Editor's note: An earlier version of this article incorrectly stated that David Lee was Webtoon's CEO.
Shares of Webtoon Entertainment (WBTN +1.70%) soared to a 52-week high on Wednesday. Powered by a strong earnings report and an unexpected Walt Disney (DIS 0.44%) partnership, Webtoon's shares had gained 93% as of 11:40 a.m. ET -- and the chart is still trending upward as of this writing.
NASDAQ: WBTN
Key Data Points
Webtoon's results and a sweet Disney deal
Let's start with the financial filings. The average Wall Street firm had expected second-quarter earnings of roughly $0.02 per share, with top-line revenue near $341 million. The mobile webcomics specialist posted adjusted earnings of $0.07 per share instead, based on $348 million of revenues. That's a clean sweep, also exceeding the top end of management's guidance ranges for this period.
But the bigger news came from the House of Mouse. Besides the earnings report, Webtoon also announced a brand new Disney deal. This contract adds a selection of Disney, Marvel, 20th Century Fox, and Star Wars content on the Webtoon platform.
It will start with a handful of free webcomics at launch, followed by approximately 100 pieces of premium content over time. That's a robust slice of Disney's instantly recognizable content portfolio, but Webtoon users won't get full access to this deep well.
Image source: Getty Images.
How the partnership helps Webtoon and Disney
Webtoon CFO and COO David Lee wasn't able to share financial terms or launch dates quite yet, as the commercial details are still being hammered out. But he called the deal a win-win for both companies. Webtoon will supplement its mainly anime-style comics with a deep well of proven hits, while Disney reaches the Gen Z kids (and younger) from a new angle.
The stock calmed down to an 85% gain by noon ET. That's still a solid 52-week high. Again, the Disney deal holds more weight than a modest earnings surprise. From here, Webtoon needs to make the most of its Disney contract, boosting the company's fairly slow revenue growth and nearly breakeven profits.
