NYSE$U
Unity Software Inc. · Q4 2023 earnings
Q4 2023 earnings · · Investor relations
Briefing
Unity's Q4 2023 earnings showcased revenue growth driven by strategic partnerships and a focus on core businesses, amidst a company reset aimed at reigniting revenue growth and expanding adjusted EBITDA margins.
Unity's Q4 2023 revenue reached $609 million, a 35% increase year-over-year, significantly influenced by a $99 million contribution from a Wētā FX transaction. Excluding this, revenue would have been $510 million, a -2% decrease year-over-year. The company experienced a GAAP net loss of $254 million, with the Wētā FX transaction increasing the loss by $27 million. Adjusted EBITDA stood at $186 million, or $84 million excluding Wētā FX.
- Q4 revenue was $609 million, up 35% year-over-year, including a $99 million boost from the Wētā FX transaction.
- Create Solutions revenue was $290 million, up 47% year-over-year, also including revenue from Wētā FX.
- Grow Solutions revenue was $319 million, up 26% year-over-year.
- GAAP net loss was $254 million, which includes a $27 million impact from the Wētā FX transaction.
Headline financials
Revenue & EPS history
Unity · Revenue · Quarterly
$609M
Revenue by segment
Unity · $544M total across 2 segments · Q3 2023
- Grow Solutions$355M+106.8%65.3%
- Create Solutions$189M+47.0%34.7%
Forward guidance
For Q1 2024, Unity anticipates Strategic Portfolio revenue between $415 to $420 million and Adjusted EBITDA between $45 to $50 million. For the full year 2024, the Strategic Portfolio is projected to generate $1.76 billion to $1.8 billion in revenue, with Adjusted EBITDA expected to range from $400 to $425 million.
Tailwinds
- High engagement from gamers and new game launches are expected in 2024.
- Strategic Portfolio revenue is expected to grow 2% to 4% year-on-year for 2024.
- Adjusted EBITDA is expected to increase by 67% year-on-year.
- Benefits of the cost reset will have a full-quarter impact as of the second quarter.
- The company expects to exit 2024 with Adjusted EBITDA margins over 25%.
Headwinds
- Strategic Portfolio revenue guide for the quarter is flat to prior year.
- The organization is completing the portfolio and cost reset.
- Cost actions are offset by costs from non-strategic businesses.
- Continued softness of the advertising market and ongoing restrictions related to the gaming industry in China.
- Ongoing geopolitical instability, particularly in Israel, where a significant portion of the Grow Solutions operations is located.
Historical earnings impact
How earnings announcements have historically affected this stock's price.
Avg. return before/after earnings
Based on 20 quarterly earnings reports · overlaid with Q4 2023
+2.1%
Avg return
Earnings day
+3.9%
Avg return
5 days after
+5.8%
Avg return
30 days after
58%
14 / 24 earnings
Positive
+30.4%
Q4 2024
Best reaction
-39.9%
Q1 2022
Worst reaction
| Quarter | Report date | Reaction (Day 0) | +5 days | +30 days |
|---|---|---|---|---|
| Q1 2026 | -1.8% | -1.7% | +6.9% | |
| Q4 2025 | -26.3% | -35.7% | -33.1% | |
| Q3 2025 | +18.1% | +20.2% | +27.6% | |
| Q1 2025 | -3.1% | +2.4% | +17.9% | |
| Q4 2024 | +30.4% | +19.5% | +0.4% | |
| Q3 2024 | -5.4% | -11.3% | +27.9% | |
| Q2 2024 | +11.6% | +16.7% | +13.9% | |
| Q1 2024 | -10.0% | -4.4% | -28.3% | |
| Q4 2023 | -0.8% | -7.5% | -13.7% | |
| Q3 2023 | +3.6% | +12.0% | +25.5% | |
| Q2 2023 | -9.2% | -11.8% | -18.1% | |
| Q1 2023 | +14.8% | +6.1% | +28.4% | |
| Q4 2022 | -12.7% | -18.8% | -21.3% | |
| Q3 2022 | +17.1% | +37.6% | +42.8% | |
| Q2 2022 | +11.7% | +17.5% | -22.1% | |
| Q1 2022 | -39.9% | -22.4% | -18.0% | |
| Q4 2021 | +6.5% | +5.5% | -12.7% | |
| Q3 2021 | +8.2% | +20.6% | -14.2% | |
| Q2 2020 | +18.2% | +14.0% | +26.1% | |
| Q2 2021 | +10.1% | +16.9% | +21.7% | |
| Q1 2021 | +3.3% | +7.2% | +23.6% | |
| Q4 2020 | -13.3% | -13.7% | -36.7% | |
| Q4 2019 | +9.6% | +13.0% | +49.9% | |
| Q3 2020 | +8.7% | +11.8% | +44.4% | |
| Q1 2020 | — | — | — | |
| Q3 2019 | — | — | — | |
| Q2 2019 | — | — | — | |
| Q1 2019 | — | — | — |
Discussion
Share your read of this quarter. Sign-in carries your eToro identity.
Join the conversation
Sign in with eToro to post your read of this quarter and vote on others'.
Sign in with eToro