Unity outperforms guidance in Q2 2024 despite leadership changes
Unity Technologies earned just shy of $450 million in revenue in Q2 2024, outperforming guidance and analyst expectations.
While this is down 2% from its Q1 revenue of $460 million, mobile game engine and infrastructure platform has significantly cut its costs. In Q2, Unity reported a net loss of $126 million — less than half of Q1’s $291 million in losses. The majority of these expenses came from restructuring and reorganization costs.
As a result of these cost reductions, Unity is reporting major gains in its earnings before interest, taxes, depreciation and amortization (EBITDA). In Q2, this metric jumped about 45% to $113 million from $79 million the previous quarter.
Compared to Q2 2023, Unity’s revenue is down 16% from $533 million. However, Q2 2024 outperformed the prior year, reducing its net losses 35% (from $193 million) and posting 15% EBITDA growth.
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Despite these gains, Unity has reduced its guidance expectations for 2024 to $1,680 to $1,690 million — a decrease of about 2-3% year-on-year. Additionally, the company reduced revenue expectations for the third quarter by 4-6%.
Market position
Unity’s financial results also revealed key performance metrics about the company and its future growth prospects.
According to the company, games represent 60% of the roughly $130 billion of consumer app spending annually and 70% of the top mobile games in the world are built on Unity. In 2023, consumers downloaded applications made with Unity 3.7 billion times per month. The company’s ad business delivers over 65 billion impressions each month, reaching over 1.5 billion individual gamers.
“The focus now is on fostering a culture of execution, discipline, and accountability. We plan to accelerate the pace of product innovation, strengthen the bond we have with our customers and community, and add world class talent to the team. We understand what needs to be improved, and we are making the necessary changes in our leadership, products, and processes with a sense of real urgency,” said Unity CEO Matthew Bromberg in the company’s letter to shareholders.
In the coming months, the company is gearing up for the release of Unity 6 in the fall. The latest edition promises to be the most stable and high-performing version shipped.
Additionally, Unity has continued to explore non-gaming applications of its technology. The company highlighted recent partnerships with Diageo, Audi, Rady Children’s Hospital and Bosch Rexroth.
Unity’s leadership shakeup
This earnings report is the first from Unity since it appointed former Zynga COO Matthew Bromberg as its CEO in May. Unity’s previous CEO John Riccitiello stepped down in October 2023 in the wake of a pricing change that sparked open revolt among developers.
Today, saw additional shake ups among Unity leadership. The company named MoHub cofounder Jim Payne as its new chief product officer for advertising. He will join another recent hire, Alex Blum, SVP of corporate development, in expanding the platform’s ad offering.
On the other hand, Unity also announced the departure of its CFO Luis Visoso. He worked for the company for the last three years.