WEBTOON Entertainment Inc. (WBTN) Earnings Call Transcript & Summary

Thank you so much for joining us, everybody. I'm Nathan Feather, Morgan Stanley's small and mid-cap Internet analyst, pinch-hitting for Matt Cost. I am excited to be joined today by David Lee, CFO and COO of WEBTOON. Thanks so much for joining us.

Happy to be here.

Now before we begin, a few quick housekeeping items. For important disclosures, please see the Morgan Stanley research disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to Morgan Stanley sales representative. And then in addition, some of the statements made today by WEBTOON may be considered forward-looking. These statements involve a number of risks and uncertainties that could cause actual results to differ materially. Any forward-looking statements made today by the company are based on assumptions as of today, and WEBTOON undertakes no obligation to update. Please refer to WEBTOON's Form 10-K for a discussion of the risk factors that may affect actual results. And with that, let's begin.

Given you just listed last June. I'm sure there's a lot of investors who are new to the WEBTOON story. And so to start things off, maybe it'd be helpful if you could give a brief history of the company, explain the platform you have today and the opportunities you and the team are pursuing?

Great. Thank you. And by the way, you did that safe harbor statement very quickly, which I appreciate. It's not surprising that many they're listening in on what we'll publish or here in the room may have never heard of the company. 1.5 years, I certainly had not. But I would wager that you may have seen many of the rich film releases, movies that started as stories on our global storytelling platform. Just after Thanksgiving here in the U.S., for example, there was a great top 5 hit per variety called Sidelined: The Quarter Back and Me. It's starred Noah Beck, which is unfortunately for me, not relevant for my demographic, but for our core target, which is Gen Z, the young consumer was a major film release. And that's because this company, WEBTOON is a global storytelling hub. We have 24 million creators out there, most of which have full-time jobs who want to see if a story that they have in their head can be beloved by somebody in the world. And we're uniquely the category leader because we have over 160 million monthly active users not in Asia. Like a lot of people think that this thing which started in Korea is Asian content for Asian consumers. The reality is 60-plus percent of our monthly active users are outside Asia. We certainly have great penetration where we started, 50% household penetration in Korea. We are an everyday name. Some have written that we may be powering half of the great hits in Korea, but you're seeing more and more of the hits come in different languages. In fact, 2 of Netflix's all-time top 10 films ever came from us, Through My Window in the Spanish language and then All Of Us Are Dead. So the company may have started in Korea, but has become a global sensation in terms of product market fit. But we're really young in terms of understanding how we operate, and I'm glad to spend time with you today, because the story of the company from an investor standpoint is very nascent. And part of my job is to make sure I explain why I think it's so compelling.

Well, I want to touch a little bit more on the global piece. And considering your global expansion, how should we think about where WEBTOON is prioritizing growth and the implications to margins as a result of expanding that geographic footprint?

So if you think about, for example, our 2024 results, we had a record year in revenue. We grew 13% on a constant currency basis. And that growth was across all the 3 segments we talk about. We talk about Korea, Japan and what we call the Rest of World. So I want to talk a little bit about where we are in terms of penetration. You heard me say Korea is our origin market, so we have 50% penetration. By the way, in Q4, Korea, our most mature market grew 6-point, I believe, between 6% and 7% on a constant currency basis in revenue. But the company's overall MAU growth, we talked about a 6.7% Q4 global webcomic MAU growth comes from more than just Korea. In Japan, LINE Manga, which is our offering is actually the #1 consumer app per sensor tower in Q4 based on revenue outside mobile games. And then when I look at -- where we have 15% penetration by the way, versus 50% in Korea. And when I look at the Rest of the World, which includes this market, which includes North America, we're just getting going. We're sub 5% household penetration and yet we see product market fit. The one thing I would say about why we're betting on North America, and we're seeing a rocket ship in Japan is what the consumer tells us. So consumers here, which, by the way, our largest demographic is the coveted Gen Z skewing female in North America, 97% of our consumers in North America say that they can't get the content they see, the stories anywhere else. 77% of them say, that their experience on our platform, these are North American consumers is more fun than their experience on Roblox, TikTok or Netflix. So when you're building a global storytelling hub and huge markets, which we've yet to penetrate are telling us we have a more fun experience that they can't get these stories anywhere else, and we reported in Q3 120,000 new stories sitting every day because we have these 24 million creators. I think you have the basis for the rationale that we can really grow not just as we're seeing in Japan and Korea, but everywhere else.

That's great. On one side of the business, you have your large web novel platform, Wattpad. Help investors understand the importance of this asset and why it remains a key part of the company's strategy? And how do you envision Wattpad contributing to WEBTOON's flywheel over the next 5 years?

It's interesting. The webnovel parts of our business and Wattpad is certainly one prominent one, but we have great history with webnovels outside of Wattpad, which was acquired. It's a great source of IP. I mentioned that huge film release after Thanksgiving here Sidelined: The Quarter Back and Me. That started as a webnovel. If you look at last year, Amazon Prime's global hit everywhere, including North America, Marry My Husband started as a webnovel that became a great monetizing webcomic globally and eventually became a great rich film release. So from a source of IP standpoint, having this UGC source of creators globally writing webnovels, some of which may not yet are able to be webcomic or WEBTOON creators gives us the ability to have a great source of IP, convert them into pay content monetization as WEBTOON creators and even see them cross over. And when something crosses over as a film, it brings more creators, it brings more users back to the core platform. So that's why Wattpad and the webnovel platform is so important. But let me explain why we shouldn't over lens on some of the non-GAAP measures you may see from the webnovel business. We largely don't monetize pay content through our webnovels. It's really our webcomics and particularly, the webcomics that are on our app, where we're rolling out this very aggressive new product pipeline this year where you're going to see monetization in Korea. I mentioned in Q4 that we grew 6% to 7% on a constant currency basis. That was driven by ARPU. And ARPU is driven by webcomic, new product releases. So for example, Wattpad, like a couple of other great companies was banned by a country in good company. And that had the headline impact for investors saying, wow, total MAU is down in Rest of World. But we didn't talk about a hit to pay content. So in the future, I think we'll do a better job making sure investors understand that we have a double-digit growing healthy constant currency business, as you saw in 2024. And that while we love the scale of our webnovel business as a source of IP, as a future source of advertising revenue, it's far less tied to the constant currency revenue that you're seeing us deliver pretty consistently over the last year.

Speaking of the app, your user base is, of course, a mix of both web and app users. And in the past, you've mentioned it's a strategic priority to transition more users to the app. So what can you note about the behavior of the app user cohort versus the web user cohort? And how has the transition been trending relative to expectations?

Well, we love the trend from an app user standpoint because it's where they benefit from new products. So for example, we rolled out recently in 2024, an AI-based personalization engine. We are talking about rolling out in the back half, currently testing in market, things like a new landing page with better ways for people to express preference. There's a major new product release that we call Headlines, which is a preview teaser like product that I think is really relevant for adoption here in North America. All of the core product and technology primarily benefit more our web users that -- I'm sorry, our app users versus the passive web MAU that's included in our total MAU. And we'll -- you'll have to come and see us as we release our Q1, Q2, Q3, Q4 results, but we're really excited about the back half of this year because it represents investment in products, in infrastructure, and I think you'll see, as we stated in the Q call, a strong slate of crossover IP outside of the Q1 period. So I guess stay tuned for more specifics, but we're very encouraged about our slate.

And given the benefits you see from app users as opposed to web users, do you envision a point of time, maybe kind of in the back half where you think you would become more aggressive than you are now in shifting users to the app?

So it's interesting, the primary opportunity for us from a marketing and a crossover IP standpoint. I think one great example is last year, we talked about partnering with Discord, which we partnered again with in Q4 or Duolingo, we partnered with, where we had the series called Duo Unleashed. There, where we saw great growth is, I think, over 7 million views is we're a partner with a similar attractive demographic that coveted Gen Z demographic can actually publish stories, content. Content is a big factor for our growth. And as a result, when we talk about investing, investing, marketing, investing in infrastructure and product, we're not talking about needing to significantly increase beyond the levels, the absolute levels that you saw us investor, for example. And I think in Q4, we may have posted $32 million of investment in marketing. That's the benefit of a content platform. As we have steady-state investment and increasing levels beyond our Q1 guide of constant currency revenue, which, by the way, we are now guiding our revenue guidance based on spot FX, we found it quite difficult to help investors keep track of volatility that may have headline risk on a U.S. GAAP reported basis, but don't fundamentally change our business health. But as we see in Q2 and beyond, more of that constant currency growth that you've seen in the past at relatively flat levels of investment, I don't think you're going to need to see us make bigger and faster investments to deliver great accretive growth. That's certainly not our historical approach. And I think, as I said, we really believe in the underlying fundamentals. This is not like a social network business or like my old days turning around mobile games, I do not need to buy passive eyeballs top of funnel to maintain total MAU growth. I have delivered constant currency revenue growth, more focusing on content and app MAU rather than total MAU.

Now I want to get into a little bit of what you're investing in. But first off, can you use a few puts and takes when we think about the 4Q between strengthening USD, political instability in Korea, content timing movement and realizing the full impact of the 1 country that did ban Wattpad. Looking ahead to your 1Q guide, can you help us frame what's baked into that?

Yes. I think I'd like to characterize what we experienced in Q4 and the guide in Q1 as including isolated incidents that I don't think are persistent. Let me reflect a little bit on Q4 and then we can talk about the Q1 guide. With regard to Q4, we talked about how political instability and there you can read, for example, in Korea the declaration of Marshall Law being a factor affecting FX significantly, but also affecting the amount of attention and time creating consumers were spending on applications like ours. We think we've largely incorporated that impact in Q1, and we do not -- we say that we do not see it persisting. When you think about the isolated impacts on bottom line, in Q4 there was a noncash accrual change due to an actuarial estimate done by a third party regarding our pension and welfare expense. I don't see that as being a persistent impact. And you saw us clean up a lot of our goodwill with some impairments in Q4. I think as a result, when I look forward to Q1, the guide of 2% to 4% constant currency growth certainly is different than what you saw us deliver the 13% constant currency growth in the fiscal 2024 period. But it's largely, as I said on the call, a function of the timing of an even stronger slate than we expected just not hitting that crossover IP in Q1. And I won't go through all the different releases that are great examples of this, but we're seeing more and more that when our consumers see a great movie release that it has a wonderful impact to the core platform. And we said we're confident in it, but that, that was a unique to Q1 factor. In short, I feel like we've cleaned up the business. We've learned a lot as a young public company about how we can disclose metrics and address maybe a lack of translation of published FX rates into expectations, so that we can go forward more effectively. And I think that's reflected in where we are today. So again, we said we are really bullish about the fundamentals of this business beyond the cleanup that occurred in Q4 and the guide to Q1.

You've mentioned a couple of times, continued investments in marketing to fuel growth with an expectation of positive adjusted EBITDA as we look forward moving past some of those one-off impacts. How do you think about balancing growth and profitability?

So our commitment has been to do what we've done in the past. We believe we can grow constant currency growth as well as deliver great bottom line return. When you're growing 13% constant currencies as we did in 2024 and think we posted $67 million of adjusted EBITDA. We were positive operating cash flow. We have nearly $600 million of cash or cash-like securities on our balance sheet. We do not need to heavily deplete nor have guided to heavily having to deplete our balance sheet even as we post growth. Even in Q1, when you look at the breakeven guide of 0 to $5.5 million positive adjusted EBITDA at only the 2% to 4% constant currency growth rate, we were clear that, that included a significant persistent investment in marketing, and infrastructure and a product rollout that really benefits later quarters in the year. You can infer from that we feel strongly that the business model can deliver both constant currency growth and as well profitability. Now we're not guiding to the year and crossover IP, while a huge success factor for the company, we're not managing it to deliver revenue in the quarter. We're managing it to create more habituation in large markets like North America. So you will see some quarters have a little bit of volatility, but our fundamental belief in the top line and the bottom line growth remains.

Let's talk product. Last week, you referenced a few new product initiatives that you have slated for the back half of the year, including Highlights, trailer-style promotional videos as well as giving users the ability to purchase entire completed series. It would be great if you could expand on the second half initiatives and speak to sort of the uplift you're expecting to see after those rolled out.

One of the benefits of our company is we have a diversity of maturity and penetration. So in Korea, where half of the households enjoy our content every single day, being able to have a test bed to help those consumers, for example, find the content they want, which is the AI personalization engine has been a wonderful contribution. On the other hand, seeing the rocket ship that we have in places like Japan and the emerging markets that we have in Rest of World, combining different product improvements in a more aggressive, concerted way is the opportunity for us that we're guiding to this year. So when we talk about Highlights plus the personalization engine, plus a new landing page, plus a business model opportunity to let consumers purchase a whole series of episodes in a title. We believe that will accelerate the adoption we see, not just in Korea and Japan, but here in Rest of World. And the reason why we're so excited about this is the consumer has told us here and the Rest of World that they really value the stories that we offer globally. The consumer, the Gen Z consumer almost wants to find a story from source, from some different language in some different part of the world that was unexpected. And as I mentioned, because so many of them tell us that they can't find the content they enjoy except for on our site, it gives us confidence to make these product rollouts and to continue to invest in marketing because we want to speed up the adoption that we hoped for and that we're seeing really strong signs of success here in North America and the Rest of World.

Now understanding that you don't guide to the full year. Help us think through how these initiatives inform the shape of 2025 for WEBTOON as it relates to top line growth and margins. How should we think about the impact to both of those as a result in the near term and the long term?

Well, I can point you as a starting point to the Q1 guide and Q4 results is that's in the record, if you think about, for example, in Q4, you saw gross profit margin X onetime adjustments be around 24%. We stated that excluding these re-classes, it's 154 bps increase year-on-year. In previous quarters, we talked about every time we have greater consumption of content outside Korea, either exported from Korea to the Rest of World or Japan, or from -- in Japan, we talked about 174 new titles in Q4, oftentimes from local contributors in country. Those creative flywheels export content, not just in country, but to the rest of our global flywheel, and that has a positive impact on profitability. So first, I would suggest that you should come up with your own view on how persistent is the trend that you're seeing on increased gross profit margin driven by mix. By the way, our advertising business, we're clear on, which grew 27% constant currency in Q4. We've also said has a better profitability impact. So as we grow advertising, as we row content adoption outside of -- within Korea, first, you should model beyond the 2% to 4% revenue guide, what you think that looks like? Again, looking historically, we posted 13% constant currency growth in 2024, you should ask yourself what is -- what your expectation is in 2025. That will help you get to the bottom line. We said that the onetime stock-based compensation expenses associated with transitioning to a public company that you saw, for example, in Q2 of 2024 need not persist. You've already seen some posted results in Q3 and Q4 to inform your perspective on going forward. We haven't talked about a giant increase in G&A. You know that our model is CapEx light. And we've said that we continue to invest in marketing, but we haven't said we need to increase from the absolute levels that we've seen in the past. I think with all those elements, you can come up with your own perspective on 2025. And then beyond 2025, we continue to express strong confidence in the nascent development of the big opportunity in advertising in North America that we believe in the content generation of our flywheel, particularly as we grow geographically, LINE Manga continues to be a rocket ship for us. And we've talked about how eBookJapan has yet to fully monetize its advertising potential. So that can give you some sense on how we're thinking about the long term. And then finally, the enablers as I said, we may be one of the greatest AI stories yet to be told because a large part of the product and the technology rollout you see are benefited by our owned AI technologist, 100 AI technologies that have been hard at work for years. And we believe in that. We believe in the product and the tech we're offering, whether it's to fight piracy, which we have been doing ongoing or to inform these personalization engines or the products that we have already discussed rolling out.

Let's dig a little bit more on that AI piece. You've mentioned leveraging AI within the company on the creator side, in the content recommendation engine. Talk to us about the areas where you're most excited about GenAI's potential impact on the business? And where are you investing the most here?

Well, we believe firmly that the human creator is the best storyteller. And our job is to enable his or her success by making it easier for them, more efficient, but also to make them more creative and effective. So let me talk about ways we do it. First, to benefit both the creator and the consumer, a lot of content companies don't like to talk about piracy. We like talking about it because we think we do an extremely strong job using our technology in AI to fight it every day, to manage the ongoing arms race with anyone who publishes original content. We think that helps the creator. Remember, we may be the only company that is a uniquely aligned business model with the creator. From 2017 to 2023, their success and our success meant that creators received $2.8 billion in revenue share from us. So having that alignment with the creator gives us permission to navigate all the IP rights. We may have the largest digital repository of images and stories to mine and leverage in our technology and our AI, but we can partner with our creators because of the alignment on how these tools benefit them and us in a fair share model. And so when you think about beyond piracy, if you think about how do we help consumers discover more content to personalization, but how do we help our creators reduce the time and effort for them to publish that next story. When Rachel Smythe, who is a graphic designer full-time thought she had a story. She was not different than many of the 24 million creators who have full-time jobs. So we try to make it very easy for them to come to our platform to publish, take hours out of the work. We are also working on ways to help our webnovels. We talked about webnovels at the beginning. Imagine how powerful it would be to leverage our vast repository of webnovels and help them become in to hit WEBTOON through enabling creators to draw better and faster using our technology. These are the tools that we've been long underway with. I think you're going to see some of the consumer facing technology tools that I've already described coming out in the course of this year. And over time, you'll hear more and more about these creator tools that we've been long developing.

Now if we flip to the other side of the coin, with a lot of those opportunities also comes investment. So how do you think about the ROI and revenue incrementality from investing in GenAI?

Well, the core bread and butter is to allow human storytellers globally to enable them to have a voice that turns into revenue for them and us. So for us, it's not just about incremental AI. It's about speeding the adoption of consumption of more creative content, for example, in Rest of World, which has an extremely high ROI for a company like ours. We're already profitable. We are already from an adjusted EBITDA standpoint in 2024, we're already generating positive operating cash flow. And we haven't committed to spending adjusted EBITDA beyond the guide to Q1. So here, I think we've already have embedded -- remember, it took us over a decade to have 24 million creators we said in Q3, creating 120,000 new stories every single day, managed and curated through our technology in AI to 160-plus million monthly active users. That global flywheel and ecosystem is already paid for, so to speak. So we have not guided or talked about needing to justify a higher ROI on higher fixed rate of expense than what we have already seen in Q4 and what we're guiding to in Q1. I think you're going to see accretive growth beyond some of these fixed levels of investment. That doesn't mean we won't when we see incredibly strong performance for an opportunistically choose to use balance sheet. We just haven't had to in the past, and we haven't guided that we need to at this point.

Okay. Well, I want to bring it back to something we talked about a little bit earlier in advertising. It's been accelerating nicely over the past few quarters. What are some of the early learnings you've had from scaling the segment? And how has progress been in North America relative to your expectations?

So we're very early broadly in advertising. And yet you see us growing 27% constant currency, for example, in Q4. The big step change function in markets like in Rest of World have yet to occur. And that's partially because, as I mentioned, we already have a very attractive demographic consumer, right? We already have strong engagement, 30 to 60 minutes of time spent on average per day on our content. And we already have an evergreen source of new content. Those things we do not need to build upon to achieve the step change function. But we do need to build an execution engine. We need to consolidate, we have this wonderful back-end ad tech stack from our relationship with NAVER that we've leveraged in Korea. We need to ensure that's executed well in Rest of World. We need to build up a direct ad sales force, because the opportunity for us, if you're an advertiser, having spoken to many of them in the last 1.5 years since I joined, it's such a unique high CPM, high engagement. Maddie, our core consumer, our attracted kind of Gen Z consumer, she is reading 30 to 60 minutes per day, a specific story that we know may have genre affinity for a particular advertiser. These are passive eyeballs in a social network or in our mobile game. These are really engaged consumers on something that has a specific genre that could have a high affinity for a unique differentiated product. We talk about rewarded video. Like imagine Maddie sees in North America if she's reading Lore Olympus or if she's reading True Beauty, romantic-oriented comedy, imagine like how many beauty brands could really be interested in drawing a very related high CPM rewarded video ads. So that when Maddie watches it, she forgoes the $0.15 to $0.70 on average she pays to see that next episode. We know when Maddie chooses to pay for an episode in a story she loves, the cohort data suggests she chooses with higher probability to pay and buy more over the next 3 years. So I'm not really cannibalizing Maddie's paid content stream. And when Maddie finishes her title, what does she have? She has more confidence that she's going to find the next because we have, as we reported in Q3, 120,000 new stories coming every day, and we're not limited to manga or anime where every genre that our UGC creator platform can imagine. So because we have an evergreen source of stories, as we roll out what I think to be high CPM, strong affinity, brand takeover opportunities in Rest of World, what we can do is speed adoption on the pay content engine, right? It can be very commensal. I want to be clear, this opportunity, I'm talking about requires short-term execution that we have not guided to the benefit of. The 27% constant currency rev from advertising you saw in Q4 was basic blocking and tackling in the Rest of World and Korea. But there is this opportunity that I don't think is yet realized that will take us more time to achieve.

Well, speaking of IP, well, still smaller from a revenue opportunity today. IP adaptations represent a really exciting opportunity for you all. For those less familiar, can you walk through the process of a story becoming adapted into other formats, what will you play in it and how WEBTOON benefits?

Sure. So let's talk about an example -- well, let's talk about the example I already mentioned. So it's rumored that Lore Olympus will soon be announced as potentially being a featured animated series on one of the major streamers. And we've talked about how we partnered with Jim Henson to support the success of our creators. In fact, we actually announced in a press release that Stagtown, a webcomic, that we have is now officially in partnership with Margot Robbie's LuckyChap, a studio. Just as an example of how our stories can become powerful engaging film. Let's walk back in the Rachel Smythe example on Lore Olympus. She was a, as I mentioned, a full-time hard-working graphic designer. She had a story to tell. We enabled it through our hard-working technology for her to tell the story. And we saw before anyone that she had a surprise hit that could be relevant not just in their original language, but every language that we offer in. With our support, she went from being an amateur creator to a professional creator. And generally, when that occurs, we received exclusive rights on our platform for the content that we help them go global with because they can be great success stories as creators just on our platform, going beyond 1 country to multiple countries, which is what happened to Rachel. Rachel ended up outside our platform, becoming a New York Times best selling author in print and now is, I think, going to be very successful as a creator of an animated series. All of that is enabled by the fact that we are fundamentally for the creator and our financials are tied from a business model standpoint. This $2.8 billion that we were allowed to share with creators from 2017 to 2023 is unique. And our AI and technology in antipiracy, it's very credible for an amateur creator to come to us and say, I want to be your professional creator because we're the category leader everywhere in our format. When something crosses over to becoming a hit Netflix film, like Marry My Husband on Amazon Prime actually or Trauma Code on Netflix in January. We oftentimes have first right of refusal or the opportunity to choose to invest or not. We've been very conservative as a company. When something crosses over, we have such a strong benefit back to the platform, Fandom who wonder what the creator may have told as a new story on our platform, more consumers interested in reading that we have not deployed significant CapEx or dollars against being an upside producer of films. But as we scale and as we grow, that's a free option that we have case by case, because we have what a lot of folks in the industry don't. We have a data-driven signal globally on what could be a hit, sometimes years in advance of it becoming a hit. And we have a relationship with the creator that is already aligned from a rev share standpoint at the beginning. And so right now, we're thinking about crossover IP as a way to speed adoption on our core platform. We haven't provided aspirations or guidance that we intend to be a studio nor do we want to change our successful business model to do so. But it is interesting to ask in the long term, if we are the evergreen source of stories consumed by Netflix and Amazon Prime and talked about Sidelined on Tubi, maybe we just own storytelling and let others spend their CapEx to bring it to a successful market. That's something that we're still thinking through. It's an option for the long term, but not incorporated in our short-term guidance.

Okay. Now before we wrap, interested to hear how you view the competitive landscape. Who do you view as your primary competitors? And how does WEBTOON differentiate itself to take share of attention?

I think it's always easy for someone in my position to say, we have no competitors. We're the category leader. And I actually believe that's true. And we have seen large companies attempt to be our competitors. But it's very hard to compete with the flywheel. So I often times instead of using my judgment, refer investors to what the consumer says. Because ultimately, it's what the consumer decides that determines the competitive set, not what a company says. Let's talk about North America, where we are more nascent. When North American consumers say that they can't get the stories they see on our platform anywhere else, 77% say that. When North America, I think it's 97% of North American consumers say that we're more fun than Roblox, Netflix or TikTok. When we actually enable great stories in the format of a movie on Netflix and who knows, we probably could inspire TikTok videos or Reels. It's the fundamental story from the consumer is that we are a pure form of storytelling that's evergreen. One, they can't find anywhere else that's more fun than their alternative use of time. For me, that's where I would focus the investor, not on what I think, but what consumers are saying, what they're doing. Now could I imagine if we are at 50% household penetration in the Rest of World as we are already in Korea, and if everyone's time is so constrained, could one day there be a zero-sum game, possibly. But at that point, we would be many orders of magnitude larger than where we are. And I still think with a competitive advantage, giving our business model and our ever-increasing assets in AI and tech, but that's far, far away. That's a different phase for the company that we've yet to see.

Now one last question for you. I've covered a lot of ground here. Maybe we can wrap with your thoughts on what the most underappreciated opportunity is for WEBTOON and perhaps the most underappreciated challenge?

I think the most underappreciated opportunity is to understand that we are an evergreen source of stories that are an almost pluripotent format, meaning it can be any way a story is consumed. I think people look at us and they think, is it a social network, is it a mobile gaming company and we are neither, which is why content and adoption are more insulated than quarterly changes in overall MAU. I think the greatest challenge that may not be understood is how recent our story has been as a global public company. We are early. We are an infant in being able to tell the story in a coherent, strong way with global investors, extremely mature in our technology development, given our legacy with neighbor in Korea, but truly immature as a new public company. We will get better at telling the story with appropriate metrics, making sure investors actually translate current FX rates to our guidance, which has been, frankly, a struggle in the past. And we're open years and learning from investors how we can do a better job. I think that -- fundamentally, this is a company we believe the fundamentals are very strong. And yet here we are trading at the valuation you all know, right? $600 million of cash and cash-like securities, trading below our total revenue size despite growing constant currency and being positive operating cash flow. So clearly, we're young in our maturity on making sure investors understand what they're really is here to invest in at WEBTOON.

Well, from Matt, myself and the whole team of Morgan Stanley, David, thank you so much for being here.

Great. Thank you very much.