Unity Q320

Unity Q320

PR: https://investors.unity.com/news/news-details/2020/Unity-Ann…
Slides: https://s26.q4cdn.com/977690160/files/doc_financials/2020/q3…
CC transcript: https://www.fool.com/earnings/call-transcripts/2020/11/18/un…


Revenue 200.8M  +53.3%
- Create 63M +45% (31% of rev)
- Operate 120M +72% !! (60% of rev)
- Parters/Other 18M +5% (9% of rev)
Adj Gross Margin 79% -200bps
Adj Gross Profit 158.9M +50.5%
Adj Op Loss -8.4M (vs -27.8M)
... margin -4.2% (vs -21.2%) +1700bps !!
Opex 294.93M +101%, adj +58% w/o charity
... 61.8M SBC now vs 9.1M
... 63.6M charitable contrib 
CFO 20.6M (vs -49.1M) swung pos
... margin 10.3% (vs -37.5%) +4780bps !!!!
FCF 10.9M (vs -55.7) swung pos
... margin 5.4% (vs -42.5%) +4790bps !!!!
Cash 1.8B

Custs >100K 739 (vs 553) +33.6%
$NER 144% (vs 132%) +1200bps !!
App Downloads 5B
MAU 2.5B

  • Impacted by one-time donation of 750K shares to charitable foundation at IPO
  • Launched cloud CDN for game content in Sept.
  • LEGO Microgame launched in Sept, to use LEGO blocks for building free 3D games quickly
  • Big games include: Mediatronic’s Fall Guys (10M copies sold on PC via Steam, most downloaded game on Playstation Plus); miHoYo’s Genshin Impact (10M mobile downloads on release day), and 10 Chamber’s GTFO (players in 140 countries, top 10 in Korea)
  • 94% of top 100 game dev companies are customer
  • 100% of top auto OEMs are customers

Trends:

  • 2D → 3D
  • Users want Interactive, high-fidelity, contextualized content

Pros:

  • Neutral across 20+ gaming platforms (Epic/Unreal … not so neutral)
  • Natively port to any platform
  • Faster dev cycle w/ lower costs
  • Integrated monetization and other tools (chat etc)

News

Unity Reflect supports Autodesk for AR/VR
Nov-20
https://investors.unity.com/news/news-details/2020/Unity-Ann…

… helps expand into architectural & construction markets


Announcing Unity Forma
Dec-20
https://investors.unity.com/news/news-details/2020/Unity-Int…

  • Allows marketing teams to create and publish content and interactive experiences from 3D data
  • Turnkey solution, doesn’t require Unity coding
  • Visualize models in real-time 3D
  • Publish to cloud, mobile, web, and eventually AR/VR
  • VW used for campaign video for new EV SUV, rendered car interiors, exteriors, environs, and allowed for shooting angles not possible w/ live camera

… helps expand into consumer product & e-commerce markets


Acquired RestAR
Dec-20
https://investors.unity.com/news/news-details/2020/Unity-Acq…

  • Tel Aviv computer vision and deep learning co
  • Scan and render products in high quality 3D using mobile device
  • Will help power Unity Forma (just announced tool for marketers to create & publish interactive experiences from 3D data)
  • Scans take 1 minute, processed and compressed in cloud via AI-based tech
  • RestAR works w/ leading fashion brands & e-commerce platforms like Ugg, Wix, Hoka One One, etc

Partnership w Snap
Dec-20
https://venturebeat.com/2020/12/17/unity-teams-up-with-snap-…

https://investors.unity.com/news/news-details/2020/Unity-and…

  • extends Unity Ads supply to Snapchat advertisers
  • Snap Audience Network (SAN) can do video ads on Unity’s network of mobile titles

Unity Ads has

  • 22.9B monthly global ad impressions
  • 2B+ monthly active end-users
  • install conversion rates +23%
  • mobile gamers installing 84% more apps

Unity Asset Store, mobile game devs can leverage Snap:

  • use Snap Kit Login Kit to allow users to log in via Snapchat acct
  • Snap Kit Creative Kit share gameplay (stills or 15s videos), or AR lens to share on Snapchat
  • Shares include referral link back to game

… Snapchat has 249M DAU
3D Bitmoji integration coming

Partnership w/ Snap (Dec-20)
https://www.fool.com/investing/2020/12/18/why-snaps-deal-wit…
bolster ad/game platform
add support in Unity Engine for Snap Kit SDK
add Snapchat logins in games
allows promoting game via screenshots, stickers, AR lens
Snap added Unity Ads platform to its Audience Network
lets advertisers purchase ads on Unity based games & apps
adds support for Snapchat Bitmojis, to allow users to play as virtual avatars (coming next year)


NuEyes adopts Unity as partner on their Pro3 VR
Jan-21
https://apnews.com/press-release/newswire/technology-busines…
…VR glasses for assisting those with eye conditions

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nice summary, thanks Muji! I scanned through some of the materials looking for quantification of their recurring revenue but couldn’t find it listed explicitly. Is Unity’s service offered through a subscription? If so, do they break it out?

Another thing I noticed is they are forecasting a slower YoY revenue growth rate for next quarter (~30% or so). Is this forecasted slowdown because management thinks the Covid tailwinds will begin to subside?

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