Line loses users for the first time, but makes more money than ever

While WhatsApp and Facebook add hundreds of millions of new users each year, Line is not faring so well. The messaging app announced today that it lost three million users from October to December, stumbling from 220 million to 217 million.

The bad news comes six months after Japan-based Line IPO’d in a dual listing in Tokyo and New York, debuting with a US$9 billion valuation. That has since fallen to US$8 billion.

Line is more dependent than ever on its four main user bases in Japan, Taiwan, Thailand and Indonesia, who now make up 77 percent of its audience, up from 67.3 percent a year prior.

A profit, some consolation

Its growing irrelevance around the rest of the world comes as WhatsApp and Facebook Messenger have each surged to a billion active users. An array of companion apps and services, such as Line Pay, Line Music, and Line Moments, has not managed to boost user numbers, which have been nearly static since mid-2015.

Line CEO Takeshi Idezawa talks shop at TIA Singapore 2016.

Despite the gloom, Line – which makes most of its money from ads, gaming, and cutesy stickers – saw total revenue in 2016 hit US$1.2 billion, up 17 points from the year before.

It pulled in a full-year net profit – US$66.6 million – in place of the similarly sized loss it made in 2015.

Converted from Japanese yen. Rate: US$1 = JPY 113.6.

Update on Jan 25, 10pm SGT: Headline was changed to reflect the fact that Line made record revenues.