Unity reports revenue downturn but says business rebuild is making 'progress'Unity reports revenue downturn but says business rebuild is making 'progress'

Engine maker Unity says its fourth-quarter results "meaningfully exceeded" revenue and profit expectations despite a 25 percent downturn in quarterly revenue.

As noted in the company's fiscal report for the year ended December 31, 2024, that decline was attributed to a "portfolio reset" that included downsizing and layoffs. It resulted in Q4 revenue falling by 25 percent year-on-year to $457 million.

Revenue within the company's Create Solutions division fell by 47 percent to $152 million—although that accounts for the impact of the termination of Unity's business agreement with Weta FX.

"The year-over-year decrease was driven by our portfolio reset, partially offset by 15 percent growth in subscription revenue, and 50 percent growth in Industry strategic revenue," reads the report.

Grow Solutions revenue totalled $305 million, down 5 percent year-over-year, albeit with another caveat. "Excluding the impact of the return of customer incentives issued by ironSource prior to the merger ('customer credits') for which we received approximately $21 million of revenue in the fourth quarter of 2023, Grow Solutions revenue would have been up 2 percent year-over-year," said Unity.

Unity's strategic portfolio

Q4 revenue from Unity's strategic portfolio (which encompasses the engine, cloud and monetization) was $442 million, up 4 percent year-over-year.

Unity CEO Matthew Bromberg said those quarterly results should provide optimism as the company's works to reshape its business.

"The Company's fourth quarter results meaningfully exceeded expectations on both revenue and profit, underscoring our progress in building a new Unity," said Bromberg.

"The successful launch of Unity 6, the appeal of our new pricing model, and the progress we’re making in AI for our advertising customers are providing a lot of optimism for the future."

Looking briefly at Unity's annual performance, full-year revenue fell by 17 percent to $1.81 billion. Again, the company said that drop was "driven by our portfolio reset, the Weta FX termination, and decreases in Grow Solutions revenue."

Create Solutions revenue declined by 29 percent year-on-year to $614 million. Grow Solutions revenue fell by 10 percent to $1.2 billion over the same period.