Unity Reports Fourth Quarter and Fiscal Year 2024 Financial Results
Unity (NYSE: U) reported Q4 2024 financial results with revenue of $457 million, down 25% year-over-year. The company's strategic portfolio revenue grew 4% to $442 million. Create Solutions revenue was $152 million (down 47% YoY), while Grow Solutions revenue was $305 million (down 5% YoY).
For full-year 2024, Unity recorded revenue of $1,813 million, a 17% decrease from 2023. The company reported a GAAP net loss of $664 million with a margin of (37)%. Adjusted EBITDA was $390 million with a 21% margin. Free Cash Flow improved to $286 million from $179 million in 2023.
Looking ahead, Unity provided Q1 2025 guidance with expected revenue between $405-415 million and Adjusted EBITDA of $60-65 million. The company highlighted the successful launch of Unity 6, new pricing model implementation, and progress in AI advertising solutions.
Unity (NYSE: U) ha riportato i risultati finanziari del quarto trimestre 2024 con un fatturato di $457 milioni, in calo del 25% rispetto all'anno precedente. Il fatturato del portafoglio strategico dell'azienda è cresciuto del 4% raggiungendo i $442 milioni. Il fatturato di Create Solutions è stato di $152 milioni (in calo del 47% su base annua), mentre il fatturato di Grow Solutions è stato di $305 milioni (in calo del 5% su base annua).
Per l'intero anno 2024, Unity ha registrato un fatturato di $1,813 milioni, con una diminuzione del 17% rispetto al 2023. L'azienda ha riportato una perdita netta GAAP di $664 milioni con un margine del (37)%. L'EBITDA rettificato è stato di $390 milioni con un margine del 21%. Il flusso di cassa libero è migliorato a $286 milioni rispetto ai $179 milioni del 2023.
Guardando al futuro, Unity ha fornito una guida per il primo trimestre 2025 con un fatturato atteso tra $405-415 milioni e un EBITDA rettificato di $60-65 milioni. L'azienda ha evidenziato il lancio di successo di Unity 6, l'implementazione di un nuovo modello di prezzo e i progressi nelle soluzioni pubblicitarie basate sull'IA.
Unity (NYSE: U) reportó los resultados financieros del cuarto trimestre de 2024 con unos ingresos de $457 millones, lo que representa una disminución del 25% en comparación con el año anterior. Los ingresos de la cartera estratégica de la compañía crecieron un 4%, alcanzando los $442 millones. Los ingresos de Create Solutions fueron de $152 millones (una disminución del 47% interanual), mientras que los ingresos de Grow Solutions fueron de $305 millones (una disminución del 5% interanual).
Para el año completo 2024, Unity registró ingresos de $1,813 millones, una disminución del 17% en comparación con 2023. La compañía reportó una pérdida neta GAAP de $664 millones con un margen del (37)%. El EBITDA ajustado fue de $390 millones con un margen del 21%. El flujo de caja libre mejoró a $286 millones desde $179 millones en 2023.
De cara al futuro, Unity proporcionó una guía para el primer trimestre de 2025, con ingresos esperados entre $405 y $415 millones y un EBITDA ajustado de $60 a $65 millones. La compañía destacó el exitoso lanzamiento de Unity 6, la implementación de un nuevo modelo de precios y los avances en las soluciones de publicidad basadas en IA.
Unity (NYSE: U)는 2024년 4분기 재무 결과를 발표하며 수익이 4억 5천7백만 달러로 전년 대비 25% 감소했다고 밝혔습니다. 회사의 전략 포트폴리오 수익은 4% 증가하여 4억 4천4백만 달러에 달했습니다. Create Solutions의 수익은 1억 5천2백만 달러(전년 대비 47% 감소)였고, Grow Solutions의 수익은 3억 5백만 달러(전년 대비 5% 감소)였습니다.
2024년 전체 연도에 대해 Unity는 18억 1천3백만 달러의 수익을 기록했으며, 이는 2023년 대비 17% 감소한 수치입니다. 회사는 GAAP 기준으로 6억 6천4백만 달러의 순손실을 보고했으며, 마진은 (37)%입니다. 조정된 EBITDA는 3억 9천만 달러로 21%의 마진을 기록했습니다. 자유 현금 흐름은 1억 7천9백만 달러에서 2억 8천6백만 달러로 개선되었습니다.
미래를 바라보며, Unity는 2025년 1분기 가이던스를 제공했으며, 예상 수익은 4억 5천만에서 4억 1천5백만 달러 사이, 조정된 EBITDA는 6천만에서 6천5백만 달러로 예상하고 있습니다. 회사는 Unity 6의 성공적인 출시, 새로운 가격 모델의 구현, AI 광고 솔루션의 발전을 강조했습니다.
Unity (NYSE: U) a annoncé ses résultats financiers pour le quatrième trimestre 2024, avec un chiffre d'affaires de 457 millions de dollars, en baisse de 25 % par rapport à l'année précédente. Le chiffre d'affaires du portefeuille stratégique de l'entreprise a augmenté de 4 % pour atteindre 442 millions de dollars. Le chiffre d'affaires de Create Solutions était de 152 millions de dollars (en baisse de 47 % par rapport à l'année précédente), tandis que le chiffre d'affaires de Grow Solutions était de 305 millions de dollars (en baisse de 5 % par rapport à l'année précédente).
Pour l'année entière 2024, Unity a enregistré un chiffre d'affaires de 1,813 million de dollars, une diminution de 17 % par rapport à 2023. L'entreprise a signalé une perte nette GAAP de 664 millions de dollars avec une marge de (37) %. L'EBITDA ajusté était de 390 millions de dollars avec une marge de 21 %. Le flux de trésorerie libre s'est amélioré à 286 millions de dollars, contre 179 millions de dollars en 2023.
En regardant vers l'avenir, Unity a fourni des prévisions pour le premier trimestre 2025, avec des revenus attendus entre 405 et 415 millions de dollars et un EBITDA ajusté de 60 à 65 millions de dollars. L'entreprise a souligné le lancement réussi de Unity 6, la mise en œuvre d'un nouveau modèle de prix et les progrès réalisés dans les solutions publicitaires basées sur l'IA.
Unity (NYSE: U) hat die finanziellen Ergebnisse für das vierte Quartal 2024 bekannt gegeben, mit einem Umsatz von 457 Millionen Dollar, was einem Rückgang von 25 % im Vergleich zum Vorjahr entspricht. Der Umsatz des strategischen Portfolios des Unternehmens wuchs um 4 % auf 442 Millionen Dollar. Der Umsatz von Create Solutions betrug 152 Millionen Dollar (ein Rückgang von 47 % im Jahresvergleich), während der Umsatz von Grow Solutions 305 Millionen Dollar (ein Rückgang von 5 % im Jahresvergleich) betrug.
Für das Gesamtjahr 2024 verzeichnete Unity einen Umsatz von 1.813 Millionen Dollar, was einem Rückgang von 17 % gegenüber 2023 entspricht. Das Unternehmen meldete einen GAAP-Nettoverlust von 664 Millionen Dollar mit einer Marge von (37) %. Das bereinigte EBITDA betrug 390 Millionen Dollar mit einer Marge von 21 %. Der freie Cashflow verbesserte sich auf 286 Millionen Dollar von 179 Millionen Dollar im Jahr 2023.
Für die Zukunft gab Unity eine Prognose für das erste Quartal 2025 ab, mit einem erwarteten Umsatz zwischen 405 und 415 Millionen Dollar und einem bereinigten EBITDA von 60 bis 65 Millionen Dollar. Das Unternehmen hob den erfolgreichen Start von Unity 6, die Implementierung eines neuen Preismodells und Fortschritte bei KI-Werbelösungen hervor.
- Strategic portfolio revenue grew 4% YoY to $442 million in Q4
- Subscription revenue increased 15% YoY in Q4
- Industry strategic revenue grew 50% YoY in Q4
- Free Cash Flow improved to $286M in 2024 from $179M in 2023
- Adjusted EBITDA margin improved to 21% in 2024 from 20% in 2023
- Q4 revenue declined 25% YoY to $457M
- Full-year revenue decreased 17% YoY to $1,813M
- GAAP net loss of $664M for full-year 2024
- Create Solutions revenue dropped 47% YoY in Q4
- Grow Solutions revenue declined 5% YoY in Q4
- Cash and equivalents decreased by $76M to $1,528M
Insights
Unity's Q4 2024 results reveal a strategic transformation in progress, with the company successfully executing its portfolio reset while improving operational efficiency. The headline 25% revenue decline to
Operational Excellence: The company demonstrated remarkable cost control, achieving an Adjusted EBITDA margin of
Strategic Growth Vectors:
- Create Solutions showed
15% growth in subscription revenue and50% growth in Industry strategic revenue, signaling strong adoption of Unity's core platform - The successful Unity 6 launch and new pricing model are driving improved monetization
- AI integration in advertising solutions suggests potential for enhanced targeting and efficiency
Financial Health: With
Forward Outlook: Q1 2025 guidance of
"The Company’s fourth quarter results meaningfully exceeded expectations on both revenue and profit, underscoring our progress in building a new Unity,” said Matt Bromberg, President and CEO of Unity.
“The successful launch of Unity 6, the appeal of our new pricing model, and the progress we’re making in AI for our advertising customers are providing a lot of optimism for the future,” Bromberg continued.
Fourth Quarter 2024 Results:
-
Revenue was
$457 million $609 million -
Revenue from our strategic portfolio was
$442 million $423 million 4% year-over-year. -
Create Solutions revenue was
$152 million $290 million -
Grow Solutions revenue was
$305 million $319 million -
GAAP net loss was
$123 million -
Adjusted EBITDA was
$106 million 23% . -
Net cash provided by operating activities was
$112 million -
Free Cash Flow was
$106 million
Full Year 2024 Results:
-
Revenue was
$1,813 million $2,187 million -
Revenue from our strategic portfolio was
$1,723 million $1,733 million 1% year-over-year. -
Create Solutions revenue was
$614 million $859 million -
Grow Solutions revenue was
$1,199 million $1,328 million -
GAAP net loss was
$664 million -
Adjusted EBITDA was
$390 million 21% . -
Net cash provided by operating activities was
$316 million -
Free Cash Flow was
$286 million
Fourth Quarter Results
Revenue
Revenue was
Create Solutions revenue was
Grow Solutions revenue was
Basic and Diluted Net Loss per share
Basic and diluted net loss per share was
Net Loss and Net Cash Provided by Operating Activities
Net loss for the quarter was
Net loss margin was (27)%, compared to (42)% in the fourth quarter of 2023, due to decreases in our personnel-related costs.
Net cash provided by operating activities for the quarter was
Adjusted EBITDA and Free Cash Flow
Adjusted EBITDA for the quarter was
Free Cash Flow for the quarter was
Full Year 2024 Results
Revenue
Revenue was
Create Solutions revenue was
Grow Solutions revenue was
Basic and Diluted Net Loss per share
Basic and diluted net loss per share was
Net Loss and Net Cash Provided by Operating Activities
Net loss for the year was
Net loss margin of (37)%, compared to (38)% in the full year 2023, due to decreases in our personnel-related costs, and the gain on repurchase of our convertible notes.
Net cash provided by operating activities for the year was
Adjusted EBITDA and Free Cash Flow
Adjusted EBITDA for the year was
Free Cash Flow for the year was
Liquidity
As of December 31, 2024, our cash and cash equivalents, and restricted cash was
Q1 2025 Guidance1
-
Revenue of
$405 $415 million -
Adjusted EBITDA of
$60 $65 million
About Unity
Unity [NYSE: U] offers a suite of tools to create, market and grow games and interactive experiences across all major platforms from mobile, PC, and console, to extended reality (XR). For more information, visit Unity.com.
UNITY SOFTWARE INC. |
||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
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(In thousands, except par share data) |
||||||
(Unaudited) |
||||||
|
|
|
||||
|
As of |
|||||
|
December 31, 2024 |
December 31, 2023 |
||||
Assets |
|
|
||||
Current assets: |
|
|
||||
Cash and cash equivalents |
$ |
1,517,672 |
|
$ |
1,590,325 |
|
Accounts receivable, net |
|
573,884 |
|
|
611,723 |
|
Prepaid expenses and other |
|
133,795 |
|
|
122,843 |
|
Total current assets |
|
2,225,351 |
|
|
2,324,891 |
|
Property and equipment, net |
|
98,819 |
|
|
140,887 |
|
Goodwill |
|
3,166,304 |
|
|
3,166,304 |
|
Intangible assets, net |
|
1,066,235 |
|
|
1,406,745 |
|
Other assets |
|
180,698 |
|
|
204,614 |
|
Total assets |
$ |
6,737,407 |
|
$ |
7,243,441 |
|
Liabilities and stockholders' equity |
|
|
||||
Current liabilities: |
|
|
||||
Accounts payable |
$ |
13,948 |
|
$ |
14,517 |
|
Accrued expenses and other |
|
294,951 |
|
|
307,704 |
|
Publisher payables |
|
394,284 |
|
|
385,113 |
|
Deferred revenue |
|
186,304 |
|
|
186,769 |
|
Total current liabilities |
|
889,487 |
|
|
894,103 |
|
Convertible notes |
|
2,238,922 |
|
|
2,711,750 |
|
Long-term deferred revenue |
|
16,846 |
|
|
6,015 |
|
Other long-term liabilities |
|
165,004 |
|
|
217,195 |
|
Total liabilities |
|
3,310,259 |
|
|
3,829,063 |
|
Commitments and contingencies |
|
|
||||
Redeemable noncontrolling interests |
|
230,627 |
|
|
225,797 |
|
Stockholders' equity: |
|
|
||||
Common stock, |
|
|
||||
Authorized shares - 1,000,000 and 1,000,000 |
|
|
||||
Issued and outstanding shares - 409,393 and 384,872 |
|
2 |
|
|
2 |
|
Additional paid-in capital |
|
6,936,038 |
|
|
6,259,479 |
|
Accumulated other comprehensive loss |
|
(9,425 |
) |
|
(5,009 |
) |
Accumulated deficit |
|
(3,735,944 |
) |
|
(3,071,830 |
) |
Total Unity Software Inc. stockholders' equity |
|
3,190,671 |
|
|
3,182,642 |
|
Noncontrolling interest |
|
5,850 |
|
|
5,939 |
|
Total stockholders' equity |
|
3,196,521 |
|
|
3,188,581 |
|
Total liabilities and stockholders' equity |
$ |
6,737,407 |
|
$ |
7,243,441 |
|
UNITY SOFTWARE INC. |
||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS |
||||||||||||
(In thousands, except per share amounts) |
||||||||||||
(Unaudited) |
||||||||||||
|
|
|
|
|
||||||||
|
Three Months Ended |
Year Ended |
||||||||||
|
December 31, |
December 31, |
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
Revenue |
$ |
457,099 |
|
$ |
609,268 |
|
$ |
1,813,255 |
|
$ |
2,187,317 |
|
Cost of revenue |
|
115,537 |
|
|
261,582 |
|
|
480,853 |
|
|
733,722 |
|
Gross profit |
|
341,562 |
|
|
347,686 |
|
|
1,332,402 |
|
|
1,453,595 |
|
Operating expenses |
|
|
|
|
||||||||
Research and development |
|
217,970 |
|
|
265,150 |
|
|
924,830 |
|
|
1,053,588 |
|
Sales and marketing |
|
175,747 |
|
|
215,367 |
|
|
752,649 |
|
|
834,625 |
|
General and administrative |
|
71,499 |
|
|
126,129 |
|
|
410,072 |
|
|
398,176 |
|
Total operating expenses |
|
465,216 |
|
|
606,646 |
|
|
2,087,551 |
|
|
2,286,389 |
|
Loss from operations |
|
(123,654 |
) |
|
(258,960 |
) |
|
(755,149 |
) |
|
(832,794 |
) |
Interest expense |
|
(5,839 |
) |
|
(6,155 |
) |
|
(23,542 |
) |
|
(24,580 |
) |
Interest income and other income (expense), net |
|
9,108 |
|
|
20,840 |
|
|
111,558 |
|
|
59,529 |
|
Loss before income taxes |
|
(120,385 |
) |
|
(244,275 |
) |
|
(667,133 |
) |
|
(797,845 |
) |
Provision for (benefit from) Income taxes |
|
2,138 |
|
|
9,710 |
|
|
(2,846 |
) |
|
28,477 |
|
Net loss |
|
(122,523 |
) |
|
(253,985 |
) |
|
(664,287 |
) |
|
(826,322 |
) |
Net income (loss) attributable to noncontrolling interest and redeemable noncontrolling interests |
|
204 |
|
|
(1,239 |
) |
|
(173 |
) |
|
(4,311 |
) |
Net loss attributable to Unity Software Inc. |
|
(122,727 |
) |
|
(252,749 |
) |
|
(664,114 |
) |
|
(822,011 |
) |
Basic and diluted net loss per share attributable to Unity Software Inc. |
$ |
(0.30 |
) |
$ |
(0.66 |
) |
$ |
(1.68 |
) |
$ |
(2.16 |
) |
Weighted-average shares used in computation of basic and diluted net loss per share |
|
405,172 |
|
|
381,788 |
|
|
395,951 |
|
|
380,457 |
|
|
|
|
|
|
||||||||
Net loss |
|
(122,523 |
) |
|
(253,985 |
) |
|
(664,287 |
) |
|
(826,322 |
) |
Change in foreign currency translation adjustment |
|
(8,102 |
) |
|
5,847 |
|
|
(5,544 |
) |
|
(4,556 |
) |
Change in unrealized gains on derivative instruments |
|
— |
|
|
— |
|
|
— |
|
|
289 |
|
Comprehensive loss |
$ |
(130,625 |
) |
$ |
(248,138 |
) |
$ |
(669,831 |
) |
$ |
(830,589 |
) |
Net income (loss) attributable to noncontrolling interest and redeemable noncontrolling interests |
|
204 |
|
|
(1,239 |
) |
|
(173 |
) |
|
(4,311 |
) |
Foreign currency translation attributable to noncontrolling interest and redeemable noncontrolling interests |
|
(1,664 |
) |
|
1,210 |
|
|
(1,128 |
) |
|
(949 |
) |
Comprehensive loss attributable to noncontrolling interest and redeemable noncontrolling interests |
|
(1,460 |
) |
|
(26 |
) |
|
(1,301 |
) |
|
(5,260 |
) |
Comprehensive loss attributable to Unity Software Inc. |
$ |
(129,165 |
) |
$ |
(248,112 |
) |
$ |
(668,530 |
) |
$ |
(825,329 |
) |
UNITY SOFTWARE INC. |
||||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS |
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(In thousands) |
||||||||||||
(Unaudited) |
||||||||||||
|
|
|
|
|
||||||||
|
Three Months Ended |
Year Ended |
||||||||||
|
December 31, |
December 31, |
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
Operating activities |
|
|
|
|
||||||||
Net loss |
$ |
(122,523 |
) |
$ |
(253,985 |
) |
$ |
(664,287 |
) |
$ |
(826,322 |
) |
Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
|
|
||||||||
Depreciation and amortization |
|
103,161 |
|
|
232,254 |
|
|
408,980 |
|
|
563,916 |
|
Stock-based compensation expense |
|
110,356 |
|
|
180,953 |
|
|
596,249 |
|
|
648,696 |
|
Gain on repayment of convertible note |
|
— |
|
|
— |
|
|
(61,371 |
) |
|
— |
|
Impairment of property and equipment |
|
(83 |
) |
|
— |
|
|
22,791 |
|
|
— |
|
Other |
|
8,574 |
|
|
13,056 |
|
|
23,309 |
|
|
24,613 |
|
Changes in assets and liabilities, net of effects of acquisitions: |
|
|
|
|
||||||||
Accounts receivable, net |
|
1,896 |
|
|
(6,555 |
) |
|
37,359 |
|
|
21,791 |
|
Prepaid expenses and other |
|
746 |
|
|
(2,040 |
) |
|
(11,203 |
) |
|
20,314 |
|
Other assets |
|
(7,113 |
) |
|
11,514 |
|
|
(2,746 |
) |
|
45,047 |
|
Accounts payable |
|
652 |
|
|
(6,881 |
) |
|
742 |
|
|
(6,313 |
) |
Accrued expenses and other |
|
8,696 |
|
|
2,952 |
|
|
(6,671 |
) |
|
(21,069 |
) |
Publisher payables |
|
11,731 |
|
|
(23,147 |
) |
|
9,170 |
|
|
(60,509 |
) |
Other long-term liabilities |
|
(1,181 |
) |
|
12,017 |
|
|
(47,963 |
) |
|
(47,245 |
) |
Deferred revenue |
|
(2,720 |
) |
|
(88,035 |
) |
|
11,194 |
|
|
(128,219 |
) |
Net cash provided by operating activities |
|
112,192 |
|
|
72,103 |
|
|
315,553 |
|
|
234,700 |
|
Investing activities |
|
|
|
|
||||||||
Purchases of short-term investments |
|
— |
|
|
— |
|
|
— |
|
|
(212 |
) |
Proceeds from principal repayments and maturities of short-term investments |
|
— |
|
|
— |
|
|
— |
|
|
102,673 |
|
Purchases of non-marketable investments |
|
— |
|
|
— |
|
|
— |
|
|
(2,500 |
) |
Purchases of intangible assets |
|
— |
|
|
— |
|
|
(12,860 |
) |
|
— |
|
Purchases of property and equipment |
|
(6,442 |
) |
|
(11,361 |
) |
|
(29,549 |
) |
|
(55,921 |
) |
Net cash provided by (used in) investing activities |
|
(6,442 |
) |
|
(11,361 |
) |
|
(42,409 |
) |
|
44,040 |
|
Financing activities |
|
|
|
|
||||||||
Repayments of convertible note |
|
— |
|
|
— |
|
|
(414,999 |
) |
|
— |
|
Repurchase and retirement of common stock |
|
— |
|
|
— |
|
|
— |
|
|
(250,000 |
) |
Proceeds from issuance of common stock from employee equity plans |
|
19,390 |
|
|
10,991 |
|
|
76,692 |
|
|
75,985 |
|
Net cash provided by (used in) financing activities |
|
19,390 |
|
|
10,991 |
|
|
(338,307 |
) |
|
(174,015 |
) |
Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash |
|
(13,227 |
) |
|
11,510 |
|
|
(11,223 |
) |
|
(6,146 |
) |
Increase (decrease) in cash, cash equivalents, and restricted cash |
|
111,913 |
|
|
83,243 |
|
|
(76,386 |
) |
|
98,579 |
|
Cash, cash equivalents, and restricted cash, beginning of period |
|
1,415,968 |
|
|
1,521,024 |
|
|
1,604,267 |
|
|
1,505,688 |
|
Cash, cash equivalents, and restricted cash, end of period |
$ |
1,527,881 |
|
$ |
1,604,267 |
|
$ |
1,527,881 |
|
$ |
1,604,267 |
|
About Non-GAAP Financial Measures
To supplement our consolidated financial statements prepared and presented in accordance with generally accepted accounting principles in
However, non-GAAP financial measures have limitations in their usefulness to investors because they have no standardized meaning prescribed by GAAP and are not prepared under any comprehensive set of accounting rules or principles. In addition, other companies, including companies in our industry, may calculate similarly-titled non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. As a result, our non-GAAP financial measures are presented for supplemental informational purposes only and should not be considered in isolation or as a substitute for our consolidated financial statements presented in accordance with GAAP.
We define adjusted EBITDA as GAAP net income or loss excluding benefits or expenses associated with stock-based compensation, amortization of acquired intangible assets, depreciation, acquisitions, restructurings and reorganizations, insurance reimbursement for legal expenses, interest, income tax, and other non-operating activities, which primarily consist of foreign exchange rate gains or losses. We define adjusted EBITDA margin as adjusted EBITDA as a percentage of revenue. We define adjusted gross profit as GAAP gross profit excluding expenses associated with stock-based compensation, amortization of acquired intangible assets, depreciation, and restructurings and reorganizations. We define adjusted gross margin as adjusted gross profit as a percentage of revenue.
We define non-GAAP cost of revenue as GAAP cost of revenue, excluding expenses associated with stock-based compensation, amortization of acquired intangible assets, depreciation, and restructurings and reorganizations. We define non-GAAP research and development expense as research and development expense, excluding expenses associated with stock-based compensation, amortization of acquired intangible assets, depreciation, and restructurings and reorganizations. We define non-GAAP sales and marketing expense as GAAP sales and marketing expense, excluding expenses associated with stock-based compensation, amortization of acquired intangible assets, depreciation, and restructurings and reorganizations. We define non-GAAP general and administrative expense as general and administrative expense excluding expenses associated with stock-based compensation, depreciation, acquisitions, restructurings and reorganizations, and insurance reimbursement for legal expenses. We define free cash flow as net cash provided by operating activities less cash used for purchases of property and equipment.
UNITY SOFTWARE, INC. |
||||||||||||
Non-GAAP Reconciliation |
||||||||||||
(In thousands) |
||||||||||||
|
|
|
|
|
||||||||
|
Three Months Ended |
Year Ended |
||||||||||
|
December 31, |
December 31, |
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
Adjusted EBITDA reconciliation |
|
|
|
|
||||||||
Revenue |
$ |
457,099 |
|
$ |
609,268 |
|
$ |
1,813,255 |
|
$ |
2,187,317 |
|
GAAP net loss |
$ |
(122,523 |
) |
$ |
(253,985 |
) |
$ |
(664,287 |
) |
$ |
(826,322 |
) |
Add: |
|
|
|
|
||||||||
Stock-based compensation expense |
$ |
110,203 |
|
$ |
180,953 |
|
$ |
469,128 |
|
$ |
648,696 |
|
Amortization of intangible assets expense |
$ |
88,465 |
|
$ |
219,647 |
|
$ |
353,371 |
|
$ |
515,489 |
|
Depreciation of property and equipment |
$ |
14,696 |
|
$ |
12,606 |
|
$ |
55,609 |
|
$ |
48,427 |
|
Restructuring and reorganization costs |
$ |
16,398 |
|
$ |
31,396 |
|
$ |
266,855 |
|
$ |
70,373 |
|
Acquisition-related costs |
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
888 |
|
Legal settlement costs |
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
(3,250 |
) |
Interest expense |
$ |
5,839 |
|
$ |
6,155 |
|
$ |
23,542 |
|
$ |
24,580 |
|
Interest income and other expense, net |
$ |
(9,108 |
) |
$ |
(20,840 |
) |
$ |
(111,558 |
) |
$ |
(59,529 |
) |
Income tax expense |
$ |
2,138 |
|
$ |
9,710 |
|
$ |
(2,846 |
) |
$ |
28,477 |
|
Adjusted EBITDA |
$ |
106,108 |
|
$ |
185,642 |
|
$ |
389,814 |
|
$ |
447,829 |
|
GAAP net loss margin |
|
(27 |
)% |
|
(42 |
)% |
|
(37 |
)% |
|
(38 |
)% |
Adjusted EBITDA margin |
|
23 |
% |
|
30 |
% |
|
21 |
% |
|
20 |
% |
|
|
|
|
|
||||||||
Adjusted gross profit reconciliation |
|
|
|
|
||||||||
GAAP gross profit |
$ |
341,562 |
|
$ |
347,686 |
|
$ |
1,332,402 |
|
$ |
1,453,595 |
|
Add: |
|
|
|
|
||||||||
Stock-based compensation expense |
|
9,685 |
|
|
21,972 |
|
|
43,566 |
|
|
80,213 |
|
Amortization of intangible assets expense |
|
27,293 |
|
|
139,754 |
|
|
108,580 |
|
|
243,690 |
|
Depreciation expense |
|
2,372 |
|
|
2,839 |
|
|
9,613 |
|
|
10,480 |
|
Restructuring and reorganization costs |
|
117 |
|
|
10,447 |
|
|
15,154 |
|
|
13,510 |
|
Adjusted gross profit |
$ |
381,029 |
|
$ |
522,698 |
|
$ |
1,509,315 |
|
$ |
1,801,488 |
|
GAAP gross margin |
|
75 |
% |
|
57 |
% |
|
73 |
% |
|
66 |
% |
Adjusted gross margin |
|
83 |
% |
|
86 |
% |
|
83 |
% |
|
82 |
% |
|
|
|
|
|
||||||||
Operating expenses reconciliation |
|
|
|
|
||||||||
Cost of revenue |
|
|
|
|
||||||||
GAAP cost of revenue |
$ |
115,537 |
|
$ |
261,582 |
|
$ |
480,853 |
|
$ |
733,722 |
|
Stock-based compensation expense |
|
(9,685 |
) |
|
(21,972 |
) |
|
(43,566 |
) |
|
(80,213 |
) |
Amortization of intangible assets expense |
|
(27,293 |
) |
|
(139,754 |
) |
|
(108,580 |
) |
|
(243,690 |
) |
Depreciation expense |
|
(2,372 |
) |
|
(2,839 |
) |
|
(9,613 |
) |
|
(10,480 |
) |
Restructuring and reorganization costs |
|
(117 |
) |
|
(10,447 |
) |
|
(15,154 |
) |
|
(13,510 |
) |
Non-GAAP cost of revenue |
$ |
76,070 |
|
$ |
86,570 |
|
$ |
303,940 |
|
$ |
385,829 |
|
GAAP cost of revenue as a percentage of revenue |
|
25 |
% |
|
43 |
% |
|
27 |
% |
|
34 |
% |
Non-GAAP cost of revenue as a percentage of revenue |
|
17 |
% |
|
14 |
% |
|
17 |
% |
|
18 |
% |
|
|
|
|
|
||||||||
Research and development |
|
|
|
|
||||||||
GAAP research and development expense |
$ |
217,970 |
|
$ |
265,150 |
|
$ |
924,830 |
|
$ |
1,053,588 |
|
Stock-based compensation expense |
|
(58,077 |
) |
|
(76,001 |
) |
|
(240,556 |
) |
|
(290,160 |
) |
Amortization of intangible assets expense |
|
(17,737 |
) |
|
(28,734 |
) |
|
(69,345 |
) |
|
(84,022 |
) |
Depreciation expense |
|
(7,025 |
) |
|
(5,608 |
) |
|
(26,686 |
) |
|
(21,994 |
) |
Acquisition-related costs |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Restructuring and reorganization costs |
|
(1,892 |
) |
|
(1,284 |
) |
|
(54,460 |
) |
|
(23,588 |
) |
Non-GAAP research and development expense |
$ |
133,239 |
|
$ |
153,523 |
|
$ |
533,783 |
|
$ |
633,824 |
|
GAAP research and development expense as a percentage of revenue |
|
48 |
% |
|
44 |
% |
|
51 |
% |
|
48 |
% |
Non-GAAP research and development expense as a percentage of revenue |
|
29 |
% |
|
25 |
% |
|
29 |
% |
|
29 |
% |
|
|
|
|
|
||||||||
Sales and marketing |
|
|
|
|
||||||||
GAAP sales and marketing expense |
$ |
175,747 |
|
$ |
215,367 |
|
$ |
752,649 |
|
$ |
834,625 |
|
Stock-based compensation expense |
|
(20,898 |
) |
|
(38,189 |
) |
|
(95,171 |
) |
|
(143,461 |
) |
Amortization of intangible assets expense |
|
(43,435 |
) |
|
(51,159 |
) |
|
(175,446 |
) |
|
(187,777 |
) |
Depreciation expense |
|
(3,199 |
) |
|
(2,450 |
) |
|
(11,567 |
) |
|
(8,756 |
) |
Restructuring and reorganization costs |
|
(5,135 |
) |
|
(98 |
) |
|
(56,888 |
) |
|
(9,059 |
) |
Non-GAAP sales and marketing expense |
$ |
103,080 |
|
$ |
123,471 |
|
$ |
413,577 |
|
$ |
485,572 |
|
GAAP sales and marketing expense as a percentage of revenue |
|
38 |
% |
|
35 |
% |
|
42 |
% |
|
38 |
% |
Non-GAAP sales and marketing expense as a percentage of revenue |
|
23 |
% |
|
20 |
% |
|
23 |
% |
|
22 |
% |
|
|
|
|
|
||||||||
General and administrative |
|
|
|
|
||||||||
GAAP general and administrative expense |
$ |
71,499 |
|
$ |
126,129 |
|
$ |
410,072 |
|
$ |
398,176 |
|
Stock-based compensation expense |
|
(21,543 |
) |
|
(44,791 |
) |
|
(89,835 |
) |
|
(134,862 |
) |
Depreciation expense |
|
(2,100 |
) |
|
(1,709 |
) |
|
(7,743 |
) |
|
(7,197 |
) |
Acquisition-related costs |
|
— |
|
|
— |
|
|
— |
|
|
(888 |
) |
Restructuring and reorganization costs |
|
(9,254 |
) |
|
(19,567 |
) |
|
(140,353 |
) |
|
(24,216 |
) |
Insurance reimbursement for legal settlement |
|
— |
|
|
— |
|
|
— |
|
|
3,250 |
|
Non-GAAP general and administrative expense |
$ |
38,602 |
|
$ |
60,062 |
|
$ |
172,141 |
|
$ |
234,263 |
|
GAAP general and administrative expense as a percentage of revenue |
|
16 |
% |
|
21 |
% |
|
23 |
% |
|
18 |
% |
Non-GAAP general and administrative expense as a percentage of revenue |
|
8 |
% |
|
10 |
% |
|
10 |
% |
|
11 |
% |
|
|
|
|
|
||||||||
Free Cash Flow reconciliation |
|
|
|
|
||||||||
Net cash provided by operating activities |
$ |
112,192 |
|
$ |
72,103 |
|
$ |
315,553 |
|
$ |
234,700 |
|
Less: |
|
|
|
|
||||||||
Purchases of property and equipment |
|
(6,442 |
) |
|
(11,361 |
) |
|
(29,549 |
) |
|
(55,921 |
) |
Free cash flow |
|
105,750 |
|
|
60,742 |
|
|
286,004 |
|
|
178,779 |
|
|
|
|
|
|
||||||||
Net cash provided by (used in) investing activities |
|
(6,442 |
) |
|
(11,361 |
) |
|
(42,409 |
) |
|
44,040 |
|
Net cash provided by (used in) financing activities |
|
19,390 |
|
|
10,991 |
|
|
(338,307 |
) |
|
(174,015 |
) |
Cautionary Statement Regarding Forward-Looking Statements
This press release and the earnings call referencing this press release contain “forward-looking statements,” as that term is defined under federal securities laws, including, but not limited to, statements regarding Unity’s outlook and future financial performance, including: (i) Unity’s ability to further enhance its platform, accelerate product innovation and enhance financial performance; (ii) expectations regarding the release of Vector, including anticipated timing for the rollout on iOS and Android and the impact on financial results, as well as expectations regarding Vector’s improvements over time and Unity’s ability to mature the product and operate it at scale; (iii) plans to allocate R&D to the highest impact initiatives, complement revenue growth with ongoing margin expansion, drive growth and to be prudent stewards of shareholder capital; (iv) near term expected uses of capital; (v) plans to focus on per share returns and reduce shareholder dilution from stock-based compensation; (vi) expectations regarding revenue from non-strategic portfolio and stock-based compensation expense for 2025; (vii) Unity’s opportunity to gradually de-lever over the next several years; and (viii) Unity’s financial guidance for the first quarter 2025.
The words “aim,” “believe,” “may,” “will,” “estimate,” “continue,” “intend,” “expect,” “plan,” “project,” and similar expressions are intended to identify forward-looking statements. These forward-looking statements are subject to risks, uncertainties, and assumptions. If the risks materialize or assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. Risks include, but are not limited to, those related to: (i) the impact of macroeconomic conditions, such as inflation, high interest rates, and limited credit availability which could further cause economic uncertainty and volatility; (ii) competition in the advertising market and Unity’s ability to compete effectively; (iii) ongoing restrictions related to the gaming industry in
Source: Unity Software Inc.
_________________________________
1 These statements are forward-looking and actual results may differ materially. Refer to the “Forward-Looking Statements” safe harbor section below for information on the factors that could cause our actual results to differ materially from these forward-looking statements.
We have not reconciled our estimates for non-GAAP financial measures to GAAP due to the uncertainty and potential variability of expenses that may be incurred in the future. As a result, a reconciliation is not available without unreasonable effort and we are unable to address the probable significance of the unavailable information. We have provided a reconciliation of other GAAP to non-GAAP financial measures in the financial statement tables for our third quarter non-GAAP results included in this shareholder letter.
View source version on businesswire.com: https://www.businesswire.com/news/home/20250220165070/en/
Investor Relations :
ir@unity3d.com
investors.unity.com/
Media Relations :
UnityComms@unity3d.com
investors.unity.com/resources/contact-media-relations/
Source: Unity Software Inc.
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