All right, we'e going to go ahead and get started. I'm Doug Anmuth, J.P. Morgan's Internet Analyst. We are very pleased to have with us WEBTOON's Chief Operating Officer and Chief Financial Officer, David Lee. WEBTOON is a leading global storytelling company that connects about 24 million creators to almost 170 million monthly active users in over 150 countries. WEBTOON pioneered a new form of digital storytelling with long stories that are serialized into short form, vertically scrolling, image-based webcomics, or text-based web novels. WEBTOON's mission is to be the world's storytelling technology platform, empowering creation by anyone for everyone. David joined WEBTOON in 2023. That's right. Prior to that, he was the founder and CEO of Inevitable Tech, the COO and CFO of Impossible Foods, and CFO of Zynga, among other various leadership roles. Welcome, David. Great. Thank you so much for having us. Absolutely. Let's start off kind of big picture, maybe just for some of those who might be a little less familiar with the company, if you can really talk more about what WEBTOON is, the problems that you're trying to solve, and really the mission of the company. Great. Absolutely. I'm not surprised if folks listening in maybe have never heard of the company before at all. It was a short two years ago when I first learned of the company. While I had not really recognized it, those who are in our core demographic, these Gen Z consumers, 18 to 25, they all knew about it. In fact, I was just telling a friend that my two teenage daughters knew so much more about the company I was to join than I did. It's because if you think about what WEBTOON offers, it offers the opportunity for all of our consumers to find an unexpected story from anyone in the world. We have 24 million creators connected simply with a platform that took a long time to build, enabling any amateur to try to see if their story can resonate with somebody else in the world. It was a very difficult technology challenge, and we're proud to have solved it. On the other side, we have 150 million monthly active users that spend 30-60 minutes every day. These are native digital consumers who are just looking for a story that's unexpected. While a lot of you may not have heard the company, I have a feeling you may have seen our movies, meaning we have 100 examples where a great story on our platform goes global, gets translated into multiple languages, helps an amateur turn into a full-time professional creator. Sometimes it changes their life fundamentally. Then to see these same creators, former kindergarten teachers, former graphic designers become top producing creators on Netflix, on Amazon, the day after Thanksgiving, this last Thanksgiving, Sideline, The Quarterback and Me came out on Tubi, was a top five release according to Variety. I hope you'll get to know the name of the company, but I'd be happy if you just continue to see the product of our creators either on our platform or on the big screen. OK, great. Maybe you can talk a little bit about what differentiates WEBTOON from other content platforms. If you are a creator, why are you coming to WEBTOON? What are the tools and the functionality, the scale perhaps, that draw creators there? Also, of course, consumers of content. I think you did a great job summarizing kind of the core reasons why a creator might want to pick us. I'll give you an example. One of the things the company has that distinguishes it is that we're the only company at the very inception. Junkoo Kim, our founder and CEO, he very patiently said, we are going to share results, revenue with creators, and we're going to take them as far as they can go. Having paid $2.8 billion in shared revenue with creators is very compelling when you're talking to an amateur creator that we have this track record of not just being able to publish globally as the category lead in multiple languages, but outside our platform. We just started going in Japan, for example. Korea was our first market of origin. We're the number one LINE MANGA. Our app is the number one consumer app in Japan, including mobile games this quarter by revenue. That explosive growth, and here's the example, the creator of a wonderful story called The Savior of Divine Blood, he could have worked with anybody. To have the ability to publish his story first in Japanese and with the leading consumer app in mobile that's current for our times, but then quickly be able to be published in multiple languages on our platform and have the opportunity to cross over into TV, this is a great example of why we're increasingly attracting more creators. It is both marketplaces and scale, though. I think maybe 15-20 years ago, it might have been harder to say this, but when you can tell creators that they have 150 million consumers out there through our platform in multiple languages, that scale and having category leadership in every market we're in helps. It also helps from a consumer standpoint. We did this study. Something like 90% plus, I think it's close to 97% of our North America consumers, the Gen Z consumers, they say that our experience is more fun actually than TikTok, Roblox, and Netflix. I think a big part of it is, I think 77% say, they simply can't get the stories they see in our platform anywhere else because nobody else has this world of 24 million creators. I think that distinguishes us. The only other thing is the format. A lot of those in the audience or listening may not know what a WEBTOON or a webcomic is. It is this wonderful, accessible digital format in the palm of your hand. You can be waiting for a cup of coffee. You could be at a bus stop. You can flick your finger up, and you can see in a moment enough visuals, just a few words, and a lot of motion to tell you where a story is going to go. Yet you can be engrossed in it. You can sit down, as many do on average, 30-60 minutes per day and really sink your teeth into an unexpected story because there are 120,000 stories that we have talked about in the past arriving on our platform every day, curated for quality using tech. It's an evergreen source of stories that we hope more and more folks discover and, importantly, more and more creators use to change their lives and have a voice. OK. Can you talk about why original content is important and how you go about successfully attracting new creators and content and then also retain your star creators? Yeah. Having the ability to provide consumers something they can't find anywhere else is a core advantage of our platform. I'll tell you an example of a creator that comes to mind. There was a graphic designer in New Zealand who had a full-time job. In this particular case, her name is Rachel Smythe. Her name still is Rachel Smythe. She came to our Canvas platform, our English-based platform, and she had a story to tell. None of us would have ever expected that her story called Lore Olympus, this incredible story, this romantic comedy set in the context of the Greek gods, would become, I mean, in print, a New York Times bestselling book, to win multiple awards, Eisner Awards, to have a following that went global on our platform that enabled Rachel to be a full-time creator and to reach audience outside our platform as a future animation release. That is just one example. My IR and comms team has trouble making sure that I tell more than one, even though we have hundreds and hundreds, because that is the core benefit for the consumer to find stories that not an individual high-powered merchandiser of stories determined would be hot next season, but rather they did. Because the market signal and the data that we've been accumulating, the tech we have behind it, is what reveals and curates the platform. It took a long time for us to have enough scale, enough data, enough movement on both sides of the marketplace, this flywheel, as J.K. calls it, to be a reliable evergreen source of stories. Here we are. I think the other reason why we think it's important is we think the world needs increasingly greater access to stories from sources that are unexpected across the globe. It turns out that everyone loves a good story more and more independent of the original language or the geography or the location. That free access to great storytelling and great consumers of stories we think is important. I'd like to think it shows up for the investor now increasingly as well. How does traditional manga like Fullmetal Alchemist and global franchises like Godzilla and Sonic, how do they fit into your content strategy? It's a great question. We patiently wait in every market to create a flywheel of our own amateur creators using our platform to be discovered. Canvas, it's called in English, Indies is the platform in Japanese, because that exclusive content from creators that we've cultivated uniquely, as I just mentioned, is a core advantage. We are at such a large scale that we love to delight our consumers with great franchises, even if they were not created by a creator we have on our platform. We announced, for example, this quarter, as you mentioned, a collaboration with IDW Publishing, where being able to bring Sonic the Hedgehog and Godzilla to our platform is a wonderful way to delight consumers. By the way, it also is a great gift to those amateur creators because it increases the audience and the interest to allow them to tell their new story new to the world on our platform one day. It is great for us to offer exclusive content that we discover. We are large enough and global that we are pretty compelling, given our demographic, for very established sources of stories that are out there that our consumers want. With regard to, in particular, anime, anime is becoming a superstar globally. It is not a local Asia consumption phenomenon. Having 20 anime projects we have committed to launching through our Japanese operation, being able to have in addition to those, these pieces of great print and manga turn into WEBTOON platforms and animation is important for us too. We will go wherever the consumer wants. That includes content that people want to see on our platform that exists elsewhere. OK, great. Let's shift gears a little bit, talk about engagement and users. Who are really the users of WEBTOON today? In what geos or demographics are you seeing the most traction? What's fascinating to me is in almost every market, you see a similar pattern where younger consumers, the Gen Z consumer, gravitates to our platform because they just, as I mentioned, they can't get these stories anywhere else. This generation of consumers, they want to discover something. It doesn't have to be just a TikTok reel or a funny meme on a social network. It can be a story, a series that they feel no one else knows about. Because we have the largest source of amateur creators on a WEBTOON or webcomic platform, we increasingly can provide it. That younger consumer has the benefit of global access. We find as they get older, we call her Maddie, by the way, Maddie, our core target in North America. Maddie is, say she's 23 and she's either out of university college or in between jobs. Maddie, as she turns into a 35-year-old, a 45-year-old, and older, we have every genre the Maddies of the world want. We find them staying with us, even if they convert at an earlier age. Part of the story of WEBTOON is that people sometimes mistakenly think we are for older Asian consumers, male-oriented and manga-focused. We are. We have a distinguishing demographic in the younger female-skewing North American consumers who are looking for romantic comedy or whatever mix of genres we cannot predict, but that our creators create. We like to think we have the best of both worlds, longevity, but as well a really attractive early demographic with Gen Z. OK, great. Let's just talk about geos a little bit. Korea, Japan, and rest of the world, which includes the U.S., those are your three key regions. Korea, your biggest MAU market at about 24 million MAUs. Japan, closely behind, 22-23 million. And then rest of the world, really making up the vast majority at over 100 million. How are you able to build such a globally diversified audience despite some of the cultural differences across these markets? And then maybe you can talk about the strategy across each of those key regions. I think what's interesting about our format, so I think it has to do with the company that J.K. envisioned, he created this WEBTOON category, this format, which uniquely ports across language and culture extremely well. If you see it in your hand on a mobile device, you'll understand that it's not just a very quick attention-getting format. It is one that a story can originate in France and be consumed in Asia and vice versa. The format itself, I think, is a great conduit of storytelling. It's probably the reason why we increasingly see these stories do well in multiple languages on our platform, but as I mentioned, turn into mobile games and increasingly rich film releases on one of the streamers. With regard to the geography, increasingly, even a consumer in one part of the world really wants to see a great story in an accessible format from far away. It used to be this notion in other formats that one would publish in one language and be limited to it. Here we see hits. Lore Olympus is a great example. The Savior of Divine Blood from Japan is a great example. We highlighted two Spanish examples. We've talked about Italian examples. We just see in almost every language globally the fact that consumers want a great story. In this format, it ports well. North America, as part of the rest of the world, is a key area of focus. We're seeing, for example, our webcomic app MAU in our English platform grow by 19% year on year this last quarter, while global webcomic app MAU grew 4%. 19% is a big number, and we really are just starting. Seeing North America, Australia, the U.K., these are the countries that comprise our English platform, grow rapidly. To see average revenue per paid user, ARPU, which we think is a sign of habituation, also grow 8% plus on a constant currency basis. That is why we are so focused on the "rest of the world." It is because consumer product-market fit is already evident. It is our job to execute more and more where consumers want us, which is everywhere, and hence our global focus. OK, great. Let's talk about paid content. Paid content revenue makes up about 80% of the total. How does paid content monetization actually work? It is really unique. I think most who do not know us would imagine that we must be similar to how other industries have operated. Ours is very simple. We allow consumers for free, intentionally, to wander our digital universe to find unexpected stories and consume them for free. The primary revenue mechanism is when they see an episode that is going to drop next week, and they are hooked on the story, and they want to be there first in queue to see it like the rest of the world, they only pay, on average, $0.15-$0.70 per episode. Per episode. We intentionally do not lock folks in because we have 120,000 episodes or stories arriving potentially per day. Having that patience, letting Maddie for a long period of time serve for free or for a short period of time flexibly only make a micro payment at a time creates long-term longevity and loyalty. Instead of forcing the consumer, we find that consumers, once they gain confidence that they see multiple episodes they want to pay for, it allows us to do things like introduce other business models, like rewarded videos. This is 80% of our revenue today, our $1.4 billion or so of annual revenue, is in the form of these micro payments and paid content. We have this huge opportunity, once Maddie starts reading a story, to say, hey, here is a very relevant high CPM video ad for the romantic comedy you are reading that you will find interesting, and you do not have to pay that $0.50-$0.70. We know Maddie will already, after watching that ad, continue to pay. We know from our cohort data that over a three-year period, the Maddies of the world pay more and more to read more and more. I think we're just at the beginning of rounding out the fundamental paid content business model. We are very excited by the progress to use advertising to speed up content consumption on the platform. OK. Yeah, we'll talk about advertising a little more in a minute. How do you think about the key drivers of growth for paid content, and how do they differ across the key geos? It's interesting. In Korea, where we have 50% penetration, we're an everyday household name. Some articles have been written that, by the way, it's not just on our platform, that something like a majority of the K-drama hits in South Korea originated as stories on our platform. When you have half the population enjoying your product and getting stories every day, you tend to see, for example, we posted nice constant currency revenue growth in the quarter from Korea alone. That growth will come in the form of folks discovering content and finding it more accessible. We talked about using our personalized AI engine. You see that show up as ARPU. Don't get me wrong, webcomic app MAU is super important. In fact, if there's one metric I could help investors understand, it's that webcomic app MAU is the best predictor of our paid content engine. We love our overall MAU for the potential one day of ad revenue. Where we focus is on the app. Where people tend to pay for content is in the form of a webcomic. That differs a little bit in the key metrics we see in a market like Japan. Japan is three times larger than Korea, but it is more nascent. Instead of 50% penetration, we are more like somewhere in the teens, say 15%. We are the number one consumer app. You are seeing MAU, MPU, app MAU, all of these are attractively growing. There, by the way, in Japan, the monthly ARPU is $22 versus the company average of roughly $12 or so. Every market is a little bit different. I think the commonality I see is in consumer behavior. Consumers everywhere spend 30-60 minutes on average per day, whether they're in North America and France or in Korea or Japan. The maturity of the market has different profiles for us as a company. In North America, where we're sub 5% household penetration, while we really like to see the increasing habituation in ARPU, we're just starting to grow that English webcomic app MAU number. Seeing it grow early days, 90% is really encouraging. We talked about on the call wanting to continue to invest in marketing and infrastructure because we feel like we see from the data a huge large market opportunity here in rest of the world. The dynamic is similar. The business model works. It's just the level of maturity of penetration is what differs by region. OK. Let's shift gears a little bit, talk about advertising. Ad revenue, about 12%-13% of the total currently. Can you talk more about how advertising works for WEBTOON and how you think about kind of overall size of the opportunity there? Yeah, if you think about advertising, first, a credit to our founder and CEO. J.K. really was focused on more and more creators for more and more consumers through this content flywheel that we call it. We simply just did not focus on advertising initially until the flywheel was robust. In Korea, if you think about what comprises a great ad business, we have a lot of great lessons on how to use a great ad tech stack. Our heritage with Naver allowed us to be confident in how we use it. We have a lot of history on ad products. We talk about this rewarded video. This is a wonderful way to pay off the deep immersion we know consumers have to a particular episode of a story. We not only know the genre of the story they're reading, we know what they're reading episode by episode. Giving folks the ability to see a high CPM video ad that's relevant for the story is a wonderful way to give diversity to the consumer's business model. We also have this set of products where we know that people are already, say, purchasing on a major consumer e-commerce player. Having them be able to earn the ability to have a discount on merchandise or other behavior outside our platform has proved to be a very proven ad product for us in Korea. We've just begun to roll those products out to the rest of the world and Japan. We talked in the quarter, though, about great signs, 13% constant currency ad revenue growth in the quarter and across all three of our major markets. I also think that the new product feature rollout that we're very excited about, particularly in the rest of the world, can pay off the ability for us to see growth both in paid content and in advertising. We're just getting going. North America, everyone knows, is the largest ad market in the world. It's where we are absolutely the earliest. I'm hopeful that we can realize the biggest opportunity after a proven history of seeing results with our products elsewhere. OK. What does the advertiser profile look like on WEBTOON? What do you think makes it most attractive for advertisers? The diversity of the genres, but the attractiveness of the demo is the winning formula for attracting advertisers, meaning we have great examples of beauty brands because they know how deeply engaged some of our female consumers are for the romantic comedies they read. We have established lifestyle brands that target the hardcore male consumer of suspense and drama. I think the differentiator actually is the diversity of genres and the hyper engagement. We know a lot about what people are enjoying. Having an attractive demographic deeply engaged in a type of story is a different kind of opportunity for an advertiser than, say, an alternative mobile game of the world I used to be in or in a social network. I was at CES talking to Variety, meeting with advertisers. One of the common refrains I would hear in speaking with them would be, we've never seen the ability to target so deeply an attractive demo to a particular lifestyle brand. Now, that's an opportunity we haven't paid off that we're early in developing the advertising rollout, particularly in North America. The potential, I think, is very differentiating for the advertiser. OK, great. Let's talk about IP adaptations. I think, look, I think people would be kind of surprised and blown away by some of the titles and content that has originated on your platform, which winds up on Netflix. You mentioned Tubi earlier, lots of different streaming services. IP adaptations revenue, about 7% of your total. Can you just talk about how that part of the business works, why that's so important for WEBTOON? Yeah. I mean, the bullseye of the company had always been about allowing more and more creators to tell stories on our platform. The reason why we're only 7%-8% revenue on crossover IP is not for lack of demand for our stories. I mean, I think in this last quarter, we tended to focus more on the Spanish language just to show that we're in every language. We're really excited about the releases on Netflix, on Amazon Prime, on Tubi, on TV, across all the languages. We have 100 examples. One little factoid I oftentimes mention is if you look at the top 10 all-time projects for Netflix, all-time top 10, we have two of them, right? They're not in English. One's in Spanish, and one originated in Korean. The reason why we're only 78% is we've been so focused on the bullseye, and we're not particularly interested in the unnecessary bet to become a studio. We have very modest internal studios. We can let others pay for the cost to bring the great story to film through their own streaming platforms. We just want to be the evergreen source of every great story they want to use. Now, over time, this represents, I think, a really compelling option value for our investors and the company. Here we have an evergreen source of stories. We knew about the success of some of these stories multiple years in advance of their release. Mary and My Husband is a great example. Mary and My Husband started as a web novel on our platform. We took it global as a webcomic. Multiple years later, it was a global number one for Amazon Prime, even here in North America. We have a data-driven, technology-enabled evergreen source of stories where we can de-risk for anybody else knowing who resonates with that story. If you think about what is a WEBTOON, what is a webcomic, it is a digital storyboard. It just happens to pay for itself very well on our own platform. I think the potential of crossover IP is immense. Its core value today is when someone sees something on Netflix or Amazon Prime, they ask, what else did that creator create? Where did this come from? They come back to the WEBTOON platform. We use it as a very effective low-cost customer acquisition vehicle and creator engagement vehicle. We could have the option one day of treating it as a standalone business. Right now, there's so much growth in our core business models, we do not feel the need to. We think our advantage in this area grows, though. More and more data, more and more stories, more and more creators, et cetera. We really just have a low-risk way of drawing interest back to our platform today. OK, great. Maybe you can talk a little bit about how you think WEBTOON is positioned if we're in a potentially weaker macro environment. Yeah, it's interesting. When you're a little bit older like me, I'm in my 50s, I remember working on consumer packaged goods companies and having to pass on the cost of price increases and dealing with global issues with heavy CapEx in factories to run and all the rest. I feel very fortunate. I think our consumers benefit from the fact that we have an incredible amount of entertainment content for free, but also at a fraction of commitment price that others have. These micropayments story by story, I think, advantages us because it creates flexibility for the consumer. I also can tell you that I have not yet seen data in recessionary times to indicate that people don't want to consume more stories. I don't want to ever predict macroeconomic futures. I think WEBTOON is particularly well positioned in what we see every day today. We're closely monitoring everything, of course. People in the comfort of their home or their office or the subway tucking into a great unexpected story at a very low cost, we think is a pretty strong positioning in the current environment. OK, great. The company has kind of lots of different KPIs across MAUs and MPUs, paying users, ARPU, ARTMOW, the geographies that we talked about. Just for investors looking at the story, especially those who may be newer to the story, what are the key metrics that you think they should be really focused on? Where do you see the growth coming from over the next few years? I think webcomic app MAU is a really important metric. Unlike a lot of other businesses, 80% of revenue is paid content. Our new product roulette is on our app. We are intentionally focused on webcomics. Webcomic app MAU, this 19% growth that we've demonstrated on our English platform, is a very important metric. I think ARPU matters a lot, particularly when you're in a large, heavily penetrated country like South Korea or one that we're increasingly penetrating like Japan. Financially, of course, we care about our GAAP revenue and our GAAP bottom line. The reason why we look at it just as even data is just the company's in transition as having only gone public within the last year. I think overall, you will see us want to be on equal footing with other investment options on a GAAP basis over time. It just may take us a little bit to help the street understand what to look for in our performance. I think we have a strong potential to deliver on leading indicators like webcomic app MAU, ARPU, and financial results, and hope that more and more folks take a look at WEBTOON. OK. Maybe you can help us think about long-term margin potential and what you think the biggest sources of leverage are over time. One of the things that I found very appealing when I was doing my own diligence is that our continued execution is a source of leverage. Let me explain. In the quarter, to get specific, we posted like 22% gross profit margin. If you exclude some of the one-time discrete outliers, it is pretty normalized close to what we did in Q4, around 23%. The company has already, as recent as its last few quarters, demonstrated the ability to increase margin. Let me explain how. Within paid content, 80% of our revenue, the more and more consumers purchase locally created content here in North America and Japan, everywhere other than Korea, it has a much higher profit margin. As we grow in the biggest part of the world, rest of the world, and as we continue to grow in Japan, that is leverage to the gross profit margin. As our penetration increases in advertising, it creates leverage on gross profit. Because if you think about it, the company has already paid for an evergreen source of content. It already has a very large audience. Advertising does not cannibalize the paid content machine as much as other platforms because people always want to see the next episode that drops. We have continuously updating IP. As we grow our advertising business, I think, and if you think about if you believe that North America is a big step change growth opportunity for us, that is a step change margin opportunity for us as well. Crossover IP, to me, represents leverage because when Netflix pays to release one of our stories, we see the benefit on customer acquisition and engagement with creators. I think you'll see more and more of that, a cheaper and cheaper way to draw interest in emerging markets like North America. Those are the areas we focus on for leverage. OK, great. Maybe just one question, one last one to wrap up. Somehow we got this far. We did not mention AI at all. Yeah. I want to hear about how WEBTOON is using it internally and then also how it may be helping creators as well. What's unique about WEBTOON is we believe in human creativity. We use AI to unlock more human creativity. Very specifically, we use it to fight piracy so that creators, when they finally have a well-crafted hit story, we have a significant advantage, we believe, in the use of our technology to prevent that story from being copied. Because we're on a revenue share model, we uniquely are allied with the creator. We have, in some ways, pre-negotiated a lot of the future opportunity from an IP standpoint because we share in the upside. We have tools that allow creators to draw better and faster, to curate their stories, discover their next stories. We have AI that helps consumers find the story that they really want to read out of our big library. We believe that AI and technology can enhance the human creativity engine and as well can enable consumers to pay creators for their great stories. It's funny, in this day and age, everyone talks about AI. In order to have an effective program, you better have great AI technologists and a huge amount of data. We happen to have both. Our mission is for human creators, not against them. OK, great. We're going to leave it there. Thank you, David. Thanks, Doug. Take care.