Webtoon (WBTN) Q2 2025: Disney Deal Unlocks 100+ IP Titles, Fuels Platform Monetization Ambitions
Webtoon’s Q2 saw the launch of a multi-year Disney partnership, positioning the platform as a global IP powerhouse and accelerating its English-language user growth strategy. While headline financials showed mixed signals, the company is leaning hard into premium content and product upgrades to drive long-term monetization, especially in the US market. Investors should watch for the impact of new IP launches and ongoing product improvements as Webtoon eyes sustained growth in the second half of 2025 and beyond.
Summary
- Disney IP Expansion: Webtoon’s landmark Disney deal brings 100+ iconic titles, cementing its role as a top-tier digital comics platform.
- English App Momentum: English-language webcomic MAU up 19% for a second quarter, validating product and content investments.
- Monetization Focus: Upgraded onboarding and content formats aim to boost ARPU and user engagement, with North America as the next growth engine.
Performance Analysis
Webtoon delivered 5.5% constant currency revenue growth in Q2, with reported revenue up 8.5%. The company’s operating loss narrowed sharply, reflecting lower G&A after its IPO, but adjusted EBITDA declined year-over-year as investments continued in product and marketing. Segment results revealed a nuanced picture: Japan and Korea posted solid revenue and ARPU gains, while Rest of World lagged due to Wattpad-related headwinds, including government bans and search indexing issues.
English-language webcomic app user growth remained the standout, up 19% for the second straight quarter, as new onboarding, home tab, and content discovery features helped drive engagement. Paid content revenue grew 2% in constant currency, led by Japan, but Korea saw a modest decline. Advertising rose 10.2% in constant currency, with Korea and Japan offsetting softness elsewhere. IP adaptations revenue surged 42.6%, reflecting the growing importance of content licensing and cross-media opportunities.
- ARPU Expansion: Company-wide ARPU rose 7.4% in constant currency, with all regions contributing, highlighting ongoing monetization progress.
- Gross Margin Rebound: Gross margin improved sequentially to 25.1%, benefiting from mix shift toward higher-margin businesses and better ad performance in Japan.
- Wattpad Drag: Rest of World MAU and MPU declines, primarily from Wattpad, weighed on total user metrics but had limited revenue impact due to Wattpad’s lower monetization.
The quarter’s results underscore the company’s transition from pure user acquisition to deeper engagement and higher-value monetization, especially in English-speaking markets where the addressable opportunity is largest.
Executive Commentary
"We are thrilled to kick off this collaboration with Iconic Cities from their comic book catalog, and this is just the start. Together, we are bringing this legendary storytelling to a new generation of mobile-native comic fans while giving existing fans a new way to experience the series' and characters they love."
Jungu Kim, Founder and CEO
"We have not disclosed any significant deviation in our strong unit economics, And I think that when you think about the opportunity, it gives us the opportunity to accelerate new user growth, to let them discover stories that they had not had access to prior. And we hope to deliver equal or more value to our friends at Disney by introducing a brand new relevant format of vertical scrolling content in the hands of Gen Z consumers on their app."
David Lee, CFO and COO
Strategic Positioning
1. Disney and Premium IP as Growth Levers
The Disney partnership brings more than 100 blockbuster comics—including Marvel, Star Wars, and 20th Century Studios properties—onto Webtoon’s vertical scroll platform. This deal is multi-year and includes both reformatted classics and new original series, positioning Webtoon as a top destination for both legacy and next-gen IP. Management emphasized the long-term strategic value over immediate financial impact, signaling a focus on building durable user engagement and monetization opportunities.
2. English-Language Platform Acceleration
English-language webcomic MAU rose 19% for a second consecutive quarter, propelled by revamped onboarding, discovery, and content curation features. The US and other English-speaking markets are now Webtoon’s primary growth engine, with leadership citing “demographic gold” in Gen Z engagement and a deliberate push to pair content upgrades with improved monetization mechanics.
3. Monetization and Product Innovation
ARPU grew across all regions, supported by new paywall structures, more personalized onboarding, and alternative ad formats (such as video ads for content unlocks). Management sees further upside as free-to-paid conversion remains low relative to engagement, and as video ad inventory is built out in North America. The company is also experimenting with cross-format content, leveraging both user-generated and premium IP to drive consumption.
4. IP Adaptations and Cross-Media Expansion
IP adaptations revenue jumped over 40% year-over-year, with Korea and Rest of World leading and Japan still early-stage but with a strong pipeline of anime projects. Webtoon’s ecosystem approach—spanning webcomics, web novels, and adaptations—aims to maximize the value of its intellectual property across formats and geographies.
5. Wattpad’s Evolving Role
Wattpad remains a drag on global MAU but is not a major revenue driver. Leadership continues to view Wattpad as a strategic source of original IP for future adaptations, rather than a near-term monetization lever. Recent government bans and technical disruptions are expected to be lapped in Q3, with limited impact on consolidated financials.
Key Considerations
Webtoon’s Q2 marked a strategic pivot toward premium IP and deeper engagement in English-speaking markets, with the Disney deal serving as a watershed moment for the platform’s global ambitions. Investors should weigh the following:
Key Considerations:
- Platform Differentiation: Disney and Dark Horse Comics partnerships create a unique content moat, attracting both new users and established fandoms.
- Monetization Levers: Upgraded onboarding and ARPU growth signal early success, but the company must prove it can convert engagement into sustained revenue, especially in the US.
- Advertising Upside: Video ad formats and direct sales initiatives are in early stages in North America, with success hinging on user habituation and advertiser adoption.
- Content Ecosystem Depth: Cross-media IP adaptations and Wattpad’s original stories create optionality for future growth, even as Wattpad’s near-term metrics remain volatile.
- Execution on Product Roadmap: Management’s ability to deliver on promised app upgrades and content launches will be critical to maintaining growth momentum and margin improvement.
Risks
Webtoon faces execution risk in translating premium IP partnerships into sustained user and revenue growth, particularly in competitive Western markets. Regulatory and technical disruptions, such as government bans on Wattpad, could continue to impact user metrics, though revenue exposure is limited. Advertising ramp in North America is unproven, and the company’s willingness to invest ahead of profitability may pressure margins in the near term.
Forward Outlook
For Q3 2025, Webtoon guided to:
- Constant currency revenue growth of 9.4% to 12.2%, or $380–$390 million
- Adjusted EBITDA of $2–7 million, reflecting ongoing marketing and product investment
For full-year 2025, management maintained a focus on product and content investment, reiterating optimism for improved platform performance in the second half:
- Continued rollout of Disney and other premium IP titles
- Further onboarding and discovery upgrades to drive user growth and ARPU
Management highlighted several factors that will shape the trajectory:
- Delayed financial impact from Disney partnership, with benefits expected to build over several years
- Ongoing investment in English-language user acquisition and engagement
Takeaways
Webtoon’s Q2 was defined by a strategic leap into premium IP, with the Disney partnership setting the stage for global content leadership and deeper monetization. While headline metrics were mixed, the company’s focus on product innovation, ARPU growth, and English-language expansion signals a clear long-term playbook.
- Premium IP as a Platform Magnet: The Disney deal and similar partnerships differentiate Webtoon from digital comic peers and traditional publishers, creating a flywheel for user and advertiser growth.
- English-Speaking Market as Growth Engine: Sustained MAU gains and rising ARPU in the US and other English-speaking regions validate the investment thesis, but execution on monetization remains key.
- Product and Content Execution Will Define 2H25: Investors should monitor the pace of app upgrades, new IP launches, and advertising ramp in North America as leading indicators of future trajectory.
Conclusion
Webtoon’s Q2 2025 results mark a turning point, with premium IP partnerships and product upgrades positioning the company for long-term leadership in digital comics. Execution on content launches, monetization, and market expansion will determine whether the strategic vision translates into sustained financial outperformance.
Industry Read-Through
Webtoon’s aggressive move into premium IP and mobile-first content formats is a wake-up call for both legacy publishers and digital platforms. The Disney partnership signals that major media companies increasingly view vertical scroll and webcomic formats as critical channels for Gen Z engagement. Competitors in digital publishing, streaming, and even gaming should monitor how cross-media adaptations and mobile-native storytelling reshape user expectations and content monetization models. As advertising and direct-to-consumer models converge, the battle for IP and platform loyalty will intensify across the broader entertainment ecosystem.