U - Earnings call transcript Q2 2022

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Richard Davis

[Call Started Abruptly] I’d like to remind participants that during this conference call, we will be making forward-looking statements, including statements about goals, business outlook, industry trends, market opportunities, and expectations for future financial performance, all of which are subject to risks, uncertainties and assumptions.

You can find more information about these risks and uncertainties in the Risk Factors section of our filings at sec.gov and the press release we issued this morning. Actual results may differ and we take no obligation to revise or update any forward-looking statements.

We will also be discussing non-GAAP financial measures today and reconciliations between our GAAP and non-GAAP financial results and a discussion and limitations of our non-GAAP financial measures can be found in our earnings press release, which was issued earlier today and is available on our website under the Investor Relations tab on the appendix to this call’s slide deck. On July 13, we announced a definitive agreement to merge with ironSource, which we expect to close in the fourth quarter of this year.

our end results reduced of year guidance. that than slightly our pre-announced revenue top the our also second were quarter higher full We guidance and deeper results Today into will go and we projections. our

Marc Operate our call are over turn and Riccitiello; Luis Solutions today me With Whitten, of that, CEO, Create our Joining our Lestiyo the Leader. our to John CFO, John. Visoso; Solutions Ingrid me Leader; let

John Riccitiello

Thank you, Richard.

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Marc Whitten

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look at a example. [Audio/Video Presentation] Let's an take

Marc Whitten

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John Riccitiello

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Ingrid Lestiyo

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John Riccitiello

Thanks, Ingrid.

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Luis Visoso

second revenue Create guidance the $XXX of quarter ago. up our high In performed and million, at John. year-over-year you, X% strongly XX% year end revenue with we $XXX of the a of Thank from range. delivered up XXXX, million, of

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Richard Davis

Great. very much. Thank you

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Stephen Ju

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John Riccitiello

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Marc Whitten

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John Riccitiello

point Just on X last this.

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Richard Davis

And Kash Rangan Sachs. at Goldman

Kash Rangan

for can and see out the first the there but in I all as, don't and know the if you John Crew of thanks details, progress me Create all, side. tremendous

good a is handle I probably not the gaming informed have on question advertising. how an Operate, how talked a I'm to mean and expert the John, impact? But versus much you mobile data, since going I'm competitive better versus are bit in about And -- boot you macro On data little these caused won't you the mentioned all contributors going a to potential place that that you guardrails you company on issues the the have X the in? ensure issue. what I that shortfall know to in forward, this have about

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John Riccitiello

So for Kash, again, -- join. keep I'll way, to everybody and question. to by ask tap this and a to it The the XX-part I'll reason. try the thanks

it's before, gaming. only is a game very as remains and I've few So majority industry business in the the is a our rest industry. on of and games growth first larger off, just thing our side, of and Operate this. that the saying within Operate and The the than vast And pundents talking a about on industry the of recession . the industry numbers it. the game times -- all said by robust start majority I'd macro business

together of period, time. to we're looked from extremely short-term back Yes, look double-digit a And down the dealing this can that, is see we've almost a and for number way near-term expect a And driven from X that so time some bit seen to little stay the that game X macroeconomic we'll prior over the of game bit the a reported growth than where revenue now a companies engagement all better there's headwind, that in at with home persevere And for out many And or which or industry You there's out through that present averaging space. is growth, in better. occur looking relative when bringing typically by recessions, growth back understand or a in sort less people we're years. change seen headwinds period, headwind any mid-teens long-term COVID of the little you've high into a you that We to last life. the XXs forecasts. X-year factors. I've we time

very, that. good about feel So we very

here. her products had around the literally Now strong which teams. to period in really had top ultimately start that? level, and show wanted vantage has are their but They a weeks very from task our to And issues the point. it's what of to I'm magnificent see want you things a misses, game team the features. the tell you add is great worked revenue or terms is rebound to a on part. but redundancy have high need focus at and some been own of Ingrid, on the one engineering proud they've team I'm you where we Ingrid to we've I platform, she X-day issues pinpoint really our work of that I'm pulled saying KPIs execute, side, of on my to from their X grow. what but some around can It pulled coming and to And together let data from it's going that It do me been really pre-revenue, everything able together resiliency accuracy to things to effort the that, the to and did, new expand around tough to for on the

Ingrid Lestiyo

best forces, things John. just about the of connecting this innovation. One what that on the said part, in John we've build the added across the investment to pin audience just pointer. and you, is Thank drives task Yes. to And On question constraint significant our board, macro focus your

system velocity happens. part incidents the in are this the to exercise And disciplined of our to And opportunities need we this an resources, actions really most that luxury value resiliency Unity. systems become and find means for further drive as the digging and to really expect we've of well that environment. installs to down our the really to both our drive of that customers systems machine new time, anticipate increase our performance So of challenging finding current ways the all to on resilient these all every we and optimization during excess into dollars, right? provide as boundaries those with more without spend, less such as doubled fewer this ad our products customers pushing innovate services in model development, with for making learning, and example, of is the performance our that sure we've in So

that So us to emerge our the the ever in than side opportunity to hand. other emerge stronger we expect market with is goal products capture on our to enables best --

John Riccitiello

variety we along didn't And an is of year. and that them in we around we lot now business data-driven it. in No things with. use see as had the and deal position To catch a measure we're saying to early go around I to want kinds them not wasn't warning accuracy otherwise would we we and built fast a resiliency the that suffer that a things without in of to of for fix take earlier things us cash. and measuring redundancy I We're sets data data give challenges errors.

Richard Davis

is Clark at next Lampen And BTIG.

Clark Lampen

I had may. X, if I

in to gaming the approach I to think, kind products if the of what and flexibility XX-day have think what recognizing I'm then sort And a seems crosscurrents additional second you the solutions think usage like compelling you curious market? now range how And is talking curious you maybe rebuild separately I'm customers more and or visibility as you're flexibility ad and added for quarter your with in comments first, with sort the larger customers, becoming guys to like maybe but the products bundling dollar compelling. and sort I guess, generation, relative could the John, phase sort of more about, So data. rates where becomes upon that right in you incentives a with guys about of your platform need of maximize platform still offering monetization take now competitively you're to, way in the a push of difficult potentially macro way maybe based you of drive where last

John Riccitiello

say doesn't a can't returns. that one, solution would long-term we yield firm very do generally never really but incentives, I that's So and

of in be and on like the our so focusing Again, it we're And quarter. the can investors know high of on at and part this ours a frustrated cognizant that very will think is the that's long The portfolio times, to term, never be focused But playbook, way. companies playbook. hurting of NPV do. it little not I higher our less is

So that's important to us.

to is the UGS every we're powerful in that UGS. they and game application. very of is The and second tools products And market their features customer innings or as with thing go of a very portfolio early needs

the these online to and services mobile need took across it when advantage. to And portfolio time mobile, of this suddenly that then really huge things up a soup for X the system I brought go now that got thing, this game things. built a around the works all that set you it and team and think a It's the of just sharp Ingrid's bring focus all It's they And of first One once and invest. need build on bunch there's to to back need all truth. source fall basically, learned into services STKs But ecosystem all covers things at flat we've a you or companies services. time this of of and XX as board. gamut but watched for XX goes it a that you of of I like I first you implement, years. there's the

uptick completely this level, isn't good every and but plumbed on one. take to we've this Now seen

-- and And the think I getting with us we pull to come out for it's or the really matchmaking we're time, only really offering. position whether huge of analytics, the opportunity create there other of And a take company start strong or the course, actually in do us it, because in it's like to we've they good starting point. back. hosting, but a reports it's a advertising it's you good systems voice customers what and years done. a that When XX% together, Our

Richard Davis

think I then we And Matt Morgan have Stanley. Cost at

Matt Cost

you year, On If Operate, bit the how this just left quarter been is in data level if to China can't do Operate not, zoom to decent secondly, work pointer XXX do business. because there that issues JV about have China in a just scaling Greater would and the tools reported I will And last your And in think today? at little terms spend? you earlier the year. and then here. of of revenue you improving the hadn't of already do on JV, the pin What the was occurred sized revenue much XX% allow macro? to It's a quality

John Riccitiello

Ingrid, Operate be up to want in you that helpful. pick So do the would I that can on of take or the beginning question

Ingrid Lestiyo

Yes.

day issues. all data where the and of specific audience at I attributed is behind us what kind think the day. in strengthened performance. the I But a versus to -- data combination But at and hard beginning the year, up of to look, now we're incidents are those it's data audience numbers, think place the and component issues absolutely, is that terms obviously, impacted It's report macro of pointer and the of pin our a the fixed by audience like of product divide things.

a So we're judicious because due advertiser in right they're to just more uptick macroeconomic of the factors. kind spend now, slower seeing

are that's So now. seeing what right we what's

John Riccitiello

You're right, Matt, to recognize there's both in there.

wrong mix of come we to high Luis so, with, But talked working they beyond talked clarity want strong higher on level, really but jumbo to it's of supports off, the a time China stand managed technology at send rather it to use sets where the call. here. and so self-inflicted of give for too we had ours behind much the us gaming, with and congratulate more deal to growth than first a do made in invest the want the the and would companies . harness last full would basically of in take also years would last opportunity members on And that work us. or did and the incredible tooling specific more doing we when engineering his team take very and for our And industries China. think around to than For this against they we things we space cases a us We in us this. our a and in didn't as advantage have. of we sustained we things to allows gaming. are in them. needed on We right, about I that's capabilities build a market of focus most in level leading What to the and otherwise is a very aspect bit environment the some up message And On macro we about philosophy lot just earnings macro, do China, dealt little

like of are a practices Now everything of that industry. things outsourcing. the arena The part both that lot same, is and of not gaming terms more operators do case, the that and There number it development the are way digital twins in business seem the in in the of it's example, but a practices in different. world may --

a involves way product, interfacing with different more of so a And more issues. cloud-centric, web that

business strengthened sustained X I this, up path more you So and at think growth. all? a . on level we for want set that by our higher Louis, add to ourselves doing for

Luis Visoso

would are as in thing business, quoted, the not of I business that our scope. total Create that's that XX% the John, revenue, X%. only a The just that's China is percent add, the and all Yes. math It's businesses the you

the prepared $XX remarks, mentioned Matt. that's in So my million I

Richard Davis

Okay.

one more, to Bazinet I is I at question our more that. probably think last in X we'll Jason then get and fit try Citi, after

Jason Bazinet

Can the once modeling JV. fast. income Am going billion on noncontrolling go an inflow to I right be on about closes? and statement clarify China be to to cash, the we're -- there's interest this of try deal then that and of $X I going I'll just

John Riccitiello

Luis?

Luis Visoso

We're will still forming and the we get $XXX and we million, Yes, consolidate venture, will stay China. joint that JV. a within will

So into. there no cash coming is flow

John Riccitiello

number an decade, And in and a last put leader strong operating I've Unity. go relationship now place my Zhang, well enterprise in well over China with leadership trust. almost globally noting executive control remain company a team around it's majority very a now and decade of a is agreements for in the the there's shareholder between worked a our we operation. And It's EA ex at really exceptionally Jumbo Microsoft worth led and Board. by that also

really we team feel the good have about So there. we

Richard Davis

All is right. Blair. Becker And Dylan then our closure question William at

Dylan Becker

with release this get kind the the with bit enable we the expanded of and but for little Azure Maybe the color the yesterday, to of strategic in to maybe didn't Operate the can X on partnerships, a Mark it. of for some since Create partnership of potentially touch as love of SI you what masses? incremental talk much on and further a tools that creators kind combination mean about can and capabilities, for unlock I'd

Marc Whitten

you Microsoft. large. unique we Very the content. use of we just of file very about when think very digital on talked amount sizes we're strong HoloLens. excited thing and side you already XD talk a cases about go of going, One to that's are real-time where set Often games the XD needs. has size is that the in all around these clear is twins. deepen about And and Xbox Obviously, our and with relationship with especially But partners, the

trillions a point talking extraordinarily You creator in high it's of compute needs billions polygons of on created points cloud when being power, can or consumed. side it's the and being about side when for on actually the whether be it's

our in believe of near or think term, set we're And you'll areas digital DevOps. professional with it some build first so In most excited that whether help we order the creators, art. I twins in like the out will or work to places it's see games, services where Azure to are

you're how to working think well as heard that's And cloud on very We Digital together talk critical actually have thing. that around we've professional are doing is been it's very source power space digital you've the with actually in Again, a about art ability world. Weta about twin build we non-XD platform powerful can these we access as with Microsoft cloud cloud our build around like different and services for side a artists It's to place as Digital, more their of we lot assets. a deliver services of work component versus Twins. increases already things talking around a when control. a out closely XD sell assets. the is integrating us with the productivity as

So the start things lot Create. we're sort across partnership. to soup that will the go a of but nuts work a doing impact There's of to of for be those, to it ready of sort

RichardDavis

on you Well, waters. to stuff, you always and all of to follow-up of navigate we questions, out kind your at out weeks and to conferences these look you calls, help and appreciate We myself, all good to Stephen very of over try much. exciting Palmtag phone can the we'll either in forward really and reach connecting or coming interest thank you

if very up, great. you much. it you to thank So be And close would that want John,

John Riccitiello

us. be Thanks We always, all. front the Thanks for opportunity more everyone. about excited Aggressive front couldn't excited. of that for can. and times, exciting as So in as being we're there we on and prosecuting best us,

Luis Visoso

Thank you.

Unity Software (U) 10 Aug 222022 Q2 Earnings call transcript