Unity Reports First Quarter 2025 Financial Results
Unity (NYSE: U), the leading platform to create and grow games and interactive experiences, today announced financial results for the first quarter ended March 31, 2025. "The Company’s first quarte...
SAN FRANCISCO: Unity (NYSE: U), the leading platform to create and grow games and interactive experiences, today announced financial results for the first quarter ended March 31, 2025.
"The Company’s first quarter results once again meaningfully exceeded expectations on both revenue and Adjusted EBITDA, highlighting our progress as we continue to build a culture of execution and discipline,” said Matt Bromberg, President and CEO of Unity.
“The early success of Unity Vector and continued strong demand for Unity 6 underscore our positioning as the leading integrated platform supporting developers across the full lifecycle of game development,” Bromberg continued.
First Quarter 2025 Results:
- Revenue was $435 million, compared to $460 million in the first quarter 2024.
- Create Solutions revenue was $150 million, compared to $164 million in the first quarter 2024.
- Grow Solutions revenue was $285 million, compared to $297 million in the first quarter 2024.
- GAAP net loss was $78 million, with a margin of (18)%.
- GAAP basic and diluted net loss per share was $0.19.
- Adjusted EBITDA was $84 million, with a margin of 19%.
- Adjusted EPS was $0.24.
- Net cash provided by operating activities was $13 million.
- Free cash flow was $7 million.
Revenue
Revenue was $435 million, down 6% year-over-year driven by our portfolio reset.
Create Solutions revenue was $150 million, down 8% year-over-year, primarily due to a decrease in professional services revenue and consumption services revenue, both caused by the portfolio reset. The year-over-year decrease was partially offset by strong growth in subscription revenue.
Grow Solutions revenue was $285 million, down 4% year-over-year. The change was driven by declines in select Grow products, partially offset by the earlier than expected rollout of Unity Vector.
Basic and Diluted Net Loss per share
Basic and diluted net loss per share was $0.19, as compared to $0.75 for the same period in 2024.
Net Loss and Net Cash Provided by or Used in Operating Activities
Net loss for the quarter was $78 million, compared to $291 million in the first quarter of 2024.
Net loss margin was (18)%, compared to (63)% in the first quarter of 2024.
Net cash provided by operating activities for the quarter was $13 million, compared to net cash used in operating activities of $7 million in the first quarter of 2024.
Adjusted EBITDA, Free Cash Flow, and Adjusted EPS
Adjusted EBITDA for the quarter was $84 million, with a margin of 19%, compared to $79 million in the first quarter of 2024, with a margin of 17%. The better than expected adjusted EBITDA margin in the first quarter of 2025 was due to better cost control and higher than expected revenue.
Free cash flow for the quarter was $7 million, compared to negative $15 million in the first quarter of 2024.
Adjusted EPS for the quarter was $0.24, compared to $0.28 in the first quarter of 2024.
Liquidity
As of March 31, 2025, our cash and cash equivalents, and restricted cash was $1,552 million, and increased by $24 million, as compared with $1,528 million as of December 31, 2024. This increase was primarily driven by proceeds from issuance of common stock from employee equity plans, and from our operations, offset by the net cash outflows from our debt refinancing.
Q2 2025 Guidance1
- Revenue of $415 to $425 million.
- Adjusted EBITDA of $70 to $75 million.
About Unity
Unity [NYSE: U] offers a suite of tools to create, market and grow games and interactive experiences across all major platforms from mobile, PC, and console, to extended reality (XR). 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 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 first quarter non-GAAP results included in this press release. |
UNITY SOFTWARE INC. | ||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||
(In thousands, except par share data) | ||||||
(Unaudited) | ||||||
|
|
| ||||
| As of | |||||
| March 31, 2025 | December 31, 2024 | ||||
Assets |
|
| ||||
Current assets: |
|
| ||||
Cash and cash equivalents | $ | 1,541,170 |
| $ | 1,517,672 |
|
Accounts receivable, net |
| 552,958 |
|
| 573,884 |
|
Prepaid expenses and other |
| 144,514 |
|
| 133,795 |
|
Total current assets |
| 2,238,642 |
|
| 2,225,351 |
|
Property and equipment, net |
| 89,972 |
|
| 98,819 |
|
Goodwill |
| 3,166,304 |
|
| 3,166,304 |
|
Intangible assets, net |
| 980,584 |
|
| 1,066,235 |
|
Other assets |
| 170,453 |
|
| 180,698 |
|
Total assets | $ | 6,645,955 |
| $ | 6,737,407 |
|
Liabilities and stockholders' equity |
|
| ||||
Current liabilities: |
|
| ||||
Accounts payable | $ | 16,538 |
| $ | 13,948 |
|
Accrued expenses and other |
| 273,444 |
|
| 294,951 |
|
Publisher payables |
| 339,129 |
|
| 394,284 |
|
Deferred revenue |
| 188,490 |
|
| 186,304 |
|
Total current liabilities |
| 817,601 |
|
| 889,487 |
|
Convertible notes |
| 2,232,143 |
|
| 2,238,922 |
|
Long-term deferred revenue |
| 14,710 |
|
| 16,846 |
|
Other long-term liabilities |
| 154,863 |
|
| 165,004 |
|
Total liabilities |
| 3,219,317 |
|
| 3,310,259 |
|
Commitments and contingencies |
|
| ||||
Redeemable noncontrolling interests |
| 234,740 |
|
| 230,627 |
|
Stockholders' equity: |
|
| ||||
Common stock, $0.000005 par value: |
|
| ||||
Authorized shares - 1,000,000 and 1,000,000 |
|
| ||||
Issued and outstanding shares - 415,406 and 409,393 |
| 2 |
|
| 2 |
|
Additional paid-in capital |
| 7,008,134 |
|
| 6,936,038 |
|
Accumulated other comprehensive loss |
| (8,501 | ) |
| (9,425 | ) |
Accumulated deficit |
| (3,813,586 | ) |
| (3,735,944 | ) |
Total Unity Software Inc. stockholders' equity |
| 3,186,049 |
|
| 3,190,671 |
|
Noncontrolling interest |
| 5,849 |
|
| 5,850 |
|
Total stockholders' equity |
| 3,191,898 |
|
| 3,196,521 |
|
Total liabilities and stockholders' equity | $ | 6,645,955 |
| $ | 6,737,407 |
|
UNITY SOFTWARE INC. | ||||||
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS | ||||||
(In thousands, except per share amounts) | ||||||
(Unaudited) | ||||||
|
|
| ||||
| Three Months Ended | |||||
| March 31, | |||||
|
| 2025 |
|
| 2024 |
|
Revenue | $ | 435,000 |
| $ | 460,380 |
|
Cost of revenue |
| 113,957 |
|
| 144,387 |
|
Gross profit |
| 321,043 |
|
| 315,993 |
|
Operating expenses |
|
| ||||
Research and development |
| 220,625 |
|
| 282,728 |
|
Sales and marketing |
| 162,013 |
|
| 230,625 |
|
General and administrative |
| 66,340 |
|
| 177,569 |
|
Total operating expenses |
| 448,978 |
|
| 690,922 |
|
Loss from operations |
| (127,935 | ) |
| (374,929 | ) |
Interest expense |
| (5,891 | ) |
| (6,035 | ) |
Interest income and other income (expense), net |
| 58,111 |
|
| 76,643 |
|
Loss before income taxes |
| (75,715 | ) |
| (304,321 | ) |
Provision for (benefit from) Income taxes |
| 2,192 |
|
| (12,843 | ) |
Net loss |
| (77,907 | ) |
| (291,478 | ) |
Net loss attributable to noncontrolling interest and redeemable noncontrolling interests |
| (265 | ) |
| (404 | ) |
Net loss attributable to Unity Software Inc. |
| (77,642 | ) |
| (291,074 | ) |
Basic and diluted net loss per share attributable to Unity Software Inc. | $ | (0.19 | ) | $ | (0.75 | ) |
Weighted-average shares used in computation of basic and diluted net loss per share |
| 411,852 |
|
| 387,151 |
|
|
|
| ||||
Net loss |
| (77,907 | ) |
| (291,478 | ) |
Change in foreign currency translation adjustment |
| 1,178 |
|
| (3,461 | ) |
Comprehensive loss | $ | (76,729 | ) | $ | (294,939 | ) |
Net loss attributable to noncontrolling interest and redeemable noncontrolling interests |
| (265 | ) |
| (404 | ) |
Foreign currency translation attributable to noncontrolling interest and redeemable noncontrolling interests |
| 254 |
|
| (710 | ) |
Comprehensive loss attributable to noncontrolling interest and redeemable noncontrolling interests |
| (11 | ) |
| (1,114 | ) |
Comprehensive loss attributable to Unity Software Inc. | $ | (76,718 | ) | $ | (293,825 | ) |
UNITY SOFTWARE INC. | ||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||
(In thousands) | ||||||
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