ReelShort Turns Its First Profit This Year, and Microdrama Is Now Graded on Earnings

A Company Built on Losses Starts Keeping Money

ReelShort’s revenue curve has been steep: $97 million in 2023, $400 million in 2024, $785 million in 2025. What the curve hides is that the company had never made money. Even in the $785 million year, it posted a $12 million net loss.

A new Media Partners Asia report calls 2026 the crossover. It projects ReelShort revenue up 34% to $1.05 billion, with $63 million in EBITDA and roughly $40 million in net profit, the first profit the company has earned at scale (Variety). The forecast keeps climbing from there: $1.4 billion in 2027, then $1.7 billion in 2028 with $306 million in EBITDA at an 18% margin and $225 million in net profit (Deadline).

MPA CEO Vivek Couto compressed the shift into one line: “Microdrama has begun to be an earnings story rather than a growth story.” That is not a claim that the doubling years are over. It is a claim that rankings will now be set by what a platform keeps, not what it books.

Worth remembering for anyone with a long memory: Quibi raised $1.75 billion for premium short-form video in 2020 and shut down within a year. The category Quibi died chasing now supports a billion-dollar app that pays for itself.

Where the Profit Actually Came From

The biggest lever was not content. It was marketing. User acquisition and marketing ate 55% of ReelShort’s revenue in 2025, and MPA projects the ratio falls to 44% by 2028. Each percentage point converts to roughly $10.5 million in EBITDA, so the direction of the P&L is effectively set by that single line.

Billing moved too. The center of gravity shifted from in-app purchases to the operators’ own web stores, routing around app store commissions (Screen Daily). Margin that used to leave as a 30% platform cut now stays home.

The revenue mix tells the maturity story. Consumer payments make up 85 to 90% of ReelShort’s revenue, and subscriptions account for 60 to 70% of those payments. A market that started as episode-by-episode coin purchases has hardened into subscriptions. Advertising is projected to reach about 15% of revenue by 2028, and it is the high-margin axis: 65 to 70 cents of every ad dollar flows through to earnings.

Five Apps Took 79%

The microdrama market outside China reaches $3.6 billion this year, up from $2.7 billion, and MPA sees it hitting $9.5 billion by 2031. The US accounts for $1.5 billion of this year’s total, nearly half, and grows to $3.7 billion by 2031. Asia Pacific triples over the same window to $2.4 billion.

The share table summarizes the present tense: ReelShort 29%, DramaBox 21%, DramaWave 13%, NetShort 10%, GoodShort 6%. The top five hold 79%, and roughly 300 other apps split the remainder. The war of attrition, buying users with paid marketing, pushed out the small players first, and now that the cost curve is bending, only the surviving leaders cross into profit. The door for a sixth general-purpose app is effectively closed.

The Open Numbers Next to the Closed Door

The same report contains figures pointing the other way. Of ReelShort’s roughly 70 million monthly users, Latin America and Asia Pacific supply 60%, yet they contribute only 19% of revenue. North America pays 59% of the bill, about $620 million. The world watches, America pays, and even the market leader has not solved local pricing and local payment rails. That such conversions do happen is what India’s app spending shift shows: short drama apps already sit near the top of India’s record Q2 in-app purchase charts.

Advertising is the other open flank. Reaching only 15% of revenue by 2028 means the layer that handles ad formats between vertical episodes, measurement, and brand safety is still being built. For YC-stage teams, the arithmetic favors selling into the platforms over competing with them: five companies just crossed into profitability and have budgets for exactly these gaps, plus a bottomless appetite for adaptable IP from web novels and comics.

If MPA’s forecast holds, ads exceed $200 million of ReelShort’s $1.7 billion in 2028 revenue. Who sells that inventory and how it gets measured is not yet decided.