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Mar 31
Unity Q1 2025 Earnings Report
Unity reported Q1 2025 results with revenue and adjusted EBITDA exceeding expectations.
Key Takeaways
Unity delivered $435M in revenue with a smaller net loss compared to Q1 2024, driven by cost discipline and strong early performance of Unity Vector.
Revenue reached $435M, down 6% year-over-year due to portfolio reset.
Net loss narrowed significantly to $78M from $291M a year earlier.
Positive free cash flow of $7.3M, reversing last year's negative outflow.
Strong adjusted EBITDA margin at 19%, aided by cost control and early Unity Vector traction.
Unity
Unity
Unity Revenue by Segment
Forward Guidance
Unity expects Q2 2025 revenue between $415M and $425M and adjusted EBITDA between $70M and $75M.
Positive Outlook
- Revenue guidance remains strong despite portfolio changes.
- Unity Vector is rolling out ahead of schedule.
- Cost discipline is driving better-than-expected EBITDA margins.
- Improved cash flow performance provides financial flexibility.
- Positive momentum in Unity 6 adoption supports future growth.
Challenges Ahead
- Revenue continues to decline year-over-year due to portfolio reset.
- Some Grow products showed declining performance.
- Adjusted EPS declined slightly compared to prior year.
- Operating loss remains substantial despite improvements.
- Q2 guidance implies sequential revenue deceleration.
Revenue & Expenses
Visualization of income flow from segment revenue to net income