Unity Software(US:U)2025-02-21 21:37Revenue Performance - Total revenue for the year ended December 31, 2024, was $1,813,255, a decrease of 17% compared to $2,187,317 in 2023[240]. - Create Solutions revenue decreased to $613,966 in 2024 from $859,174 in 2023, primarily due to the termination of a subscription agreement with Wētā FX Limited, which accounted for approximately $99 million in the fourth quarter of 2023[245]. - Grow Solutions revenue also declined to $1,199,289 in 2024 from $1,328,143 in 2023, impacted by competition and the return of customer incentives from ironSource[246]. - The dollar-based net expansion rate as of December 31, 2024, was 96%, down from 100% in 2023, primarily due to decreases in Grow Solutions revenue[237]. - The company recognized approximately $90 million in revenue from non-strategic portfolios in 2024, which is expected to decline throughout 2025[229]. - Total revenue for Unity Software Inc. in 2024 was $1,813,255, a decrease of 17.0% compared to $2,187,317 in 2023[308]. - Create Solutions revenue decreased to $614.0 million in 2024 from $859.2 million in 2023, while Grow Solutions revenue decreased to $1,199.3 million from $1,328.1 million[379]. Financial Performance - Gross profit for the year ended December 31, 2024, was $1,332,402, with a gross margin of 73%, compared to 66% in 2023[240][241]. - The net loss for the year ended December 31, 2024, was $664,287, compared to a net loss of $826,322 in 2023[240]. - Adjusted gross profit for the year ended December 31, 2024 was $1,509,315, compared to $1,801,488 in 2023, with an adjusted gross margin of 83%[269]. - Unity Software Inc. reported a comprehensive loss of $669,831 in 2024, compared to $830,589 in 2023, reflecting a 19.4% improvement[311]. - Net loss attributable to Unity Software Inc. for 2024 was $664,114, compared to a net loss of $822,011 in 2023, indicating a 19.2% improvement[308]. - Basic and diluted net loss per share for 2024 was $1.68, an improvement from $2.16 in 2023[308]. Operating Expenses - Operating expenses totaled $2,087,551 in 2024, a decrease from $2,286,389 in 2023, with significant reductions in research and development costs[240]. - Employee separation costs amounted to approximately $214 million in 2024, related to workforce reductions and modifications of equity awards[230]. - Research and development expenses for 2024 were $924,830, down from $1,053,588 in 2023, a decrease of 12.2%[308]. - Sales and marketing expenses decreased to $752,649 in 2024 from $834,625 in 2023, a decline of 9.8%[308]. - General and administrative expenses increased for the year ended December 31, 2024, primarily due to higher personnel-related costs from employee separation[258]. Cash Flow and Liquidity - Free cash flow for the year ended December 31, 2024 was $286,004, compared to $178,779 in 2023, indicating improved liquidity[272]. - As of December 31, 2024, Unity's cash and cash equivalents totaled $1.5 billion, primarily held for working capital purposes[273]. - Net cash provided by operating activities for the year ended December 31, 2024, was $315,553 thousand, an increase from $234,700 thousand in 2023[280]. - The company anticipates that existing liquidity sources will be sufficient for at least the next 12 months, but may require additional equity or debt financing sooner than expected[278]. - Cash, cash equivalents, and restricted cash totaled $1,527.9 million as of December 31, 2024, compared to $1,604.3 million in 2023[386]. Strategic Focus and Workforce - The company plans to focus on its core businesses, the Unity Engine and related consumption services, while narrowing investments in new businesses[229]. - In January 2024, Unity committed to eliminating approximately 25% of its workforce, incurring incremental employee separation costs of approximately $214 million in 2024[252]. - Research and development expenses are expected to increase in the long term as Unity expands its teams, but are projected to decrease in the short term due to a reset of the Strategic Portfolio[253]. Assets and Liabilities - Total assets decreased to $6,737,407 in 2024 from $7,243,441 in 2023, a decline of 7.0%[305]. - Total liabilities decreased to $3,310,259 in 2024 from $3,829,063 in 2023, a reduction of 13.5%[305]. - The company had cash and cash equivalents of $1,517,672 as of December 31, 2024, down from $1,590,325 in 2023, a decrease of 4.6%[305]. - The company reported a depreciation and amortization expense of $408.980 million in 2024, down from $563.916 million in 2023[319]. Legal and Compliance - The company is involved in multiple legal proceedings, including a securities class action and derivative suits, but believes these will not have a material adverse effect on its business[414]. - The company intends to vigorously defend itself against the allegations in the ongoing litigation[413].