Webtoon Entertainment's Q4 2024: Contradictions on AI Engagement Boost and Webnovel User Impact

These are the key contradictions discussed in Webtoon Entertainment's latest 2024 Q4 earnings call, specifically including: AI recommendation engine's effect on user engagement, and the impact of webnovel users on overall MAU growth:



Revenue and Profitability Growth:
- WEBTOON Entertainment reported revenue of $1.35 billion for 2024, growing 5% on a reported basis and 13% on a constant currency basis, with record adjusted EBITDA of $67.9 million, an increase of over 600% compared to 2023.
- This growth was driven by the company's strategy and flywheel of creators, content, and users, particularly in markets like Japan.

Strategic Success in Japan:
- Japan contributed nearly half of Webtoon's total revenue, with a 25.8% revenue growth on a constant currency basis for the full year.
- This success was due to leveraging Webtoon's leading position in Korea and effective cross-border content distribution strategies, including local creator investments and partnerships.

IP Adaptation and Global Impact:
- IP Adaptation revenue increased by 6.7% on a constant currency basis for the full year, with notable launches like Jeongnyeon: The Star Is Born and Sidelined: The QB and Me achieving top rankings globally.
- The global impact of IP adaptations drives new users to the platform, supporting growth and awareness.

Impact of Political Turbulence in Korea:
- In Korea, MAU decreased by 0.5%, with a decline in paying users and ARPU, partly due to political turmoil during the fourth quarter.
- Although engagement with paid users remained strong, political factors and engagement impacts temporarily affected the market.