Company delivered record quarter with $320
million in revenue during the first quarter of 2022, up 36%
year-over-year
Unity Software Inc. (NYSE: U), the world’s leading platform for
creating and operating interactive, real-time 3D (RT3D) content,
today announced first quarter 2022 revenue of $320.1 million, which
is up 36% from the same period in 2021 and at top of guidance.
“Unity delivered record quarterly revenue in the first quarter
of 2022, the highest in the company’s history, up 36% compared with
the first quarter of 2021, with Create over-performing at 65%
year-on-year growth, offset by slower growth in Operate,” said John
Riccitiello, President and Chief Executive Officer, Unity. “We
remain focused on the massive opportunity we see in front of us
long-term. Short-term, we are laser-focused on accelerating growth
in Operate.”
“In the first quarter, we continued to add new customers across
industries and expand our business with existing customers as we
made strategic investments to support long-term value creation
while improving margins,” said Luis Visoso, Chief Financial
Officer, Unity. “We believe we are in the early stages of one of
the largest transformations in tech: the move to real-time 3D. We
will continue to invest to capture the opportunity while quickly
driving to sustainable and growing profitability.”
First Quarter 2022 Financial Highlights
- Revenue was $320.1 million, an increase of 36% from the first
quarter of 2021.
- Create Solutions revenue was $116.4 million, an increase of
65%; Operate Solutions revenue was $184.0 million, an increase of
26%; Strategic Partnerships and Other revenue was $19.7 million, an
increase of 11%, each as compared to the first quarter of
2021.
- Loss from operations was $171.2 million, or 53% of revenue,
compared to loss from operations of $110.9 million, or 47% of
revenue, in the first quarter of 2021. These results were impacted
by an increase in stock-based compensation expenses.
- Non-GAAP loss from operations was $23.0 million, or 7% of
revenue, compared to a non-GAAP loss from operations of $23.4
million, or 10% of revenue, in the first quarter of 2021.
- Basic and diluted net loss per share was $0.60, compared to
basic and diluted net loss per share of $0.39 in the first quarter
of 2021.
- Basic and diluted non-GAAP net loss per share was $0.08,
compared to basic and diluted non-GAAP net loss per share of $0.10
in the first quarter of 2021.
- 1,083 customers each generated more than $100,000 of revenue in
the trailing 12 months as of March 31, 2022, compared to 837 as of
March 31, 2021.
- Dollar-based net expansion rate as of March 31, 2022 was 135%
as compared to 140% as of March 31, 2021.
- Net cash provided by operating activities was $101.3 million
for the first quarter of 2022, compared to net cash used in
operating activities of $88.9 million for the same period last
year. Free cash flow in the first quarter of 2022 was $86.4
million, compared to $(100.6) million for the same period last
year. Cash, cash equivalents, and restricted cash were $1.2 billion
as of March 31, 2022, compared to $1.1 billion as of March 31,
2021.
Recent Business Highlights
- Unity announces the release of Unity 2021 LTS. Unity
2021 LTS delivers powerful improvements to workflows, rendering
capabilities, and platform support to help creators realize their
creative ambitions. New enhancements prioritize quality,
productivity, and performance for any platform, genre, or artistic
style. The announcement was made at Game Developers Conference 2022
and represents more than a year of focused development across the
entire Unity Editor and underlying foundational features. In 2021
LTS, Unity continued its commitment to putting quality first in
order to make the creator experience working in Unity more stable,
productive, and efficient than ever before.
- Unity releases Enemies cinematic demo. A brand-new
cinematic teaser featuring major advances for photorealistic eyes,
hair, skin, and more – all rendered in real-time and running in 4K
resolution, Enemies was released at the Game Developers Conference
2022. Unity announced a plan to release a Digital Human tech
package that contains all of the updates and enhancements made
since the version shared for The Heretic, and noted that most of
the improvements in Unity that originated from the production of
Enemies, or were directly adopted in it, are already in Unity
2021.2 or will be shipping in 2022.1 or 2022.2.
- Unity announces Gigaya playable sample game. At GDC
2022, Unity highlighted a glimpse of our upcoming puzzle-platformer
sample game, Gigaya. Gigaya is still in active development, but
when it’s done, it will be a free downloadable project designed to
help developers learn from its creation process. The sample game
was created using an ecosystem of Unity tools and features and is
built on long-term support. Throughout the project, you’ll find
real-world examples of how these systems work, not just as
standalone features but operating in parallel to offer a
high-quality development product for games.
- Unity Operate Solutions announces Unity Gaming Services GA
release. Unity Gaming Services products will officially
graduate out of open beta this July. In October of last year, Unity
Gaming Services (UGS) was announced as a suite of tools and
services built to simplify every developer’s ability to create,
host, and manage their games. Unity has since launched nine
products into open beta and more than 54,000 game developers signed
up to test the service and UGS tools have been installed into over
6,000 unique game projects.
- Unity Sports & Live Entertainment Announces New
Partnership with Insomniac Events. With nearly 30 years of
creating experiences, the Insomniac Events team has partnered with
Unity to bring a brand new, persistent metaverse world to its fans
community where they can gather and engage virtually for live music
performances regardless of location. We believe this partnership
will define a new standard of live entertainment by delivering the
next evolution of the Insomniac experience in 2022.
- Unity has been hired by The Orlando Economic Partnership
(The Orlando Partnership). The Orlando Partnership, a
public-private, not-for-profit economic and community development
organization representing hundreds of the region’s top private
businesses, has hired Unity to create a digital twin of the entire
region to be showcased on display at the Orlando Partnership’s new
headquarters in downtown Orlando, Florida later this year. The
Digital Twin will help examine and is intended to potentially solve
regional challenges for the 800-square mile area, including
transportation, climate change and utility mapping. The Orlando
Partnership also plans to use the platform to show open land and
office space to company leaders considering expanding or locating
in the Orlando region.
- Unity Announces Unity For Humanity 2022 Grant Winners.
The program was created to assist creators using 3D art/creations
to make the world a better place. Grantees will be aided with
funding, mentorship, and technical support. The winners' projects
were selected based on vision, impact, inclusion, and viability. In
addition, Unity partnered with entertainer Common to create the
Imagine Grant, which was given to the project that best inspires
audiences to imagine a better world.
Outlook
Unity is providing the following guidance for the second quarter
and lowering guidance for the full year ending December 31, 2022
due to challenges with monetization products that we expect to
impact 2022.
Q2 2022
2022
Guidance
Guidance
Revenue (in millions)
$290 — $295
$1,350 — $1,425
Year-over-year revenue growth
6% — 8%
22% — 28%
Non-GAAP loss from operations (in
millions)
($62) — ($64)
($60) — ($75)
Non-GAAP operating margin
(21%) — (22%)
(4%) — (6%)
Fully diluted shares outstanding
350M
356M
A reconciliation of non-GAAP guidance measures to corresponding
GAAP measures is not available on a forward-looking basis without
unreasonable effort due to the uncertainty of expenses that may be
incurred in the future and cannot be reasonably determined or
predicted at this time, although it is important to note that these
factors could be material to Unity’s results computed in accordance
with GAAP.
Earnings Webcast Details
Unity plans to host a video webcast for analysts and investors
today to discuss its first quarter and full-year 2022 financial
results and outlook for its second quarter and full-year 2022. The
video webcast is scheduled to begin at 2:00 p.m. Pacific Time/5:00
p.m. Eastern Time and can be accessed at the Unity Investor
Relations website at investors.unity.com. The video webcast will be
available live, and a replay will be available on the Investor
Relations website following completion of the live broadcast for
approximately 90 days.
A copy of the prepared remarks for the video webcast has been
posted on the Unity Investor Relations website at
investors.unity.com, simultaneously with the issuing of this press
release.
About Unity
Unity is the world’s leading platform for creating and operating
interactive, real-time 3D content. Our platform provides a
comprehensive set of software solutions to create, run, and
monetize interactive, real-time 2D and 3D content for mobile
phones, tablets, PCs, consoles, and augmented and virtual reality
devices. We serve customers of all sizes, at every stage of
maturity, from individual creators to large enterprises. For more
information, visit unity.com.
Unity uses its Investor Relations website (investors.unity.com),
filings with the SEC, press releases, public conference calls, and
public webcasts as means of disclosing material nonpublic
information and for complying with its disclosure obligations under
Regulation FD.
Use of Non-GAAP Financial Measures
Reconciliations of non-GAAP financial measures to Unity’s
financial results as determined in accordance with GAAP are
included at the end of this press release following the
accompanying financial data. For a description of these non-GAAP
financial measures, including the reasons management uses each
measure, please see the section of the tables titled “About
Non-GAAP Financial Measures.”
Forward-Looking Statements
This press release and the earnings call referencing this press
release contain “forward-looking statements,” as that term is
defined under federal securities laws, including, but not limited
to, statements regarding Unity’s second quarter and full-year 2022
outlook and future financial performance, including the expansion
of RT3D beyond gaming; Unity’s belief that there is a massive
opportunity in the long-term; Unity’s belief that the move to
real-time 3D is in the early stages and is one of the largest
transformations in technology; that Unity will quickly drive to
sustainable and growing profitability; Unity’s ability to continue
to make the creator experience more stable, productive and
efficient than ever before; Unity’s belief that the partnership
with Insomniac Events will define a new standard of live
entertainment; business plans, priorities and objectives, potential
market and growth opportunities; product features, functionality,
and expected benefits to the business and Unity’s customers;
competitive position; product strategies and future product and
platform features; technological or market trends; and industry
environment. The words “believe,” “may,” “will,” “estimate,”
“continue,” “intend,” “expect,” “plan,” “project,” and similar
expressions are intended to identify forward-looking statements.
These forward-looking statements are subject to risks,
uncertainties, and assumptions. If the risks materialize or
assumptions prove incorrect, actual results could differ materially
from the results implied by these forward-looking statements. Risks
include, but are not limited to: (i) the impact of the ongoing
COVID-19 pandemic on our business, as well as our customers,
prospects, partners, and service providers; (ii) our ability to
achieve profitability and the timing for any such achievement;
(iii) our ability to retain existing customers and expand the use
of our platform; (iv) our ability to further expand into new
industries and attract new customers; (v) the impact of any changes
of terms of service, policies or technical requirements from
operating system platform providers or application stores which may
result in changes to our or our customers’ business practices; (vi)
our ability to maintain favorable relationships with hardware,
operating system, device, game console and other technology
providers; (vii) our ability to compete effectively in the markets
in which we participate; (viii) breaches in our security measures,
unauthorized access to our platform, our data, or our customers’ or
other users’ personal data; (ix) our ability to manage growth
effectively; (x) the rapidly changing and increasingly stringent
laws, contractual obligations and industry standards that relate to
privacy, data security and the protection of children; and (xi)
Unity’s ability to successfully integrate Weta Digital’s technology
and business, and related costs and expenses. Further information
on these and additional risks that could affect Unity’s results is
included in our filings with the Securities and Exchange Commission
(SEC), including our Annual Report on Form 10-K filed with the SEC
on February 22, 2022, and our future reports that we may file with
the SEC from time to time, which could cause actual results to vary
from expectations. Copies of reports filed with the SEC are
available on the Unity Investor Relations website. Unity assumes no
obligation to, and does not currently intend to, update any such
forward-looking statements after the date of this release.
Any unreleased services, features, or functions referenced in
this document, our website, or other press releases or public
statements that are not currently available are subject to change
at Unity’s discretion and may not be delivered as planned or at
all. Customers who purchase Unity services should make their
purchase decisions based upon services, features, and functions
that are currently available.
© 2022 Unity Software Inc. All rights reserved. The Unity design
logos, “Unity” and our other registered or common law trademarks,
service marks, or trade names are the property of Unity Software
Inc. or its affiliates. Other trade names, trademarks, and service
marks are the property of their respective owners.
About Non-GAAP Financial Measures
To supplement our consolidated financial statements prepared and
presented in accordance with generally accepted accounting
principles in the United States (GAAP) we use certain non-GAAP
performance financial measures, as described below, to evaluate our
ongoing operations and for internal planning and forecasting
purposes. We believe the following non-GAAP measures are useful in
evaluating our operating performance. We are presenting these
non-GAAP financial measures because we believe, when taken
collectively, they may be helpful to investors because they provide
consistency and comparability with past financial performance.
However, non-GAAP financial measures have limitations in their
usefulness to investors because they have no standardized meaning
prescribed by GAAP and are not prepared under any comprehensive set
of accounting rules or principles. In addition, other companies,
including companies in our industry, may calculate similarly-titled
non-GAAP financial measures differently or may use other measures
to evaluate their performance, all of which could reduce the
usefulness of our non-GAAP financial measures as tools for
comparison. As a result, our non-GAAP financial measures are
presented for supplemental informational purposes only and should
not be considered in isolation or as a substitute for our
consolidated financial statements presented in accordance with
GAAP.
Non-GAAP Gross Profit, Non-GAAP Operating Expenses, and
Non-GAAP Loss from Operations
We define non-GAAP gross profit as gross profit excluding
stock-based compensation expense, employer tax related to employee
stock transactions, and amortization of acquired intangible assets
expense. We define non-GAAP research and development expense and
non-GAAP sales and marketing expense as research and development
expense and sales and marketing expense, respectively, excluding
stock-based compensation expense, employer tax related to employee
stock transactions, and amortization of acquired intangible assets
expense. We define non-GAAP general and administrative expense as
general and administrative expense excluding stock-based
compensation expense, employer tax related to employee stock
transactions, and costs incurred from a legal entity reorganization
in China. We define non-GAAP loss from operations as loss from
operations excluding stock-based compensation expense, employer tax
related to employee stock transactions, amortization of acquired
intangible assets expense, and costs incurred from a legal entity
reorganization in China.
We use non-GAAP gross profit and non-GAAP loss from operations
in conjunction with traditional GAAP measures to evaluate our
financial performance. We believe that non-GAAP gross profit and
non-GAAP loss from operations provides our management and investors
consistency and comparability with our past financial performance
and facilitates period-to-period comparisons of operations, as
these metrics exclude stock-based compensation expense, employer
tax related to employee stock transactions, amortization of
acquired intangible assets expense, and costs incurred from a legal
entity reorganization in China, which we do not consider to be
indicative of our overall operating performance.
Non-GAAP gross profit, non-GAAP operating expenses, and non-GAAP
loss from operations have limitations as analytical tools, and you
should not consider them in isolation or as a substitute for
analysis of our results as reported under GAAP. Some of these
limitations are:
- they exclude expense associated with our equity compensation
plan, although equity compensation has been, and will continue to
be, an important part of our compensation strategy;
- non-GAAP research and development expense, non-GAAP sales and
marketing expense, non-GAAP gross profit, and non-GAAP loss from
operations exclude the expense of amortization of acquired
intangible assets, and although these are non-cash expenses, the
assets being amortized may have to be replaced in the future and
the aforementioned non-GAAP measures do not reflect cash
expenditure for such replacements;
- they exclude costs incurred from a legal entity reorganization
in China; and
- the expenses and other items that we exclude in our calculation
of non-GAAP gross profit, non-GAAP operating expenses, and non-GAAP
loss from operations may differ from the expenses and other items,
if any, that other companies may exclude from this measure or
similarly titled measures, which reduces their usefulness as
comparative measures.
Non-GAAP Net Loss and Non-GAAP Net Loss per Share
We define non-GAAP net loss and non-GAAP net loss per share as
net loss and net loss per share excluding stock-based compensation
expense, employer tax related to employee stock transactions,
amortization of acquired intangible assets expense, and costs
incurred from a legal entity reorganization in China, as well as
the related tax effects of these items. We use non-GAAP net loss
and non-GAAP net loss per share in conjunction with traditional
GAAP measures to evaluate our financial performance. We believe
that these non-GAAP measures provide our management and investors
consistency and comparability with our past financial performance
and facilitates period-to-period comparisons of operations.
Non-GAAP net loss and non-GAAP net loss per share have
limitations as analytical tools, and you should not consider them
in isolation or as a substitute for analysis of our results as
reported under GAAP. Some of these limitations are:
- they exclude expense associated with our equity compensation
plan, although equity compensation has been, and will continue to
be, an important part of our compensation strategy;
- they exclude the expense of amortization of acquired intangible
assets, and although these are non-cash expenses, the assets being
amortized may have to be replaced in the future and non-GAAP loss
from operations does not reflect cash expenditure for such
replacements;
- they exclude costs incurred from a legal entity reorganization
in China;
- as further described below, we must make certain assumptions in
order to determine the income tax effect adjustment for non-GAAP
net loss, which assumptions may not prove to be accurate; and
- the expenses and other items that we exclude in our calculation
of non-GAAP net loss and non-GAAP net loss per share may differ
from the expenses and other items, if any, that other companies may
exclude from this measure or similarly titled measures, which
reduces their usefulness as comparative measures.
Income Tax Effects of Non-GAAP Adjustments
We utilize a fixed annual projected tax rate in our computation
of non-GAAP income tax effects to provide better consistency across
interim reporting periods. In projecting this non-GAAP tax rate, we
utilize a financial projection that excludes the direct impact of
the non-GAAP adjustments described above, and eliminates the
effects of non-recurring and period specific items which can vary
in size and frequency. The projected rate considers other factors
such as our current operating structure, existing tax positions in
various jurisdictions, and key legislation in major jurisdictions
where we operate. For the year ended December 31, 2021, the
non-GAAP tax rate was (22)%. For the year ending December 31, 2022,
we have determined the projected non-GAAP tax rate to be (10)%. We
will periodically re-evaluate this tax rate, as necessary, for
significant events, based on relevant tax law changes, material
changes in the forecasted geographic earnings mix, and any
significant acquisitions.
Free Cash Flow
We define free cash flow as net cash provided by (used in)
operating activities less cash used for purchases of property and
equipment. We believe that free cash flow is a useful indicator of
liquidity as it measures our ability to generate cash, or our need
to access additional sources of cash, to fund operations and
investments.
Free cash flow has limitations as an analytical tool, and you
should not consider it in isolation or as a substitute for analysis
of our results as reported under GAAP. Some of these limitations
are:
- it is not a substitute for net cash provided by (used in)
operating activities;
- other companies may calculate free cash flow or similarly
titled non-GAAP measures differently or may use other measures to
evaluate their performance, all of which could reduce the
usefulness of free cash flow as a tool for comparison; and
- the utility of free cash flow is further limited as it does not
reflect our future contractual commitments and does not represent
the total increase or decrease in our cash balance for any given
period.
Key Metrics
We monitor the following key metrics to help us evaluate the
health of our business, identify trends affecting our growth,
formulate goals and objectives, and make strategic decisions.
Customers Contributing More Than $100,000 of Revenue
We focus on the number of customers that generated more than
$100,000 of revenue in the trailing 12 months, as this segment of
our customer base represents the majority of our revenue and
revenue growth. We define a customer as an individual or entity
that generated revenue during the measurement period. A single
organization with multiple divisions, segments, or subsidiaries is
generally counted as a single customer, even though we may enter
into commercial agreements with multiple parties within that
organization.
Dollar-Based Net Expansion Rate
We track our performance by measuring our dollar-based net
expansion rate, which compares our Create and Operate Solutions
revenue from the same set of customers across comparable periods,
calculated on a trailing 12-month basis. Our dollar-based net
expansion rate as of a period end is calculated as current period
revenue divided by prior period revenue. Prior period revenue is
the trailing 12-month revenue measured as of such prior period end
and includes revenue from all customers that contributed revenue
during such trailing 12-month period. Current period revenue is the
trailing 12-month revenue from these same customers as of the
current period end. Our dollar-based net expansion rate includes
the effect of any customer renewals, expansion, contraction, and
churn but excludes revenue from new customers in the current
period.
Source: Unity
UNITY SOFTWARE INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands, except par
value)
(Unaudited)
As of
March 31,
2022
December 31,
2021
Assets
Current assets:
Cash and cash equivalents
$
1,152,014
$
1,055,776
Marketable securities
656,581
681,323
Accounts receivable, net of allowances of
$6,259 and $5,447 as of March 31, 2022 and December 31, 2021,
respectively
332,958
340,491
Prepaid expenses
48,734
39,097
Other current assets
33,910
34,423
Total current assets
2,224,197
2,151,110
Property and equipment, net
110,170
106,106
Operating lease right-of-use assets
101,486
98,393
Goodwill
1,657,817
1,620,127
Intangible assets, net
789,144
814,386
Restricted cash
10,678
10,823
Other assets
53,168
40,401
Total assets
$
4,946,660
$
4,841,346
Liabilities and stockholders’
equity
Current liabilities:
Accounts payable
$
13,005
$
14,009
Accrued expenses and other current
liabilities
121,976
144,873
Publisher payables
213,857
237,637
Income and other taxes payable
54,740
64,759
Deferred revenue
200,218
140,528
Operating lease liabilities
26,464
23,729
Total current liabilities
630,260
625,535
Convertible notes
1,704,145
1,703,035
Long-term deferred revenue
145,676
15,945
Long-term operating lease liabilities
94,340
92,539
Other long-term liabilities
10,097
9,901
Total liabilities
2,584,518
2,446,955
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.000005 par value;
1,000,000 and 1,000,000 shares authorized as of March 31, 2022 and
December 31, 2021, respectively; 295,847 and 292,592 shares issued
and outstanding as of March 31, 2022 and December 31, 2021,
respectively
2
2
Additional paid-in capital
3,879,589
3,729,874
Accumulated other comprehensive loss
(8,267
)
(3,858
)
Accumulated deficit
(1,509,182
)
(1,331,627
)
Total stockholders’ equity
2,362,142
2,394,391
Total liabilities and stockholders’
equity
$
4,946,660
$
4,841,346
UNITY SOFTWARE INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(In thousands, except per
share amounts)
(Unaudited)
Three Months Ended
March 31,
2022
2021
Revenue
$
320,126
$
234,772
Cost of revenue
93,833
58,734
Gross profit
226,293
176,038
Operating expenses
Research and development
221,040
154,015
Sales and marketing
103,939
69,793
General and administrative
72,475
63,132
Total operating expenses
397,454
286,940
Loss from operations
(171,161
)
(110,902
)
Interest expense
(1,111
)
(115
)
Interest income and other expense, net
941
1,565
Loss before provision for income taxes
(171,331
)
(109,452
)
Provision for (benefit from) income
taxes
6,224
(1,992
)
Net loss
(177,555
)
(107,460
)
Other comprehensive loss, net of
taxes:
Change in foreign currency translation
adjustment
19
(31
)
Change in unrealized losses on marketable
securities
(4,428
)
(103
)
Comprehensive loss
$
(181,964
)
$
(107,594
)
Basic and diluted net loss per share:
Net loss per share attributable to our
common stockholders, basic and diluted
$
(0.60
)
$
(0.39
)
Weighted-average shares used in per share
calculation attributable to our common stockholders, basic and
diluted
294,341
276,068
UNITY SOFTWARE INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended March
31,
2022
2021
Operating activities
Net loss
$
(177,555
)
$
(107,460
)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
Depreciation and amortization
41,472
11,832
Stock-based compensation expense
103,195
64,424
Stock-based compensation expense in
connection with modified awards for certain employees
232
2,137
Other
3,260
1,441
Changes in assets and liabilities, net of
effects of acquisitions:
Accounts receivable, net
7,532
(25,061
)
Prepaid expenses
(9,624
)
(9,888
)
Other current assets
508
(2,318
)
Operating lease right-of-use ("ROU")
assets
6,337
5,907
Deferred tax, net
(629
)
(1,824
)
Other assets
(2,242
)
(11,569
)
Accounts payable
38
6,303
Accrued expenses and other current
liabilities
(22,439
)
(13,767
)
Publisher payables
(23,780
)
4,047
Income and other taxes payable
(10,012
)
(10,104
)
Operating lease liabilities
(4,894
)
(7,492
)
Other long-term liabilities
487
309
Deferred revenue
189,414
4,201
Net cash provided by (used in)
operating activities
101,300
(88,882
)
Investing activities
Purchase of marketable securities
(82,777
)
(129,082
)
Proceeds from principal repayments on
marketable securities
23,182
2,017
Maturities of marketable securities
77,701
78,000
Purchase of non-marketable investments
(15,000
)
(4,000
)
Purchase of property and equipment
(14,929
)
(11,744
)
Business acquisitions, net of cash
acquired
(23,637
)
(24,817
)
Net cash used in investing
activities
(35,460
)
(89,626
)
Financing activities
Proceeds from issuance of common stock
from employee equity plans
30,216
22,624
Net cash provided by financing
activities
30,216
22,624
Effect of foreign exchange rate changes
on cash, cash equivalents, and restricted cash
37
9
Increase (decrease) in cash, cash
equivalents, and restricted cash
96,093
(155,875
)
Cash and restricted cash, beginning of
period
1,066,599
1,293,947
Cash, cash equivalents, and restricted
cash, end of period
$
1,162,692
$
1,138,072
UNITY SOFTWARE INC.
RECONCILIATION BETWEEN GAAP
AND NON-GAAP FINANCIAL MEASURES
(In thousands, except
percentages and per share data)
(Unaudited)
Three Months Ended
March 31,
2022
2021
Gross profit reconciliation
GAAP gross profit
$
226,293
$
176,038
Add:
Stock-based compensation expense
8,794
5,117
Employer tax related to employee stock
transactions
1,388
2,761
Amortization of intangible assets
expense
7,555
—
Non-GAAP gross profit
$
244,030
$
183,916
GAAP gross margin
71
%
75
%
Non-GAAP gross margin
76
%
78
%
Operating expenses
reconciliation
Research and development
GAAP research and development expense
$
221,040
$
154,015
Add:
Stock-based compensation expense
(55,253
)
(31,650
)
Employer tax related to employee stock
transactions
(5,774
)
(10,098
)
Amortization of intangible assets
expense
(18,105
)
(3,177
)
Non-GAAP research and development
expense
$
141,908
$
109,090
GAAP research and development expense as a
percentage of revenue
69
%
66
%
Non-GAAP research and development expense
as a percentage of revenue
44
%
46
%
Sales and marketing
GAAP sales and marketing expense
$
103,939
$
69,793
Add:
Stock-based compensation expense
(23,834
)
(12,037
)
Employer tax related to employee stock
transactions
(1,520
)
(2,228
)
Amortization of intangible assets
expense
(7,042
)
(1,282
)
Non-GAAP sales and marketing expense
$
71,543
$
54,246
GAAP sales and marketing expense as a
percentage of revenue
32
%
30
%
Non-GAAP sales and marketing expense as a
percentage of revenue
22
%
23
%
General and administrative
GAAP general and administrative
expense
$
72,475
$
63,132
Add:
Stock-based compensation expense
(15,546
)
(17,757
)
Employer tax related to employee stock
transactions
(1,070
)
(1,371
)
Legal entity reorganization costs
(2,330
)
—
Non-GAAP general and administrative
expense
$
53,529
$
44,004
GAAP general and administrative expense as
a percentage of revenue
23
%
27
%
Non-GAAP general and administrative
expense as a percentage of revenue
17
%
19
%
Loss from operations
reconciliation
GAAP loss from operations
$
(171,161
)
$
(110,902
)
Add:
Stock-based compensation expense
103,427
66,561
Employer tax related to employee stock
transactions
9,752
16,458
Amortization of intangible assets
expense
32,702
4,459
Legal entity reorganization costs
2,330
—
Non-GAAP loss from operations
$
(22,950
)
$
(23,424
)
GAAP operating margin
(53
) %
(47
) %
Non-GAAP operating margin
(7
) %
(10
) %
Net loss and net loss per share
reconciliation
GAAP net loss
$
(177,555
)
$
(107,460
)
Add:
Stock-based compensation expense
103,427
66,561
Employer tax related to employee stock
transactions
9,752
16,458
Amortization of intangible assets
expense
32,702
4,459
Legal entity reorganization costs
2,330
—
Income tax effect of non-GAAP
adjustments
3,912
(7,337
)
Non-GAAP net loss
$
(25,432
)
$
(27,319
)
GAAP net loss per share attributable to
our common stockholders, basic and diluted
$
(0.60
)
$
(0.39
)
Total impact on net loss per share, basic
and diluted, from non-GAAP adjustments
0.52
0.29
Non-GAAP net loss per share attributable
to our common stockholders, basic and diluted
$
(0.08
)
$
(0.10
)
Weighted-average common shares used in
GAAP net loss per share computation, basic and diluted
294,341
276,068
Weighted-average common shares used in
non-GAAP net loss per share computation, basic and diluted
294,341
276,068
Free cash flow reconciliation
Net cash provided by (used in) operating
activities
$
101,300
$
(88,882
)
Less:
Purchase of property and equipment
(14,929
)
(11,744
)
Free cash flow
$
86,371
$
(100,626
)
Net cash used in investing activities
$
(35,460
)
$
(89,626
)
Net cash provided by financing
activities
$
30,216
$
22,624
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220510005640/en/
Investor Relations: Richard Davis
richard.davis@unity3d.com
Media Relations: Ryan Wallace
ryan.wallace@unity3d.com
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