SAN FRANCISCO--(BUSINESS WIRE)--$U--Unity (NYSE: U), the world’s leading game engine, today announced financial results for the fourth quarter and fiscal year ended December 31, 2025.
“Fourth quarter results once again comfortably exceeded the high-end of our guidance, led by exceptional performance from Vector, which experienced its third consecutive quarter of mid-teen sequential revenue growth, and the best growth we’ve seen in Create in over two years,” said Matt Bromberg, President and CEO of Unity.
“With Vector demonstrating rapid growth and Unity 6 adoption at the fastest rate we’ve ever experienced, our goal of becoming the essential infrastructure for the next generation of interactive entertainment is coming into clear focus.”
Earnings Webcast
Unity will hold a public webcast at 8:30 a.m. ET today to discuss the results for its fourth quarter and fiscal year 2025. The live public webcast can be accessed on Unity’s Investor Relations website at https://investors.unity.com. The webcast replay will also be available on the site.
Fourth Quarter 2025 Results:
- Revenue was $503 million, compared to $457 million in the fourth quarter 2024.
- Create Solutions revenue was $165 million, compared to $152 million in the fourth quarter 2024.
- Grow Solutions revenue was $338 million, compared to $305 million in the fourth quarter 2024.
- GAAP net loss was $89 million, with a margin of (18)%.
- GAAP basic and diluted net loss per share was $0.21.
- Adjusted EBITDA was $125 million, with a margin of 25%.
- Adjusted earnings per share was $0.24.
- Net cash provided by operating activities was $121 million.
- Free cash flow was $119 million.
Revenue
Revenue was $503 million, up 10% year-over-year.
Create Solutions revenue was $165 million, up 8% year-over-year. The increase was driven by strong growth in subscription revenue.
Grow Solutions revenue was $338 million, up 11% year-over-year. The change was driven by mid-teen sequential quarterly revenue growth from Unity Vector, which represented 56% of total Grow Solutions revenue in the fourth quarter. The growth was partially offset by declines in the IronSource Ad Network, which represented 11% of total Grow Solutions revenue in the fourth quarter.
Basic and Diluted Net Loss per share
Basic and diluted net loss per share was $0.21, as compared to $0.30 for the same period in 2024.
Net Loss and Net Cash Provided by Operating Activities
Net loss for the quarter was $89 million, compared to $123 million in the fourth quarter of 2024.
Net loss margin was (18)%, compared to (27)% in the fourth quarter of 2024.
Net cash provided by operating activities for the quarter was $121 million, compared to $112 million in the fourth quarter of 2024.
Adjusted EBITDA, Free Cash Flow, and Adjusted EPS
Adjusted EBITDA for the quarter was $125 million, with a margin of 25%, compared to $106 million in the fourth quarter of 2024, with a margin of 23%. The year-over-year improvement was driven by better cost control and higher revenue.
Free cash flow for the quarter was $119 million, compared to $106 million in the fourth quarter of 2024.
Adjusted EPS for the quarter was $0.24, compared to $0.20 in the fourth quarter of 2024.
Liquidity
As of December 31, 2025, our cash and cash equivalents, and restricted cash was $2,064 million, and increased by $536 million, as compared with $1,528 million as of December 31, 2024. This increase was primarily driven by our operations, and proceeds from issuance of common stock upon exercise of stock options and purchase of ESPP shares, offset by the net cash outflows from our debt refinancing.
Q1 2026 Guidance1
We expect First Quarter Revenue of $480 million to $490 million.
- In Grow, we expect revenue to be flat on a sequential basis.
- In Create, we expect double digit year-over-year revenue growth (excluding the impact of non-strategic revenue).
We expect First Quarter Adjusted EBITDA of $105 million to $110 million.
About Unity
Unity (NYSE: U) offers a suite of tools to develop, deploy, and grow games and interactive experiences across all major platforms from mobile, PC, and console, to extended reality. For more information, visit Unity.com.
|
1 These statements are forward-looking and actual results may differ materially. Refer to the “Forward-Looking Statements” safe harbor section below for information on the factors that could cause our actual results to differ materially from these forward-looking statements. |
We have not reconciled our estimates for non-GAAP financial measures in this press release and in the earnings call referencing this press release to GAAP due to the uncertainty and potential variability of expenses that may be incurred in the future. As a result, a reconciliation is not available without unreasonable effort and we are unable to address the probable significance of the unavailable information. We have provided a reconciliation of other GAAP to non-GAAP financial measures in the financial statement tables for our fourth quarter and fiscal year 2025 non-GAAP results included in this press release. |
UNITY SOFTWARE INC. | ||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||
(In thousands, except par share data) | ||||||
(Unaudited) | ||||||
|
|
| ||||
| As of | |||||
| December 31, 2025 | December 31, 2024 | ||||
Assets |
|
| ||||
Current assets: |
|
| ||||
Cash and cash equivalents | $ | 2,055,840 |
| $ | 1,517,672 |
|
Accounts receivable, net |
| 643,611 |
|
| 573,884 |
|
Prepaid expenses and other |
| 113,012 |
|
| 133,795 |
|
Total current assets |
| 2,812,463 |
|
| 2,225,351 |
|
Property and equipment, net |
| 68,289 |
|
| 98,819 |
|
Goodwill |
| 3,166,304 |
|
| 3,166,304 |
|
Intangible assets, net |
| 650,544 |
|
| 1,066,235 |
|
Other assets |
| 140,006 |
|
| 180,698 |
|
Total assets | $ | 6,837,606 |
| $ | 6,737,407 |
|
Liabilities and stockholders' equity |
|
| ||||
Current liabilities: |
|
| ||||
Accounts payable | $ | 13,981 |
| $ | 13,948 |
|
Accrued expenses and other |
| 299,541 |
|
| 294,951 |
|
Publisher payables |
| 431,494 |
|
| 394,284 |
|
Deferred revenue |
| 224,405 |
|
| 186,304 |
|
Current portion of convertible notes |
| 556,451 |
|
| — |
|
Total current liabilities |
| 1,525,872 |
|
| 889,487 |
|
Convertible notes |
| 1,678,899 |
|
| 2,238,922 |
|
Long-term deferred revenue |
| 14,038 |
|
| 16,846 |
|
Other long-term liabilities |
| 122,660 |
|
| 165,004 |
|
Total liabilities |
| 3,341,469 |
|
| 3,310,259 |
|
Commitments and contingencies |
|
| ||||
Redeemable noncontrolling interests |
| 252,637 |
|
| 230,627 |
|
Stockholders' equity: |
|
| ||||
Common stock, $0.000005 par value: |
|
| ||||
Authorized shares - 1,000,000 and 1,000,000 |
|
| ||||
Issued and outstanding shares - 432,860 and 409,393 |
| 2 |
|
| 2 |
|
Additional paid-in capital |
| 7,378,295 |
|
| 6,936,038 |
|
Accumulated other comprehensive loss |
| (2,156 | ) |
| (9,425 | ) |
Accumulated deficit |
| (4,138,709 | ) |
| (3,735,944 | ) |
Total Unity Software Inc. stockholders' equity |
| 3,237,432 |
|
| 3,190,671 |
|
Noncontrolling interest |
| 6,068 |
|
| 5,850 |
|
Total stockholders' equity |
| 3,243,500 |
|
| 3,196,521 |
|
Total liabilities and stockholders' equity | $ | 6,837,606 |
| $ | 6,737,407 |
|
UNITY SOFTWARE INC. | ||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS | ||||||||||||
(In thousands, except per share amounts) | ||||||||||||
(Unaudited) | ||||||||||||
|
|
|
|
| ||||||||
| Three Months Ended | Year Ended | ||||||||||
| December 31, | December 31, | ||||||||||
|
| 2025 |
|
| 2024 |
|
| 2025 |
|
| 2024 |
|
Revenue | $ | 503,089 |
| $ | 457,099 |
| $ | 1,849,648 |
| $ | 1,813,255 |
|
Cost of revenue |
| 129,239 |
|
| 115,537 |
|
| 477,739 |
|
| 480,853 |
|
Gross profit |
| 373,850 |
|
| 341,562 |
|
| 1,371,909 |
|
| 1,332,402 |
|
Operating expenses |
|
|
|
| ||||||||
Research and development |
| 249,727 |
|
| 217,970 |
|
| 929,516 |
|
| 924,830 |
|
Sales and marketing |
| 163,512 |
|
| 175,747 |
|
| 652,907 |
|
| 752,649 |
|
General and administrative |
| 67,121 |
|
| 71,499 |
|
| 268,539 |
|
| 410,072 |
|
Total operating expenses |
| 480,360 |
|
| 465,216 |
|
| 1,850,962 |
|
| 2,087,551 |
|
Loss from operations |
| (106,510 | ) |
| (123,654 | ) |
| (479,053 | ) |
| (755,149 | ) |
Interest expense |
| (6,043 | ) |
| (5,839 | ) |
| (24,007 | ) |
| (23,542 | ) |
Interest income and other income (expense), net |
| 15,466 |
|
| 9,108 |
|
| 107,862 |
|
| 111,558 |
|
Loss before income taxes |
| (97,087 | ) |
| (120,385 | ) |
| (395,198 | ) |
| (667,133 | ) |
Provision for (benefit from) Income taxes |
| (7,694 | ) |
| 2,138 |
|
| 6,295 |
|
| (2,846 | ) |
Net loss |
| (89,393 | ) |
| (122,523 | ) |
| (401,493 | ) |
| (664,287 | ) |
Net income (loss) attributable to noncontrolling interest and redeemable noncontrolling interests |
| 570 |
|
| 204 |
|
| 1,272 |
|
| (173 | ) |
Net loss attributable to Unity Software Inc. |
| (89,963 | ) |
| (122,727 | ) |
| (402,765 | ) |
| (664,114 | ) |
Basic and diluted net loss per share attributable to Unity Software Inc. | $ | (0.21 | ) | $ | (0.30 | ) | $ | (0.96 | ) | $ | (1.68 | ) |
Weighted-average shares used in computation of basic and diluted net loss per share |
| 429,833 |
|
| 405,172 |
|
| 420,914 |
|
| 395,951 |
|
|
|
|
|
| ||||||||
Net loss |
| (89,393 | ) |
| (122,523 | ) |
| (401,493 | ) |
| (664,287 | ) |
Change in foreign currency translation adjustment |
| 3,954 |
|
| (8,102 | ) |
| 9,201 |
|
| (5,544 | ) |
Comprehensive loss | $ | (85,439 | ) | $ | (130,625 | ) | $ | (392,292 | ) | $ | (669,831 | ) |
Net income (loss) attributable to noncontrolling interest and redeemable noncontrolling interests |
| 570 |
|
| 204 |
|
| 1,272 |
|
| (173 | ) |
Foreign currency translation attributable to noncontrolling interest and redeemable noncontrolling interests |
| 832 |
|
| (1,664 | ) |
| 1,932 |
|
| (1,128 | ) |
Comprehensive loss attributable to noncontrolling interest and redeemable noncontrolling interests |
| 1,402 |
|
| (1,460 | ) |
| 3,204 |
|
| (1,301 | ) |
Comprehensive loss attributable to Unity Software Inc. | $ | (86,841 | ) | $ | (129,165 | ) | $ | (395,496 | ) | $ | (668,530 | ) |
UNITY SOFTWARE INC. | ||||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||
(In thousands) | ||||||||||||
(Unaudited) | ||||||||||||
|
|
|
|
| ||||||||
| Three Months Ended | Year Ended | ||||||||||
| December 31, | December 31, | ||||||||||
|
| 2025 |
|
| 2024 |
|
| 2025 |
|
| 2024 |
|
Operating activities |
|
|
|
| ||||||||
Net loss | $ | (89,393 | ) | $ | (122,523 | ) | $ | (401,493 | ) | $ | (664,287 | ) |
Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
|
| ||||||||
Depreciation and amortization |
| 131,906 |
|
| 103,161 |
|
| 460,944 |
|
| 408,980 |
|
Stock-based compensation expense |
| 92,852 |
|
| 110,356 |
|
| 385,214 |
|
| 596,249 |
|
Gain on repayment of convertible note |
| — |
|
| — |
|
| (42,744 | ) |
| (61,371 | ) |
Impairment of property and equipment |
| 971 |
|
| (83 | ) |
| 5,882 |
|
| 22,791 |
|
Other |
| 837 |
|
| 8,574 |
|
| (3,683 | ) |
| 23,309 |
|
Changes in assets and liabilities, net of effects of acquisitions: |
|
|
|
| ||||||||
Accounts receivable, net |
| (43,244 | ) |
| 1,896 |
|
| (69,078 | ) |
| 37,359 |
|
Prepaid expenses and other |
| 13,984 |
|
| 746 |
|
| 24,071 |
|
| (11,203 | ) |
Other assets |
| 3,261 |
|
| (7,113 | ) |
| 33,819 |
|
| (2,746 | ) |
Accounts payable |
| (6,444 | ) |
| 652 |
|
| (545 | ) |
| 742 |
|
Accrued expenses and other |
| 72 |
|
| 8,696 |
|
| 4,361 |
|
| (6,671 | ) |
Publisher payables |
| 34,304 |
|
| 11,731 |
|
| 37,210 |
|
| 9,170 |
|
Other long-term liabilities |
| (13,169 | ) |
| (1,181 | ) |
| (44,825 | ) |
| (47,963 | ) |
Deferred revenue |
| (4,502 | ) |
| (2,720 | ) |
| 33,822 |
|
| 11,194 |
|
Net cash provided by operating activities |
| 121,435 |
|
| 112,192 |
|
| 422,955 |
|
| 315,553 |
|
Investing activities |
|
|
|
| ||||||||
Purchases of non-marketable investments |
| — |
|
| — |
|
| (2,000 | ) |
| — |
|
Purchases of intangible assets |
| (3,000 | ) |
| — |
|
| (3,000 | ) |
| (12,860 | ) |
Purchases of property and equipment |
| (2,753 | ) |
| (6,442 | ) |
| (19,024 | ) |
| (29,549 | ) |
Net cash used in investing activities |
| (5,753 | ) |
| (6,442 | ) |
| (24,024 | ) |
| (42,409 | ) |
Financing activities |
|
|
|
| ||||||||
Proceeds from issuance of convertible notes |
| — |
|
| — |
|
| 690,000 |
|
| — |
|
Purchase of capped calls |
| — |
|
| — |
|
| (44,436 | ) |
| — |
|
Payment of debt issuance costs |
| — |
|
| — |
|
| (13,236 | ) |
| — |
|
Repayments of convertible note |
| — |
|
| — |
|
| (641,691 | ) |
| (414,999 | ) |
Proceeds from issuance of common stock upon exercise of stock options and purchase of ESPP shares |
| 33,978 |
|
| 19,390 |
|
| 119,454 |
|
| 76,692 |
|
Net cash provided by (used in) financing activities |
| 33,978 |
|
| 19,390 |
|
| 110,091 |
|
| (338,307 | ) |
Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash |
| 5,553 |
|
| (13,227 | ) |
| 27,398 |
|
| (11,223 | ) |
Increase (decrease) in cash, cash equivalents, and restricted cash |
| 155,213 |
|
| 111,913 |
|
| 536,420 |
|
| (76,386 | ) |
Cash, cash equivalents, and restricted cash, beginning of period |
| 1,909,088 |
|
| 1,415,968 |
|
| 1,527,881 |
|
| 1,604,267 |
|
Cash, cash equivalents, and restricted cash, end of period | $ | 2,064,301 |
| $ | 1,527,881 |
| $ | 2,064,301 |
| $ | 1,527,881 |
|
About Non-GAAP Financial Measures
To supplement our consolidated financial statements prepared and presented in accordance with generally accepted accounting principles in the United States (GAAP) we use certain non-GAAP financial measures, as described below, to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe the following non-GAAP measures are useful in evaluating our operating performance. We are presenting these non-GAAP financial measures because we believe, when taken collectively, they may be helpful to investors because they provide consistency and comparability with past financial performance.
However, non-GAAP financial measures have limitations in their usefulness to investors because they have no standardized meaning prescribed by GAAP and are not prepared under any comprehensive set of accounting rules or principles. In addition, other companies, including companies in our industry, may calculate similarly-titled non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. As a result, our non-GAAP financial measures are presented for supplemental informational purposes only and should not be considered in isolation or as a substitute for our consolidated financial statements presented in accordance with GAAP.
We define adjusted EBITDA as GAAP net income or loss excluding benefits or expenses associated with stock-based compensation, amortization of acquired intangible assets, depreciation, restructurings and reorganizations, interest, income tax, and other non-operating activities, which primarily consist of foreign exchange rate gains or losses. We define adjusted EBITDA margin as adjusted EBITDA as a percentage of revenue. We define adjusted gross profit as GAAP gross profit excluding expenses associated with stock-based compensation, amortization of acquired intangible assets, depreciation, and restructurings and reorganizations. We define adjusted gross margin as adjusted gross profit as a percentage of revenue.
We define adjusted cost of revenue as GAAP cost of revenue, excluding expenses associated with stock-based compensation, amortization of acquired intangible assets, depreciation, and restructurings and reorganizations. We define adjusted research and development expense as research and development expense, excluding expenses associated with stock-based compensation, amortization of acquired intangible assets, depreciation, and restructurings and reorganizations. We define adjusted sales and marketing expense as GAAP sales and marketing expense, excluding expenses associated with stock-based compensation, amortization of acquired intangible assets, depreciation, and restructurings and reorganizations. We define adjusted general and administrative expense as general and administrative expense excluding expenses associated with stock-based compensation, depreciation, and restructurings and reorganizations. We define free cash flow as net cash provided by operating activities less cash used for purchases of property and equipment.
We define adjusted EPS as net income or loss excluding benefits or expenses associated with stock-based compensation, amortization of acquired intangible assets, depreciation, restructurings and reorganizations, and the income tax impact of the preceding adjustments (cumulatively "adjusted net income"), increased by the tax effected impacts from any relevant dilutive securities, divided by the diluted weighted-average outstanding shares. The effective tax rate used in calculating adjusted EPS is estimated for each period, based on the net income or loss adjusted for the items noted above, and may differ from the effective rate used in our financial statements. Shares of common stock that are excluded in our calculation of GAAP diluted net loss per share due to their antidilutive impact on such calculations, are included in the diluted weighted average outstanding shares used in our calculation of adjusted EPS, to the extent they have a dilutive impact on adjusted EPS given the adjusted net income in each period.
UNITY SOFTWARE, INC. | ||||||||||||
Non-GAAP Reconciliation | ||||||||||||
(In thousands) | ||||||||||||
|
|
|
|
| ||||||||
| Three Months Ended | Year Ended | ||||||||||
| December 31, | December 31, | ||||||||||
|
| 2025 |
|
| 2024 |
|
| 2025 |
|
| 2024 |
|
Adjusted EBITDA reconciliation |
|
|
|
| ||||||||
Revenue | $ | 503,089 |
| $ | 457,099 |
| $ | 1,849,648 |
| $ | 1,813,255 |
|
GAAP net loss | $ | (89,393 | ) | $ | (122,523 | ) | $ | (401,493 | ) | $ | (664,287 | ) |
Add: |
|
|
|
| ||||||||
Stock-based compensation expense | $ | 91,847 |
| $ | 110,203 |
| $ | 380,159 |
| $ | 469,128 |
|
Amortization of intangible assets expense | $ | 121,478 |
| $ | 88,465 |
| $ | 418,691 |
| $ | 353,371 |
|
Depreciation expense | $ | 10,428 |
| $ | 14,696 |
| $ | 42,253 |
| $ | 55,609 |
|
Restructuring and reorganization costs | $ | 7,651 |
| $ | 16,398 |
| $ | 46,781 |
| $ | 266,855 |
|
Interest expense | $ | 6,043 |
| $ | 5,839 |
| $ | 24,007 |
| $ | 23,542 |
|
Interest income and other income (expense), net | $ | (15,466 | ) | $ | (9,108 | ) | $ | (107,862 | ) | $ | (111,558 | ) |
Provision for (benefit from) income taxes | $ | (7,694 | ) | $ | 2,138 |
| $ | 6,295 |
| $ | (2,846 | ) |
Adjusted EBITDA | $ | 124,894 |
| $ | 106,108 |
| $ | 408,831 |
| $ | 389,814 |
|
GAAP net loss margin |
| (18 | )% |
| (27 | )% |
| (22 | )% |
| (37 | )% |
Adjusted EBITDA margin |
| 25 | % |
| 23 | % |
| 22 | % |
| 21 | % |
|
|
|
|
| ||||||||
Adjusted gross profit reconciliation |
|
|
|
| ||||||||
GAAP gross profit | $ | 373,850 |
| $ | 341,562 |
| $ | 1,371,909 |
| $ | 1,332,402 |
|
Add: |
|
|
|
| ||||||||
Stock-based compensation expense |
| 11,019 |
|
| 9,685 |
|
| 39,103 |
|
| 43,566 |
|
Amortization of intangible assets expense |
| 27,409 |
|
| 27,293 |
|
| 108,399 |
|
| 108,580 |
|
Depreciation expense |
| 1,727 |
|
| 2,372 |
|
| 6,941 |
|
| 9,613 |
|
Restructuring and reorganization costs |
| 1,001 |
|
| 117 |
|
| 1,787 |
|
| 15,154 |
|
Adjusted gross profit | $ | 415,006 |
| $ | 381,029 |
| $ | 1,528,139 |
| $ | 1,509,315 |
|
GAAP gross margin |
| 74 | % |
| 75 | % |
| 74 | % |
| 73 | % |
Adjusted gross margin |
| 82 | % |
| 83 | % |
| 83 | % |
| 83 | % |
|
|
|
|
| ||||||||
Operating expenses reconciliation |
|
|
|
| ||||||||
Cost of revenue |
|
|
|
| ||||||||
GAAP cost of revenue | $ | 129,239 |
| $ | 115,537 |
| $ | 477,739 |
| $ | 480,853 |
|
Stock-based compensation expense |
| (11,019 | ) |
| (9,685 | ) |
| (39,103 | ) |
| (43,566 | ) |
Amortization of intangible assets expense |
| (27,409 | ) |
| (27,293 | ) |
| (108,399 | ) |
| (108,580 | ) |
Depreciation expense |
| (1,727 | ) |
| (2,372 | ) |
| (6,941 | ) |
| (9,613 | ) |
Restructuring and reorganization costs |
| (1,001 | ) |
| (117 | ) |
| (1,787 | ) |
| (15,154 | ) |
Adjusted cost of revenue | $ | 88,083 |
| $ | 76,070 |
| $ | 321,509 |
| $ | 303,940 |
|
GAAP cost of revenue as a percentage of revenue |
| 26 | % |
| 25 | % |
| 26 | % |
| 27 | % |
Adjusted cost of revenue as a percentage of revenue |
| 18 | % |
| 17 | % |
| 17 | % |
| 17 | % |
|
|
|
|
| ||||||||
Research and development |
|
|
|
| ||||||||
GAAP research and development expense | $ | 249,727 |
| $ | 217,970 |
| $ | 929,516 |
| $ | 924,830 |
|
Stock-based compensation expense |
| (40,965 | ) |
| (58,077 | ) |
| (188,264 | ) |
| (240,556 | ) |
Amortization of intangible assets expense |
| (52,548 | ) |
| (17,737 | ) |
| (138,714 | ) |
| (69,345 | ) |
Depreciation expense |
| (5,095 | ) |
| (7,025 | ) |
| (20,867 | ) |
| (26,686 | ) |
Restructuring and reorganization costs |
| (7,322 | ) |
| (1,892 | ) |
| (21,752 | ) |
| (54,460 | ) |
Adjusted research and development expense | $ | 143,797 |
| $ | 133,239 |
| $ | 559,919 |
| $ | 533,783 |
|
GAAP research and development expense as a percentage of revenue |
| 50 | % |
| 48 | % |
| 50 | % |
| 51 | % |
Adjusted research and development expense as a percentage of revenue |
| 28 | % |
| 29 | % |
| 30 | % |
| 29 | % |
|
|
|
|
| ||||||||
Sales and marketing |
|
|
|
| ||||||||
GAAP sales and marketing expense | $ | 163,512 |
| $ | 175,747 |
| $ | 652,907 |
| $ | 752,649 |
|
Stock-based compensation expense |
| (14,576 | ) |
| (20,898 | ) |
| (67,996 | ) |
| (95,171 | ) |
Amortization of intangible assets expense |
| (41,521 | ) |
| (43,435 | ) |
| (171,578 | ) |
| (175,446 | ) |
Depreciation expense |
| (2,173 | ) |
| (3,199 | ) |
| (8,667 | ) |
| (11,567 | ) |
Restructuring and reorganization costs |
| (1,478 | ) |
| (5,135 | ) |
| (10,992 | ) |
| (56,888 | ) |
Adjusted sales and marketing expense | $ | 103,764 |
| $ | 103,080 |
| $ | 393,674 |
| $ | 413,577 |
|
GAAP sales and marketing expense as a percentage of revenue |
| 32 | % |
| 38 | % |
| 35 | % |
| 42 | % |
Adjusted sales and marketing expense as a percentage of revenue |
| 21 | % |
| 23 | % |
| 22 | % |
| 23 | % |
|
|
|
|
| ||||||||
General and administrative |
|
|
|
| ||||||||
GAAP general and administrative expense | $ | 67,121 |
| $ | 71,499 |
| $ | 268,539 |
| $ | 410,072 |
|
Stock-based compensation expense |
| (25,287 | ) |
| (21,543 | ) |
| (84,796 | ) |
| (89,835 | ) |
Depreciation expense |
| (1,433 | ) |
| (2,100 | ) |
| (5,778 | ) |
| (7,743 | ) |
Restructuring and reorganization costs |
| 2,150 |
|
| (9,254 | ) |
| (12,250 | ) |
| (140,353 | ) |
Adjusted general and administrative expense | $ | 42,551 |
| $ | 38,602 |
| $ | 165,715 |
| $ | 172,141 |
|
GAAP general and administrative expense as a percentage of revenue |
| 13 | % |
| 16 | % |
| 15 | % |
| 23 | % |
Adjusted general and administrative expense as a percentage of revenue |
| 8 | % |
| 8 | % |
| 9 | % |
| 10 | % |
|
|
|
|
| ||||||||
Adjusted EPS reconciliation |
|
|
|
| ||||||||
GAAP net loss | $ | (89,393 | ) | $ | (122,523 | ) | $ | (401,493 | ) | $ | (664,287 | ) |
Stock-based compensation expense |
| 91,847 |
|
| 110,203 |
|
| 380,159 |
|
| 469,128 |
|
Amortization of intangible assets expense |
| 121,478 |
|
| 88,465 |
|
| 418,691 |
|
| 353,371 |
|
Depreciation expense |
| 10,428 |
|
| 14,696 |
|
| 42,253 |
|
| 55,609 |
|
Restructuring and reorganization costs |
| 7,651 |
|
| 16,398 |
|
| 46,781 |
|
| 266,855 |
|
Income tax impact of adjusting items |
| (30,055 | ) |
| (22,688 | ) |
| (94,907 | ) |
| (111,073 | ) |
Adjusted net income used for calculation of adjusted EPS, before impact of dilutive instruments | $ | 111,956 |
| $ | 84,551 |
| $ | 391,484 |
| $ | 369,603 |
|
Increase from forgone financing costs on dilutive convertible notes, net of tax |
| 4,714 |
|
| 4,516 |
|
| 18,729 |
|
| 18,226 |
|
Adjusted net income used for calculation of adjusted EPS, including impact of dilutive instruments | $ | 116,670 |
| $ | 89,067 |
| $ | 410,213 |
| $ | 387,829 |
|
|
|
|
|
| ||||||||
Weighted-average common shares used in GAAP diluted net loss per share attributable to Unity Software Inc. |
| 429,833 |
|
| 405,172 |
|
| 420,914 |
|
| 395,951 |
|
Convertible notes |
| 41,349 |
|
| 24,486 |
|
| 38,672 |
|
| 24,766 |
|
Stock options and PVOs |
| 5,788 |
|
| 8,912 |
|
| 6,136 |
|
| 11,197 |
|
Unvested RSUs, PVUs, and PSUs |
| 12,987 |
|
| 5,901 |
|
| 8,945 |
|
| 4,820 |
|
ESPP |
| 8 |
|
| 258 |
|
| 138 |
|
| 214 |
|
Non-GAAP weighted-average common shares used in adjusted EPS |
| 489,965 |
|
| 444,729 |
|
| 474,805 |
|
| 436,948 |
|
|
|
|
|
| ||||||||
GAAP diluted net loss per share attributable to Unity Software Inc. |
| (0.21 | ) |
| (0.30 | ) |
| (0.96 | ) |
| (1.68 | ) |
Total impact on diluted net loss per share attributable to Unity Software Inc. from non-GAAP adjustments |
| 0.47 |
|
| 0.51 |
|
| 1.89 |
|
| 2.61 |
|
Total impact on diluted net loss per share attributable to Unity Software Inc. from antidilutive common stock now included |
| (0.02 | ) |
| (0.01 | ) |
| (0.07 | ) |
| (0.04 | ) |
Adjusted EPS |
| 0.24 |
|
| 0.20 |
|
| 0.86 |
|
| 0.89 |
|
|
|
|
|
| ||||||||
Free cash flow reconciliation |
|
|
|
| ||||||||
Net cash provided by operating activities | $ | 121,435 |
| $ | 112,192 |
| $ | 422,955 |
| $ | 315,553 |
|
Less: |
|
|
|
| ||||||||
Purchases of property and equipment |
| (2,753 | ) |
| (6,442 | ) |
| (19,024 | ) |
| (29,549 | ) |
Free cash flow |
| 118,682 |
|
| 105,750 |
|
| 403,931 |
|
| 286,004 |
|
|
|
|
|
| ||||||||
Net cash used in investing activities |
| (5,753 | ) |
| (6,442 | ) |
| (24,024 | ) |
| (42,409 | ) |
Net cash provided by (used in) financing activities |
| 33,978 |
|
| 19,390 |
|
| 110,091 |
|
| (338,307 | ) |
Cautionary Statement Regarding Forward-Looking Statements
This press release and the earnings call referencing this press release contain “forward-looking statements,” as that term is defined under federal securities laws, including statements regarding Unity’s outlook and future financial performance, including, but not limited to: (i) Unity’s ability to further enhance its platform, accelerate product innovation and enhance financial performance; (ii) expectations regarding Vector, including expectations regarding Vector’s improvements and performance and the expansion of Vector across our Grow solutions; (iii) our strategic initiatives, including our continued investment and focus on artificial intelligence tools; (iv) expectations regarding Vector leveraging behavioral data available through Unity Runtime, including expectations of multi-year growth of the product portfolio and its impact on financial results; (v) statements regarding our products, projects, technology and ongoing product development, including expectations regarding Unity AI and the accessibility of Unity authoring workflows by web browser; (vi) expectations regarding growth of Vector and its impact on Unity’s overall growth prospects, as well as revenue mix; (vii) statements regarding our market opportunity; (viii) expectations regarding our competitive position and growth prospects; (ix) expectations regarding improvements in operating margins; (x) expectations regarding stock-based compensation expense; (xi) plans to pay off future obligations; and (xii) Unity’s financial guidance for future periods.
Contacts
Investor Relations:
Alex Giaimo, Head of Investor Relations
alex.giaimo@unity3d.com
Media Relations:
UnityComms@unity3d.com
Read full story here
