Mar 31, 2023

Unity Q1 2023 Earnings Report

Unity had a strong start to the year, exceeding revenue and adjusted EBITDA guidance.

Key Takeaways

Unity reported a strong first quarter with revenue of $500 million, up 56% year-over-year. The company exceeded its revenue guidance and adjusted EBITDA also came in ahead of expectations. Unity is raising the low-end of its full-year revenue and adjusted EBITDA guidance ranges.

First quarter revenue was $500 million, up 56% year-over-year.

GAAP net loss was $254 million.

Adjusted EBITDA was $32 million, exceeding guidance.

The company is raising the low-end of its full-year revenue and adjusted EBITDA guidance ranges.

Total Revenue
$500M
Previous year: $320M
+56.3%
EPS
$0.06
Previous year: -$0.08
-175.0%
Dollar-Based Net Expansion Rate
142%
Previous year: 135%
+5.2%
Customers Contributing $100K+ Revenue
1.34K
Previous year: 1.08K
+23.7%
Gross Profit
$338M
Previous year: $226M
+49.5%
Cash and Equivalents
$1.59B
Previous year: $1.15B
+38.4%
Free Cash Flow
-$19.4M
Previous year: $86.4M
-122.5%
Total Assets
$7.73B
Previous year: $4.95B
+56.4%

Unity

Unity

Forward Guidance

For the second quarter, revenue is guided to $510 to $520 million, an increase of 72% to 75% year-over year and adjusted EBITDA from $50 to $60 million. The revenue guide for the year is $2.08 to $2.2 billion, an increase of 50% to 58% year-over year and the adjusted EBITDA guide is $250 to $300M.

Positive Outlook

  • Revenue is guided to $510 to $520 million, an increase of 72% to 75% year-over year.
  • Adjusted EBITDA is guided from $50 to $60 million.
  • Revenue guide for the year is $2.08 to $2.2 billion, an increase of 50% to 58% year-over year.
  • Adjusted EBITDA guide for the year is $250 to $300M.
  • The ads market will be relatively flat quarter-over-quarter and that Unity will continue to gain share and perform ahead of the market.

Challenges Ahead

  • A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis.
  • The guidance is taking into account the stronger than expected first quarter and the ongoing uncertain economic environment.
  • The shares estimates do not include the impact of any additional share buyback.
  • Uncertainty of expenses that may be incurred in the future and cannot be reasonably determined or predicted at this time
  • These factors could be material to Unity’s results computed in accordance with GAAP.