Unity's fourth-quarter performance was strong, with revenue and EBITDA exceeding expectations and significant growth in the Create and industry segments. However, challenges remain in the Grow solutions segment, and there is caution around the transition to the new ad model in Q1.

Company Guidance

In the Unity Software fourth quarter 2024 earnings call, the company reported significant achievements in various metrics, exceeding guidance for both revenues and adjusted EBITDA. Unity's strategic portfolio revenue reached $442 million, a 4% year-over-year increase, with Create solutions revenue at $139 million, up 9%, and Grow solutions revenue at $303 million, up 2%. The company announced the launch of Unity Vector, a new AI platform for its ad network, with migration expected to begin by the end of Q1 2025 and complete by Q2 2025. In addition, Unity saw a 15% year-over-year increase in subscription revenues, with Unity 6 being downloaded 2.8 million times since launch. The industry segment experienced a 50% revenue growth, maintaining its position as the fastest-growing subscription business. Unity's adjusted EBITDA for the quarter was $106 million, representing a 23% margin, while free cash flow reached $106 million, up 74% from the previous year. The company holds $1.5 billion in cash and reduced debt by $415 million. Unity provided guidance for Q1 2025, expecting revenues between $405 million and $415 million and adjusted EBITDA between $60 million and $65 million, reflecting cautious optimism due to the ongoing transition to Unity Vector.

Revenue and EBITDA Exceed Guidance

Unity's Q4 revenue from its strategic portfolio was $442 million, up 4% year-over-year, and adjusted EBITDA exceeded guidance by 26%.

Create Solutions Growth

Create solutions revenue from the strategic portfolio was $139 million, up 9% year-over-year, driven by a 15% growth in subscriptions and a 50% growth in industry revenue.

Unity 6 Adoption

38% of active users have upgraded to Unity 6, and it has been downloaded 2.8 million times since launch.

Success in Industry Segment

Industry revenue grew by 50% year-over-year, with notable new customers like Toyota and Raytheon.

Strong Free Cash Flow

Q4 free cash flow was $106 million, up 74% year-over-year, and full-year free cash flow was $286 million, up 60% from the prior year.

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Unity Software (U) Earnings, Revenues Date & History

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U Earnings History

Report Date	Fiscal Quarter	Forecast / EPS	Last Year's EPS	EPS YoY Change	Slides	Play Transcript
May 13, 2025	2025 (Q1)	0.14 / -	0.352	―	―	―
Feb 20, 2025	2024 (Q4)	0.15 / 0.24	0.472	-50.00% (-0.24)	―	―
Nov 07, 2024	2024 (Q3)	0.14 / 0.22	0.322	-31.37% (-0.10)	―
Aug 08, 2024	2024 (Q2)	0.13 / 0.27	0.229	17.03% (+0.04)	―
May 09, 2024	2024 (Q1)	0.07 / 0.35	0.026	1253.85% (+0.33)	―
Feb 26, 2024	2023 (Q4)	0.23 / 0.47	-0.014	3471.43% (+0.49)	―
Nov 09, 2023	2023 (Q3)	0.17 / 0.32	-0.14	330.00% (+0.46)	―
Aug 02, 2023	2023 (Q2)	0.08 / 0.23	-0.18	227.22% (+0.41)	―
May 10, 2023	2023 (Q1)	-0.03 / 0.03	-0.08	132.50% (+0.11)	―
Feb 22, 2023	2022 (Q4)	0.01 / -0.01	-0.05	72.00% (+0.04)	―

The table shows recent earnings report dates and whether the forecast was beat or missed. See the change in forecast and EPS from the previous year.

Beat

Missed

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U Earnings-Related Price Changes

Report Date	Price 1 Day Before	Price 1 Day After	Percentage Change
Feb 20, 2025	$21.47	$28.00	+30.41%
Nov 07, 2024	$22.21	$20.50	-7.70%
Aug 08, 2024	$14.36	$15.54	+8.22%
May 09, 2024	$24.16	$21.69	-10.22%

Earnings announcements can affect a stock’s price. This table shows the stock's price the day before and the day after recent earnings reports, including the percentage change.

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