Earnings (Loss) Per share

9 Months Ended

Sep. 30, 2024

Note 3. Earnings (loss) per share

For the three and nine months ended September 30, 2023, for the purpose of calculating earnings (loss) per share and as a result of the common control transaction as described in Note 1. Description of Business and Summary of Significant Accounting Policies, the weighted-average number of shares used in the calculation reflects the outstanding shares of Wattpad as if the equity structure of the Parent (the accounting acquirer) was retroactively stated to reflect the number of shares issued in the Wattpad Transfer.

Basic earnings (loss) per share is computed using the weighted-average number of outstanding shares of common stock during the period, including vested restricted stock units ("RSUs"). Diluted earnings (loss) per share is computed using the weighted average number of outstanding shares of common stock and, potentially dilutive common shares outstanding during the period. Potentially dilutive common shares consist of incremental shares issuable upon the assumed exercise of stock options and vesting of unvested RSUs. For the three and nine months ended September 30, 2024 and 2023, the Company's Korean subsidiaries and equity method investees each had outstanding stock options that will be settled in each respective subsidiary or equity method investee's common shares. The numerator of the Company's earnings (loss) per share include the Parent's proportionate share of the diluted earnings or loss per share impact of outstanding subsidiaries and equity method investees' stock options.

The following table sets forth the computation of basic and diluted earnings (loss) per share, as adjusted on a retrospective basis to reflect the Stock Split as discussed in Note 1. Description of Business and Summary of Significant Accounting Policies, for the three months ended September 30, 2024 and 2023, respectively, and for the nine months ended September 30, 2024 and 2023, respectively (in thousands of USD, except share and per share amounts):


	Three Months Ended						Nine Months Ended
	September 30, 2024			September 30, 2023			September 30, 2024			September 30, 2023
Basic earnings (loss) per share:
Net income (loss) attributable to Webtoon Entertainment Inc.	$	19,753		$	(11,175	)	$	(50,940	)	$	(48,854	)
Add: allocation to subsidiary / equity method investee participating security1		—			644			123			576
Net income (loss) attributable to Webtoon Entertainment Inc.	$	19,753		$	(10,531	)	$	(50,817	)	$	(48,278	)
Shares used in computation:
Weighted-average common shares outstanding		128,327,971			109,505,150			116,023,733			109,505,150
Basic earnings (loss) per share:	$	0.15		$	(0.10	)	$	(0.44	)	$	(0.44	)
Diluted earnings (loss) per share:
Net income (loss) attributable to Webtoon Entertainment Inc.	$	19,753		$	(10,531	)	$	(50,817	)	$	(48,278	)
Add: dilutive impact of subsidiary / equity method investee stock options		(2	)		(1	)		(6	)		0
Diluted net income (loss) attributable to Webtoon Entertainment Inc.	$	19,751		$	(10,532	)	$	(50,823	)	$	(48,278	)
Shares used in computation:
Weighted-average common shares outstanding		128,327,971			109,505,150			116,023,733			109,505,150
Dilutive effect of stock options and unvested RSUs		2,489,905			—			—			—
Diluted weighted-average common shares outstanding		130,817,876			109,505,150			116,023,733			109,505,150
Diluted earnings (loss) per share	$	0.15		$	(0.10	)	$	(0.44	)	$	(0.44	)

Represents net loss allocable to Jakga Company Inc. ("Jakga") redeemable convertible preferred stock which is a participating security per ASC 260. Jakga became an equity method investee from a subsidiary when it was deconsolidated on March 28, 2024 (Refer to Note 14. Disposition for additional information for Jakga disposition).

The following potentially dilutive outstanding securities were excluded from the computation of diluted net earnings (loss) per share because their effect would have been anti-dilutive for the periods presented, or issuance of such shares is contingent upon the satisfaction of certain conditions which were not satisfied by the end of the period:


	Three Months Ended				Nine Months Ended
	September 30, 2024		September 30, 2023		September 30, 2024		September 30, 2023
Stock options		2,755,529		9,099,840		10,987,180		9,099,840
Unvested RSUs		1,620,028		-		2,539,868		-
Subsidiary / equity method investee stock options		332,597		603,797		332,597		610,897
Total		4,708,154		9,703,637		13,859,645		9,710,737