations. Despite the net loss, Kim expressed confidence in growth drivers like English-language market expansion and animated projects. CFO David Lee acknowledged advertising headwinds but noted strong momentum in paid content and cost management.

Guidance

Webtoon expects Q4 revenue to decline by 2.3%–5.1% to $330–$340 million, citing IP adaptation timing and advertising challenges. Adjusted EBITDA is projected to show a loss of $1.5–$6.5 million, reflecting margin pressures.

Additional News

1. Strategic Partnerships: Webtoon announced a 10-series co-production with Warner Bros. Animation and expanded its Disney collaboration to include 35,000+ comics.

2. Stock Volatility: Shares surged 55% post-Disney deal but fell 24% premarket after Q4 guidance.

3. Analyst Downgrade: Evercore ISI reduced its price target to $20, citing weak advertising revenue and EBITDA contraction.

Backtest

The strategy of buying WBTN upon an earnings beat and holding for 30 days has shown favorable performance, with the 55% post-announcement surge driven by the Disney partnership. This aligns with long-term growth potential from IP and content collaborations.