Unity's second-quarter revenue declined by 2%, reaching $441 million
Unity has shared its financial performance for the second quarter of its fiscal year, noting slight declines in total revenue and its Grow Solutions division.
The company's Create Solutions sector experienced a 4% increase in income, largely due to the success of Unity 6, its new AI platform Unity Vector, and a 15% rise in the Unity Ad Network, as reported in their statement.
Key figures from Unity's report include:
Key Financial Metrics
- Total Revenue: $441 million, a 2% decrease compared to the previous year
- Create Solutions Income: $154 million, showing a 2% annual increase
- Revenue from Grow Solutions: $287 million, marking a 4% year-over-year decrease
- Net Loss: $107 million, with a 24% margin
Key Insights
Although overall revenue decreased by 2% to $441 million, CEO and president Matt Bromberg highlighted that results surpassed their expectations, notably exceeding their projected revenue and adjusted EBITDA.
In an earnings discussion reported via Seeking Alpha, Bromberg credited Unity's commitment to quality and developer support for robust financial performance in Create Solutions. The 2% income growth in this division was "mainly attributed to a term license sale valued at around $12 million."
Growth in subscription revenue was seen in this area, including over 6.6 million downloads of Unity 6—a 50% increase from the previous year.
Bromberg also mentioned significant partnerships formed during the quarter, such as agreements with Tencent and Scopely. Additionally, a partnership with Nintendo was announced, aligning Unity 6 for immediate compatibility with the upcoming Switch 2.
"These partnerships focus on forming new business avenues," Bromberg stated, "by leveraging our products in novel ways rather than simply selling more licenses."
In the Grow Solutions segment, Unity's Ad Network showed a 15% rise from the previous quarter, bolstered by Unity Vector, their AI platform. This segment accounts for almost half of the total Grow Solutions income. However, decreases in other advertising products tempered this growth.
For the next quarter, Unity projects revenue to range between $440 million and $450 million. The Grow Solutions division is predicted to have "mid-single digit sequential growth," while the Create Solutions segment may see "a slight drop due to a significant customer acquisition in the second quarter."