Financial Data and Key Metrics Changes - The company exceeded the high end of its revenue guidance by $20 million, with adjusted EBITDA coming in $19 million above guidance [14][15] - Adjusted EBITDA for the quarter was $84 million, with 19% margins, reflecting a 200 basis point year-over-year expansion [15][16] - Free cash flow improved by $22 million year-over-year to $7 million, despite the first quarter traditionally being modest for cash flow [16][17] Business Line Data and Key Metrics Changes - In the Grow segment, revenue was $285 million, down 4% year-over-year, partially driven by the rollout of Unity Vector [14][15] - The Create segment reported revenue of $150 million, down 8% year-over-year, due to a transition away from low-margin professional services [15] - Subscription revenues in the Create segment grew double digits year-over-year, with nearly 80% of Create revenue now coming from high-margin subscriptions [15][10] Market Data and Key Metrics Changes - The Unity ad network migration to the new AI platform, Unity Vector, was completed ahead of schedule, leading to a 15-20% lift in installs and in-app purchase values on iOS [6][7] - The company is optimistic about the future potential of AR and VR gaming, with predictions of 216 million players worldwide by 2025 [11] Company Strategy and Development Direction - The company is focused on building a culture of execution and discipline, reestablishing trust with customers, and accelerating product innovation to drive growth [6][10] - Unity aims to modernize its advertising business and create sustainable revenue growth over the long term, with a commitment to investing in high-performing products [8][9] - The company is also expanding its platform beyond gaming into other industries, which has become the fastest-growing part of its subscription business [12][13] Management's Comments on Operating Environment and Future Outlook - Management has not seen any noticeable impact from macroeconomic factors on business performance thus far, noting that gaming is historically insulated from economic downturns [40][41] - The company remains optimistic about the performance of Unity Vector and expects it to drive revenue growth in the Grow segment, despite some declines in legacy ad products [18][19] Other Important Information - The company has a cash balance of $1.5 billion and debt of $2.2 billion, with a recent convertible offering well-received by the market [17][18] - The company is focused on minimizing shareholder dilution and stock compensation expenses, which decreased by nearly $45 million year-over-year [16][17] Q&A Session Summary Question: Can you provide more detail on the Vector rollout and customer response? - Management noted that the performance of Vector is exceeding expectations, leading to increased spending from advertisers as they see better returns [25][28] Question: Is subscription revenue growth driven by price increases or new customer growth? - The growth is attributed to both core business growth and the impact of previous price increases, with significant adoption of Unity 6 contributing to this [30][31] Question: What is the trajectory of improvements expected for Vector in the back half of the year? - Management indicated that improvements will be iterative, with measurable increases already seen, and they are optimistic about future performance [34][36] Question: Have macroeconomic factors impacted the business? - Management has not observed any significant impact from macroeconomic conditions, as gaming tends to be resilient during downturns [40][41] Question: What is the current performance of Vector compared to previous ad networks? - The performance is better than expected, with significant improvements in return on ad spend (ROAS) already being observed [116][119]