Unity Software (U) 11 Aug 212021 Q2 Earnings call transcript

Company Profile

Participants

John Riccitiello	President, Chief Executive Officer, and Executive Chairman
Luis Visoso	Senior Vice President, Chief Financial Officer
Richard Davis	Investor Relations
Matthew Cost	Morgan Stanley
Tom Roderick	Unidentified
Brent Bracelin	Unidentified
Stephen Ju	Unidentified
Ophir Gottlieb	Unidentified
Kash Rangan	Unidentified

Call transcript

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John Riccitiello

game launches, including Knockout City and Balan. What is most important in our operating solutions are the connections between these components; foundational elements such as privacy controls, identity, payments, billing, security are embedded in our offerings to make sure that each of these products works seamlessly with each other.

Another critical part of an integrated system has been our ability to leverage context and data insights effectively through ML-driven optimization. From a reach of 3.4 billion monthly active users as of June 21, we can deliver the best ROI for customers. This combined with a tight linkage to our Create platform has enabled us to gain share across these important markets. a growth. designed have years deliver we exceptional of Unity, durable to business many At fundamental on non-game enjoy linkage use, scale We advantages data between and ease gaming, over Operate our of our our Create extensibility platforms. and for footprint, verticals, and massive our a the scale in consecutive These late, XX%. growth XX greater XX% quarters advantages have led growth, than exceeding of to and of as for our all prior, of proud customers us and of performance thank want to and we years We're where this the I our are helping get today. year in our We look employees. together, forward much very want thank to plus journey XXXX and I Unity's to It's an amazing and honor talented, to work a dedicated, such team. with are And board a in great new pleasure addition Smith-Jeremie speaking today announcing as of member. we taking to teams, the Unity, Keisha talent of in our brings to resources and Keisha human board. management experience decades Chief lifestyle American Morgan Global Human Human She's and News the of a brand, Stanley. at Corp and Officer Resource News the Burch, Chief Management served at -- of Chief Talent as at Resource Tory iconic People Officer Co-Head previously the She Compensation Committee. our will serve on of our in our reflection hard-working, advantage. is important a problem-solving that fact, understanding Having Keisha competitive s on people Unity's board are, our most innovative, Unity. team to welcome Keisha,

financial who the will let to Now through our me call over results. briefly turn Luis run

Luis Visoso

and revenue Thank for momentum million. XX% of $XX guidance team, health delivered execution year revenue of beating enabling 'XX you, excellent business to expectations. another full increased Unity raise strong John. our XXX We by by by both street QX the strong with quarter year-over-year. The guidance us the and million another are

work especially team. want call across performance strong from the we While I board, to out Operate outstanding the the saw

as proud change. privacy of were for help Apple's platform a in We're customers we quarter. during share for last well quarter, execution, of to we uncertainties our changes, As market I build result thrive the mentioned this excellence prepared and

year-on-year. of also with a advanced Our a strong competitive $XX insights Create be revenue of are $XXX $XX revenue XX% X% million up revenue strategic year-over-year. was context, to Operate million up advantage. partnerships had of and And XX% analytics, million year-over-year. up quarter proving was

XX continue during sustain to months We XXX Unity's was gross at more we net -- becoming verticals customer and product XX in as XX growth. of non-GAAP earlier. on loss XXX XX% year. as more remain expansion mix. million of from efficiently generating can we the from equal up June year, benefit quarter in above as expand new progress rate year confident last of revenue benefited more revenue was We continued pace. good XX% base XXX Non-GAAP last the XXXX, to a We the we as QX to $XXX,XXX XXXX that up was our XXXX bringing XD fast we for gross margins than industries. compared operating -- each X.X long base can strong as million to trailing of June is from we $X.X And term. a add a on customers customers sequential margin points dollar expect with to and see basis basis operate basis real-time into from diverse games XXX% other a to year-on-year new

after. We margin many We cash have with QX. minus XX% will opportunities a XX% invest minus to as continue attractive to free we 'XX business R&D, our in flow on of QX emphasis in compared generated go to

a to previously up lease brings for from the of agreement office quarter includes ago. space. end termination guidance. had planned for the This quarter, of a a one-time year This We me of at cash X,XXX X,XXX occupancy new outlay employees the

a increase of $X XX is revenue prior range again growth full of million which year billion Given billion to This X.XXX XX% from X.XXX are for guidance to revenue a the we range raising year-on-year. from to to strong business a represents guidance. the $X.XXX billion, momentum, XX% billion

our With loss year of from to revenue, as the XX guidance to million range a XX offsetting we of million million are XX reducing we our XXX non-GAAP increasing fiscal million. a also income range to are

will in driving to the We continue business. invest

creation. We are focused on long-term value

than This in For compares QX, which growth XX% we place years. there's the XX% million against million, in during or XXX to expect to XXX revenue engagement shelter revenue quarter of which boosted represents year-over-year. QX XXXX more prior year's

expect million reaching while our For to non-GAAP invest between XXXX, and operating to more XX non-GAAP we extend loss be QX, in continue for to lead the customers. reach profitability We XX a committed to we and remain quarter million. technological

optimization for with make let that, material capabilities. John? and family Data with With Inc., expect enables sustainable July. opportunities. a now can year impact enhancing This and real-time scale In acquisition of enable to the easily conditions we Metaverse Unity into our creators, first not import enable the software authoring professional quickly XXXX. In integration with business share creation of Technologies, confidence outstanding Unity pending terms SpeedTree of shares and closed I for year. acquisition means XXX gives results. Creation us Visualization, customary to Environment want for XXX closing will Unity. in - we welcome We're is very SpeedTree to performance Interactive and the close have We will This another about Pixyz fiscal the diluted that acquisition to million million to for who forecasting preparation, QX. addition which more on a Unity me of announce John, QX. our another is popular to of workflows to and the year artists data to and artists The acquisition building And strong the deeper data The fully full models SpeedTree back to a With turn the in The our us creators great it quarter Unity. XD count, Pixyz, that, we're the massive we're acquisition closed ecosystem, the step and raise providers optimize summary, prospects. half environments pleased guidance development. XD in Suite and optimistic

John Riccitiello

I'm customers special. had looked rapid the with Parsec that we we that viral the agreement optimistic development Luis. adoption on what announce saw excited does just with confident our about Thanks, our same something had minute. you But combination and a organization. curve and when reached knew of it is some become to definitive Parsec inside of fill a intent truly important Parsec. we're at largest in found of we to I'll Parsec, acquire reason an the And have we

who Parsec they Parsec, that remote they together applications. requirements a of professional of because and done you deeply innovative for not companies a are support that anywhere. creative What the desktop rigorous allows Now, and with familiar have built from is has work those individuals can to are Company streaming platform

whether with sampling ultra-high-definition the also all space rich same private in delivers XK XX creators. hybrid, can highly quality But for impressions delivering and latency, and support Parsec immersive, life likely processing the more at access. Parsec remote, for lightning-speed need shift complex. high-performance it's fundamentally and to work rich of desktop are. of have per their development their imagine, it's Creators needed focuses only they Parsec spades, ways, it's they type get addressed you rates had detail in low security management frame also like is and second. resources professionals to for detail, their pleasing with As the Parsec technology. images and this companies XD. more different and incredibly Boxer all high leaders, companies working fidelity, no interactive, both support and the this tools computer and distributed of streaming to on Chris creative to Dickson, in Benjy matter simplicity more environments, complex game their collaborating or Parsec requirements work creators of of X:X:X And need employees streaming, real-time more. and going founders and unique variable it's It's a provides where and as color been innovative has

use a with and just remote creator virality professional-grade linkage and And of with fully peers, incremental further companies class push partners. with they drive a You get and desktop Parsec, adoption can button. as coworkers, individuals started a can

customer solutions including lens opportunity cloud from result will we to after as nearly evolve a architectures. to strong to accelerate plan many to and Parsec real-time device base. shift Ubisoft, shared more industry Teams ways targeted future flexible and is new is creative Parsec, to working, cloud. next the to were shared run tools, business think why that Richard, to Parsec the unique developers in an a and through experience expanded share key before internal of have further questions. based Unity's and has we're with net hardly We'll cloud this the more. cross through their as we architecture, will Square view of of XD with subscription rich future. I that, call for a on-premise the the about collaboration entertainment, towards customers Subscription creators gaming This the of of aggressive able mentioned, step And we're a Parsec, we drive see turn by our year-over-year close moving over and and for these even is understanding expansion with capabilities anywhere Even and bundled growth a on XXX%. Vision, momentum They relationships any solutions. agreement from require loyal rate who into to an growing entered powerful As we transaction. and alone. our us on our be will driven year. over s but to deliver and cost-effective our When XXX% with where verticals the is cross-selling Cloud will the sell investing own We of expect devices our capabilities Parsec Create, more companies process like on through EA, I'd work strong infrastructure details Enix, design, media adopting dollar with

Richard Davis

Thanks Great. much. very

section. move we'll the So, on to Q&A

guys and call, Then that might on this collected we're so, as analysts us many the twice you allows the at And as we up stuff for questions get as going as questions have end, get normal open call did from open us well. to we and telephone it almost questions to ups. for on sorted and through you last

So, and we'll raise the call as guys. Questions approached just you, section, your hand on virtual on we the Open then system,

question, So, start with we'll first financials.

earnings, start is financials So, so this let's to about do call some with.

couple during So, also, see further Barclays just this on we M&A with questions, then Is Pixyz And updates asked potential M&A on automatics? honed quarter We've front possibility Mario the you how in good and AR for NVIDIA And with just of you've asked as about announced a the and partnership rest to and the the the heard, growth? Any regard to he there at active Pixyz Microsoft. to specifically, Piper Brent we're to on regard have on some. doing of Lou then with finally, remained, well. a at with as do drive there? acquisitions recent software Bracelin expand

So now things we're doing cross-sell that. and like

you with that'd great. if questions, Luis, M&A roll be want So, to

Luis Visoso

Yeah. to lenses. will continue say and Thank role through you, and the future. three Mario believe our Richard, Brent. question, would Lou opportunities M&A use I approach to in for play a We evaluate disciplined a We thanks what that

we investment? the strategic acquisitions Second, our performance our to an generate position And can our with key we third, strengthen capabilities areas and acquisitions. track our return market? in do attractive the of can accelerate excellence? on We the First, our execute significantly focus

And completed set we we further. our performing about accelerate fact, that acquisitions ago. when we the aggregate believe month our a many even Overall, growth potential expectations deals. of the we in update signed line these in have acquisitions In the last with are to

have As where so. some we do we do there can would better, expect, are you to and opportunities plans

differently, XD more optimized great NVIDIA. data my life. Now point point, our capability in strong enables for and part that professional XD customers best-in-class optimize to has on input creators of and Unity Pixyz, our to remarks, other Pixyz creators forward on several and as your to tools been for look across with with many I models we into data for offers quickly Microsoft strengthening Said a industries. Pixyz games easily partnerships verticals mentioned development. This years. to both And offering is real-time digest And and prepared the real in enables Pixyz

Richard Davis

and a Munda that than low-hanging Gal or near of that good at then Great. seen early the you've And you've "Now financial Luis. another in for perspective?'' in observations a question question. a you purely either says, on fruit that are has a job strategic what some been the the for Berenberg from can quarter, the of term, It more focus

Luis Visoso

of here little seems very bit I've I'm but you, been Gal. that, happy it's be longer for been It than Unity. Yeah. at like Thank fun. lot a a to

said allocate mastery, with or cash deep creating and as we this Unity to for for I that XX% and we improve what projects that leverage us as I've is strategies ever scale. believe a to technical over the flow the resources as so seen. business outstanding, metaverse the can and that is unique and And more believe And creators, I businesses operating revenue high would enable once-in-a-lifetime will at and fantastic, Successful year As we culture can long have and the above This as time. to The winning really generate ideas is per discipline team a growth opportunity. is evolves. I before, call operate while to result, the at passion is sustain margins requires clear free those our do -term. expertise,

Richard Davis

Great.

we're now questions several IDFA. usual, And under So monetization. on we have as

So, this to John. we're going over to hand

Suisse questions, handful versus publishers over of we'll are better with Ju relative Unity's advantage following. networks? Credit What So, in making overtime is compensated start the so that and asked we have sure a well other are Stephen

John Riccitiello

in business started in short-term We a low, and the our X delivered at monetization ago advertising best of business kind sell thesis broken high" Stephen. with the model. success whole Thanks, "buy legacy years that model reality was

learning me on we understanding of reached succeed and ROI deep superior behalf for a billion we of we we SDKs billion and data Unity's customers. LTV based and really of leveraged deep, to engine you again it's a the integration X true -- quarter, manage analytic billion X.X last This user machine our monetization heard create MAUs deliver advanced is analytics with means customers. announce X on engagement, We program and algorithms and Our data. our from producing apply petabytes and ROI when earlier about --

engagement not is for different optimizing spread. business. we're in what a So, LTV, really It's

going there's And platform may the it like it's silent of complicated. be more reading closed data. more moving media on on Now, lately, based world into seems out the a there, first-party and

services, they are for them. to the we open. Here proprietary options got partners I our a choose our and are data. monetization advantage. that have want can We've that own important so note But tools believe best tool, creators monetization It's

better at for We more goal have XX that our We we'll than success than have That's are over the our this rewarded we optimize a the with option, growth. that several in better unified last star. choices our businesses And quarter ultimately, partners of for publishers, and we the we believe fewer. of last And publishers. -- be creators, are years. if saw maximizing north Unity, less, revenue

[Indiscernible] Our and far, were that for results this [Indiscernible] we near - long-term path. continue down and so

Richard Davis

over press asked to about say trends Morgan pulled from question, people at conversations John. it things, listen releases say difficulty one Stanley, of another people Matt if some ad different spending. industry-wide Because was in it while attribution. because Cost that you forward, other was over and comes And reduced Great. and This who

So, going there? on there's seems of yeah, lot what's It crosscurrents. a like

John Riccitiello

if Look, own Well, monetization, they're stories in sure confusing individual we're living their constant in truth, own publisher, constant that's some there's from each their or has and changed. truth. gaming I'm hearing the it's anything

investment invest have be acquisition to of continue in and to based in and Attrition successful, is is the game than people every going What can't go to is I'm sometimes business companies successful in every the order of all thriving this the changes reality a a thriving to in would America, a in to things And gaming need that confident the really different I advertising small, direction big, businesses. it's user year. Sometimes videogame a revenue industry. they but are they're say for happen Europe, world, in longer-term continue on quarter, Asia. North of,

That's do. as we are is to continue what quality our at spend to publishers Now, positive view they're a as ROI. advertisers, players going getting long

got they what in target our they'd changes regardless Audience that on delivering. In we've what or based IAP of to ad like revenues, fact, what's get a can happening retention, allows we're find ROAS to so return attribution. guaranteed like advertisers tools or Pinpointer with That's

the quarter growth. increase a at They or Our Unity be results there and acquisition consistent maybe can't spent -- spending reflect go industry continued in a on between but ad the time, user there with. I network, been But hand-in-hand. be we've again, something material divergence think a two can don't

Richard Davis

William monetization. this for question does now Blair big a how Great. of Unity? firms post-backs seems It on fall? advertising iOS asks, have the And conversion that companies that at out one that on impact is Facebook? big extent like level XX Bhavan what them, And to Suri with like a last does to factor then play how update impact but

John Riccitiello

Look, to monetization. view I executive attribution I'll how a want affects you question. and in my of team it's what all as of providers the We've to Bhavan, step attribution this the Facebook always proponent ecosystem into day a the X from to been to give But figures point try wouldn't get -- open supported good view. them.

But and content authority. pleased that's protocol who and they and to includes surprising implement. -- a backs an what in or Unity, And We and single than course advertisers for are. rather it should having competition, too. proprietor for open from here, choice, business. networks. believe normal believe We of consistent open use post adding comes attribution of creators another and those rather away self-attributing [Indiscernible] systems, we're when ecosystem attribution And then we there field level that is more in choices other see a move to services For standard systems, have to a with SKad we're ready playing

Richard Davis

Great.

people on similar can Okay, at or you some Capital William see? Market the normalcy. just few we'll thematically, and talk you're the now impact anecdotal? Maybe expect express overall with next say concerns all what you, -- was, you got Some you basically, And on those And run could shift sustainable. macro least if from maybe, to how what is -- you questions, move Laboratories color could their reopening one. and and return the at gaming that that comment about might give Bhavan We seeing Gottlieb over quarters. engagement Blair. from some and have to discussions Ophir People over about trends concerns Luis,

Luis Visoso

over but active you for look for your up high is question. engagement in Globally, We're to of America having also the Thank little very XXXX, back ramped little have pleased Sure. we what and year-on-year. particular started APAC, the we count behind, continued we're And is users if actually grow Bhavan ever Europe metrics in but great, unique active spike excess the with I somewhere in see. -- growing at seeing of an look are seeing decline monthly unique XXXX, more We're globally. wintertime XXXX the to pandemic Japan, doing to all-time back then year-to-date then during that before. seeing XX% than growth led is nicely. user XXXX. that And also Korea quickly and users a fall bit the very a

board. growth across the we're good seeing So,

Richard Davis

Great.

has a late. important ESG have topic an become We ESG. about question of

ESG report on doing ESG section front. every In Blair on what and has Bhavan asked fact, about William Siri about a the we're

maybe that one. want run So if Luis, with to you

Luis Visoso

Sure.

on shareholders, we stages committed creators, a they where our early we're -- recognize environment, have the You the our communities, in employees, ESG impact to know, positive customers, of the and opportunities building and frameworks reporting reality, assessment, reach aligning to have ESG better and the current more our global metric to program. our and We're that with goals. so sustainability conducting can understand our we accounting initiative position to

a We full to our our and investor list a programs this highlight on of and measuring for few listed have we call. dedicated an let internal efforts, coordinating team page. me just But have

foster Unity more supporting the the social power employees our sustainable, backgrounds technology. assessment. world environmental all gas more We're to we're with those also making side, sustainable the become On of sustainable of customers inclusive impact, to On currently more empower conducting a greenhouse we and and our creators world.

technology, of our date. $XX be in [Indiscernible] values we know fact, committed to and and there and workplace in an is a this valued done, at be now governance, more positive shares that and over million sustainability, donated to inclusive In to have respect, empathy, change front, continue approach On governance committed at we health. economic but lot a we're on and details We time, sharing education enable opportunity. be work we'll to later and more opportunities,

Richard Davis

move Well, on -- monetization. Great. don't we to beyond why Operate

of and godly, that market. Labs the social theme fair as comment Vivox of I'll think how you becomes is: multiplay addressable product So, a play backbone social about the opportunity deltaDNA? question to it John, offering should the take that you extend you broader one? cloud games more out up be but and picked His games the how that industry Capital in a both so Can multiplay Markets on might broader involve we on for gaming and of don't progress relates verticals? why as And and that broadly,

John Riccitiello

a just off, little first So background.

lagged partly the of they solo you'd socially that -- CPUG H and on at console back networks the broadband for console you multiplayer the technology they're it's had on games were haven't it. see capability it That's activity. the of But largely back a Sports took was for products, ready as games not gameplay go Mobile the is games support PC had because to games and the there PC of changing. out form If play got play later order most PC console. XX gaming a against to that and single-player be forefront and for lot dominant of you couch. most years, the machine of is on over. performative and And you getting games, that.

of XX, front that, Heavy to tricky multi-play growth to have this. area, we track seeing XX, plan come management code. use opportunity a capacity hosting but is enabled and true in And leading others. with include the City, substantial see in these and master many, Bomberman, mobile bits healthy we mentioned, very than voice resources a casual services a Knockout resources, thing this And they the matchmaking of for more games, they they they toxicity. the Unity Boxer, with hit operating spikes they game and It's and on because but gaming. games many particular, you for developers. Konami, hosting and a tend traffic get people in to -- multiplayer see for. becoming multiplayer. multi-user our gaming One And Sudden And everywhere networking mobile games together. Ashmaker. Super as services, difficult there's provider back-end to lot it's need of These there's also a the and XXX Social find then we're as they very we're also And that many themselves environment, are

new top to create these we're of tools a of just it easy a make so, with games as succeed to team multiplay at two-person And types hundred-person to what for studio. building is on it as we have

mobile great than a because bigger social a are been they've it's becoming ever much question before. multiplayer and So, experience

Operate to on side. And I it think opportunity the it's unstoppable trend. speaks an

Richard Davis

Create Great. -- We've games. to pivot got for over

recently this a you competitor gaming? we an open one out. from in this have small is of players?" believe market competitive Stanley landscape the if so you you on engines other continue do Cost consolidate Matt changing at with And will source. over to large one, perspective to obvious play good took question game So, could engine "A John, number their maybe another the asked, and How have Morgan he

John Riccitiello

start Matt, what owns that them that saying, yeah. mean by I'll you both were using Company of I The as mentioned. the large? do by Well, games or

scalability, I Godot that ongoing an around sure in business The model way. competitor, going is really has [Indiscernible] commitment opportunity been a engine. to take humor. to engines reality investment, it's that large you source been that around. that forever, it but technology appreciate always requires I So, that's QA. hard: and hope game But and be are open-source I'd stability not I'm call has for a

with hardware, optimum engines Another when we're Amazon We going hardware the new been I it the our shares on next software believe developers on existing an They that side we key embedded on it's front a XX with told and after creators are games several to to a our or used of an but that. master year little competitor. we on after Lumberyard. saw role nearly We or X,XXX supposed that Autodesk ago. the investment referring got take to has goes think the player is It's place years platforms you open-source in not externalize be the can the game new those But that's tough. gaming open-source innovations we bit up believe product mobile. often for play, And competitive King on continue really have platforms really to now that. to year the builders do year or hard were gain. to so impossible top companies that. new really think a to these that We show I tough. then be we're you for direct the folks context, works That's landscaping it's and industry. easy to ago And that with in while such we the of for hardware. get working

far competitor largest next behind. Our is

all Nintendo effort. in strong very keep We R&D upping the our we and AR/VR, have position PC, consoles, a on

we market. going competitively So, we I growth. think position believe we're continued deal in are to in a really share market the good see to

Richard Davis

Great.

picked the space run pace on, seeing?" for opportunity articulating with Bracelin has work new and hiring at Brent to Facebook, one. John, asks, spend a for within we've in that Unity you're on could that developers have intentions from you time Walmart the AR/VR question and done Apple, up We could some applications Sandler. AR/VR fundamental some he build Unity if you the good "Based Piper of at new And adoption

John Riccitiello

sorts verticals. really nothing very -- to tomorrow, sizable starting We're I sizable selling this next and around have over me AR/VR look, know are which have of library, proper we're around I in gave been +X. mentioned bit. excited in because X starting where of that the hardware, see different step mean, to were is market and AR/VR like [Indiscernible] there happen. happier confidence a I to X and is going our ago, in acquisition. Not hardware gap that some see killer points time players, I going really the analysts about of AR and ease-of-use, content well, consumer VR, some there's Walmart, because Yeah. change I course traction on we that you companies about see we strong a change, Several setbacks happen growth to but think coming of bridging see presentation has a right you I Facebook disappointment, that all of world on to don't as going many that a Facebook I [Indiscernible] the from very, years great others, years, this a staggering the in combination back very, of little makes projecting a said to apps. of companies market the -- have and a But at what to they I'm side. and particularly a that's the time. see think didn't I announced numbers hardware. based basically getting across on

hiring, this it's time people, So, we're real.

or X years, I I [Indiscernible]. X think think the under next

Richard Davis

Great.

Microsoft of your entrants one. of to cloud attempts have what recently in into get levels a love of have in asked, mixed thoughts do opportunities, entry announced offering. cloud etc. there market? ex-CoD question with end We'd for past vein, opportunities. Project Netflix in could run Siri Bhavan because maybe that success. on Unity the Microsoft about the We at with -- especially a look how we extension cloud been I'll gaming the asks the So several mean their new gaming And of And with Tiny, Mario the the similar Lou

these Bhavan for both, two you So, Mario, thank questions. good and

Richard Davis

start then we'll down level, high we'll a as at drill context. this of first of look, So,

market, build games, More forms fill entertainment First games off, for the they that's we to do benefit -- and of to generally we more need games people new be better. good come the so built Unity means emerged. when we because needs, connectivity’s, which the into new

we like see Company we that when enter thing. the good view as Netflix market, a So, a

Now, double-clicking subscriptions and services. question. down streaming music we've on in than Game the scaled subscription out seen have slower

a So, be that experience weeds. too cost-effectively great technical made there that to believe going patterns. that not let's consumption the We to case. have hurdles We're think are deliver their into far user difficult it evolve about consumers the why really would

right So have now you in same play what delivering as to way. opposed to is basically the same the games

now movies bought -- you way a at So, about the went had movie. differently days CD -- a music how and store and you consume think the when the than to

will people. how And challenges, Unity, change subsequently, if and new more we to to do opportunities consumed. So believe we for a of not far, unlock consumption. have have developers at we tools those just they that will But of patterns seen game and we solve technological business models evolution are -- that, we in-game we lot consumption how millions give the games

For that other DOTS, you modules Tiny, several CPU the have as and game includes know, made Furioos, among less and GPU streaming example, our things other portfolio, intensive.

takeaway the comes And for that to Stifel, than verticals Tom we bigger are last. and broadly Aniweta the get subscription gaming in to Roderick in answer is about optimistic rise always, for for when going as we're create of that asked ability save question verticals. about big often help And the that at So, to gaming. services the be the (ph.) Unity best Max the basically and team "You the and area question from

maybe I good have which open now trend think, from a sub-growth If you a line, question right also is have to on before Snowflake, up an be have because subscriptions, great. this alley. John, seat-count be But would more Operate And along that model you revenue Stripe, question is, is a with that's, model which right usage-based there chugging that'll will mic. Create and the get but last you question update we our like see others.'' based interesting your what you

John Riccitiello

Sure.

working lot with what for working question it's it internally, because really initiatives. on in So, a of or we're -- great several a speaks

a customers So, number major several adds significant customers me earlier new the vertical you new announced heard of side. on

outside a uptake. and we permanently the business And services seeing generate gaming’s SaaS we're professional today business. So,

right. runtime You're [Indiscernible] These to customers. we new help their getting our and need typically sell applications. and licenses, We [Indiscernible] seat running sell like applications companies also up and with

others. And Walgreens Conservancy Lowe's The many, so, Nature with and and like companies many and

services. for are professional We

they're But it Unity -- services hiring need companies internally build have scale You team but they talked they professional prior a about, we developers. lot do in often question, comes what services. thing. Unity engage you augment the here to Hence, of thousands with smaller much scale models. thousands in usage-based it important they the these they see want. how are, to A the from are more they're than the -- is more to to on When us a developers. companies same hit with way not And on professional you'll of verticals, think and really I game

We a We of are on price, twin this business, it Furioos. consumption consumption That thinking our a we -- pretty simulation services all visual based are of the serving on is model as the tend makes a individual When around with on much seat. consumption already an early problem. about we Operate stages our model. applied and of model on parts a basis focus computing to to working or

being in vertical to going scale, consumption the a over models we and but see series variety as for we're shift and how growth will for grow of strong and a on services be see time. will that to a evolve say seat consumption on servers to side sometimes those, in significantly many would continue there'll continue I are to licenses from models streaming. additive time of based verticals something, to be professional metrics, of think used being be And will that So, we another

Richard Davis

Great.

guess open we'll questions. direct you up at with mean, start Morgan to Stanley. now I I can Cost Okay, Matt it

other your the you we'll video, then a roll up If question, ask open to want folks as well too.

Matthew Cost

lot question, the for Thanks Great. guys. a

So, I the strong for obviously quarter. came Operate very guess in

the on of quarter-to-date and and you picked trends those you side opinion were was of mentioned share are did gains drivers the that how see trends business in doing? side curious, You can just do your on monetization. what with share that monetization those to QX update what over the in give gains you XQ, in an I up Thanks.

John Riccitiello

want So, I'm that across me. came might going pretty speakers. you to Luis, my And because that to jumbled take for reset

Luis, open that close up that drivers, So, audio and if helps. my you can see I'll and pick

Luis Visoso

quarter whatever organization events talked Matt, mentioned about if million minute. Yeah, prepare over we that No, last what remember analyzes each and two I our and XX upgrade for captures good. And question. then that's I we single and INAP IDFA great years. IDFA back you Sounds billion every is that said day. for also XX And

that's well. We're and market I So our strong our very not mentioned actually that XX the that spending models, our and that on some really platform for amazing these IDFA. working expect that I really do And which platforms. growth. pretty And we across do across was contextual is reason rely

were strong is access even really us platform And the to then back scale data, provide Our customers. feedback based was getting vast depth of we from very data. and our end-user and performance amounts on engagement which

we about some a Unity's and to quarter. is single way. exactly with readiness same raise a but think as saying ago clearly $XX see partnered we else. of that I were And thing mentioned, as IDFA our our above guidance to impact The the customers guidance in players million. out different far s John having and advantages. different And impacting really every it's last quarter anybody hey, things like, by are there Now, network us an what is same the we in and saw continue industry, allowed

are of some accelerating, are them of them decelerating. some Now,

to have $XX again, QX, where Pinpointer Audience data analytics about and we being by these to all talked that and about guidance to be allowing that fortunate this prepared at us accelerating, are and the is earlier. our raise actually we're We million

the quarter about, very just same see to that strongly Matt, it's we it message -- talked we're this play out performing ago, and a environment. we in it's So, continue

John Riccitiello

I Earlier business the to advertising on Luis' just revenues think and we now I to from way share. are share. They industry affect experience understand this differently this, Europe affect And another. best than in really in publisher the on question I point, deep think or what we build on question. while gaining GDPR, advertising -- -- the about market better one approx industry. relative the disruptions happened about have market connected and We're to gaming the industry got the

every relative every of when in GDPR enough No, networks it anticipated game those I'm every third? calculation aggregate different, say every The The often this, the and be every for Will monetization is who's think every the adapting rules. out level, is stories. difficulty in the affects the I every publisher. was publisher did major geography with as growth shuffling and there. affect ads happy mind is some LTV within are more different do publisher, fortunes. second, I before, GDPR but did aggregate well market. not some network to whatever IDFA to in But these we're that doubtless other going harsh or up and publisher, for to basis, net are a IDFA, because on different same? in to there who's or expect some at up that And just see it equations. as you Who's So, relative going having game change we've the publishers on my stack, some see reality mechanisms for to own it's top of it through to winners end the the the

Richard Davis

Great.

Matthew Cost

audio any [Indiscernible]. guys, Great. issues for Thanks, and sorry

Richard Davis

fine. it's No,

Luis Visoso

to just can just complement. Matt, I add, If

really Our context they to Unity competitive are the making us. first inside Developers come when not is unique platforms. advantage other their and for to games,

many the app, other to Operate runtime is addition in in Our services.

come will to we nicely. the [Indiscernible] and in that's So, have scale

Richard Davis

Roderick, to Great. pop do Tom want you in?

Tom Roderick

Outstanding, okay? okay. you hear Can me,

John Riccitiello

perfectly. I hear you can Tom, Hey,

Tom Roderick

right. go. Away All Wonderful. we

down Matt's think So, is question these and maybe question I'll tremendous measure just I up the there, at an John, are quarter think and there a finer to to then really you I point clearly even I put guidance of monster And all put crosscurrents that you're it's out. Richard, try a a that great everybody just trying figure and Luis, trends because on looking where sort number. against sequential that what's when weigh forward

I is bit. We're reflection just a we we the going in bit sequential barn nervous a undoubtedly just, put you're the it don't lot to are is, of to get, and of the be of that the about it going Is us. tougher? from keep reflection Or trends guess little point monster horse a just I a kill Is be finer should advertising quarter, people that think with so, ecosystem? And around a uncertainty on engagement little it that? on hey, question a up a conservative

John Riccitiello

going to would time give seconds waste I XX we're So, can you, we're not about not of nervous. be growth great one. that if I'm Tom, we going nervous. Luis not prepare growth feel assure has to you We an is to about long-term answer sequential our good we're and guidance And where nervous, But to feel encourage I about our are business. There our any less or short-term nothing us opportunity. where and

how speak and quartering and works. to seasonality So, sequential Luis guidance might premumble, that with to want

Luis Visoso

I Tom, Yeah. we just be raising again if a that XX not after million were doing ago. mean, would quarter nervous, we

So were are the not we on nervous, business. very bullish

that's that peak traditionally and the year. impacted QX at misleading. so consumption-based and We for see If you that know been look more Operate which was bit Summer by we -- holiday seasonality in a look is have particularly QX, just -- of how COVID, months model. business upgrades. little at Seasonality it's us, you'll business, a real seasons the the relative you X last years to ago overly

very call. feel as So the of we business in about times health we've said good -- But what's the impacting many that's the very we're us.

John Riccitiello

but Yes. sequential lower that hard I such months we've of dramatic seen -- it's The to this to growth for a Tom. months parse it's were different specifically, vacation want add from growth. to summer seasonality reasons, sometimes bunch

Tom Roderick

Very fair.

then And Okay. touched a on Luis, quick one. it. you really

that not Just let has you can that Company make bolting it levels. within to on get, Is revenue sense guidance? the a I that I'll here? but you're different all at you Richard strictly or mentioned associated give to is inside of of of But there a product Parsec, Millennium joke a any just there, there And probably it's this Falcon is later. materiality material, a make it the on us which so, lot vision

Luis Visoso

very, this year, is material revenue in There very Yeah. any Tom. little Nothing way.

technology small. the very very great, So is We were It's no, think future that guidance? question Company. amazing -- that very, I is -- it. that love no. -- it's why The is, you great is year the -- explained. is but the if wouldn't our a raising is as impact We Absolutely this John of

John Riccitiello

a put name guidance. in [Indiscernible]. discuss working on Also, include on were To it try is the never to our not Parsec that, point I [Indiscernible] and would don't we whilst [Indiscernible] Luis we guidance. we --

Tom Roderick

Appreciate Excellent. [Indiscernible]. all. Very it. you Thank

Richard Davis

are Hey, Bracelin, you Brent up?

Brent Bracelin

guys. Hey,

question. taking Two ones Thank the for good you So quick here. afternoon.

quarter performed color you IDFA linearity Any consecutive You Monthly just got about of linearity I XX% Operate pretty a with in think in consistent it stronger. to implemented? basis trend is was year-over-year in on to quarters, to sort business in linearity? the pretty the start given just see quarter, the did in on last are here stronger Operate over we what wanted X as X phase which numbers impressive. Month it down ask, or X? But started here be start to for quarters, the X, and how much Month the as was the guide actuals crushing IDFA, obviously, Operate, in

Luis Visoso

Brent -- that. is don't say well, I What disclose we would

linearity and geo, -- as very the at not have by it, it good And good it. looked feel you quarter. We the the was feel if again, was the health of we about very year look about guidance anyway, we raised the as did. by about and month, by good during the We we good are linearity. We business. would for it by feel by business, at much We not,

Brent. there, concern a not So

Brent Bracelin

as John offering to of that functionality I be you your the you package it. question Do are last about what you've post subscription thoughts that's initial of change kind over [Indiscernible] subscription bargaining my of separate on share your of the operate to Got IDFA. think base will a the part but the for Well, packaging sure opportunity? that What offer? the kind planned bundling Parsec? going initial and it are guess you time, I'm going to on could and of that as think Parsec, thoughts?

John Riccitiello

First off, both.

a industry they that artists. other mentioned, It's Remember, remote with ago, the seat I'd boatload Parsec game that about we XX a more Brent, because pick essential on can are are a our me lot think developer now. the Let Unity we for There's enough, half-hour an back Weirdly up said component artists gaming trace can using question. of a to a coverage I to than XX have a into there and customers, month. around draw bucks easy system. of way the to

to a of -- to sort creation, and lot is like thing of they able other to are their tablet and any The developers Parsec come and use in be provides honestly something are for -- need do Parsec that.

insight one customers as about stand was and and that just deep so, those penetration it it us where we we age. And we Benjy of this customers, them into was I is as can both And wish really, pull that when they are into just can bundle I I customers, They're feel with share sense mean, gain pull one. they I penetration. is with with that my I and marvel Goldilocks can met, and killing back really and at. I significant half good Chris, this with fields smart their execution

Brent Bracelin

encouraging. so sounds Well, much. Thank it you

Richard Davis

are Hey, you available? Ju, Stephen

Stephen Ju

Yes, sir.

Richard Davis

Okay. Great.

Stephen Ju

following more game there's developers, lot guess from around across is I but marketing set spend verticals. video there questions the Hi. of the up broader advertisers business, larger a the on advertising opportunities, the also the

So, you're non-endemic, more doing to onboard Thanks. game can about non-video what advertisers? you talk

John Riccitiello

Yeah, sure.

and aggregators So, margins advertisers. advertising other a network, a most Google, partnerships on but brand Think us first And being and the anybody, got notably for supply-side or among at defined things. we've lot bring demand-side they industry of supply side. as the experimenting game of side the non-game with then up, we're mostly game number of big on

out what expect, I see there, seeing frankly networks. and advertising game more and on sophistication. is we're I based more So, industry that into buying Non-game is

advertising there, to probably on that answer both But we'll He sides on mute still And again, of both lion's went still of this it's so, game the share Stephen? question, equation. but more sides. we're me. open is Does see the your

Okay.

Stephen Ju

thinking about longer-term Yeah. the opportunity Sorry. I'm -- because just

John Riccitiello

I term think longer the --

Stephen Ju

Yeah.

John Riccitiello

Let me be clear. really

operating is box I think bigger Unity the a we're within monetization. than experimenting for constantly. longer-term We're

goal We a have all companies around a advertising precious like of with more Facebook. data-centric learned anywhere to are client advertising on sophistication few that our admire players but love a you few outside and There those that's we're will. and more and our you're on we XX% now broadly quarters, when data, skills and quarter, business. the to that acquire But want of approaching are focused and what you're the doing

Stephen Ju

Thanks, Gotcha. John.

Richard Davis

then Ophir Great. Gottlieb. And

Ophir Gottlieb

the for there. and Thanks Hey taking Richard. my question, for thanks format,

Richard Davis

welcome. You're

Ophir Gottlieb

year, QX and in wanted per quarters Low the hoping we didn't about of sustainable talk it QX could I guys because last And had XXXs, you COVID I was a XXXs, right? -- I mid Unity -- and seem spike, saw DBNER. ask se. this

on -- little and Here bit XXX% that? QX in an Thanks we you Maybe or update a guardrails of QX it's even talk about what's driving XXXX again. are on that Can on longer-term metric?

John Riccitiello

or Luis me?

Luis Visoso

want you to John? go, Do

John Riccitiello

Sure. Look.

customers not you of and of understand two that's What's an the bring numbers than happening more are. then [Indiscernible] can keep multiplication and number a us our up we thresholds, are to lines of is growth. the and when keep we [Indiscernible] larger grow extension that at to thing whenever they doing is things the thresholds, bit XXX are have is we below second [Indiscernible] [Indiscernible] look customers trend the to involved and little the -- help One these you're taking not from graduating underlying a helping like, there things division, them. And that calibration continuing above the lot XXX what is and some

set continued the bottom realizing our when So, people number. be and the with we you, year, above we're materially a the this stack, in guide currently the the of stack. were expectations. for is top the the into And lower of guiding we're stack, above success then for we seeing of our honest up at To plan, bringing our keep lot our customers we revenue that than growth

rapidly. its our kind the And up you see news, it's wake news. as usually of and the something we to It's we're good almost so, on we're It's are. to what when platform, as bringing they as And new customers time Unity. in get It's the want be pleasant growing them you CEO. to we see And -- morning platform a good why at the and rapidly. to good always bullish are

Ophir Gottlieb

All right. Thank you.

Richard Davis

Great. a have when And about Kash, question do to we're did want you? then or which's done. you we the chat callbacks, better you do just for

Kash Rangan

the chat after. so I'll them much. in callback. Thank with you Maybe

Richard Davis

We it that's right. that in too All wraps did so Well, bad. it Great. Okay. up. minutes, not XX

either interest and to appreciate your you conferences everyone we thank the and very But So, on look or call. we definitely seeing being you next call and we appreciate support. on earnings much at forward our

Luis Visoso

Thank you.

John Riccitiello

Thanks, everyone.

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