Unity restructuring increases losses to $291m in Q1 2024
But engine provider says the "cost reset" process has now been completed
Unity has posted its first financial results for 2024, showing a loss of nearly $300 million for the first quarter.
Despite this, the company said in a letter to shareholders that its Q1 results were "in line with expectations."
The engine provider also said the "portfolio and cost reset that we started a few months ago is completed," suggesting the thousands of layoffs that have been implemented across the business are at an end.
Here's what you need to know:
The numbers
- Total revenue: $460 million (down 8% year-on-year)
- Create Solutions revenue: $133 million (up 17%)
- Grow Solutions revenue: $294 million (down 4%)
- Net loss: $291 million (compared to $254 million for same quarter last year)
The highlights
Unity noted that $212 million of the quarter's net loss can be attributed to restructuring costs. Without these, and a convertible note purchase, the net loss would have been $141 million.
Back in January, Unity announced it was laying off 1,800 people as part of these restructuring efforts, representing 25% of its total workforce.
It was the largest round of layoffs the company had implemented so far, having dismissed another 265 employees just two months before, 600 in May, nearly 300 in January, and around 200 in June 2022.
Grow Solutions continued to be the biggest revenue generator for Unity's business, while Create Solutions — which includes the company's eponymous engine — grew thanks primarily due to growth in subscriptions and partnerships. Unity said that, excluding China, the number of core subscriptions it is serving rose by 13% year-on-year this quarter.
Looking forward, Unity reiterated its belief that AI tools will become more important, with plans to directly integrate its Muse suite of tools into the engine's editor. And the firm is building up to the release of Unity 6 later this year.
The company is also under new leadership going forward, with former Zynga and EA exec Matthew Bromberg named as CEO earlier this month.
Unity's strategic revenue forecast for the second quarter is that it will generate between $420 million and $450 million for the three months ending June 30, 2024, representing a year-on-year decline of up to 7%.
However, it expects year-on-year growth of up to 4% in its full-year strategic revenue guidance, which was confirmed as between $1.76 billion and $1.8 billion.