U Q4 2022 Earnings

Call Details

• Call Title: Unity Software Inc. Q4 2022 Earnings Call
• Date: 2023-02-22T22:00:00Z
• Management Team:
  • John Riccitiello (CEO, President and Chairman)
  • Luis Visoso (CFO)

Call Summary

Financial Performance

• The combined fourth-quarter revenue was reported as $518M on the call comparing to a combined Q1 guide of $475M.
• The company reported a non-GAAP loss of $90M for 2022 and was only profitable in Q4 2022 on a non-GAAP basis.
• The company expects adjusted EBITDA of $230M to $300M for 2023 and expects to be profitable in every quarter of 2023.
• First-quarter adjusted EBITDA guidance was stated as a range of $7M to $12M.
• The profitability improvement in 2023 is expected to be split roughly 50/50 between the Create and Grow segments.
• Costs are expected to be relatively flat during 2023 while revenue is expected to grow sequentially quarter-over-quarter.

Guidance

• The revenue guide for Q1 was described as a prudent assumption based on current market signals.
• The company explicitly chose not to model an ad-market recovery for 2023 and used conservative ad assumptions in guidance.
• The first-quarter adjusted EBITDA guide of $7M to $12M was explained as a partial-year impact of earlier cost actions with fuller impact in later quarters.
• The company expects adjusted EBITDA of $230M to $300M for the full year 2023 as a result of flat operating costs and revenue growth.