“We are really happy with our third quarter results and we havegreat news to share.
We reported another strong quarter with results well above our expectations…
raising our revenue guidance again, this quarter.”
2 | Weta Acquisition
“Democratize Weta's industry-leading tools & bring the genius of Peter Jackson…amazing engineering talent…for artists everywhere.”
“escape the Weta world &..be available to everyone.
“Weta is, by far, the leading light in the world of video effects.”
3 | Expanding 3D Use Cases
“…being used in just about every industry you can imagine from retail to medicine, to film and TV, and gaming….”
“there's the need for 3D content in every industry: in AR and VR, in virtual worlds, and much more.
4 | Arming Creators with the best Tools
“Whatever the word metaverse means, it's going to be built by millions of content creators, and we're on a mission to give them the easy-to-use and high-performance tools that will bring their visions to life.”
5 | Unity’s Strength
“Unity benefits from a very unique dataset driven by over 3 billion people MAU in our analytics platform. And hundreds of millions on our IAP platform.”
“…have the single largest data insight based on the largest MAU count for anybody in our world.”
6 | Contextuality an advantage vs Identity in Advertising
“Most ad networks…based on…the specific identity of the user interacting with the application..”
“Ours is not. Ours is based on understanding contextually, where they are and what they're doing and…
6 | cont’d…
what they've done before, and what they're going to do next, using predictive models based on AI, on the 50 billion-plus data as we adjust per day.
“…Apple with IDFA…we gained advantage…we became relatively stronger..”
7 | How big can Unity become? 25X? 👍🏻
“…only 2% of the world's content is made in real-time 3D today, 50% of all that's built on our platform, that 2% can go to a 50% number within 10 years in terms of content.”
8 | More Tools - Higher Take Rate
“…more tools…doesn't change the trajectory of 2% or 3% becoming 50…it changes Unity's take rate….we've doubled our revenue in 24mths, we haven't doubled our market share in 24mths.
8 | More Tools - Higher Take Rate (cont’d)
So we're increasing our take rate as we go along. And that's going to go for a very long time, but there's so much take rate in front of us, it's crazy.” 😳
9 | TAM Expansion
“…we estimate that this transaction expands our TAM by over $10bn.”
10 | FCF Breakeven within 2023
“We continue to expect to break even on our free cash flow basis within fiscal 2023.”
11 | New Products
“Unity Game Services unifies & simplifies launching of X-platform multiplayer games.”
“Unity Mediation, waterfall & bidding within Ads.”
“Medicare, first real-time 3D sports platform for creating and delivering interactive content directly to the consumer.
12 | M&A Strategy
“…do not see M&A as a strategy…but a way to execute our business strategies.
…constantly evaluate build versus buy alternatives…the time to market and cost.
…in 3Q, < 0.5% of revenue came from acquisitions completed over the last 12 months.”
13 | Unity’s Focus - The Best Tools for Creators
“…we plan to do what we do best, create & develop amazing technology & tools…easily use & available to a wide spectrum of users…
we believe the world is a better place with more creators in it.”
Final Takeaway on Unity Software $U:
➡️ Focus on arming creators with the best tools, combined with the superiority of their users, Unity could well become the Adobe (creator software) +Google (advertising) as it scales across different verticals & use cases.
➡️ Still growing along rapidly, potential for rising take-rates to drive improving profitability (FCF breakeven in 2023). Thesis unchanged. Last Q’s low earnings guide long forgotten.
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- Billable Tests 2.2m >2X 🚀 +38% QoQ ↗️
- Average COGS / Test ~$20 ↘️ (vs $23 in 2Q21) 💪🏻
1 | Continues to benefit massively from COVID near-term
“While our COVID-19 testing solutions continue to drive strong cash generation…could have unpredictability…will turn passively as the therapeutic treatment may become available in the near future.”