Unity Q4 revenue drops 25% to $457m
Unity has released its financial results for Q4 and the full fiscal year, experiencing a decrease in revenue during the fourth quarter which exceeded previous guidance of between $422 million to $427 million.
The engine maker also exceeded its guidance for the full year, which was estimated to be between $1.7 billion and $1.71 billion.
Here’s what you need to know:
The numbers
Q4 2024
- Revenue: $457 million (down 25% year-on-year)
- Create Solutions revenue: $152 million (down 47% year-on-year)
- Grow Solutions revenue: $305 million (down 5% year-on-year)
- Net loss: $123 million (compared to $254 million for the same quarter last year)
FY 2024
- Revenue: $1.81 billion (down 17% year-on-year)
- Net loss: $664 million (compared to $826 million in 2023)
The highlights
Unity attributed its decrease in revenue across Q4 and the full year to its “portfolio reset”. The firm cancelled its controversial runtime fee in September 2024, and appointed three new executives the following October and November: CTO Steve Collins, COO Alex Blum, and CFO Jarrod Yahes.
There were also reportedly job cuts earlier this month, with an unknown number of staff affected.
In an email reportedly sent to staff and seen by 80.lv, CEO Matthew Bromberg said the layoffs were “a response to choices [Unity was] making about what direction Unity will take in the future.”
While Unity’s overall revenue was down 25% YoY for its fourth quarter, the firm saw a 4% rise in revenue for its strategic portfolio to $442 million. This includes its engine, cloud, and monetisation segments.
“Unity’s fourth quarter results meaningfully exceed expectations on both revenue and profit, underscoring our progress in building a new Unity,” said Bromberg.
“The successful launch of Unity 6, the appeal of our new pricing model, and the progress we’re making in AI for our advertising customers are providing a lot of optimism for the future.”
Focusing on its Create Solutions segment (the division in charge of Unity’s engine), revenue was down 47% YoY to $152 million due to the firm’s portfolio reset. However, this was “partially offset by 15% growth in subscription revenue and 50% growth in industry strategic revenue.”
As for its Grow Solutions division, Bromberg said it “exceeded expectations” despite being down 5% YoY to $305 million. He noted that this result was “clearly not enough to satisfy [Unity’s] ambitions” during an earnings call, and the company has “the assets and the capabilities to grow much faster.”
During the earnings call, Bromberg revealed the “migration of the Unity Ad network” to its new AI platform, called Unity Vector.
“Vector is designed to leverage data from across the Unity ecosystem, integrating self-learning AI models that will provide deeper insights, optimise performance, and deliver better results for customers,” he said.
“The migration [will] begin towards the end of Q1 2025, with the first phase slated to be complete by the end of Q2.”
Bromberg also highlighted the success of Unity’s latest engine, Unity 6, which launched in October 2024. The engine has been downloaded 2.8 million times since launch, and 38% of active users have since upgraded.
Looking at Unity’s performance for the full year, Create Solutions revenue was down 29% YoY to $614 million. Once again, these were affected by the portfolio reset but were partially offset by a 13% rise in subscription revenues and a 55% increase in industry strategic revenue.
As for Grow Solutions, revenue dipped 10% YoY to $1.19 billion.
