Unity Software Inc. (NYSE: U) announced its financial results for the fourth quarter and fiscal year ending December 31, 2024, on February 20, 2025. The company reported revenue of $457 million for Q4 2024, surpassing Wall Street’s estimate of $432.5 million, though this represents a 25% decrease from $609 million in the same quarter the previous year. For the full year, revenue reached $1.813 billion, exceeding analysts’ expectations of $1.79 billion.
Despite the revenue beat, Unity reported a net loss of $122.73 million for the fourth quarter, an improvement from the $252.75 million loss in the same period last year.
CEO Matt Bromberg highlighted the successful launch of Unity 6, the positive reception of the new pricing model, and advancements in AI for advertising customers as key factors contributing to the company’s optimistic outlook.
Fourth Quarter 2024 Results:
- Revenue was $457 million, compared to $609 million in the fourth quarter 2023.
- Revenue from our strategic portfolio was $442 million, compared to $423 million, up 4% year-over-year.
- Create Solutions revenue was $152 million, compared to $290 million in the fourth quarter 2023.
- Grow Solutions revenue was $305 million, compared to $319 million in the fourth quarter 2023.
- GAAP net loss was $123 million, with a margin of (27)%.
- Adjusted EBITDA was $106 million, with a margin of 23%.
- Net cash provided by operating activities was $112 million.
- Free Cash Flow was $106 million.
Full Year 2024 Results:
- Revenue was $1,813 million, compared to $2,187 million for the full year 2023.
- Revenue from our strategic portfolio was $1,723 million, compared to $1,733 million, down 1% year-over-year.
- Create Solutions revenue was $614 million, compared to $859 million for the full year 2023.
- Grow Solutions revenue was $1,199 million, compared to $1,328 million for the full year 2023.
- GAAP net loss was $664 million, with a margin of (37)%.
- Adjusted EBITDA was $390 million, with a margin of 21%.
- Net cash provided by operating activities was $316 million.
- Free Cash Flow was $286 million.
Fourth Quarter Results
Revenue
Revenue was $457 million, down 25% year-over-year driven by our portfolio reset.
Create Solutions revenue was $152 million, down 47% year-over-year. Excluding the impact of approximately $99 million of incremental revenue in the fourth quarter of 2023 from terminating an agreement with Wētā FX limited (the “Wētā FX termination”) revenue would have been down 20% year-over-year. The year-over-year decrease was driven by our portfolio reset, partially offset by 15% growth in subscription revenue, and 50% growth in Industry strategic revenue.
Grow Solutions revenue was $305 million, down 5% year-over-year. Excluding the impact of the return of customer incentives issued by ironSource prior to the merger (“customer credits”) for which we received approximately $21 million of revenue in the fourth quarter of 2023, Grow Solutions revenue would have been up 2% year-over-year. The change was driven by strong seasonal demand.
While the company has made strides in product development and customer engagement, it continues to face challenges, including a significant year-over-year revenue decline and ongoing net losses.
