Unity has published its financial results for the third quarter of its fiscal year, seeing modest but better-than-expected gains across most segments, including its Create Solutions and Grow Solutions. Overall revenue was up 5% year-on-year to $471 million.
Here’s what you need to know:
The numbers
- Revenue: $471 million (up 5% year-on-year)
- Create Solutions revenue: $152 million (up 3% year-on-year)
- Grow Solutions revenue: $318 million (up 6% year-on-year)
- Net loss: $127 million (with a margin of 27%).
The highlights
The company attributed the 3% increase in its Create Solutions revenue to strong subscription revenue growth “offset by decreases in consumption services revenue, driven by [its] portfolio reset.”
The 6% rise in Grow Solutions revenue, the company added, was similarly driven by strong performance of its Unity Ad Network. However, this growth was “slightly offset” by year-over-year declines in “other Grow businesses.”
Calling progress in its Create business “exciting,” CEO, president, and director of Unity Matthew Bromberg confirmed that “after backing out the impact of nonstrategic revenue, [Unity’s] Create subscription software business increased 13% year-over-year, reflecting the fundamental improvements [it has] made in both the quality of our product and the connection we have with [its] customers.”
“Unity has always been about democratizing access to technology. We aim to give every software developer the tools and the platform to become a game developer,” he said. “That’s in our DNA. Advancements in artificial intelligence will enable us to enhance and extend this mission.”
According to Bromberg, since the launch of Unity 6 – which now has over 9.4 million registered downloads, up 42% on last quarter – customer-reported issues are down 22%, and with its enhanced quality and features, the firm reports “seeing significant continued momentum and adoption.”
“Third-quarter results once again meaningfully exceeded expectations on both revenue and Adjusted EBITDA, powered by Unity Vector AI, as well as continued strength in Create,” the company said. “As consumer enthusiasm for interactive entertainment continues to grow, Unity is poised to grow with it.”
Looking ahead, Unity expects revenue of around $480-$490 in the next reporting period, with mid-single digital sequential revenue growth for Grow, and high-single digit YoY growth for Create. Bromberg also hinted that Unity would be “fully leaning” into extended and augmented reality, and “will ensure that Unity has the capabilities in place to support robust industry growth” as shipments of AR and VR headsets are expected to grow 38% in 2025 (thanks, Seeking Alpha).
Last month, Unity discovered a “major security vulnerability” affecting games made using its development tool dating back to 2017. Unity director of community and advocacy Larry Hryb clarified that “there [was] no evidence of any exploitation of the vulnerability, nor has there been any impact on users or customers.”
