Thoughts on Unity's Q2 2021 Earnings:
-Revenues stronger than anticipated
-Operate *accelerated* despite IDFA
-Create gaining market share
-Parsec: remote UHD desktop streaming service, shows strong push to cloud
-Metaverse = shared universe; NOT zero-sum game.
Thread 🧵👇 $U
-Revenues stronger than anticipated
-Operate *accelerated* despite IDFA
-Create gaining market share
-Parsec: remote UHD desktop streaming service, shows strong push to cloud
-Metaverse = shared universe; NOT zero-sum game.
Thread 🧵👇 $U
Here's a Q1 2021 refresher for those interested:
https://twitter.com/JoeyKoh_/status/1392487353646653444?s=20
1/ Financials and Metrics
Strong QoQ growth of 17% on revenue led mgmt to raise guidance by 4.5%. Net enterprise customer adds stronger than Q1, showing continued momentum w big spenders. DBNER superb at 142%! Strong metrics all around.
Strong QoQ growth of 17% on revenue led mgmt to raise guidance by 4.5%. Net enterprise customer adds stronger than Q1, showing continued momentum w big spenders. DBNER superb at 142%! Strong metrics all around.
2/ Create
Despite lacklustre growth vs Operate, still has >50% overall share for 2020. In certain AR/VR gaming sections, share even higher and growing much faster. Each month >190 countries download 5 billion apps built w $U (!)
Despite lacklustre growth vs Operate, still has >50% overall share for 2020. In certain AR/VR gaming sections, share even higher and growing much faster. Each month >190 countries download 5 billion apps built w $U (!)
2b/
They see an opportunity to increase Create TAM to artists; foresee current ratio of 1 artists: 1 game/technical personnel will evolve into 5:1 ratio. All talk for now, patiently waiting for execution...
They see an opportunity to increase Create TAM to artists; foresee current ratio of 1 artists: 1 game/technical personnel will evolve into 5:1 ratio. All talk for now, patiently waiting for execution...
2c/
While Unity have cloud presence, they surely amplified it w Parsec acquisition: low-latency, ultra-high-def desktop streaming via remote desktop. Revenue growing 150% YoY and Net Expansion rate at 200% (!).
Big step towards cloud-first and appealing towards artists
While Unity have cloud presence, they surely amplified it w Parsec acquisition: low-latency, ultra-high-def desktop streaming via remote desktop. Revenue growing 150% YoY and Net Expansion rate at 200% (!).
Big step towards cloud-first and appealing towards artists
3/ Operate
Operate is what surprised most analysts. IDFA started on late April so had 1 month, yet revenue accelerated. Mgmt attributes it to preparation years before and implied that they gained market share as other companies may not have prepared as well.
Operate is what surprised most analysts. IDFA started on late April so had 1 month, yet revenue accelerated. Mgmt attributes it to preparation years before and implied that they gained market share as other companies may not have prepared as well.
3b/
With a monthly network of 3.4 billion monthly active users (!!!) across 20 platforms, its hard to see another co in gaming ecosystem having as much impressions/data/insights as Unity does. 50 billion in-app events a day! ROI is delivered at scale to game studio of all sizes.
With a monthly network of 3.4 billion monthly active users (!!!) across 20 platforms, its hard to see another co in gaming ecosystem having as much impressions/data/insights as Unity does. 50 billion in-app events a day! ROI is delivered at scale to game studio of all sizes.
4/ Non-gaming
Managment highlighted additions of:
- 3 automotive manufacturers
- 3 leading consumer companies
- 3 leading aerospace/defense manufactuers
Decent progress in non-gaming vertical but its clear gaming still lion's share and possibly gorwing faster.
Managment highlighted additions of:
- 3 automotive manufacturers
- 3 leading consumer companies
- 3 leading aerospace/defense manufactuers
Decent progress in non-gaming vertical but its clear gaming still lion's share and possibly gorwing faster.
5/ Metaverse
CEO took a shot at explaining Unity's place in Metaverse, which as we currently see it, is in real-time 3D (how apt), which replaces 2D content. 5G will be key enabler (momentum will start only after full 5G buildout?).
CEO took a shot at explaining Unity's place in Metaverse, which as we currently see it, is in real-time 3D (how apt), which replaces 2D content. 5G will be key enabler (momentum will start only after full 5G buildout?).
5b/
Within metaverse, games=Roblox, Creation destinations=Unity Nvidia. Social communication=Snap/FB.
Key value creation lies in interoperability, and being the link that ties all parts of the metaverses together.
On AR/VR, likely will pick up momentum in next 3-4 years.
Within metaverse, games=Roblox, Creation destinations=Unity Nvidia. Social communication=Snap/FB.
Key value creation lies in interoperability, and being the link that ties all parts of the metaverses together.
On AR/VR, likely will pick up momentum in next 3-4 years.
6/ Conclusion
Re-acceleration of Operate despite IDFA headwind shows execution . I like Parsec acquisition as it shows targeted appeal to artists. Main obstacle of IDFA now resolved. Thesis strong.
Markets (and I) will be expecting another beat and raise next Q.
Long $U
Re-acceleration of Operate despite IDFA headwind shows execution . I like Parsec acquisition as it shows targeted appeal to artists. Main obstacle of IDFA now resolved. Thesis strong.
Markets (and I) will be expecting another beat and raise next Q.
Long $U
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