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Dec 31, 2023
Unity Q4 2023 Earnings Report
Unity's Q4 2023 earnings showcased revenue growth driven by strategic partnerships and a focus on core businesses, amidst a company reset aimed at reigniting revenue growth and expanding adjusted EBITDA margins.
Key Takeaways
Unity's Q4 2023 revenue reached $609 million, a 35% increase year-over-year, significantly influenced by a $99 million contribution from a Wētā FX transaction. Excluding this, revenue would have been $510 million, a -2% decrease year-over-year. The company experienced a GAAP net loss of $254 million, with the Wētā FX transaction increasing the loss by $27 million. Adjusted EBITDA stood at $186 million, or $84 million excluding Wētā FX.
Q4 revenue was $609 million, up 35% year-over-year, including a $99 million boost from the Wētā FX transaction.
Create Solutions revenue was $290 million, up 47% year-over-year, also including revenue from Wētā FX.
Grow Solutions revenue was $319 million, up 26% year-over-year.
GAAP net loss was $254 million, which includes a $27 million impact from the Wētā FX transaction.
Revenue by Segment
Forward Guidance
For Q1 2024, Unity anticipates Strategic Portfolio revenue between $415 to $420 million and Adjusted EBITDA between $45 to $50 million. For the full year 2024, the Strategic Portfolio is projected to generate $1.76 billion to $1.8 billion in revenue, with Adjusted EBITDA expected to range from $400 to $425 million.
Positive Outlook
- High engagement from gamers and new game launches are expected in 2024.
- Strategic Portfolio revenue is expected to grow 2% to 4% year-on-year for 2024.
- Adjusted EBITDA is expected to increase by 67% year-on-year.
- Benefits of the cost reset will have a full-quarter impact as of the second quarter.
- The company expects to exit 2024 with Adjusted EBITDA margins over 25%.
Challenges Ahead
- Strategic Portfolio revenue guide for the quarter is flat to prior year.
- The organization is completing the portfolio and cost reset.
- Cost actions are offset by costs from non-strategic businesses.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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