WEBTOON Entertainment Inc.WBTN
WEBTOON Entertainment Inc. Goodwill & Intangibles Disclosure
Goodwill, net and Intangible Assets, net
Intangible assets, net as of December 31, 2025 and December 31, 2024 consist of the following:
| As of December 31, 2025 | |||||||||||||||||||||||||||||
| Estimated Useful Lives (in years) | Gross amount | Accumulated Amortization | Impairment | Carrying amount | |||||||||||||||||||||||||
| (in thousands of USD) | |||||||||||||||||||||||||||||
| Intangible assets with definite lives: | |||||||||||||||||||||||||||||
| Brand | 15 | $ | 133,164 | $ | (36,354) | $ | — | $ | 96,810 | ||||||||||||||||||||
| Intellectual property rights | 4-14 | 120,165 | (66,481) | (978) | 52,706 | ||||||||||||||||||||||||
| Software | 5 | 55,120 | (47,484) | — | 7,636 | ||||||||||||||||||||||||
| Trademarks, copyrights, and patents | 4.32-15 | 98 | (57) | — | 41 | ||||||||||||||||||||||||
| Intangible assets with indefinite lives: | — | ||||||||||||||||||||||||||||
| Intellectual property rights | Indefinite | 346 | — | — | 346 | ||||||||||||||||||||||||
| Membership | Indefinite | 265 | — | — | 265 | ||||||||||||||||||||||||
| Total intangible assets | $ | 309,158 | $ | (150,376) | $ | (978) | $ | 157,804 | |||||||||||||||||||||
| As of December 31, 2024 | |||||||||||||||||||||||
| Estimated Useful Lives (in years) | Gross amount | Accumulated Amortization | Carrying amount | ||||||||||||||||||||
| (in thousands of USD) | |||||||||||||||||||||||
| Intangible assets with definite lives: | |||||||||||||||||||||||
| Brand | 15 | $ | 133,837 | $ | (27,565) | $ | 106,272 | ||||||||||||||||
| Intellectual property rights | 4-14 | 109,552 | (50,270) | 59,282 | |||||||||||||||||||
| Software | 5 | 41,290 | (26,576) | 14,714 | |||||||||||||||||||
| Trademarks, copyrights, and patents | 4.32-15 | 80 | (41) | 39 | |||||||||||||||||||
| Intangible assets with indefinite lives: | |||||||||||||||||||||||
| Intellectual property rights | Indefinite | 346 | — | 346 | |||||||||||||||||||
| Membership | Indefinite | 259 | — | 259 | |||||||||||||||||||
| Total intangible assets | $ | 285,364 | $ | (104,452) | $ | 180,912 | |||||||||||||||||
Intangible assets, other than goodwill, are initially recognized at cost and stated net of accumulated amortization. The amortization expense is recorded in General and administrative expenses or Cost of revenue in our Consolidated Statements of Operations and Comprehensive Loss, depending upon the nature of activities. Brands, software, trademarks, copyrights and patents are amortized on a straight-line basis over their estimated useful lives. Intellectual property rights consist of exclusive rights under contracts, customer relationships, and publishing rights. Intellectual property rights with definite lives are amortized over their economic useful lives or the period over which we have exclusive and unrestricted rights to the content under the contract on a straight-line basis, while intellectual property rights with perpetual exclusive rights are treated as indefinite-lived assets.
Amortization expense for intangible assets for the years ended December 31, 2025, December 31, 2024, and December 31, 2023, was $33.3 million, $36.7 million, and $34.5 million, respectively, which included the accelerated amortization expense for abandoned intellectual property rights of $1.6 million, $3.9 million, and $2.5 million, respectively.
Intangible assets, other than goodwill, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. During the fourth quarter of 2025, based on management’s updated cash flow forecasts, management determined that the carrying amount of the Bootcamp video production assets was no longer recoverable as no further revenues or cost recoveries are anticipated from the project. As a result, the Company recognized an of $1.0 million for the year ended December 31, 2025, in Impairment losses on goodwill and other intangible assets in the Consolidated Statements of Operations and Comprehensive Loss, representing a full write-off of the remaining carrying balance. There were no impairments of intangible assets, other than goodwill, during the years ended December 31, 2024, or December 31, 2023.
Intangible asset amortization expenses for the following five years are expected to be as follows:
| Years Ended December 31, | (in thousands of USD) | |||||||
| 2026 | $ | 31,826 | ||||||
| 2027 | 17,058 | |||||||
| 2028 | 12,982 | |||||||
| 2029 | 12,980 | |||||||
| 2030 | 12,980 | |||||||
| Thereafter | 70,346 | |||||||
| Total intangible assets, net | $ | 158,172 | ||||||
The changes in the carrying amount of goodwill for the years ended December 31, 2025, and December 31, 2024 are as follows:
| 2025 | 2024 | ||||||||||
| (in thousands of USD) | |||||||||||
| Goodwill at January 1 | $ | 761,770 | $ | 843,298 | |||||||
| Less: accumulated impairment losses | (96,495) | (64,122) | |||||||||
| Goodwill, net at January 1 | $ | 665,275 | $ | 779,176 | |||||||
| Goodwill Activity: | |||||||||||
| Acquisition | 1,398 | — | |||||||||
| Foreign currency translation adjustments | 5,660 | (30,564) | |||||||||
| Disposition, net | — | (13,594) | |||||||||
| Impairments | (335,508) | (69,743) | |||||||||
| Goodwill, net at December 31 | $ | 336,825 | $ | 665,275 | |||||||
| Goodwill at December 31 | $ | 768,165 | $ | 761,770 | |||||||
Less: accumulated impairment losses* | (431,340) | (96,495) | |||||||||
| Goodwill, net at December 31 | $ | 336,825 | $ | 665,275 | |||||||
______________
(*)Accumulated impairment losses include $437.0 million and $101.4 million of impairment charges for the years ended December 31, 2025, and December 31, 2024, respectively. Additionally, cumulative translation adjustments (“CTA”) resulted in a net reversal of $5.6 million and $5.0 million for the year ended December 31, 2025, and December 31, 2024, respectively.
During 2025, the Company acquired a controlling interest in Purple Duck through a business combination achieved in stages, and recognized goodwill of $1.4 million. During 2024, the Company deconsolidated its reporting unit Jakga, which resulted in the Company derecognizing goodwill, net in the amount of $13.6 million, which consisted of goodwill of $44.3 million and accumulated impairment of $30.7 million. (see Note 17. Disposition and Business Combinations, for more information on these transactions).
For the years ended December 31, 2025, and December 31, 2024, the Company elected to bypass a qualitative assessment and performed a quantitative assessment to fulfill its annual goodwill impairment testing requirements under U.S. GAAP. The fair value of each reporting unit as of October 1, 2025, and October 1, 2024, respectively, was estimated using a discounted cash flow method with significant Level 3 inputs such as projected future cash flows, discount rate and terminal growth rate. The carrying values were based on each respective reporting unit’s net asset balance as of October 1, 2025, and October 1, 2024, respectively, and included directly attributable assets and liabilities, including goodwill.
for Wattpad, Munpia, Wattpad WEBTOON Studios Corp. (“WWS”), and Purple Duck of $257.2 million, $74.0 million, $2.9 million and $1.4 million respectively, for the year ended December 31, 2025, as the carrying value of each reporting unit exceeded the fair value of the respective reporting unit.
For Wattpad, the impairment charge was primarily driven by a downward revision in projected operating results, which led to a lowered outlook for 2026 and beyond. This adjustment resulted from challenges in the advertising business, where delays in key strategic initiatives, such as the migration to the advertising platform, caused by organizational restructuring in the North American advertising division, along with the loss of sales personnel, led to a shortfall in advertising revenue. Additionally, user metrics declined due to a sustained decrease in Monthly Active Users (MAU) and traffic from prolonged service bans in Russia and Turkey, combined with technical issues affecting search engine functionality, which collectively resulted in lower ad impressions and slower growth in paid content revenue.
For Munpia, while recent standalone operating performance remains stable, the Company recalibrated its long term forecast to reflect a lower than expected realization of synergies from IP expansion. Recent financial analysis indicated that the conversion of webnovels into secondary content and the subsequent increase in distribution revenue were slower than initially anticipated. This structural realignment resulted in a reduction in projected business scale, which in turn increased the discount rate applied in the valuation due to a higher size premium.
For WWS, business strategy shifted from drama and movie production to providing scripts or rights utilizing Webtoon IP to clients, such as drama and movie production companies, leading to a significant reduction in projected future cash flows.
In the case of Purple Duck, lower than expected operating profits and cash flows contributed to the impairment of the reporting unit.
The Company recognized impairment loss on goodwill for Wattpad, Munpia, and WWS of $46.7 million, $20.3 million, and $2.7 million respectively, for the year ended December 31, 2024, as the carrying value of each reporting unit exceeded the fair value of the respective reporting unit. For Wattpad, strategic shifts toward an ad-based revenue model had not yet yielded significant revenue improvement, resulting in delayed profitability enhancement which contributed to the impairment of the reporting unit. For Munpia, structural changes in operations, workforce reduction, and project delays resulted in the underperformance in revenue growth which contributed to the impairment of the reporting unit. In the case of WWS, lower than expected operating profits and cash flows contributed to the impairment of the reporting unit.
The company recognized impairment loss on goodwill for WWS, Munpia, and Jakga of $6.1 million, $25.6 million, and $31.7 million, respectively, for the year ended December 31, 2023, as the carrying value of each reporting unit exceeded the fair value of the respective reporting unit. For WWS, the delay in web-novel video production resulted in lower operating profits and cash flows than expected, leading to the impairment of the reporting unit. As for Munpia, operating profits and cash flows were lower than anticipated due to a delay in realizing synergies and returns from investments in content creation and IP Adaptations which were initiated as a vertical expansion from Munpia’s platform business, leading to the impairment of the reporting unit. In the case of Jakga, the postponement of releases for major works led to operating profits and cash flows that were lower than anticipated, leading to the impairment of the reporting unit.
Making estimates requires significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the Consolidated Financial Statements could change in the near term due to one or more future events. Changes in these estimates and assumptions could materially affect the fair value of the reporting units, potentially resulting in a non-cash impairment charge.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 5, 2026 | Showing above |
| 2024 | Mar 11, 2025 | |
About Goodwill & Intangibles Disclosures
Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.
Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.