Unity Software (U) 12 May 212021 Q1 Earnings call transcript

Company Profile

Participants

Richard Davis	Investor Relations
John Riccitiello	President, Chief Executive Officer, and Executive Chairman
Luis Visoso	Senior Vice President, Chief Financial Officer
Tom Roderick	Stifel Financial Corp
Franco Granda	D.A. Davidson
Brent Bracelin	Piper Sandler

Call transcript

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Operator

…Abrupt start .... so with me on the call today is John Riccitiello, President, Chief Executive Officer, and Executive Chairman; and Luis Visoso, Senior Vice President and Chief Financial Officer.

So as we did last quarter, we will open up with introductory remark by John and Luis. And then we will have -- we've collected and sorted questions from our analysts and the goal is as before was to help investors understand our business model and outlook in the most efficient way possible. And finally, time permitting; we'll have the last 10 minutes or so for panelists to ask additional questions.

to harbor on go let's the statement. safe So quarter as, the during all making business and as of this like and subject the risks, statements, and goals to which industry financial performance, call, that assumptions. everyone and for uncertainties, remind second for outlook be I'd conference of opportunities, participants we are expectations future about our and financial statements full and year including XXXX, trends well forward-looking outlook, market will similar items, to

Now uncertainties update discussing you measures results and of differ and in at our be our measures section also finally, forward-looking And any today. filings can will risks find financial between that discussion our more financial information earlier or press may statements. which SEC in And non-GAAP of GAAP we can we non-GAAP about our was non-GAAP financial these undertake at issued sec.gov. and and everyone results factors We release today. no found remind earnings the obligation risk of be actual revise limitations our to reconciliations

So John for over with it to let remarks. introductory that, some me turn

John Riccitiello

thank part fiscal a tunnel more the we with light of Richard. that always the guiding world, And large our to world which pandemic. our you joining the you, with some creators. Unity, for end many the focused regard principle, for of challenges, our face believe place we will on Star And see is North at Thank the At society has tonight least COVID at quarter a in us call. earnings likely XXXX everyone while and it's reassuring, to remain better is

them these is creators always, succeed. to help as focus, Our to and enable

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when displaced shift potential has XD replaced great As the cloud subscription real-time the for on-premises, we dollar multibillion to saw that's perpetual opportunities. license,

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life businesses linear. not Of like are course,

years make is that opportunities But the expect. achievable. than so, and really be we'll us goal likely have higher we will even some front it a or in of quarters So lower such

move Let's to financials. on

where contributions step AWS, into he want Luis CFO and Luis Kim growth new thank oversaw many worked I Alto to agreed significant Unity. Networks, Luis scale. Unity. thrilled to role First CFO, for am Jabal the our at her Luis off, believe drive call and Palo that Luis of in I look and all continue to I to Amazon us Visoso. at together to the with business. this of joined to Luis. a forward and I working that our to that, served on With impact turn I'll a board great will the Unity know great build position from have on passion over company. knowledge energy

Luis Visoso

partnership was than team operating and was Thank you, million earlier. XX XD each sweet their as deliver a of net customers months XXX as XX% with I guidance million in almost earlier us rate XXX% of $XX expectations. front trailing from to our transition quarter XX, Unity We year up year-over-year, year-over-year, at the expand March I'm strong their XXXX, industries. strategic the of of in $XXX,XXX strong the limitless expansion XXX year as XX% the warm for and Unity. 'XX grew revenue here. of up We XXXX million revenue to is million from XXX%, revenue John. as excellent opportunity the of XX% be I'm Unity across up And was very And of had generate QX particularly success. year-over-year. to encouraged March in business that thanks happy with across the everyone real-time welcome. believe enables by up and based XD from customers Pre games another dollar of Unity XX, revenue more was $XXX year-over-year, revenue $XXX $XX board. continued with customer execution XX% by a beating performance very

and added as we right illustration in vertical us them year operate and customer as XX% and we platform healthcare, expand earlier higher year, mix Our gross that the was simulations show last XD increase from develop enables Home this platform becoming non-GAAP costs. verticals. to R&D $XX.X we infrastructure our QX quarter expansion to and to will monetize household compared is and appliances, is to business non-GAAP customers attract dropped This growth. create due future Improvement, government. our to $XX.X cloud base we product, XX% and under in our aerospace a competitive from content, customers real-time expand their advantage. good which existing ones. Unity providing million into loss enables we tools in to with expect create games margin new a creators operating QX 'XX investments A million 'XX where hosting other enable and Unity's more is diverse work.

XX% expect to related to margins payment of our a think licenses, income on our one year time stock employee as higher estate. vesting, increasing to related capital prepayments mostly we breakeven real to payroll in fluctuate working impacted a QX minus business particularly payment XXXX the gross XXXX operating and by software bonus, our We for XX%. grows was and taxes fiscal non-GAAP flow fiscal basis, of and expect margin high year free cash this XXXX

improve the free half significantly to the in year. cash free expect We cash second margins of

of last up quarter, We have XX% This guidance. quarter. the X,XXX end employees the from year's me brings to March at

million Given guidance also to year our our full companies now This to revenue operating million at few billion headwind narrowing million XX% investing vertical for implemented revenue drive as billion as $X.X see to for for R&D mark. represents was million by momentum, from XX% We're the the in the guidance markets. significant related end dollar April. billion, we're a approximately $XXX growth million; year which non-GAAP to we $XX to scale revenue to $X.XXX to reminder, XXXX raising opportunities growth is IDFA, the term to Unity the software guidance Apple long- still strong loss to milestone $XX to $XXX finally, $XXX assumes year-over-year. of of and an continue And our which important

million, growth months $XXX For to of million represents QX, two revenue expect of XX% which includes IDFA XX% revenue and $XXX to year-over-year. we

non-GAAP $XX $XX loss million expect and be to operating We the between million. quarter for

continue business. to the invest As we in

QX Richard shares through back In [Tech XXX for full quarter, call XXX through the with I'll share the terms who year. run Difficulty] summary, [Tech outstanding will In million forecasting questions. we're the turn fully for diluted results of Difficulty] above to the year, million and count,

Operator

[Operator Instructions]

RichardDavis

very much. thanks Great,

call. going section So okay, of we're move the Q&A the into

try So when I to innovative. be say Unity we

we've so of as I've said, is questions a kind we've a all and fashion. collected the out And them in what sorted logical done,

So instead the In year case, any XXXX, actually mid-XXXXs. with we're of this. into methodologies, start XX late using going let's old

start some questions. the Let's with of financials

joined who with Louise, Unity as our member last the So let's begin team, month. of newest

So and think kind it? And R&D, can things of of think and and existing those we William allocate whether portfolio Blair you of so how kind sales and we out? into asks, about about you remind of is of or your between us going kind expenses, allocating products, verticals enhancing do Bhavan gaming operating how new Suri G&A marketing, how this do

LuisVisoso

actually We prioritize We're that many in capabilities we it's to Bhavan. strengthen very to you, of the R&D, choices, opportunity been both term. fortunate as financials; have investments to us to resulting at capture with Thank front XD of XD transition have to front overall, very the I've good us right? continue significant we in we're in have from behind, the large long this attractive investment that John looking to But our about. talking invest potential behind real-time opportunities ideas that solutions always and build

Now we term. value create long to want

invest result, we and new over portfolio creating strive do As we as that improve gaming a leverage we in to products both our existing verticals. will And do enhance margins and time. in

RichardDavis

Great.

Munda say, so and those of think and question and kind new things the freemium the of how customers, of think should we of underlying about that they stack of like kind rank, components, the if we of had about of how mid new to kind about how term, and when metrics finance you the selling, kind things industries, thinking create from vectors of Gal grow cross in that? Berenberg seats monetization Luis. growth So asks gaming,

LuisVisoso

built. have that Gal. that us SaaS built of platform Thanks that that in not is real-time verticals. in foundation keep are or of many to are in -- or, customer creation And also games out that I vector the means required XD capabilities the content other very for while mind already win we the application for This we different, use cases and think enable as, that this to win question, the

able get So we build this the head market us believe when helps start share that leading that you segments, result effectively blown cycle growth they we you in are virtuous to us are across gaming that are workflows intense the cost from And basic to journey customers, their our verticals. and wherever meet applications. in our gives with a combine platform several full is

RichardDavis

Okay. lot analysts It's for of IDFA. while people A investors. a mind favorite on for been topic of a and the

dig So let's this. into

spring XX. that to growth suggested you Sachs would April your year, February came in out begin call, iOSXX.X So about be headwind Chris Merwin, $XX would at on Goldman million that our this asked, revenue the IDFA a

So did of kind with or the impact? the you like? of And that why Luis, more that early in one? importantly, opinion of help are what quarter? And what looks your land on don't that terms implications your March indications play run

LuisVisoso

Thanks, Chris. This is a very question. important

provide impressed has member Unity. part as side, team a So you last bit board always been very their quality was least now before conversations in on the I'm a see I at IDFA the of was joining plans and I for preparing details. little for thinking. the impressed of these try to me even let I And The years. But other several more two more by of detail. that the

you. for this dimensionalize to try me Let

math, XX minute. events XX we analyze XX that's us XX.X captures Our each positions analyzes This platforms. we and these believe events day; roughly do across the ability industry. this to X app operating billion events every billion in includes day; iOS each in very app the do the app in million in that And well data about in organization you

as like leave to teams, you the probably with. are talk So there five key I to that takeaways would we

towards strong. and First, the advertisers determine KPIs. our spending pointer, and price a the platform achieve want is platform our from through ROI campaign, their that pin for our outcome based the campaigns when There on they to channels shift is audience right determine on them is we this which very

well. our aware to need on very does So Point working perform that's customers, is contextual IDFA point which in number privacy number for environment. rely more We one. not even our model, two, a importantly,

need engine our a strength. for You it And this is game us deep business. with leadership context provides ads

every us to user provides Third is amount in point, very about these feedback which strong, and point is was I billion XX customer the The app of performance XX my it's of platform depth probably vast end we're this across earlier, our is the fourth one and day mentioning events access is Chris. a getting scale which favorite platforms. data, point, engagement

we you with of to number lot we're we're all problems quotes a which read three one, from most -- customers me our Unity, our of with reactiveness. compete with it far none work and every able readiness are iOSXX.X every the Unity's Quote with we network and number two, Let as and number single to with them network partners, available, that of above are when guidance having quote comes Quote out and are to partner rest. coming three, readiness happy Unity others.

that at that million. competitive look confident this I'm in increase operate with I I strong this if raising everything the So driver business. customer on our feedback, of by to And we're make And is very fairly point guidance $XX is wanted position. a we're the last the

QX our beat year. are raising we momentum, have we the expectations So forecast and for

to analytics learn mentioning very we'll we ads obviously well informed more. the manage data So I keep believe us advanced and industry. IDFA our plus And likely you will most was as the this that preparation impact But positions that advantage, we IDFA.

RichardDavis

much. facing. to of a a William asked is estimating challenge our Bhavan for question customers, ecosystem, and about we others means question including and Great, of look, interesting customers at Blair some user then of Luis, in were are IDFA challenges customers but that of creators an our that under the that evolve, And and acquisition thanks levers, no especially our competitors can kind said, And how ways we not just lot teams basically, Unity that help navigate, in addition lot and while play there's it's that to outlined the a does what what the Suri IDFA role in one. Luis an take I'll what transition? terms will very

believe short make thing no more So industry, for in customers. long that run, And right, durable. let's and question and a in to macro our the be for the that stronger there's the out we will more All it'll studios a good the nimble question. that's it'll challenge Merwin question come in broader through a let's, we engagement innovative But the because of Can think about of Goldman we over rest your speak ahead. case, it rotate some Chris the another out Sachs. one? move should take trends start see base? trends customer How operate impacting of quotes at He as John, you a you economy. from the we that revenues a those zoom reopening bit. to don't run, And of XXXX? And to as why

JohnRiccitiello

And consumers speaking would gaming there's have XXXX. in at the users, And by might well watershed clear end say us a levels is what about Chris. no I enjoying expected year, year XXXX that you're question visited XXXX. are it's was I they So

it's several move years. clear forward that So certain behaviors

data part to Now, every I acquire, minute engagement, our understanding earlier, like the game, everything Luis the the points the is people look makes minute, to of changed changed way they address. we they've have have permanent, to me behaviors, changed country people mentioned, We feel their And come all way in left cost those see gaming LTV; at they've a literally industry. the in they world, have into understand data is huge. big

Normally, if going holiday, giving I'm a a for and through start to say, in not half that is where from only backs really entire school, be be aspects would going some the because pattern period not this It and expect. of at be the this, wouldn't unprecedented with some be going does look will normal, to the number to the permanent. home otherwise from that's sharp we some exact that and and activity reduction think of be ago see be and were COVID, other they really is, reflect thing already are would I I next the from as work go home was the Point we're engagement. think there's year balance left, home interesting, to won't Christmas driving in October-November Now to prudent seasonality. of it's engagement that. and one, our seasonality kids include to quarter, but going it. a do year-over-year, changes we holiday guidance point going the that that to interesting making comparative see associated the this indexing year year But In they we that to the

RichardDavis

Right.

at Suri William from question a have Bhavan Blair, data. about We

we that have population given So a platform. the using Unity large

us of customer this insights preferences. kind behavior Now deep into and the gives

kind get up opportunity to that thinking network of we of consumer's we even how on as based effects So marketplace running, about these cetera. playing, are drive the for and a are kind introduce et recommendations friends

John, run if want that? So you maybe, with to

JohnRiccitiello

for inside been board of seven the about favorites. years. for I've question. that thanks Well, my It's room talking one what And Unity

First began effects and marketplace, of customers. network. to more have game a these thesis third relevant off, be sell the many the to which a really sort of markets low another it high the our allows want monetization arbitrage upon rest right, the those population network network And world's of understand our didn't leverage the that we monetization. to seen fall on the well say our take to LTV of and that's And differentiator are undifferentiated platform. over market we're versus advantage those we've of our we understand us optimization our CAC. to business; in better us helps What solutions around substantial and operate for developers, it a buy proud data supports And this wayside. companies marketing, build and done was is follow This and contextual with the messaging, better is

do cost what really customers, customers. level understand that's job understand of a us is. network interplay, our of it our And better we the to LTV we a understand really we for our helps nuance, So the acquire; the and

is it even It's XX% we a great X largest So MAUs rarely that. advantage. a to a effect, at of network customers our count our billion, massive are month

be into highlighted, that's the interesting And XX the or based XX billion multiple customer had these why platforms. on some work scenes insights we to And that on important to tenet develop an recommendations. of our to amplify we're data able drive the We app what how consumers deep behavior. for new behind and recommend on marketplace reason we customer that's to events existing core the factors. would Luis to Now over built

RichardDavis

Great.

Now let's operate, monetization. of another operate switch part over so to beyond

asks the while operations so is other So business, under operating Tom monetization have also several you or very Roderick at a good Stifel umbrella. offerings

are or So we how are that? run near solutions monetization, in beyond with if to most you and operate kind we about excited term? about areas thinking John, long of the want which

JohnRiccitiello

off to multiplayer and live in becoming used continues the long pricing coming. the feel to position, me a it's They're deals going scale content, Network, operate, a the year. known It's we drive operate. think excited do user will more scale to effort the team, to features content I'm it's, like in success. streamline confident lot really in a social mix. and more will great with this faster how is the a used making part put generated we I you it. more, feel to a I multiplayer job the And there. to opportunity. going displaying then more want history faster get And sales resonating the business, important games, revenue more about going paying second really voice this running is it's Delivery larger plan that I better. here. under by of real-time particularly XD, pipeline. self the term I gaming. billion coming is grow dollar that's games, than to service we're they large again, A easier uptake concerted cloud models, the consumer her cloud trend who right And a world's some new really move of we're seeing in class this half it's admit and are coming, million in great in I it and We prospects. huge, smaller, on the looks of let of several Sure, scalable believe updates an features and there's The multiply, portion business about and multi of orchestration business we'll we've for best operate put time multi Ingrid side been And increasing got there's our it box the that functionality It's best say

continue we we tuck-in accelerate new look work about acquisitions So to to growth our We the feel But features internally. operator in space. overall. really for great

RichardDavis

Great.

create go A Granda engagements? Let's to with DA game tangible mobile but for development so also monetization them, aspect. video on at has efficiencies game game been Franco gaming. engaged only process, Number the maximize over and Davidson uptick look developers two one; asks, the to triple of they there as as large Unity focus their how a Number not has renew

you So to John, that? want if with run

JohnRiccitiello

few intellectual industry point first property. they consuming, find studios studios, challenge, seeing we error about engines. changed. game a the games, increasingly something bit that from prone. and not And need The realized think different We're AAA a mobile. of successful intriguing building bespoke seen first; if lot they're to are they the on path of an the into and more is a get commercialization have disastrously But games as AAA costly, often mobile it's they So AAA has an last engagement both years AAA for of for dynamic time

getting And many most faster, at to Unity build look better. largest, world's For example, when development mobile, built to on Duty our successful the of they're you if for quicker, charts, platform franchise like use games the are highly to you'll successful there come see of Unity. mobile AAA Call

and we to mobile moved AAA. Secondly, games began or in AA see in to start some then

move butter. platforms, whether our cross cross of finally, what that the more consoles using title. circumstances, to cross keep Unity's we value launched over to that once to And day or game not other rise becomes even we've a PC platforms and versa. and on bread side platforms in to and we published on up it's we Switch sometimes are That's And the minute platform; games have obvious to day play console these minute these bring speed title vice Nintendo to is minute. all platform maybe And play, or seen right platform to successful mobile that with minute, table. The of multi

a they As of keep with have up do. and doesn't smaller ones publisher catch changes with in the A to ready. big make the They're always stack. ahead the playing Unity; there technology game. time never they're We're sometimes up

RichardDavis

So Bhavan asked question on another side. the Create

market, game addressable as the Studios. of Game what progress addressable more of in the currently used with differentiates artists Tam, market market? is trends Your being that on update you're us artists to you Art into multiples artist for opportunity Could shifting engine And the market to due at programmer involving today. the making penetration what relative the John?

JohnRiccitiello

Getting workflows lot more of the platform. in tasks. Bhavan, Art we AI productive by the rendering we've lot more because of finishes realistically, work enhances work of also hand. also those or and visual augmentation it new and the brought for done is a over about. the under an with talking what pipelines, the thanks engine, front in AI of artists for artists otherwise us. with still And exactly work made means bringing augmentation the and using completes XX doing who you a on platform for be productive would what most artist times Unity are made AI early don't including the I'm they that a that make scripting, many artistry, know progress to or an provide power lot XX we've have question. of essentially a It's times important scenario we're the one. a progress of And Investments

the exactly on It better GDC contexts want It's our there. asking more at to look see to we question you're Artists them it XD. in And content good about. here's for the everyday on most study. this, you him a Insomniac, a studios. serve if thesis. read; you'll to the website, tools. seek featured But was more our gets AAA are one case real-time better, creators tools, of might Now, of you numerous want showcase. It's the

RichardDavis

Great.

Okay, create for let's of over to verticals. pivot kind

what Sandler kind And So market for into tailwind extent that construction fit Bracelin, recovery Piper Brent you? go has live and a does visual to how the of asked, strategy, market John? been to

JohnRiccitiello

more So has look, be market And it tailwind. been nascent construction industries these the a some I that in time relatively can for I guess say will but with realistically, likely we're recovery customers.

more our by construction case this But point really companies. with by it's a case tools it's helpful. is really is interesting macro penetration So and trend growth with and at driven architecture

I penetration allowed who innovators the closely we market construction. license other mood for engineering in here work in their see I $X I fifth a for with based to JE And we've largest AEC billion existing company. Sweden world, JE site that driving is when now who's better you're continue they construction example, prospective XX begun wins architecture, signed into recently the that growing. And have live, visual were could. The we what's to see point release. the wish we And a company not in is like is Dunn would top us right to customers guess Dunn business. in For Skanska, construction

a it makes that little maybe bit So easier.

RichardDavis

tied been at there's and asks quarter opportunity manufacturing these another a from industrial for new and AI, releases the and in gone? last synthetic computer Continuing could broader Great. data, Sandler. via others Piper models, vision with in simulation, you manufacturing of Bracelin applications tools John? frame robotic learning, enabling in market the on industrial Brent product handful question He to machine markets,

JohnRiccitiello

question, but and to could going reform -- the industrial slightly be I'm it to reframe held specifically So market. manufacturing your

few their is near bring models, and fly. which AEC right our to experiences, ability scale customers is saw gaming press are needs media of that address, our key on different. resolve easy and creation. the forma for what quite we to on say functionality. and and of our case to These about expanded getting thesis. here's they give capabilities to and relevant there industries. particulars known for plan up LRDs use for in many capabilities for content team for is training XD, Today, in opportunity engine. toy of few of expand that the Today, tools with of have has need move that editor, portfolio and it, a gaming. investing There Unity BIM Legos similar. gaming. were but with for data AR/VR us that a Unity HDMI build to And industry, as many government, additional go are look really also this Our outside industry for for And production are gaming portfolio handful level beyond detail open opportunity case of computer essentially thesis virtually real-time customers linear, box of displays of to years cases we and so One industries. our are for models extreme last optimistic. portfolio inherent to just we our brands real-time it's technology reflect about unbounded are any content, in unbound and well features use make needs Unity a building blocks. But But XD, believe Unity, market health thing for real-time truly Unity The use product and incredibly opportunity in to The Think Like goal top real-time manufacturing, handful and unbounded from capabilities. streaming collaboration release, new AI across them after control has will announced fairly use version to are additional vision pretty one substantially. streaming way a They core for XD automotive, massive us with in and their at keep other at solve XD that retail, that me case us to new large opportunities an to easy We we you the encompasses it, employees. additional presence the simulation as for XD There in bars tools amount periods use our for heads in care, is entertainment. our XR Unity to as versus to for core product think the of at large

RichardDavis

partnerships We'll seeding mostly to Bracelin providers. in verticals. verified a this, our ask expand other point, you this addition to thinking but also a have how make as Brent said, you question this it's been are the can what market, about about basically John take look, I we'll Okay, into just sales, trifecta. we've our up closely And through with service working

growing beyond sense it of referenced, sense to makes in partner a that global firms. for John of kind with gaming handful us and just we as makes of gaming, for However, professional have foundation strong services us a kind

And front. say Gal but now And that gets quarter. last EPIC, award every NVIDIA have Microsoft on metaverse of suggested then only the that we software too if that Berenberg Facebook affect of big tuned interesting company. most isn't With we'll hard Roadblocks that, has platforms talking even hopefully quarter. working we'll quote don't keep do this and do are but NVIDIA How that and the a least, Munda well new question strategy not Apple We becoming, metaverse, the Google, regard. stay metaverse. course does in on Unity? anything Maybe like So they to company

help this favorite of Unity you is sort John, this out? your this? one into fit thing could does investors topics. how And So

let So run I'll with you it.

JohnRiccitiello

marketplace. I'm it me, not problem thing. try define a hold because same can become think that a have about It's I'm maybe on topic to our favorite such that all where terminology we're way talking I with And to a sway going the for in we sure

that them Let great of They're collaborate of with by a don't as saying me friend, I and NVIDIA company, things. competitor. Jensen on a start we and think a a I lot see as

ideas. So let frame me some out

in for shows a and seller the this, a or the this buy shirt go like I going clear dark upside sound I not the is a word in black goes And decide one I suit is a me I'm and another And of they argue that. spelling invite wearing at see this or the But is with between metaverse in out just me first family that with be And help looking distinction I'd metaverse, walking can a model laughing shirt. blue a them. down. button I whether define on green on a and really exactly environment can online when looks my in laughing my me I'm let here that just of this picture The might draw good direction, clear I'd the see I'm let And want internet. me And be at can me same I wearing. but and me turning that to really me and shirt if internet. I little family example, it's metaverse the down. that to this changed. better. not already in well argue I to model for be scene, say invite a to me what me But the a of and the picture

real-time became You've heard phrase, it became internet this became Linear solo or in social experience My a from changed me before, XD. to interactive XD. XD contents real-time. an

There'll the I many networks, happen. Is millions We years metaverse to we're apps, will it huge it these are sites is a underlying by metaverse games, it very endpoints the so websites win. get in think of include come. of millions social job think in what and providing constructions I wrong competition. endpoints and infrastructure doing ways shopping is will of expand Fortnite real-time what in and form conferencing, can a And get to they augmented all So these see the and see roadblocks when messaging whether or this reflect. lot Unity XD of or make metaverse the going destinations differently. in be the as they XD it of sites,

let bit get make point this even that, a more clear. me little I into before Now,

on internet. is, they believe internet the the part today, metaverse played using zoom more more point No engaging, to the of more do made three words, I and about several made But changing So online the more I XD, of static is games I more purchases online meetings. today, shopping a This on with now. of they an interactive, continents. destinations as two I to sites. on other online, are other with yet and I today. The content just seven few in back participated FaceTime. the some get tilt. these happening jointly more And people I family from one full XD website, content. of data Antarctica it six I is metaverse. and I document in interacted diverse the And become version the metaverse businesses for presentation with real-time OMB and visited real-time XD and edited in making. endpoints my you connected

into existence four how as scale, come in see So metaverse this I will I predict, major enablers. huge

GPUs relies is better underlying XG, them and of These of of Jensen fiber NVIDIA physical. are that and systems One that and and lines on. The it all stuff getting GPS the optic the faster satellite stronger. infrastructure provision

enable hosting monetization streaming, underlying XD are services. computer Second services multiplayer vision, real-time like the operating

those are more. there lastly, all content millions And the creation and endpoints. will there examples I've the Third, tools. real-time are mentioned, the include XD tools, of these And

of substantial for and today, created XD industry, an endpoints. all the don't really we the majority a the substantial also player, And we real-time as song. the provide these playing content operate hardware tool So Unity if music, an services. make Unity is has gaming metaverse don't choice our we has know, are and games. in it's you of But

grow, point. rides use that the in park and and recent view co with destinations are together, future the building take Fortnite, Minecraft important of roadblocks, and them. Oasis it with Ready so a could EPIC, and in don't in We're And to Microsoft, videos we And metaverse, part make -- the theme if see the we love that Unity metaverse. we it the same us endpoints competition, presentations of them we we'd Microsoft in or The and movie the these most the not see of and I I'd metaverse a conspirator with metaverse. without as the and up where its reference X, Google. were couldn't entirety the see partner, proving this, to will Autodesk Player production, them do the

to Back you, Gal. you, thank Richard. So

RichardDavis

to great. your live, open or or now free that ask you whatever. it's have have if Well, questions pop Friday, mic, to mic we Okay, hand like, you open all want whatever. But feel up

call I'll just Otherwise, So on you.

raise hit any the if Maybe So button. go. There have we just not. hand we questions,

UnidentifiedAnalyst

either could Hi, questions two you this is I Kenny. to just I address of had Hey, them. one know, wanted

was like in the And first are do ever produce plan or investors that of my most The games now questions. operate is second Unreal EPIC attention right to? does the create room growth services the paying yes, has and So, which aren't to those for you think do? Unity

JohnRiccitiello

Luis, you the second. take the take, first don't I'll why one,

LuisVisoso

Yes. John. Yes,

I growth we a But, think terms board. expect, I bit a that where think growth. multi-play the significant of we I see little referred it, scenario about I'm for John think the to frankly, optimistic across in opportunity

optimistic there said, remarks, across here the no my change prepared I And across for why going company. I'm Now, board, a view, we've as being actually. to very growth month, that's but in is the seen reason after in strong my

JohnRiccitiello

share measurable estimate board. market quarter to Christmas with. been the think games, their want years low is of the making or content the of this know, then steadily reasons and teens competing why, market I last reasons where in we've your that way a year, increasing answer I of best of someone up we've they I across ago in five wasn't it's lot we of other Like, grown advantages have products with out and it's it's the back particularly on to engines the double creation the one mobile, from, It's have low think So, there. over past, in trust think don't customers share the win operation times easiest don't terms in come necessarily I to one don't People XX% competitive is conversion. compete honestly, no. And the digits our the

with compete us not customers their trust think the inside their deepest going secrets, is I building pop them. that to one we're of and with worried up reasons our

RichardDavis

All up. able to right, un-mute? I hands Mario, are see a couple you

UnidentifiedAnalyst

taking the question. for thanks Great,

guide. one year a couple just have full the So on

by revenue, close You be $XX quarter terms first full year and million. guys of $XX in to the roughly in the million by raise

gives this So call confidence? out April just in kind wondering, May? and far thus any positive of trends that of additional you kind to The

LuisVisoso

feeling Yes, good I business. think the we're overall, about

strong Now QX, mentioned, Very I little we very premature it's it's business very on based year projections bit across just look and the healthy. -- confident to discussed, about strong that on as are QX, for right? but enough broad we factors base, our talk a the

we million are by comfortable $XX guide mentioned. the about So raising that you

So given with health the the that's we're -- of the encouraged particularly where business we are we're Mario, we very are environment in.

UnidentifiedAnalyst

and high Great on level then just one question.

So see one I competitors we engine to of your last the of were game week, able in financials think space. the XD

combined of revenue less comprise I the you XXXX. two think in total than X% So of gaming

what So level, just wondering high a game time. economics would percentage at engine you think be over fair offering

JohnRiccitiello

limiting. it's question. tough think I way almost a a self And in That's

an the if thesis some got gaming and we the a dollars is a in first. simple industry more I believe straightforward. this that But expand couple of under obvious we in billion capabilities, of and XXX approaching take X% pretty gaming, do take year, our as that we as you've value dollars, our pretty rate we that led rate, well, by do in So some it's billion incrementally increase can charge and verticals add number services for which as we we

XX help products there one the data two which make also productive, There I continue prices, reason engine. and their capability. industry provide more and to sort can If some coming more we developers AI a possible in for. think to charge about AI, we earlier leveraging not was there's no and we do although data, our services premium itself, consequence growing on of and as raise a it's rate going Art to And ways. we as won't take our which it's Artists for data times question advantage more have of of So up take can adding customers platform, will prices, around ended that raise a to expand rate. increase artists to services training pay we're are

to increasing that but in take every industries, way have we the add so value, that And in add particularly gaming we're that ability across and proportion to increase we rate we her the day. value

RichardDavis

did question? Okay. Roderick, have a Tom you

TomRoderick

deal. hear directly the game you marketplaces. out love its video operate, marketplace. see giving from John, or having to. know that, a about you even know, build okay? they're new there that title Can But I'd I marketing game to interesting love other Would But acquisition of I emerging hey, small me a it and And platform, as this Sure. Hey, competitive you seeing you not response I'm a like developers, opposed players feel own, as it's IDFA. development was response a maybe can advertising what your digital on thoughts competitive. make We how own digital a here. is to in, directly Zynga advertising

JohnRiccitiello

off, I have of first Frank world, can say, quote me is one you So the on on my favorite to people that.

saying does, So anything sure was and got that I'm he's -- he he's been thoughtful smart.

mega competitive competing he a Unity we're four or users, by Boost. really we got not The really ago, or driven of possibly it. years is We're quarter, was the to good to a ago, supply Or where leads knows we just to was market brand that time understand second a that even every user a increasing cap imagine with customers, do space. And way and our four our we installs. with -- ability thing that ago, of demand the time on players billion than at in for their a their We're the competitive in yield we've couldn't dramatically five make order smaller to beat share, and come There years made us we've there advantage lot situation lot more advantage drive gained ground major their up Chart were long base, unique. to with that. in they where $X our

about waiting amusing like they I things is Tim, really find keep EPIC, when for So at we're me I about talk never competition nasty journalists, something Tim. to over more worried to I say

and our glad the of to is business they've am that that I to there innovating. they I competition. I done like competitive do because innovation our love out spirit best sure winning. think bring important bigger, us I'm really execution. they're I also things.

marketplace we're lot the And add. the said, so we And you. the right, on together I to take on messing to eke And I our that's few of Short constantly by like maybe last it's highly other to a in being increasing add like to a continue them term, of for XX% It's easy We're are quarters, and of our always out rate by succeed. going to to is scale. around that basis question value with part was dollars answering competitive that. the I focused And string we in I'd or we platform we're at. our messing confident as what I'm lap. things can monetization investing win. pricing with around going Values that hard increase

RichardDavis

have Franco, Love your Granda, hand raised? is to you talk to you?

FrancoGranda

it team. going? the right to see am Thanks, I here. How's Good

I've Luis. questions welcome, couple First, got you. a for

what are settle to of guess, I takeaways growth? month to Unity only embark on but in in, platform that And general. about first of had of your are areas you So stage next a the now your not you've the this what main -- finance focus

LuisVisoso

great Yes, question.

every was Because I right? had So meeting than like was time, nine in to like at like, fun more I the getting was but into, why some other was sitting I side? It time I be on what was was. knew I good the am having a a I long is spent he thing I only seemed the board. I seem and blast They months I and

join. to decides So

surprise passionate about is in is I terms are impossible. of so people here, nothing think winning

everybody's I've the table. problems have it's and other we see is to solutions a that happening You can bring of. part every and And the great. problem in company been which smiling, And they not

it's you're that's just thing disagree, and sitting fun And the but a expects company board, is and everybody the that a culture. very to you It's place expects you be. you of other the see be part you can company honest. The unique you're when to really where can agree see when and it at

priorities your question. the I other think to in of of part terms

I about top do strong shareholder long-term creation. by we think growth. driving line And it's value it

free want that. as want want that growing can. want where possibilities possibly new come point the can do get we fast piece we're And But I those customers, make to it we we progress make John's we to existing with of and flow. And in to we always expanding progress flywheels business want think do fundamental a in in think cash our as the is to we growth our from in also really right are margins; do to we the limitless. right, and earlier, to -- I direction, all moving customers, way if

FrancoGranda

you. Thank

So looking forward to seeing one evolves. one. last And then how that

got over we over or $X.X capital cash, think should in next you've So deployments two? year billion the how about

LuisVisoso

always do can I in that. that. And don't Yes, we're which we've reasonable shareholder think the value, much you at there here great find price. technologies market And growth of looking accelerate we for I know, give opportunities and more continue always best question. look to I creating we'll to and sure. we than will as continue as been can get ways there companies a our at But at continue to acquiring mean, we'll you that a the best out right? few

RichardDavis

you all questions? run had Brent have May have you the Bracelin of them? did any know through if people. I didn't any

BrentBracelin

I Yes, did thought. I

time have one John. you If for more,

JohnRiccitiello

do. course we Of

BrentBracelin

the calling King; King I they're out a time platform actually But really as around had a you're question building here. first

Why weighing And could long? And what's John, are so then in maybe investing well, my R&D? aggressively you did R&D. meaningful did Who it Louis, take about displace? how talk you is King And you that is, unique as so two, with and relationship it? And about that first now? just why question

putting I those dollars us, are think year. to quarter it's work. with XX% versus sales of where last XX% you this Share

JohnRiccitiello

first, our on story, halls. ago, insider on say global I'll whether King, of town join most us So X tad CTO a an

to the And And most why on business. interesting, so the look really they're how the King; at got organizations platform. innovative off, you first Unity of it's planet. describing creative they're And if at and they one good

decisions they So their make thoughtfully.

And in so from developers King, they most didn't a one all. I and I and here little announcement. and say, of today, it. being And by And get we more a I sort They get a accident. of from also to in that successful we makes the Beside more, from powerful think proud, the that little there trying history they one that of at our quote known King. Unity us learned there to when was it get world, world and In to support game time ago. and bit feel like I or scrutiny. passed, and strategy of me, I use with have day years on it the a universe could But in was what their lose they taking seven have that engine probably the have a relationship didn't the mobile bad they about. free time it's six mobile, that services. direct the making that good deeply it it they they And given started around really timeframe, been respectful were they use not Unity deep developers that we're a was competition They opportunity didn't that idea products to needed win there, to in to learn. booted with think announced six, business obviously for lost using ultimately get started test from products. every gave particularly their we Unity,

LuisVisoso

that's R&D continue Yes, growth. to think we we innovation, we're right? it are committed committed And Because I your to takes. think to what question. to

and leverage how more drive to as that's expanding but of know marketing. mentioned R&D although we're we're relative my do to were some G&A, continue you and a generating sales our we goes need obviously, we And in more if to about games in our remarks, are XX% to as of are particularly lot we OpEx from leverage now invest. generating look synergy, verticals. where prepared as including and is were there areas much of and you more in you significant And at So to in investing We're investing R&D. growth, saying there I

investments R&D. So our that's what's driving in

I look do dollars continue, invest R&D. of course. incremental think we I of leverage, will forward, we will generate the to I As continue But most to in expect

JohnRiccitiello

in an it of opaque, question, I always that Unity, because think one of Understand just have on Yes, as thing. generic is looking kind a outsider, understanding add that thing things. R&D at a organization invests here at any seems R&D, we really clear

Art not For example, engine, I of is distant going today. feature on got happening building for not developers people, question artists promising a of a there, I we're designed maybe productive. the artists us. R&D future and this across make where we're see lot to came an and a they've towards, tools for isn't Unity, earlier But it's redwood about focused Elm more building this we've am day in and a the AI where out and intellectually, lot

now. of Or computers of so a And you XXX,XXX, river the all Elm enough is, couple The transformed forest couple and more are any surrounding river. training data they're start don't a to and type. redwoods that a point powerful of a do have infrastructure work, finishes the take and you for do artists so to AI XX,XXX or to you of it is of today photos doing us much a Elm that for

on into AI users, we're dollars I've you and XX what like things are and it build if and smartest of of they the the putting some could cents technologists office can some dazzled productive. possible, half many the of you we connects already community Across a happening in those way such some they very things of that they you in and But so might described what a about artists of that, and with Now are are why that show it, how building, we came the the the company. more a priorities package pay want times it, I how dazzle are them engineers feel it. to to clear we dozen there for

on And focus it's senior and and that. A of teams my R&D question, really operate we're leading right. just our Jeff, about Ralph, on the part this leaders side, lot our So Ingrid leader. thoughtful great and of like time, that R&D occupies what of Mark a

Richard Davis

Thank That's questions, of did it explains, Brad, or you you a have encapsulates good Bye. you. wrap what have if follow up, kind any other do. up, you any good? we John, Are

So wrap can John, questions, you'd any we stop up you here, if whatever otherwise, have like.

John Riccitiello

questions. We're go. Unless on callbacks. we'll everyone. see of you ready to you, there's Thank more And No. some

Richard Davis

Thank you Appreciate it. so everyone. much,

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