Unity has published its financial results for the second quarter of its fiscal year, experiencing slight drops in overall revenue and in its Grow Solutions segment.
The firm saw a 4% rise in revenue for its Create Solutions sector, which it attributed to the continued success of Unity 6 in addition to its new AI platform Unity Vector and 15% sequential growth in its Unity Ad Network.
Here’s what you need to know:
The numbers
- Revenue: $441 million (down 2% year-on-year)
- Create Solutions revenue: $154 million (up 2% year-on-year)
- Grow Solutions revenue: $287 million (down 4% year-on-year)
- Net loss: $107 million (with a margin of 24%)
The highlights
While Unity’s overall revenue dropped by 2% to $441 million, the firm’s CEO and president Matt Bromberg said “results once again exceeded expectations” which “substantially beat the high-end of [its] guidance for both revenue and adjusted EBITDA.”
During an earnings call (via Seeking Alpha), Bromberg attributed Unity’s “re-dedication to quality, stability, and improving the developer experience” as “catalysing strong financial results” in Create Solutions. The 2% revenue rise in this segment was “primarily driven by the sale of a term license for approximately $12 million.”
Unity also saw subscription revenue increases in this segment, including more than 6.6 downloads of Unity 6 which was up 50% compared to the same period last year.
Bromberg highlighted “major multiyear partnerships” announced during the quarter, including with Tencent and Scopely. It also announced a “multifaceted partnership with Nintendo” which involved making Unity 6 “fully optimised on day one for the release of the Switch 2.”
“These new partnerships are not built around selling seats,” said Bromberg. “Rather, our goal is to create new business opportunities for our partners by leveraging our platform and portfolio of products in new ways.”
As for its Grow Solutions segment, Unity reported “strong performance” of its Unity Ad Network, which rose by 15% quarter-over-quarter.
This was boosted by its new AI platform, Unity Vector. Overall, this section represents nearly half of total Grow Solutions revenue.
However, Unity clarified that this increase was “offset by declines in select other Ads products.”
Looking ahead, Unity has forecast revenue of between $440 million to $450 million for its third quarter. For Grow Solutions, it expects “mid-single digit sequential revenue growth from Q2 to Q3.”
As for Create Solutions, it predicts a “slight sequential decline from Q2 to Q3 due to the impact of a large customer win in Q2.”
