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Unity
🇺🇸 NYSE:U
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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.

Total Revenue
$609M
Previous year: $451M
+35.1%
EPS
-$0.66
Previous year: $0.04
-1750.0%
Gross Profit
$348M
Previous year: $311M
+11.8%
Cash and Equivalents
$1.59B
Previous year: $1.49B
+7.1%
Free Cash Flow
$60.7M
Previous year: -$63.9M
-195.1%
Total Assets
$7.24B
Previous year: $7.83B
-7.5%

Unity

Unity

Unity 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.
  • 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

Company Overview

Full financial data and analysis

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