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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.
Unity
Unity
Unity Revenue by Segment
Revenue by Segment
Create Solutions Revenue
CapyFin.comGrow Solutions Revenue
CapyFin.com 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.
- Continued softness of the advertising market and ongoing restrictions related to the gaming industry in China.
- Ongoing geopolitical instability, particularly in Israel, where a significant portion of the Grow Solutions operations is located.
Revenue & Expenses
Visualization of income flow from segment revenue to net income