LogInThe result has exceeded the revenue guidance of $510-$520 million.
Unity Technologies has released its financial results for Q2, 2023, a three-month period that ended June 30, demonstrating exceptional record-breaking performance in terms of revenue.
As per the company's report, both revenue and adjusted EBITDA surpassed their projected figures. The revenue amounted to $533 million, exceeding the projected range of $510 to $520 million, showcasing a remarkable +80% year-over-year growth and +11% year-over-year on a pro-forma basis.
The GAAP net loss for the quarter was $193 million, while adjusted EBITDA stood at $99 million, exhibiting a notable improvement of $136 million compared to the previous year. This significant progress surpassed their adjusted EBITDA guidance range of $50 to $60 million. Free cash flow for the quarter was $33 million, which was reduced by one-time payments related to the company's restructuring.
"We estimate that for the second quarter of 2023, we grew revenue faster than the markets in which we compete, and expect to continue to do so for the balance of the year," commented the team. "We are encouraged by the progress on profitability with second quarter adjusted EBITDA margins of 18.5%, which compares to 6.5% in the first quarter of this year and negative 12.7% in the second quarter of the prior year. Our margin expansion was driven by strong operating expense management, enabled by portfolio choices, productivity improvements across teams, more efficient cloud usage, and other optimizations."
During the second quarter, the revenue of Create Solutions, Unity's business division encompassing its Unity engine and strategic partnerships, reached $193 million, reflecting a 17% year-over-year increase.
The team attributes this growth to the robust performance of the core subscription business, which experienced a 22% year-on-year rise, excluding China. Create Solutions contributed to this success by introducing significant innovations and business model enhancements across Unity's product lines.
"We continue to reduce our reliance on Professional Services as we build a scalable and profitable business. Excluding Strategic Partnerships, Create Solutions revenue also grew 17% year-over-year," reads the report. "Industries (beyond games) represent 30% of the total Create Solutions revenue, same as in the fourth quarter of 2022. As mentioned above, we made the decision to be less Professional Service centric and increase our focus on subscription and consumption models to scale a profitable business, leveraging our partnerships such as Capgemini and Booz Allen."
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