Unity (U) Q1 2023 earnings results beat revenue expectations
A week removed from laying off 600 employees, Unity has reported a $500 million revenue increase for Q1 2023.
Unity Software (U) is the latest company to report in with its quarterly earnings. The news is largely good for the engine developer, as it reported in with a $500 million USD revenue increase for Q1 2023. That's above Wall Street's projected $480 million number and a 56 percent leap year-over-year.
The following was posted to the Unity Q1 2023 Shareholder Letter:
Unity had a strong start to 2023, with first quarter revenue of $500 million, up +56% year-over-year and down -2% on a pro-forma basis. In the first quarter, we exceeded the revenue guidance that we provided during our previous earnings call of $470 to $480 million. GAAP net loss was $254 million. Adjusted EBITDA of $32 million also came in ahead of guidance of $7 to $12 million and is an improvement of $55 million year-over-year.
Unity's numbers stem from a strong first quarter revenue for Create Solutions and Grow Solutions, the latter of which is up 101 percent year-on-year. Unity is also touting its major games partnerships, some of which are mentioned later in the Shareholder Letter.
This quarter we celebrated several customer key wins within games. This includes Unity’s partnership with Outfit7, the company behind the Talking Tom & Friends brand, which boasts up to 470 million MAU and over 20 billion downloads. Another strong Unity partnership, Second Dinner’s Marvel Snap passed 18 million downloads in the first quarter. Games made with Unity continue to be celebrated as Immortality was among the winners in the 2023 British Academy Game Awards. Unity also showed up strong at the Game Developers Conference (GDC) this March in San Francisco, with 40 mostly creator-led sessions, demos of our latest UGC open beta, HRDP enhancements, DevOps and over 800 customer sales meetings. The conference generated nearly 10,000 leads and contacts, and tens of millions of dollars in sales pipeline.
Based on these first quarter numbers and the uncertain future of the economy, Unity is adjusting its guidance revenue to $510-520 million, which would be an increase of 72-75 percent year-over-year. The company is expecting a flat ad market that will allow it to gain share and perform ahead of the rest of the market. Wall Street responded positively to today's earnings report with Unity Software (U) finishing up $0.46 at end of trading and rising an additional $3.39 in after-hours trading as of the time of this post.
Unity's positive numbers look good on the surface, but it should be noted that the company is fresh off 600 employee layoffs. We'll continue to monitor Unity Software (U) and its ongoing endeavors, which includes an increased focus on AI, in the weeks ahead. Keep it on Shacknews for any updates.
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