WEBTOON Entertainment Inc. Common stock Price & Performance (WBTN)

Good afternoon. Thank you for joining us. As a reminder, our remarks today will include forward looking statements, including those regarding our future plans, objectives, expected performance, and particular, our guidance for the next quarter. Actual results may vary materially from today's statements. Information concerning risks, uncertainties and other factors that could cause these results differ as included in our SEC filings, including those stated in the Risk Factors section of our filings with the SEC. These forward looking statements represent our outlook only as of the date of this call. We undertake no obligation to revise or update any forward looking statements. Additionally, the matters we discuss today will include both GAAP and non GAAP financial measures. Reconciliations of any non GAAP financial measures to the most directly comparable GAAP measures are less set forth in our earnings press release. Non GAAP financial measures should be considered in addition to not as a substitute for GAAP measures. Joining us today on the call are Chunghoo Kim, Founder and CEO David Lee, CFO and Yong Soo Kim, Chief Strategy Officer. With that, I will now turn the call over to our Founder and CEO, Chun Woo Kim.

Thank you, everyone, for joining us today.

I'll make a few brief comments on our performance and then David will provide more detail on our results and outlook.

For my full thought on the year and our path forward, please refer to the shareholder letter posted on our Investor Relations WEBTOON. 2024 was an important year for Webtoon.

We became a public company making the beginning of an exciting new chapter in our history. And our creators and IPs continued to grow their influence all over the world. I'm pleased to share that we reported strong results for year 2024 will record annual revenue and profitability. Revenue of $1,350,000,000 grew 5% on a reported basis and 13% on a constant currency basis. While we reported net loss of $153,000,000 mostly due to non cash We reported a record adjusted EBITDA of $67,900,000 an increase of more than 600% compared to 2023. We believe these measures demonstrate that our strategy and flywheel are working. I'd like to share a few highlights from 2024 starting with the progress of our business in Japan. By leveraging our leading position in Korea, and our successful and differentiated growth for the strategy We've been able to take the top position in Japan for the second half of twenty twenty four.

As measured by revenue in the non game app market. After successfully exporting a number of our hit Korean content to Japan, including series like Teenage Mutant Ninja, we are now focused on building a powerful local creator ecosystem in the market. In January, we invested in No. Nine, our Japanese studio that has produced titles such as our Global Heat Savior of Divine Blood. Which was Linemanga's first local web comic to become a breakout hit both in and out of Japan. Our investment in No. Nine will boost our content pipeline in Japan. The company's largest geography and the fastest growing market. Further, our individual amateur platform in Japan is helping us discover local creators and maintain a pipeline of fresh new content. Zenpai is on OTTO co discovered through Indeed and was developed into a successful commercial anime series in 2020 With its continued popularity this type has since been effective into a new animated feature featuring by NCLEX. Our incredible success in Japan is evidence of the power of our strategy We are taking similar actions at various stages in The U. S. And the other key markets. Investing in content studios and creators to build our global content pipeline Finishing up with IP annotations, we had a number of successful launches In Q4, and we are off to a great start in 2025.

Three examples of this include first, [indiscernible] Born in Korea was ranked sixth in Disney plus global TV show category in November. Second, over The U. S. Thanksgiving weekend, we launched the Sideline, the QB and Me, The project was instant hit reaching number one on [indiscernible] in The U. S. And Canada. During the biggest number of viewers of anti tide on Tubi, in its first seven days. This success has already led to a green light [indiscernible] And finally, in January, the drama called Heroes on Court debuted on Netflix as a global stream hit, spanning four weeks the streamer's top 10 non English category. We've intentionally built our global IP and creator ecosystem to develop titles that can find variety of audience across formats We believe these services will continue to drive new users to our platform as viewers seek out the original source material for these other patients. In conclusion, Our success in 2024 was driven by our passionate and dedicated community of creators and users who continue to create share and enjoy stories on our platform.

I also want to thank our employees for their continued commitment to our company and our mission. Looking to 2025, I remain confident in our ability to continue driving innovation with both new initiative to grow our business and ecosystem as we continue to democratize storytelling by bringing comics and new form of visual storytelling to the creator economy.

With that, I will now turn the call over to David. David, please go ahead.

Thank you, JK, and thank you everyone for joining us. I'm going to focus my commentary on fourth compared to the prior year unless otherwise noted. During the fourth quarter, we grew revenue 10.4% on a constant currency basis with growth across all revenue streams. Our reported revenue was up 5.6% year over year as a result of strength in paid content, and advertising. Partially offset by our exposure to weaker foreign currencies. As we executed on our cross border content distribution strategies, we also gained greater leverage on our gross profit. Which expanded 45 basis points year over year. If you adjust for the e book marketing expenses, which moved from marketing to cost of revenue during the quarter, gross margin expanded by 147 basis points. On a sequential basis, gross margin declined due to a sales mix shift to certain studio and performance based ad businesses both of which have higher revenue share ratios. Net loss was $102,600,000 in the quarter, compared to a loss of $95,300,000 in the year prior. Driven by higher general and administrative expenses due to public company costs and higher marketing expense. Adjusted EBITDA was negative $3,500,000 in the quarter compared to a positive $10,400,000 in the same quarter of 2023.

We were primarily impacted by increases in actuarial losses on retiree benefits a non cash, non operating expense as a result of a third party evaluation. As well as the effects of currency and lower gross profit in Korea due to a shift in revenue mix.

Actuarial losses had an impact of approximately $6,000,000 to adjusted EBITDA in the fourth quarter.

As a result, our adjusted loss per share for the quarter was $0.03 compared to adjusted earnings per share of $0.09 in the prior year. Turning to operational health. Total company MAU was down roughly On our last call, we shared our efforts to focus on driving app users who are more engaged and present better monetization opportunities. While app MAU decreased slightly by 1.5 overall, we saw a 6.7% increase in WEBTOON App MAU when we removed the impact of web novel users. This growth was led by increases across importance, English speaking markets as well as other key countries like France, As mentioned last quarter, we continue to see pressure on rest of world MAU due to a government ban on Wattpad in one country. While we're working closely with that government to get the ban lifted, the fourth quarter included the impact of a full three months of the ban accounting for two thirds of the MAU decline in rest of world. Although webcomics tend to generate higher revenue and profitability than web novels, which we believe is an indication of our acceptance in rest of world web novels are still an important piece of our IP strategy as the format's lower barrier to entry allows even more creators to showcase their stories on our platform.

Wattpad remains the global leading platform for web novels, and we are focused on returning the platform to growth and profitability. Now I'd like to provide an update on our revenue streams at consolidated level. Starting with paid content, In the quarter, we posted 10.9% revenue growth on constant currency basis year over year. For the full year, we posted 12.6% revenue growth on a constant This was driven by our ongoing strength in Japan which continued to show double digit growth. As well as successful monetization efforts in Korea, and the rest of the world.

Additionally, ARPU growth on a constant currency basis of 12.4% in the quarter and 13.7% for the full year represents success in driving paying user engagement as we continue to improve our recommendation models and users increase their propensity to spend on the content they love.

While we have seen MAU declines in Korea and rest of world, due to decreases in web users coupled with the continuing Wattpad ban, I just mentioned, we've been able to post solid revenue growth with strong ARPU growth Advertising posted 27.4% revenue growth in the fourth quarter, on a constant currency basis year over year. This strong performance was driven by double digit growth in Korea and Japan, In Korea, saw increased ad sales from both Neighbor and other partners as the strength of our offering continues to draw interest from partners. Japan's growth was driven by higher year over year MAU for Line Manga and Ebook Japan. During Q4, we introduced rewarded video ads to eBooks Japan as we continue to make improvements on that platform. For the full year, we posted 19.8% Advertising revenue growth on a constant currency basis. Finally, our IP adaptation business saw revenue decline 6.9% year over year on a constant currency basis in Q4. Driven by declines in Korea and rest of world, partially offset by growth in Japan. For the full year, IP adaptation revenue was up 6.7% on a constant currency basis. While the pipeline of entertainment projects in Korea remains strong, we experienced a prolonged delay in project timing in Q4.

In 2025 and beyond, we are excited to bring our latest Studio end projects to market and believe our IP adaptation strategy continues to support brand awareness globally driving traffic to our platforms. Now I'd like to look at our results in the context of core geographies. In Korea, during the fourth quarter, our revenue grew 6.6% year over year on a constant [indiscernible] primarily driven by growth in paid content and advertising revenue. We continue to see benefits from rollout of our AI recommendation engine from Q2 and we also saw balanced growth in ad sales from Neighbor and other partners. For the full year, we posted 0.5% revenue decline on a constant currency basis.

During the fourth quarter, MAU of $24,500,000 decreased 0.5% NPU of $3,600,000 declined 8.6% and our paying ratio of 14.5% was down 129 basis points compared to the fourth quarter of twenty twenty three.

As we reported when we preannounced results a few weeks ago, we experienced some short term engagement impacts from that occurred during the fourth quarter.

That said, ARPU on a constant currency basis was up a solid 16.3% compared to the fourth quarter of twenty twenty three. Representing the strong relationship we have with our existing users. As we mentioned previously, our AI driven personalized recommendation model which was fully rolled out in June of twenty twenty four, continues to improve home tab recommendations. During the fourth quarter, we saw the number of weekly episodes viewed per user increased 2%. Moving to Japan. For the quarter, Japan posted revenue growth on a constant currency basis of 18.9%. This was driven by significant growth in each of our revenue streams, LINE Manga is now firmly on top of the market in Japan as Sensor Tower data shows that we topped the non game app market by revenue in for both the fourth quarter and the second half of twenty twenty four. For the full year, we posted 25.8% revenue growth on a constant currency basis and Japan now represents nearly half of our total revenue. Compared to Q4 twenty twenty three, Japan's MAU of $22,100,000 increased 6.6%.

NPU of $2,300,000 grew 15 and paying ratio of 10.3% was up 75 basis points.

Engagement with paid users steepened with fourth quarter ARPU of $22 growing 2% year over year on a constant currency basis as we launched 164 new original titles during the quarter. As JK talked about our localization efforts in Japan earlier, we're particularly pleased to note that local Japanese title launches made up the majority of our launches in the quarter. In the rest of the world, we saw revenue decline 3.3% driven by declines in pay content and IP adaptations in the quarter, partially offset by growth in advertising. For the full year, we posted 14.9% revenue growth on a constant currency basis. While fourth quarter MAU and NPU declined 6.13.3% year over year respectively, paying ratio of 1.4% stayed consistent year over year ARPU of $6.9 grew 2% year over year on a constant currency basis. Turning to profitability.

Gross profit for the quarter was 82,300,000.0 compared to 76 point representing growth of 7.7%. This resulted in a gross margin of 23.3% which expanded 45 basis points compared to the prior year. Starting in Q4, part of e book Japan's marketing expense was moved from amounting to an impact of $3,600,000 Excluding this reclassification, gross profit would have been $85,900,000 dollars or an increase of 12% from the prior year. Approximately 24.3% of revenue. Gross margin declined sequentially due to a sales mix shift to certain studio and performance based ads businesses both of which have higher revenue share ratio.

While there was some temporary mix shifts that impacted gross profit in the short term, we expect to increase our gross margin over time as we increase our pay content in markets outside of Korea. Adjusted EBITDA loss for the quarter was $3,500,000 compared to a profit of $10,400,000 in the prior year.

Actuarial losses on retiree benefits a non cash non operating expense based on a third party evaluation. Had an impact of approximately $6,000,000 to adjusted EBITDA. In the fourth quarter.

On the cost side, total G and A expenses for the quarter were $77,800,000 as compared to 55,100,000.0 in the prior year quarter.

Primarily as a result of public company costs.

Interest income in the fourth quarter was $6,000,000 compared to $700,000 in the prior year, other loss was $6,200,000 compared to 20,800,000.0 in the prior year period. Income tax expense of $4,100,000 in the quarter compared to a benefit of $7,500,000 in the prior year.

Depreciation and amortization was $12,100,000 compared to $10,400,000 in the prior year. Net loss of $102,600,000 was primarily driven by higher general and administrative expenses due to public company costs, higher marketing, and higher impairment losses on goodwill which were primarily related to our WEBTOON novel businesses. As a result, GAAP loss per share was $0.72 compared to a loss per share of $0.62 in the prior year period.

Adjusted loss per share was $0.03 in the quarter compared to adjusted earnings per share of $0.09 in the prior year period.

For the first quarter of twenty twenty five, we expect to deliver revenue growth in the range of 1.7% to 4.8% on a constant currency basis.

This represents revenue in the range of $318,000,000 to $328,000,000 This guidance is based on current FX rates, rather than FX rates from the end of Q4 twenty twenty four.

As we have discussed previously, we will face FX headwinds in the first quarter and the first half of this year as rates were more favorable in the first half of twenty twenty four. We continue to experience delays with IP adaptation in Korea despite a strong slate. We are also investing in our infrastructure ahead of product improvements which will occur in the back half of 2025. We anticipate first quarter EBITDA in the range of $500,000 to $5,500,000 which representing an adjusted EBITDA margin in the range of 0.2% to 1.7%. In addition to revenue factors I just referenced, we expect to maintain our strategic investment in marketing to drive future growth. We also have additional public company expenses this quarter that we did not have in the year ago quarter as a private company. While we are not providing full year guidance, we continue to believe in the fundamental health of our long term strategy. Underpinned by our powerful flywheel of creators, content and users. Over the long term, our goal is to generate profitable, constant currency revenue growth. In closing, I'm pleased with the progress we made in our first year as a public company. While there's still much work to be done, we're encouraged by positive signs we see in key regions like the English speaking markets, and France, and we look forward to executing our strategy in 2025.

With that, I'd like to turn it back to our operator to begin the Q and A session.

Thank you. As a reminder, Our first question comes from the line of [indiscernible] Mahaney from Evercore.

The line is open.

Okay. Okay. Thanks. I'll ask two questions please. First, the strength that you're seeing in Japan, just talk about the sustainability of that as embedded in your March guidance and and maybe for the full year? And the second question really has to do with the full year. You've got a lot of puts and takes. The anniversarying of the Wattpad the outage or however you want to say that, The strength in Japan, you've got MAU issues that should stabilize. There are a lot of puts and takes should we think about the growth and the profitability levels just directionally post the March? Thank you very much.

Thanks, Mark. It's a great question and one that I really do want to answer. I want to first be clear, we are extremely confident in the fundamental business we have. The flywheel that JK has created and the rocketship that is Japan we continue to be very bullish on. That said, I wanted to be clear on some of the discrete issues that are reflected in the Q1 guidance and try to be helpful for you as you think about your model. Thereafter. Did have a few very specific discrete items that I think are specific only to One of the key ones is that we talked about a great IP slate in Korea we gave examples of Trauma Code, Jung Yong Yi, A Star is Born. And in The U. S. Even, we talked about a great film on Tubi called Sideline, the quarterback and me.

So while the fundamental health of the IP slate is strong, The sequence of timing in Q1 is a factor on your compare to previous quarter. Similarly, within the Q1 guide, while we maintain our investment in marketing because we're really bullish on the user opportunity we see, particularly as we mentioned in English speaking countries and abroad. We still post or suggest that we are going to guide towards a positive EBITDA range. Importantly, the sequence of product development, JK founded this company on technology and product innovation. And he's been very specific both in the shareholder letter as well as his commentary today that a large portion of it is sequenced towards the back half of the year. And what we discussed whether it's highlights, the ability to unlock entire series, [indiscernible] improvement in the way in which we engage with users on the home landing page These are significant, but they affect the remainder of the year. And so when I think about our fundamental business, while we are only guiding quarter out We've talked about not just our target, but our confidence in how we've demonstrated previous strong profitable growth And I encourage you to think about the business mid to long term with that confidence.

That said, we want to make sure we're very clear in Q1 One other point, Mark, which is important. We previously guided on an FX basis based on the last day of the previous quarter.

But we have seen unprecedented change in the rate of the Korean won versus the USD and some investors had trouble tracking what we based our guidance on though we'd like to be parent to what the current FX for a given period might be. So just be clear that in the guide for Q1, position to a current rate a current rate that one could argue is at a historic weakness for local currency relative to the USD I wanted to make sure that was also clear in your model. Your second question was specific to Japan. I would just say in short, whether you want to look at the 165 new original titles that launched, most of which were locally created or the fact that we're rated as number one revenue line manga is outside of mobile games, we feel very strongly that we built a a rocket ship in Japan and we're excited about it.

Thank you. Your next question comes from the line of from Goldman Sachs. The line is open.

Thank you so much for taking the questions. I want to come back to some of the things you highlighted in the shareholder letter with respect to investments.

In users and creators. Can you go a little bit deeper in terms of how usability and elements of giving users new onboarding experiences can continue to drive increases in user engagement and maybe a little bit of quantification of what you might be seeing in rate of change from an engagement? And second part of it would be just you talked about exploring new formats to include engagements. How should we be thinking about what that might mean either in investments you need to make or again what it might mean in terms of lift on engagement or conversion of traffic? Thank you.

Thanks, Eric. Another great question. First, on overall levels of investment Q1 as well as in our strategic commentary in JK's letter, we are already making investments in the periods reported and in the guidance both in marketing and in product innovation.

And clear, we're going to post or promise to post positive adjusted EBITDA. So I would not want you to read our comments on investment to be at the expense of our fundamental profitability. That said, I wanted to highlight specifically what JK mentioned in product and then we can talk about marketing because the innovation of our content flywheel with our creators product is key, And he was very specific. We talked about in January how we revamped the onboarding experience for new users. Showing them preference We talked in Korea about this AI based personalization engine that while launched in June continues to show a 2% sequential increase in new titles red, We actually provided some additional color commentary you may not have seen before regarding how we're testing this trailer style promotional video called Highlights And then we're even talking about different business model options, which includes unlocking an entire series for a completed title, these are not insignificant. And ones that we have been testing in some cases for some time all of these will pay off, we believe, post the Q1 guidance period which is part of the reason why our resources are focused on long term value creation throughout the Q1 period.

We remain very confident in that. With regard to marketing, I have always said, JK has always said as well, that we will invest for the long term business health. Our investments in marketing, we do not expect nor desire for them to show up one quarter out. The investments in marketing show up in greater engagement in rest of the world where we see already ARPU increasing significantly as more and more English speaking or English reading engage more with our content. So I would think of the marketing as being a longer term payoff but product is real. It shows up in the everyday experience of consumers which will likely be in the back half, second half of the year. That's how I think about the sequence of those investments.

Great. Thank you.

Thank you. Our next question comes from the line of Benjamin Black. From Deutsche Bank. The line is open.

Great.

Thank you for taking my question.

So just a follow-up on the AI recommendation engine in Korea. I know you mentioned that it drove sort of a 2% increase in engagement per user. So it's really great to hear sort of more about your learnings here. How big of a lift could AI driven recommendations become? And so generally speaking, how should we think about user growth in the near to midterm? And then the second question is, you mentioned the political disruption in Korea. Could you just talk about how MAU impaired trends have progressed so far this year?

Thanks, Benjamin. First, with regard to the AI personalization engine, the reason why we talk about it in relation to our experience in Korea as as you know, Korea is an extremely robust market. When you have 50% household engagement and there is habituation well in place with strong ARPU, as we release more content and that's why crossover IP is so powerful in Korea. As we release more content, any impact we can have on presenting users what they want to potentially read.

Just given the depth of the content and the amount of habituation we think is critical for long term growth. We're not providing guidance specific to any one of our new product releases. But we have talked about how we are focused on web comic app MAU growth. We specifically highlighted a new metric for you the spirit of transparency around a 6.7% increase. And while we highlighted it, and we talked about strength, abroad. This will become something I promise we will talk to you all about more and more because it's that app MAU growth, particularly for webtoons or webcomics, where you will see the benefit of product innovation show up in paid content revenue. Our web novel business critical for our crossover IP is more for the scale of our advertising business where we really see paid content strength and the heart of which is in Korea and [indiscernible] is really around those product innovations. So I can't provide you more specific metrics today, but I wanted to inform strategically why we're beginning to disclose more and more of this metric called WEBTOON App MAU. As for commentary with regard to January, I would trust the guide that we've given you for Q1 which do include us.

We mentioned these issues that we faced starting in Q4, this political turbulence. We also said that our guide reflected the fact that while we believe those issues have resolved, our Q1 guide reflects our best estimate today on the performance in the first three months.

Great.

Thank you. Our next question comes from the line of Doug And from JPMorgan. The line is open. Great. This is Deane on for Doug. Thanks for taking my questions.

Just a follow-up on your 1Q guide.

You talked about some of the discrete issues like the IP slate and Your commitment to EBITDA and also some of the issues that like the political unrest in Korea that it happened in 4Q, but it's falling into 1Q.

Like, when you were to look at the magnitude of the impact across those items, Like what do you think is the bigger driver? And is the IP slate being pushed out also affecting some of the organic traffic acquisition that you've not been assuming for in Korea and other regions?

Well, one way I can answer that is to point you to a longer period than a quarter. So when you look at our overall penetration of versus paid content, you'll note that it's actually a relatively small percent of total revenue. And I can send you the specific numbers. I think we disclosed it primarily at a total company level. So I wouldn't read the IP slate delay as being an annual or persistent mid to long term issue. It can affect a quarter, and that is because of how much of a great organic lift it can provide. If you think about what we have talked about in previous periods like Merry My Husband, which was a phenomenon globally that started actually as a web novel then a web and then crossed over to Amazon Prime as a global hit in Q1 of twenty twenty four, that had lifted engagement and usership globally across our business and had some revenue impact in that quarter, just as an example of something I can discuss outside of the guide period. I do not I think the strength of our IP slate is significantly important as a source of strength overall It's just in a given quarter, it may have an impact.

The other thing I would emphasize is we are not a whale dependent business. We do not see a single hit move the paid content engine. But if a slate that includes more than one or two projects shifts by a month or two, it would affect our short term quarterly guide. Long term though, I want to be clear, we feel like our IP slate is a source of increasing strength. Hope that answers that question. And then with regard to the short term impact on some of the other issues, again, we can only point you to the guide. We have said that we don't think these issues, for example, to political turmoil in Korea, persist beyond the guided period it is something that we do want to include as a reason for our Q4 performance.

As well as our Q1 guide. And as a quick follow-up, on the IT adaptation delay, could you explain what's causing that delay? And what's your strategy when like projects get pushed out? Do they just all kind of like fall into future quarters Meaning like, do they have to compete against each other or does the pipeline kind of move back together? [indiscernible] Yes. So first, we are not we've never liked to depend on the short term timing of a given IP crossover. We rejoice when they reach market and drive engagement with our users. But we're not managing to a short term schedule. That's why we would much rather have them come to market in the best organic way because we know that they organically lift our core paid content engine very well. So as a result, we don't seek to manage the short term schedule [indiscernible] because remember, we have the advantage of not having to deploy massive amounts of studio dollars we have these hits that cross over to feature length film and other forms of crossover IP that then benefits our paid platform. So rather for me this is an IR disclosure issue where I want to be clear on the timing and impact on future results rather than seek to short term manage when they come out.

We're also not at a scale yet with this business. Where we need to worry about cannibalization or one affecting another. These crossover hits we think they're pretty significant, but they don't compete for share of mind when they come out. They have a fairly diverse source of content and the timing of them remember this is not a primary business. The timing of them benefit the core paid content platform for us.

Got it. Thank you. Thank you. Our next question comes from the line of Matthew Koss the line is open.

Hey, thanks for taking the question. I want to ask about advertising.

Shown a really nice maybe you saw an opportunity to show that advertising business really inflect maybe even as early as kind of the first half year. So I guess now that we're almost two months into the year, how is advertising scaling? Where are you tracking versus where you hoped to be common and what initiatives would you call out as needed moving on the ad side? And then I have one follow-up. Thank you.

Thanks, Matt. Advertising continues to be a strength. On a constant currency basis, just underlining the 27.4% increase.

While we didn't disclose it by region, when I peel back internally and look at Japan versus Korea versus rest of world, I'm seeing growth in the Q4 period constant currency in all markets. Remember, we've talked about how advertising is a nascent opportunity in markets like English speaking markets in rest of world and Japan.

Where we feel like we have a fair amount of room to run, not having a robust direct ad sales force yet, for example, in North America. So I think it's early days and we're really pleased with the continued quarter quarter growth we see on a constant currency basis.

Great. And then just following up on the app NAU number. So if I understand it correctly, the total app NAU number But if you back out web novel users, web comic, app end user up almost 7%. So I guess part one is like, is that accurate? And then part two, is the impact on web novel users is there is that a result of some changes that you've made to the experience of WEBTOON novel users Is that something that will continue as a headwind? How should we think about that from here? Thank you. Well, first on the accuracy of your interpretation, yes, 6.7% growth In the Q4 period, when we look at webcomic MAU that excludes web novels. An example of that would be our Wattpad business. First, let me explain why we're disclosing this. Wattpad is an important business for us, but it is not a business that is as driven by paid content as it is by other business models. And it's a source of crossover IP given its scale.

In fact, when we talk about sideline the quarter back in May and other feature length films, many of the examples that we've mentioned in the web novel Wattpad platform. So we value it. But when we talk about this metric that grew 6.7%, we're trying to more precisely you where the paid content engine look up because the paid content engine is driven by product improvement and where we monetize on a paid content basis and that is more so from our global web comic business than for example our web novel business. So that's the reason why we are pointing you towards that number. The other reason we're pointing you towards that number is I want to be transparent about what we've disclosed in total MAU from Wattpad. Our total MAU declined in Q4 and we pointed specifically to one country that banned WAPAT which actually drove two thirds of the total rest of world MAU decline, just one country's embargo that we saw the full quarter impact in Q4. So part of the reason why we're trying to be transparent is sometimes we worry that when we show these total MAU numbers, not helpful to the investors on where this big product innovation is going and what metric on a non GAAP basis it's more tied to.

We're just at the beginning of providing more disclosure on this but that's the primary reason why we shared it in this release.

Great.

Thank you.

Thank you. And our next question comes from the line of Andrew Merritt from Raymond James. The line is open.

Hi, thanks for taking my question. Maybe one on kind of the supply supply side of the equation here, maybe more as it relates to paid content rather than IP adaptations. But if you could just talk about kind of your level of comfort and your level of or your evaluation of the new content that's kind of come online, both in terms of the the quantity as well as kind of the cohort behavior how that's monetizing versus your expectations? And any commentary about the breadth or geo mix of those things that we can that we can use for our models as we're looking into 25.

Thanks for the question, Andrew. I think while there could be quarterly slips, in a market like Korea where we are so dominant we feel strongly that our content engine in every market is robust. The market that we provided the most disclosure I think you want to spend time in your model is Japan. We talk about not just the share growth being the number one app outside of mobile gaming for Line Monga, but we specifically called out 164 new original launches, the most of which are local. This is very important. When JK creates flywheels, they export globally. But when they are created locally, those creators have now the ability not just to publish in the language of origin, in Japanese, for example, but they have the power like savior of divine blood to reach audiences outside of their original market.

And the reason why that's important is sometimes, folks look at our business and they think, the source of content can only come from one country for the consumption of one country. When in reality, we've proven there's a global consumption for content to market is. And so Japan is going to, I believe, be a robust long term source of content, not just for Japan, but giving those local Japanese creators access to the rest of world and Korea helps them and it helps our business. So I think you should think of these local sources of content as having a global outlet. With regard to the rest of the world and Korea, we didn't provide too much commentary in this release because it was a year end release.

But JK's intentionally spent time on the crossover IP slate because I think it's a very powerful low cost way that we do marketing. When a creator has an unexpected hit that hits feature length film, like the ones we've mentioned in this release, it naturally lists the platform. I think that's a testament to the power of the flywheel we have. It's at scale and it's growing. So for the mid to long term, we feel very good. I think we're just trying to be very transparent Q1 guide to establish a practice of ensuring that we are providing as much information for what we know about, which is this quarter, but the mid to long term is bright, particularly as a source of content from creators.

Thank you.

Thank you. Seeing as there are no more questions in the queue, that concludes our question and answer session. I would now like to turn the call back over to the WEBTOON Entertainment team for closing remarks.

Thank you very much and we look forward to Meeting you over the current period and then providing new results at the end of Q1.

The meeting has now concluded. Thank you all for joining. You may now [indiscernible]