WEBTOON Entertainment’s third quarter of 2026 came in with revenue of US$362.8 million, down 4.0% year over year, and the split between its two biggest markets tells the story better than the headline number does.
Korea grew. Japan shrank. The company’s net loss narrowed to US$7.5 million from US$11.1 million a year earlier, helped by higher gross profit and an income tax benefit, partly offset by heavier marketing spending and larger foreign currency losses.
Advertising up, paid content flat, adaptations down
Advertising was the one segment moving clearly upward, up 26.2% to US$49.7 million. Paid content, still the biggest business at US$275.5 million, slipped 3.9%. IP adaptations fell hardest, down 27.5% to US$37.6 million. WEBTOON again pointed at the weak Korean won and Japanese yen for the revenue decline. Strip out currency effects and revenue grew 0.2%, with paid content in Korea up 23.7%.
Korea versus Japan
In Korea, monthly active users rose about 4% to 25.6 million and paying users grew 5.2% to 3.9 million. Average monthly spending per paying user climbed 17.6% to US$9.4, which pushed Korean revenue up 10.8% to US$169.3 million.
Japan is where the numbers hurt. It is still WEBTOON’s largest market by revenue at US$147.3 million, but that figure is down 18%. Monthly active users fell 12.1% to 22.3 million. Paying users dropped 12.9% to 2.0 million. Average spending per paying user slipped 5.8% to US$22.3, and that last number is worth pausing on: Japanese readers who do pay spend more than twice what Korean readers spend, so losing them costs more per head than losing users anywhere else.
The rest of the world added users without adding payers. Active users grew to 111.7 million, while paying users fell 8.0% to 1.6 million. Across all markets the company counts about 159 million monthly active users. Translation: a very large free audience, and a paying base that is not keeping pace with it.
The 10 billion yen Japan plan
President Yongsoo Kim told investors on the earnings call that Japan remains one of WEBTOON’s biggest growth opportunities. The company plans to put 10 billion yen, roughly US$63 million, into Japanese content over the next three years to strengthen its local pipeline. That is a real bet on a market that just lost a ninth of its paying customers in a year, and it will take a few quarters before anyone can say whether it worked.
Kim also pointed to IP expansion and a new app as growth drivers. Remarried Empress, which WEBTOON traces from web novel to webcomic to a live-action Disney+ series, is his example of a story that keeps moving between formats, with an anime now in the works at TROYCA. North American webcomic Mafia Nanny is in development as a Hulu series. A Marvel app built with Disney launches on November 16 and will gather about 35,000 titles from Marvel, Star Wars and 20th Century Studios, which is less a publishing move than a distribution deal riding on someone else’s catalogue.
Fourth-quarter guidance
For the fourth quarter, WEBTOON expects currency-adjusted revenue growth of 9.0% to 12.0%, or US$371 million to US$381 million at current exchange rates. That guidance includes revenue from RI Games Holdings, the game developer WEBTOON is investing in, once the second closing of the deal completes. Founder and CEO Junkoo Kim said the company kept investing for growth in the third quarter and expects to return to double-digit revenue growth in the fourth.
Read the quarter as a company that is stable in Korea, exposed in Japan, and still searching for a second engine. Advertising is growing fast off a small base. Paid content is flat to slightly down. IP adaptations, the piece that sounds most exciting in an earnings deck, dropped by more than a quarter. The 10 billion yen Japan plan is the thing to watch, because Japan is the market where the platform earns the most per paying reader and where it is currently losing them fastest. The leadership shuffle from earlier this year, when the company named two co-CEOs for Naver Webtoon, is another piece of the same picture: a company rearranging itself around markets that are not behaving the way they used to.
Source: Anime News Network, citing WEBTOON’s press release and YNA reporting by Kyung-yoon Kim.
Featured image: the WEBTOON logo, via Anime News Network.
