Unity report: annual revenue in excess of $2 billion, the company will get rid of several businesses
Unity has published a financial report for the fourth quarter of 2023 and immediately for the whole year. She reported on revenue growth, and also shared new details about the process of "rebooting" the company.
Financial indicators:
- In the fourth quarter of 2023, Unity earned $609 million. Its revenue increased by 35% compared to the previous year;
- The growth of quarterly revenue was facilitated by a deal with the special effects studio Weta FX. Recall that in November 2023, Unity terminated its cooperation with the studio and stopped providing a number of services to that company. At the same time, Unity and Weta FX signed an indefinite license agreement for the use of Weta FX tools that previously belonged to the studio, and since 2021 belong to Unity. We are probably talking about tools such as Lumberjack, Scenic Designer and Gazebo. Unity's revenue from the deal is $99 million (excluding this deal, Unity's quarterly revenue fell by 2%);
- Most of Unity's quarterly revenue came from the Grow Solutions segment (monetization tools). It amounted to $319 million. Growth of 26% in annual terms;
- quarterly revenue of the Create Solutions segment (development tools) increased by 47% to $290 million;
- Unity's net loss for the fourth quarter of 2023 was $254 million. For comparison, a year earlier it was $288 million.;
- In general, 2023 was more successful for Unity than 2022. The company ended it with revenue of $2.18 billion with a net loss of $826 million. In 2022, it reported revenue of $1.4 billion and a net loss of $919.5 million.;
- In 2024, the company expects to earn $1.76-1.8 billion.
How is the Unity "reboot" going?:
- At the end of 2023, Unity announced the so-called "reboot" of the company. She decided to focus on the "core business" (i.e., the development of the engine, cloud technologies and monetization solutions) and optimize the cost structure. As Unity writes in the report, the first stage of restructuring is already close to completion — according to the plan, it should be completed by March 31, 2024;
- Unity has decided to withdraw from a number of areas in which it "cannot provide unique value to customers or guarantee good returns to investors." In particular, she will give up working with hardware for multiplayer games and stop working on the Luna monetization platform. She will also suspend work on independent artistic tools, now they will be integrated into the Unity Editor and AI toolkit.;
- In 2023, the businesses that Unity is getting rid of earned a total of $283 million. They were working at a "significant" loss;
- as part of the "reboot", Unity also laid off 1,800 people and closed some offices, it announced this in early January;
- Unity expects the restructuring to reduce annual operating expenses (non-GAAP) by $250 million.
After the release of the financial report, Unity shares fell in price. As Bloomberg noted, their cost fell by 20% to $26.5 per piece.
