Digital storytelling platform WEBTOON (NASDAQ:WBTN) missed Wall Street’s revenue expectations in Q3 2026, with revenue falling 4% year on year to $362.8 million. On the other hand, next quarter’s outlook exceeded expectations with revenue guided to $376 million at the midpoint, or 6% above analysts’ consensus estimates. Its non-GAAP profit of $0.02 per share was $0.02 above analysts’ consensus estimates.
For more on WEBTOON, read our free full research report.
WEBTOON (WBTN) Q3 2026 highlights:
- Revenue $362.8 million vs S&P analyst consensus of $377.5 million (4% year-on-year decline, 3.9% miss)
- Adjusted EPS $0.02 vs S&P analyst consensus of $0.01 ($0.02 beat)
- Adjusted EBITDA $2.21 million vs analysts’ consensus estimates of $4.12 million (0.6% margin, 46.5% miss)
- Revenue guidance $376 million at the midpoint for Q4 2026, above analysts’ consensus estimates of $354.6 million
- EBITDA guidance $2.5 million at the midpoint for Q4 2026, below analysts’ consensus estimates of $6.21 million
- Operating margin -2.5%, up from -3.9% in the same quarter last year
- Free cash flow margin 0.9%, down from 2.4% in the same quarter last year
- Monthly active users 159 million, up 4 million year on year
- Market capitalization $1.31 billion
Kim continued, “Our strategy is working across the business. On-platform, we are strengthening how readers discover and engage with stories; Off-platform, we are turning our IP into global franchises across diverse formats; and through collaborations, we are extending our reach to new audiences. Each reinforces the other, and together they position us for durable, long-term growth. This is the future of storytelling, and WEBTOON is building it.”
Revenue growth
A company’s long-term revenue performance is one signal of its overall quality. Any business can deliver a good quarter or two, but many enduring ones grow for years. WEBTOON’s 6.1% annualized revenue growth over the last four years was solid. Its growth was slightly above the average business services company and shows its offerings resonate with customers.
Long-term growth matters most, but within business services, a longer historical view may miss recent innovations or disruptive industry trends. WEBTOON’s recent performance shows its demand has slowed as its revenue was flat over the last two years. 
This quarter, WEBTOON missed Wall Street’s consensus estimates and reported an uninspiring 4% year-on-year revenue decline, generating $362.8 million of revenue. Management is guiding for a 13.7% year-on-year increase in revenue next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 11% over the next 12 months, according to S&P, an improvement versus the last two years. This strong projection implies its newer products and services will drive better revenue performance.
Adjusted operating margin
Although WEBTOON broke even this quarter on an operating basis, it has generally struggled over a longer period. Its expensive cost structure has contributed to an average adjusted operating margin of negative 3% over the last five years. Unprofitable business services companies require extra attention because they can be vulnerable in a downturn. Its ability to endure a full business cycle remains uncertain.
On the positive side, WEBTOON’s adjusted operating margin rose by 11.8 percentage points over the last five years, as its revenue growth gave it operating leverage. Still, it will take much more for the company to reach long-term profitability.
In Q3, WEBTOON generated a negative 0.4% adjusted operating margin.
Free cash flow
Free cash flow matters because accounting profits alone can’t pay the bills.
WEBTOON broke even from a free cash flow perspective over the last four years, giving the company limited opportunities to return capital to shareholders.
WEBTOON broke even from a free cash flow perspective in Q3. The company’s cash profitability declined 1.5 percentage points from the same quarter last year but remained above its four-year average. A single quarter’s decline should not carry too much weight because investment needs can be seasonal, leading to short-term swings. Long-term trends are more important.
Key takeaways from WEBTOON’s Q3 results
WEBTOON’s quarter had some key positives: EPS beat analysts’ consensus estimates, and revenue guidance for next quarter topped Wall Street’s consensus. Revenue, however, missed expectations, making this a decent but mixed quarter overall. Shares rose 2.6% to $10.16 immediately after the report.
WEBTOON had a solid quarter, but is the stock a buy? The latest quarter matters, but longer-term fundamentals and valuation carry much more weight in that decision. Read the full research report here (it’s free).