Unity’s EBITDA surges despite revenue decline

1 month ago 19

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Unity has posted a 2% dip in revenue for the second quarter of 2024, reaching £358 million, down from £366 million in the previous quarter. Despite this slight decrease, the mobile game engine and infrastructure platform exceeded both its own guidance and analyst expectations.

Unity reported a net loss of £100 million for Q2, a significant reduction compared to the £232 million loss incurred in Q1. Restructuring and reorganisation costs were identified as the primary driver behind these expenses.

This strategic cost reduction has yielded impressive gains in Unity’s earnings before interest, taxes, depreciation, and amortisation (EBITDA). Q2 saw a considerable 45% jump in EBITDA, reaching £89.8 million compared to £62 million in the previous quarter.

Looking back at the same period last year, Unity’s Q2 2024 revenue reflects a 16% decrease from the £424 million generated in Q2 2023.

Nevertheless, the company has demonstrated significant progress over the past year—evidenced by a 35% reduction in net losses (from £154 million). Furthermore, Unity recorded a commendable 15% growth in EBITDA compared to the same period last year.

Despite these positive strides, Unity has tempered its guidance for the full year 2024, now projecting revenue between £1,336 million to £1,344 million. This revised forecast represents a year-on-year decrease of approximately 2-3%. Additionally, the company has lowered its revenue expectations for the third quarter by 4-6%.

Future growth

Unity’s financial results offer valuable insights into the company’s market position and future prospects. The company highlighted the dominance of games in the consumer app market, representing 60% of the estimated £103 billion spent annually. Notably, 70% of the world’s leading mobile games are built using Unity’s platform.

Furthermore, applications developed with Unity achieved 3.7 billion downloads per month in 2023. The company’s robust advertising business also boasts impressive reach, delivering over 65 billion impressions monthly and engaging more than 1.5 billion individual gamers.

In the company’s letter to shareholders, Unity CEO Matthew Bromberg stated: “The focus now is on fostering a culture of execution, discipline, and accountability. We plan to accelerate the pace of product innovation, strengthen the bond we have with our customers and community, and add world-class talent to the team.”

Anticipation is building for the upcoming release of Unity 6 in the autumn. This latest iteration promises to deliver major stability and performance enhancements.

Beyond its core gaming market, Unity continues to explore new applications for its technology. The company highlighted recent collaborations with industry giants such as Diageo, Audi, Rady Children’s Hospital, and Bosch Rexroth, demonstrating the versatility of its platform.

Leadership restructuring

This earnings report marks the first under the leadership of Matthew Bromberg, former Zynga COO, who assumed the role of CEO in May. Bromberg’s appointment followed the departure of former CEO John Riccitiello in October 2023 following a developer backlash over a controversial pricing change.

Further changes in leadership were announced, with the company welcoming MoHub co-founder Jim Payne as the new chief product officer for advertising.

Payne joins another recent addition to the team, Alex Blum, SVP of corporate development, as they work together to expand the reach of Unity’s advertising platform.

However, Unity also confirmed the departure of CFO Luis Visoso after a three-year tenure with the company.

“We understand what needs to be improved, and we are making the necessary changes in our leadership, products, and processes with a sense of real urgency,” Bromberg concludes.

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Tags: engine, game development, gaming, unity, unity 6