To more South Korean audience, but they're definitely expanding out of that. There's actually some content on Netflix that's been created that has spun out of their content. I'm going to turn it over to David first to go over some more details high level on the business, and then we'll turn it into a quick fireside chat. The management team has to catch a flight, so there will not be a breakout session after this. Great.
Great.
Thanks, David.
Yep. Thank you, Ralph. Thanks for sitting in. I'm curious, and I'm expecting very few hands, but just to make this a little interactive for folks who aren't on the webcast, how many of you had heard of WEBTOON or Wattpad as a company before? OK, I see half a hand up. As I talk to you about the company, I will make you a bet, a wager, that if you talk to friends or family in the 18-25 demographic here in North America, I bet they actually might know about it. Because we actually, unbelievably, you may not know us or what we produce on our platform, but you've probably seen movies that were created out of the storyline from this company.
In fact, if you look at Netflix as an example, if you look at the last three years, every quarter, we're in their top 10. Because what we are, as you can see in detail, is we are a global storytelling hub. We're the only company that is adopted; there's product-market fit in 150 countries. We may have started in South Korea, but the majority of our 153 million active users are actually outside Asia. Here in North America, people are consuming this the same way they consume it in Asia and in Europe. They're spending an average of 30-60 minutes every single day finding unexpected stories. Because what is atypical about us is we have over, actually, 24 million creators globally providing user-generated content curated by AI. I've been around the block on consumer tech.
I've been around for over 30 years, and I've definitely seen my fair share of low-quality, redundant content come from UGC platforms. I have never seen a company that has produced over 100 rich film adaptations. The day after Thanksgiving, "Sidelined: The Quarterback and Me" came out. It was a top five release. That started as a novel on our Wattpad platform, et cetera. The reason why we can do it is this flywheel has achieved global scale. We have 120,000 stories being generated and applied to our site. We have worked really hard on the supply side to make any amateur—by the way, the vast majority of our creators don't have a full-time job being a creator. They have a hope and a dream. We've taken those amateurs, turned them into professionals. They make an average of nearly $50,000 a year.
That makes a big difference if you're from a certain part of the world. The franchise stars that had a full-time job and realized they had a story to tell on our platform can make up to $1 million a year. That's the power of this platform. We went public very recently, I would say in the summer of last year. This company has also achieved scale financially. In 2024, we did $1.35 billion in GAAP revenue. We actually over-delivered in the first two quarters, the adjusted EBITDA margin. We delivered more than what was expected. We grew significantly in 2024, 13% constant currency. If you look at more recent performance, the number's not on the page, but I want to tie you to it. The global market is enormous. There's already product-market fit, but we're just getting going here.
Despite the fact that our Gen Z consumers love us everywhere, we are very nascent. In North America and other English-speaking parts of our market, we actually grew 19% our web comic app, MAU, and total company was 4.2%. The thesis here is, in the bottom, you can see, we have a pretty diverse set of brands. LINE Manga, just as an example, in the last year, we dramatically increased our presence in Japan. We are the number one consumer app in Japan. We are bigger by revenue than any other mobile game. We came out of nothing because we were powered by AI and a library that allows us to generate content from all over the world that can be published everywhere else. I am going to keep going because we are going to run out of time. This is what we call the flywheel.
What I want to explain about this is that it's self-reinforcing. Some people think we're a South Korean content company that publishes to South Koreans. I want to make sure you understand that's not the case. We have a great business in South Korea. We have great creators. We have great consumers. We're at 50% penetration of the entire population of South Korea. I mean, we're the digital Kleenex of entertainment of South Korea. You go to South Korea, some have estimated that half of the great movies, K-dramas you see in South Korea in the Korean language started as platform stories on our site. The thing I want to impress upon you is that all that content in Korea publishes globally. It turns into great content that Gen Z likes in North America. The number one consumer app in Japan is exporting content to North America.
We have content from France into Japan. This is a global flywheel. I'm not going to go through all of it. It is rooted in the fact that it took us over 20 years to get 26 million creators. And how is that? Why would a creator, a really well-established or an amateur creator, pick us? We're the only place that has promised a rev share model and has delivered $2.8 billion provided to creators. It took us a long time to reach the flywheel that we have. Now we have escape velocity because we can grow powered by our exclusive ecosystem of creators. They create unexpected hits that are very, very low cost relative to the rest of the industry. What I mentioned before is not well shown on this chart, but each of these flywheels, Korea where we started, Japan, where we're recently number one.
By the way, our growth in Japan was dramatic and quick. It's not like we've been there for 15 years. I would say if you look at our market share relative to people who tried to copy our business, Piccoma, Kakao, we've blown them away in the last year. Importantly, we're just getting going on the 107 million monthly active users we have outside Asia. There's a geographic expansion story, but there's also a business model story. This is why it's important for me to explain this. Our business, how do we make money? Everyone is guessing, oh, David, you're a subscription business, right? We're very different. In this current environment, I'm very lucky to work at a company where $0.15-$0.70 is all that the consumer pays to see the next dropping episode. Let's call her Maddie.
Maddie's our target consumer. She's 18 - 25. She's in North America. We skew slightly female, and we are very strong amongst 18- 25-year-olds here. Maddie can surf for free. She can see these 120,000 stories arrive on our site. We make it super easy for her not to pay anything to surf for free, just as creators don't have to pay to post a story. When Maddie picks something she likes and she wants to see that next episode, and we're very patient with Maddie, we want Maddie to explore. We want her to feel like she discovered a story on our program just the way you discover a TikTok reel. The thing about our content is it's much more flexible than other content. In a flick of your finger off your mobile device, you can see where a story is going.
You can sit there and be engrossed for 30- 60 minutes all in a row. The thing is, we have been so patient that we have not really sought to monetize our business in advertising. Despite the fact that we asked thousands of North American consumers, they are two times more likely to be engaged by an ad on our platform than TikTok, Roblox, and others. By the way, our North American consumers, 97% say their experience is more fun than Roblox, Netflix, and TikTok. Why? Because 77% of them tell us they cannot get the stories they find anywhere else. We are the evergreen source of stories for Netflix, for Amazon Prime, and for ourselves. The big opportunity is in the middle because we know that high CPM ads that are relevant—I mean, remember, we know what Maddie is spending 30- 60 minutes every day on.
We know what episode of what genre of what story she's in love with. You can imagine if she's interested in "Lore Olympus," which became a hit out of nothing and is a New York Times bestselling book in print, or "True Beauty." If she is, for example, watching something in this genre, we can give her an ad that is relevant for her experience. That is why the consumer research is telling us that they're much more engaged and more likely to want to see an ad. We have only started outside Korea. We have plenty of good lessons learned in Korea, but we're just beginning to apply the ad model. Some have estimated that this business should generate as much revenue and be much more profitable because we've already paid for it, right? We're already generating positive adjusted EBITDA off the paid content model.
We already have the consumers, the engagement, the demographic, the creative, the content on an ongoing basis. If we execute it as we promised, this is a very important business model growth story. I want to talk about IP adaptations. This is our secret weapon. When someone sees a big hit in North America or in one of the new markets on, say, Amazon Prime, last year in January of 2024, something called "Marry My Husband" became a global sensation on Amazon Prime. It was number one globally. I do not mean in Korea. I mean globally. It was number one here in North America. Fans saw for the first time a story. They did not realize it, but they wanted to know where did it come from, from a fandom standpoint.
They found out that it was a web novel on our platform more than three years ago, that we turned it into a global sensation as a webcomic, that we are the ones that had the data and AI to predict years in advance what would become a great crossover IP. We have 100 examples of rich film adaptations. We have 900 examples of more than rich film, them turning into mobile games or merchandise or anything else that a story can become. I covered a lot of this. I learned early in my days as a consumer tech guy not to trust the executive, but to trust what the consumer is willing to pay for. I am not going to go through all this primary research. The simple thing you should take away is we simply have content nobody else has.
It makes for 97% of those on our North America platform say it's more fun than other cutting-edge apps that are worth a lot more than we are. Why are you interested in hearing more, I hope, about us? First, we are not an Asian content company for Asia. We are global. We're global in many ways, but we globally source our stories amongst 24-plus million amateur creators. We apply a globally developed set of product, AI, and tech to serve 150 million monthly active users all over the world. We are the only one that can give a creator the ability to publish globally. There are great creators in Japan.
It's amazing to me that we went into Japan recently and that creators are choosing us because instead of publishing in one format of one theme and in one language, they are becoming globally successful through us and have crossover IP outside of even the platform in which we first published them. There is product-market fit globally. The addressable market is not theoretical. It's here. It's here in North America today. We just need to continue to grow at that 19% rate that I mentioned. This is the English global—sorry, the English webcomic app MAU number. We have a business model flywheel where I don't need to identify new tech for improved EBITDA margin. I just got to grow. Every dollar of paid content outside of Korea has a healthier margin. Every time I drop another executed advertising dollar, I improve the company's margin.
This EBITDA margin grows as a function of the business growing, where it's already growing. The last bit is we started led by a brilliant founder and CEO named Junkoo Kim, or JK, as we call him. He had a long history at a great company called Naver. You may not have heard of it. Naver is a $30 billion tech giant in South Korea. It has, I think, arguably some of the world's best technology. While we have all this great content, we are rooted in AI and tech. I don't have a lot of time to walk you through it, but that is what's allowed us to go global, along with what I hope to be a growing team now that we're public. I think with that, with 16 minutes left, we can turn it over to questions, Ralph, and go deeper.
Sounds great. You talked about sort of Maddie being your primary audience, but maybe a little bit more specifics in terms of who are the users. Can you maybe provide some perspective on your primary geographies or demographics that are driving the most adoption today? As you think about sort of growth outside those core markets, how should investors think about that?
Yeah. So it's not surprising, but we tend to think about metrics that predict the future return for investors and consumers, right? Let's look at it geographically first. In Korea, as I mentioned, we are at 50% penetration of the population. We have all demographics there because they started with us potentially when they were quite young and enjoying some genres, but they've realized they can find every other genre they can imagine on the platform. For example, the RPU, it's close to around $14. We measure RPU on a monthly annual revenue per paying user standpoint. What's interesting is the consumer there, widely dispersed, still has great strength amongst Gen Z, started really as Gen Z and then expanded as they got older. The RPU and the behavior is very similar in North America, or what we call rest of world, is what I just mentioned in Korea.
The only difference is we just haven't penetrated rest of world as much. In rest of world, we have sub 2%, maybe sub 5% penetration of the population, depending upon how many countries you count. RPU is pretty close. It's getting there when you exclude the fact that a large part of our business is a web novel business that we use to source more IP from. You have Japan. Japan is a rocket ship. Japan, the RPU is $23. People are heavily engaged there. They're exporting content globally. The household penetration is approximately 15%. The demographics, again, we have the benefit of demographic goals, 18- 25, but we have a lot more. As people get older, they find new stories and new genres.
The dynamic I'm sensing and seeing is that in newer geographies, the 18-25 core demographic likes to pull content from our platform. They like the global source of unexpected stories. They like that they can't get these stories somewhere else. As they get older, they create habit formation because they're more confident they'll find the next story, even as their tastes change. I suspect that in rest of world, we'll see a similar pattern that we've already seen, starting with relatively younger consumers and having them grow old with us, but retaining a sizable penetration at the very beginning amongst Gen Z.
Could you walk through maybe a little bit more specifics on the monetization? As Jack and I were prepping for the meeting, we were playing with the app and played with the mobile website and it looked like there are different genres and episodes. It looked like we were able to sort of step through without a paywall, but that was probably just our experience.
Yeah. Let me correct a misstatement. I was mixing up paying ratio and RPU. RPU is approximately $6-$8 in Korea. It is closer to $6 in rest of world. It is $23 in Japan. We look at paying ratio, right, which is what % of our monthly active users are electing to pay. That is the 14% in South Korea. It is roughly 10% in Japan, and it is sub 5% in rest of world. Let me explain why that matters. Those numbers matter because when the consumer is allowed to select after whatever amount of time for free, they are surfing. They see something they like, and we call it a fast pass. What happens is they want to see the next episode that is yet to be written.
Whether that's someone on the web that we're migrating to the app, or it's someone who starts on the app as a free consumer, if they want to see the next chapter in a story, they have to pay at that average $0.15-$0.70. The reason why we think this model works is it's a very, very low commitment, and it's their discovery and choice on the story they want. We found in our cohort data that when Maddie chooses to pay for the first time over a multi-year period, she pays multiple times more organically because it's her choice.
Unlike my time at Zynga or in e-commerce turning around Best Buy and other places, I do not have to worry about the merchandise getting stale or the content being squeezed or monetized too much because we have 120,000 stories that are coming every day that are brand new from Maddie. Maddie's tastes are going to change. I do not want to make a human-based bet on what genre the Maddies of the world are going to like next year. I want the market and the creators to allow a self-selection to occur. That is the dynamic. As I mentioned, of the $1.35 billion, roughly $1 billion is paid content, primarily in this micropayment format. Of the rest, roughly 12% is advertising and 8% is crossover IP.
You talked about the opportunity to know the demographic. Obviously, knowing Maddie very well, to stay with that example. Maybe kind of walk us through where you are in the evolution with the ad platform. We cover a lot of ad-based models, and it sounds like you've got some great sort of targeting data, but it also takes a while to build ad platforms over time.
Yeah, it's a great point. In my experience before I joined WEBTOON, first, I always thought that applying an ad model cannibalizes and comes at the cost of the rest of the revenue model. In mobile gaming, I could pretend that showing more ads would not hurt the gaming experience, but frankly, it always did, whether they are a casual game. I think in e-commerce, it's the same. This is the only example I have come across where Maddie can be more delighted by our highly relevant ad because we know what she's actually reading, but also with the optionality not to pay the 15-70 cents. When you're deep in a story and you already really want to see the next chapter, giving Maddie the ability to choose to watch an ad is something that can speed up adoption.
In terms of where we are, Korea, we've been pioneering for many, many years. We have a very strong ad business, ad tech, Salesforce, direct Salesforce. We've experimented with lots of different ad products, a wealth of experience. We just began to apply that experience to Japan in the last year and a half to two years, and it's been explosive growth for us. In North America, where I spend a lot of my time helping the team, we're just putting in the foundation. We already know the product market that's there. We already know the ad tech stack that we have experience with outside of the U.S. Hiring the right direct ad Salesforce, consolidating the web novel Wattpad business with the same back end as the U.S. WEBTOON business, I think of 2025 as a foundation year.
Because in North America, once we are at scale in terms of our capabilities, it's a step change function financially, potentially, whenever you model it, whether that's in 2026 or 2027, however long you think it takes us. We are patiently trying to build the North America capability over time, not throwing it in over promises on guidance, but just being clear about what we're building, but also taking the time to do it right.
Just going through the time we spend, just the transcript seems like there's a big opportunity is migrating the mobile traffic to the app. Maybe sort of talk about where you are on that evolution and give us a sense of sort of the different monetizations of each channel.
I want to spend a little bit of time on MAU because if you have not come across a business like ours, and a lot of businesses that I have been a part of, total MAU, the expensive customer acquisition cost for many companies to throw audience at the top of the funnel, total MAU, is a good predictor of future revenue. That is not the case for us. It is our app, and it is specifically our webcomic that is where we choose to generate content, paid content revenue, which is the majority of our revenue. I want you to pay attention specifically to our webcomic app MAU because all the new product developments that we released last quarter are coming out on the app. That is why I am excited about the 19% growth in the U.S. and webcomic app MAU.
When I look at total MAU, total MAU includes, for example, our web novel business called Wattpad. And Wattpad's role, critical role, but its role is not to generate paid content revenue. Its critical role is to be a healthy UGC center for creators. So more stories can one day be transformed into webcomics or turned into these movies like Sideline. When I talk about in a quarter, total total MAU, including rest of world with one country banning Wattpad, I do not talk about it being a driver of revenue because for us, that is a latent asset. One day, we will probably get around. When we are 50% global population penetration and we have at least 15% paying ratio at $6-$8 to maybe Japan, $23 is about high RPU, then I can talk about how the rest of my MAU can be monetized.
For me, it's about leveraging where the consumer has the best product, which is on the app. We know the webcomic format works with a global audience, and we know that it ports really well, which is why our focus is on monetization, is on that part of MAU.
We just pause for a minute here to see if there's any questions. Always the uncomfortable silence.
Yeah, always.
When we spent time on the road together, I was really surprised to see how much content originates on the platform and your own IP and then extends to Netflix. Maybe sort of walk us through how that works. Is it an outbound effort? Are they coming to you? Some perspective on that and the impact for the business.
Yeah, it's interesting. We choose not to aggressively take risk in the fact that we reliably power a lot of the hits on Netflix, Amazon Prime, Tubi, et cetera. Let me explain why. Our primary bullseye focus is on expansion of global creators to be able to have great stories on our platform. When something crosses over, I think I mentioned, Marry My Husband, when that became a global hit on Amazon Prime, we're very happy to have the benefit of the fandom coming back to our platform, wondering, where did that come from? Who wrote this? What else exists by the same author? That's what I call kind of an organic, natural benefit when things kind of osmotically cross over the barrier outside of our platform.
Because we have a business model where we fair share upside revenue with the creator, we're very happy for them, and we can negotiate with them great deals. On the other hand, we may be the only evergreen, data-driven, AI-powered, predictable source of hits years before they become big budget releases on the streaming sites. Today, our focus is to let that be upside to the model, to continue to give the creator the ability, the unique ability to take what they have on our platform and turn it into a great game or a great movie or a great TV series, but not to make a heavy CapEx bet on it ourselves.
I think you'll see over time, once the company matures with the benefit of being public, we do have the option value to make very small, risk-adjusted, data-driven bets on stories that we know from the data will be a great film release. Right now, we're focused on growing the bullseye.
Great. Your more recent IPO, maybe just give some perspective. What was the motivation to go public, and how has that helped the business or potentially helped the business?
It's interesting. I was in public, I think I told you this. I was in public company retirement personal. There was a high bar for me to work for a public company, having primarily focused on helping transform public companies who might have been in trouble, like Zynga and Best Buy and Del Monte, PG&E's first struggles.
The reason why I was excited to help WEBTOON go public, and more importantly, the reason why WEBTOON should have and did go public, is it took us out of being a wonderful subsidiary of a South Korean-based tech company whose primary customers are in Asia to being a globally listed company with global board members we added and global team members we've added and a balance sheet in a public currency to be able to pay off the fact that our monthly active users are a majority outside Asia to operate as a global tech company. Certainly, the challenges that we've seen and people misunderstanding FX rates and the true health of the business and lessons learned for me and the team are real since the IPO.
We fundamentally believe that this is a great company for public investors, and we think being public helps us in our endeavor to realize the mission. I think it was the right call. I know we're a show-me story, hopefully more and more a compelling story for some of you who are new to us. We are very bullish on our mid to long term, and we're going to continue to get better and better to prove it.
Question?
Quick question. What, in your eyes, is the closest public comp to WEBTOON?
It's funny. I live in the San Francisco Bay Area, and I always try to think about, well, you know this company is like blank crossed over with blank. It's a terrible answer, but I got to tell you, there really is no good public company comp. Let me give you the elements, though, that I see in other companies that could be relevant. I see a really robust technology-enabled UGC engine, and there are a lot of companies today that I admire. I look at companies like early YouTube, where they were playing around business model, and they were thinking about advertising, and there was a new format and enabled creators globally. There are elements of that here. The thing, though, that I have to emphasize that I've not seen anywhere is a business model that is perfectly aligned to creators.
Being able to tell an amateur creator, we will go as far as you can go, gives us the ability to navigate IP rights if ever we're thinking about application of technology or AI. It gives us the ability to root for them with their success outside of our platform. That kind of alignment, that patience, I think, is what makes it challenging for me to give you a comp. I would also say we are really different than a lot of the mobile gaming companies I've helped, a lot of the social networks, social companies I've helped, because we don't need to fill audience to generate content. That's the fundamental. I don't have to talk about CAC and LTV and making sure my total MAU grows in case somebody might create something that's useful to somebody else.
We have 120,000 stories that get posted globally every day from great creators. That is one of the bigger differences, I think, in our story. It is one of our challenges as a public company. I think a lot of people looked at reported FX rates. They did not realize that we overdelivered at the bottom line because we pay costs oftentimes in the same currency that we receive revenue. Or they looked at total MAU, and they did not realize that webcomic English MAU was growing 19%. There are differences here versus almost any company I see in the public space.
The reason I ask that is I couldn't find one.
Yeah, it's hard. Which is why we need to be patient, and we need to listen to great investors and great analysts and just persist because this is a unique story. I think it's really advantaged, but I recognize that it's not well understood.
Question over here, David.
If you could still operate, what does the competitive differentiation do versus a strategy?
Yeah.
Maybe related to that, simultaneously, there's a Wattpad entity within NAVER.
You mean within us?
Within your parent company, right?
No, no. We own Wattpad. That's us. That's us. That's our business. Let me talk about competition, and I can't really talk to you, so I'm going to get up a little bit. I've heard so many founders and CFOs say, we got no competition. We have no competition. We're a category unto ourselves. Let me explain why I actually think that's true here, and let me give you a tangible example. In Japan, where there is a much more competitive dynamic than Tapas business in North America or even in Korea, there is a company called Piccoma in collaboration with Kakao. Very aggressive. Everybody else, I would argue, has a different model. These are companies I admire, by the way. I love for Kakao and Piccoma to be successful. It's just they make a human judgment almost the way you make a bet on merchandise.
They decide, hey, these stories are going to be hot. I'm going to contract to have these stories created, and I'm going to sell them as webcomics on my platform. That's a fine model. We like that model. Our model is completely different. We attract creators. In that example, we went to Japanese creators who were publishing for the big anime manga shops and said, hey, you can now publish in English. You can publish against 150 million monthly active users, the majority of which, actually, I told you, only 20-something million are in Japan. You have now, what is that? Six times the audience. You can publish in any genre. We will give you a business model where when you become a success on Netflix, we will help you.
We have all this global signal and AI and tech to make sure that you can be a global creator. That is a compelling advantage. If you are a creator in one language, to be able to publish in any language against a global platform with AI and tech, it is a different model. I, as an executive, am not saying I think that U.S. 18- 25s are going to love blank genre. That is a different model. I am letting the market, the signal, and the consumer pick, to my great surprise, actually, things that become Lore Olympus is becoming a New York Times bestselling book in print. This was a wonderful amateur creator from New Zealand who was a graphic designer, had a full-time job. Ingrid Ochoa, who I just spent time with, had no idea that Kiss Bet, her web novel, would turn into a huge blockbuster.
To me, investing in 24-plus million creators over 20 years with AI and tech has finally given this company the ability to self-generate evergreen hits in a way that I don't think any company has yet. That said, I define competition not by what I think, but what the consumer says. The consumer said 77% of them said they can't find these stories anywhere else. If you look at the consumer definition of competition, they can't find these stories anybody anywhere else. Nobody else has the global creator ecosystem to generate them. That's why right now, I don't really think we have competition.
Unfortunately, we're out of time. David, thank you so much for your time, and thank you for your interest in WEBTOON today.
Thanks. Thanks for all.
Of course. Yeah.
Yeah, shake your hand for me.
Of course.
Yeah.
Thank you.
I'll ask you one.