Webtoon: Playing the Waiting Game

Research evidence excerpt

Webtoon: Playing the Waiting Game

Deutsche Bank

Research

Rating Company Date

Buy Webtoon 12 May 2026

Forecast Change

North America

United States

Reuters Bloomberg Exchange Ticker Price at 11 May 2026 (USD) 13.31

WBTN.OQ WBTN US NSM WBTN

Price target 13.00

TMT

52-week range 21.31 - 8.05

Internet

Playing the Waiting Game

Valuation & Risks

Kunal Madhukar, CFA

Webtoon's 1Q26 top-line results came in line with our/Street expectations and

Research Analyst

within the company's guidance range, while Adj. EBITDA meaningfully exceeded +1-212-250-9357

the high-end of guidance ($9.5mn vs. $5mn high-end), demonstrating effective

cost discipline. However, the 2Q26 Adjusted EBITDA outlook of $0-5mn (margin Benjamin Black, CFA

0.0%-1.5%) implies a meaningful step-down in profitability versus the 3.0% margin

+1-212-250-9218

in 1Q, as the company ramps reinvestment into the unified CANVAS platform, the

AI-powered Translation Program, and creator/content discovery initiatives ($50mn Jeff Seiner, CFA

FY26 commitment). In our view, the results and outlook continue to present short- Research Associate

term narrative challenges especially around IP Adaptation revenue volatility (- +1-212-250-8153

22% y/y FXN), persistent paid content weakness in Japan (-3.4% FXN with MPU Benjamin Hui, Esq.

-8.3% y/y), and softer MAUs (-6% y/y). Nevertheless, these short-term headwinds Research Associate

do not fundamentally alter our long-term investment thesis. WBTN is a global +1-212-250-2064

leader in its space that continues to build upon a dominant IP library, and has a Raymond Wong

powerful creator ecosystem which would only get stronger with its partnerships Research Associate

with Disney and Warner Bros. We also note that Disney closed on its previously +1-212-250-2060