WEBTOON Entertainment Inc.

Thank you for standing by. My name is John, and I will be your conference operator today. At this time, I would like to welcome everyone to the WebToon Entertainment first quarter 2025 earnings call. All lines will be placed on mute to prevent any background noise. After the speaker remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. To withdraw your question, simply press star one again. I would now like to turn the call over to Sue and Kim, Vice President of Investor Relations. Mr. Kim, please go ahead.

Good afternoon. Thank you for joining us. Our remarks today will include four looking statements, including those regarding our futures plans, objectives, expected performance, and particularly our guidance for the next quarter. Our actual results may vary materially from today's statements. Information concerning risks, uncertainties, and other factors that could cause these results differs, including our SEC filings, including those restating the risk factors section of our annual report on the Form 10-K. These four looking statements represent our outlook only as the data looks called. We undertake no obligation to revise or update any four looking statements. Additionally, the matters we'll discuss today will include both GAAP and non-GAAP financial measures. Reconciliations of any non-GAAP financial measures to most directly comparable GAAP measures are set forth in our earnings press release. Non-GAAP financial measures should be considered in addition to and not as a substitute for GAAP measures. Joining me today on the call are Jungu Kim, Founder and CEO, David Lee, CFO and COO, and Yongsoo Kim, Chief Strategy Officer. With that, I will now turn the call over to our Founder and CEO, Jungu Kim.

Thank you, everyone, for joining us today. I'll make a few brief comments on our first quarter performance, and then David will provide more detail on our results and outlook. For my full thoughts on the first quarter and our path forward, please refer to the shareholder letters posted on our investor relations website. We reported strong first quarter results with revenue and adjusted EBITDA both coming in at the top end of our guidance range as our flywheel of creators, content, and users continue to drive significant value. Now, I'd like to share a few highlights from the first quarter. We have grown our presence in Japan, which represented over 50% of our revenue in Q1. Japan grew all three businesses in this quarter, paid contents, advertising, and IP adaptations. We are pleased to maintain our top position in Japan with LINE Manga ranking number one in overall app ranking chart for revenue including the mobile games according to SenseTower. We talked last quarter about how we initially exported Korean content to Japan to get started but have since built a local creator ecosystem in the market. We are now taking our cross-border strategy one step further by taking Japanese content to other markets. We launched Overpowered and OverEat in the U.S. and France, ranking in the top 10 of paid GMB, for each respective country for the month ending March 31st. The Bureau of the Incompetent STEMMOM was another Japanese title that performed well on our English language platform, ranking second in launch date GMB. Leveraging our learning from core market in Korea and Japan, we are making key investment in our English language platform. We have a number of initiatives from a new user onboarding experience to a revamp of the home, search, and new and hot tabs, which forms the core content discovery experience. Even though it's in the early days, we are pleased to see users in our test group show a 9% increase in a number of episode leads compared to the control group. We look forward to bringing reformatted titles like Sonic, the Hedgehog, and Fullmetal Alchemist to our platform this quarter, which we believe will help us expand our user base. Finishing up with IP adaptations, our adaptations of WAPED's hit title, Marla Influencia, recently launched on Netflix. As we discussed in the shareholder level, we are pleased to continue building on our past Spanish language success. We believe we have compelling contents that resonates with audience around the global and that IP adaptation will continue to drive new users to our platform. Before I turn the call over to David, I want to acknowledge the recent uncertainty and volatility in the market. While we are monitoring the market health of our users closely, we believe we have a resilient global business model that can withstand a potential downturn. Our AR CPU is around $12 per month, which is not a large amount, especially for the entertainment value that we provide. This is also not a single subscription price, but rather made up of many microtransactions. It depends on the geographic market. A fast pass typically costs 15 to 70 cents per episode, while a daily pass costs 30 to 40 cents per episode. We also provide a large amount of free content and offer our users the option of reading episode for free by watching advertisement. As a result, we believe we can continue to deliver great value to our users regardless of the environment. I'm pleased with the result we delivered this quarter and look forward to making continued strategic progress as we move through the balance of the year. With that, I will now turn the call over to David. David, please go ahead.