Unity Achieves First Non-GAAP Profitable Quarter, Anticipates Full-Year Profitability in 2023

Unity has reported its first quarter of profitability on a non-GAAP basis in its 18-year history. In its shareholder letter, the company disclosed a non-GAAP operating profit of $13 million for the quarter ending December 31, 2022, following non-GAAP operating losses of $22 million, $44 million, and $37 million in the preceding three quarters. The company also achieved a record full-year revenue of $1.39 billion. Key highlights include: Revenue of $451.3 million, representing a 43% year-over-year increase; Create Solutions revenue of $198 million, up 98.2%, now encompassing Unity Gaming Services and Strategic Partnerships; Grow Solutions revenue of $253 million, marking its first reporting under a new structure; Operating loss of $274 million, an 89% change from the $144.8 million loss in 2021; and Non-GAAP operating income of $13 million, a 208% improvement from the $12 million loss in 2021. For the full year, revenue reached $1.39 billion, a 25% increase, with a non-GAAP operating loss of $90 million, a 77.5% change from the $50.7 million loss in 2021. In an earnings call, CFO Luis Visoso stated that while Unity was only profitable in Q4 2022 on a non-GAAP basis, the company expects to maintain profitability every quarter in 2023. Visoso attributed the improvement in profitability equally to the Create Solutions segment, focusing on the Unity Engine, and the Grow Solutions segment, which handles ads products and services. Unity is taking steps to enhance profitability, including eliminating up to 300 roles and being selective with new hires. The company forecasts full-year revenue in 2023 to be between $2.05 billion and $2.2 billion, a 47% to 58% year-over-year increase, with first-quarter revenue expected to be between $470 million and $480 million, up 47% to 50% year-over-year.