Q4 2021 Unity Software Inc Earnings Call

Speaker 1: a high net margin business. We're committed to continuing to improve operating margins as we continue to gain scale.

Business, we're committed to continuing to improve operating margins as we continue to gain scale.

Speaker 1: These results have been and will continue to be driven by excellence and execution by the Unity team.

These results have been and will continue to be driven by excellence in execution by the <unk>.

Speaker 1: We have built our business on a strong foundation based on very healthy customer metrics and structural economics. We entered twenty two with momentum across both create and operate, which gives us confidence in our outlook. For the year, we expect to grow revenue to be between one point four eight five billion and one point five oh five billion, which represents growth between thirty four and thirty six percent from 2021 .

We have built our business on a strong foundation based on very healthy customer metrics and structural economics, we entered 'twenty two with momentum across both create and operate which gives us confidence in our outlook for the year, we expect to grow revenue to be between $1 $4 5 billion and $1 505.

<unk> billion, which represents growth between 34 and 36% from 2021.

Speaker 1: And we believe Unity is very well positioned in a fast-growing market, which we are expanding even further with internal innovation and strategic acquisition.

And we believe unity is very well positioned in a fast growing market.

We are expanding even further with internal innovation and strategic acquisitions as we've said before we expect to grow revenue above 30% for the long term and expect to expand operating margins sequentially breaking even on a non-GAAP basis within 2023.

Speaker 1: As we've said before, we expect to grow revenue above 30% for the long term and expect to expand operating margins sequentially, breaking even on a non-GAAP basis within 2023.

Speaker 1: With that, let me explain why I'm personally very optimistic about these processes.

With that let me explain why I am personally very optimistic about these prospects.

Speaker 1: First, we participate in a massive market with significant tailwind.

First we participate in a massive market with significant tailwind.

Speaker 1: At the time of our IPO, we estimated our total addressable market was $29 billion for create and operate. Our current best estimate is $29 billion.

At the time of our IPO, we estimated our total addressable market was 29 billion for create and operate.

Our current best estimate is 45 billion.

Speaker 1: This expansion is driven by growth of markets in which we complete, plus the addition of new markets as we extend our offering to new users and new use cases.

This expansion is driven by growth of markets in which we compete plus the addition of new markets as we extend our offering to new users and new use cases.

Speaker 1: We believe that the transitions from 2D to 3D, from non-real-time to real-time, from non-interactive to interactive, creates a massive growth opportunity for many decades to come. This new world that is emerging is more immersive, more engaging, and opens opportunities for gaming, to e-commerce, automotive, architecture, media and entertainment, and many others.

We believe that the transition from $2 <unk> from non real time to real time from non interactive interaction creates a massive growth opportunity for many decades to come.

This new world that is emerging as more immersive more engaging and opens opportunities for gaming to E Commerce automotive architecture media and entertainment and many other sectors. So point number one big market rapidly growing great tailwind.

Speaker 1: So point number one, big market, rapidly growing great tail.

Speaker 1: A second, Unity as a leader is the leader in real time 3D. And we're very well positioned to capitalize on these trends. We have a strong and growing market share in all of our sectors and, of course, multiple industries. During 2021, we expanded our market share in the fastest growing segments in the gaming market, mobile, ARBR. Real time 3D is growing, and within this large and fast growing market, Unity is winning.

A second generally isn't a leader is the leader in real time, three D and we're very well positioned to capitalize on these trends, we have a strong and growing market share in all of our sectors and across multiple industries. During 2021, we expanded our market share in the fastest growing segments in the gaming market mobile VR.

<unk>.

<unk> is growing and within this large and fast growing market unity is winning.

Speaker 1: Our non-gaming business is growing even faster as we add customers across multiple industries.

Our non gaming business is growing even faster as we add customers across multiple industries.

Speaker 1: We believe there is significant upside as we have embedded structural advantages.

We believe there is significant upside as we have embedded structural advantages with unity creators develop once and deploy many platforms and other unlike other companies. We don't compete with our customers either new platform. <unk> is designed to help creators through the entire lifecycle of the runtime application from ideation to launch to monitor.

Speaker 1: With Unity, creators develop once and deploy to many platforms. And unlike other companies, we don't compete with our company.

Speaker 1: The Unity platform is designed to help creators through the entire lifecycle of a runtime application, from ideation to launch to monetization, hosting and ongoing analytics to drive growth.

<unk> hosting and gone and ongoing analytics to drive growth.

Speaker 1: So point number two, we think our leadership position is strong and we're growing it and we continue to do.

Point number two we think our leadership position is strong and we're growing it and we've continued to do that.

Speaker 1: Third, we're expanding our addressable market with innovation around new products and strategic acquisitions. For north of a decade, we've been innovating and adding capabilities through our own product development and via acquisition to help solve problems our customers share.

Third we're expanding our addressable market with innovation around new products and strategic acquisitions for north of a decade, we've been innovating and adding capabilities through our own product development and buyer acquisition to help solve problems our customers share with us.

Speaker 1: We originally moved from a few platforms to over two dozen and specific response to customer needs. More recently, the addition of Parsec, wedded digital and the Unity Gaving Services are great examples that address customer pain points and also increase our addressable marks.

We originally move from a few platforms to over two dozen specific response to customer needs.

More recently, the addition of <unk> digital in the Unity gaming services are great examples that address customer pain points and also increase our addressable market.

<unk> power of some of the world's most inspiring and creating creative companies to freely work and play from anywhere on any device on their own terms with weta digital generally creates a pathway for any artist from any industry to create the most powerful tools.

Speaker 1: Part second power is some of the world's most inspiring and creating creative companies to freely work and play from anywhere, but any device on their own term.

Speaker 1: With Weta Digital, Unity creates a pathway for any artist from any industry to create with the most powerful tools.

Speaker 1: Unity Gaming Services unifies existing solutions and introduces new tools and services to simplify launching and operating cross-platform multiplayer games.

Gaming services unifies existing solutions and introduces new tools and services to simplify launching and operating cross platform multiplayer games.

Speaker 1: These initiatives are expected to continue to expand our total addressable and serviceable markets and continue to increase the value of the Unity platform for our customers as we solve more and more of creators' most challenging problems.

These initiatives are expected to continue to expand our total addressable and surface services are in the market and continue to increase the value the unity platform for our customers as we saw more and more creators most challenging problems.

Now this takes us to point number four.

Speaker 1: We believe that we have a unique platform that will endure the test of time. As I've said earlier, the process of building our platform is at the very center for a strategic process. We're ready. We add value to our platform or increasing our total address.

We believe that we have a unique platform that will endure the test of time.

And as I've said earlier the process of building our platform is at the very center of our strategic process, where we add value to our platform, while increasing our total addressable market.

Speaker 1: We aim to offer significant and increasing value to creators and artists as we reduce their operational complexity and ease their on-run.

We aim to offer significant and increasing value to creators and artists as we reduce our operational complexity and ease their on ramps.

Speaker 1: Building this platform requires time, focus, and commitment. We have devoted tens of thousands of developer hours to deliver speed, scalability, stability, and ease of use.

Building. This platform requires time focus and commitment we have devoted tens of thousands of developer hours to deliver speed scalability stability and ease of use we have trusted relationships with all the major platforms to the point, where they share with us your product Roadmaps. These partnerships are critical.

Speaker 1: We have built trusted relationships with all the major partners to the point where they share with us their product road maps. These partnerships are critical differentiators in the market.

<unk> in the market.

Speaker 1: In the coming years, we plan to solve more and more of these creators' challenges by offering new features and services. And this shows up and how you've shown up consistently in a very healthy dollar-based network potential.

In the coming years, we plan to solve more and more of these creators challenges by offering new features and services and this shows up and has shown up consistently in a very healthy one dollar based net retention rate.

Speaker 1: And lastly, across Unity, we have an amazing team of innovators. Unity is an innovation machine. Modernization is a great example. We entered this business in 2014 and have not stopped innovating ever since. We hired the best and brightest product leaders and engineers, data scientists, and folks that are improving player experience. We operate with the developers interest in mind and ensure our products contribute to the long-term success.

And lastly, our cross unity, we have an amazing team of innovators unity is an innovation machine.

Modernization is a great example, we entered this business in 2014 and have not stopped innovating ever since we hired the best and brightest product leaders engineers data scientists and focus on improving player experience, we operate with the developer's interest in mind and ensure our products contribute to the long term success.

Speaker 1: As a result, we have consistently gained market share, including this last year, when we executed with excellence in an idea of a challenging environment. This is one of many examples where Unity's innovation is making a significant difference for creation.

As a result, we have consistently gained market share, including this last year, when we executed with excellence.

It's a challenging environment. This.

This is one of many examples where <unk> innovation is making a significant difference for creators.

Speaker 1: Now I'm proud of what we've achieved so far at Unity. And I'm excited about the future that we can and will create.

Now I am proud of what we've achieved so far at unity and I'm excited about the future that we can and will create.

Speaker 1: We are executing with that clone excellence in a large and growing market that we are strategically expanding through internal innovation and acquisition.

We are executing with excellence in a large and growing market that we are strategically expanding through internal innovation and acquisition.

Speaker 1: We have a defensible platform that has significant value to our customers and keeps on getting better. Now, before we turn over to Carlton Louise, wanna share with you the magic of Ziva and Unity. This is our latest acquisition. I believe it's got huge potential. Let's show them what we wanna share.

We have a defensible platform that adds significant value to our customers and keeps on getting better.

Now before we turn over the call to always want to share with you the magic of Zebra and year to date. This is our latest acquisition I believe its got huge potential.

Sean what we want to share.

Yes.

Speaker 2: Hi, I'm a virtual human created by Ziva Dynamics. I'm powered by state-of-the-art biomechanical simulation, and I'm running in real-time in Unity. But enough about me. I have some even more amazing news to share with you.

Hi, I'm, a virtual hanemann created by Veeva dynamics I'm powered by state of the art biomechanical simulation and I'm running in real time immunity.

Enough about me.

I have some even more amazing news to share with you today.

Speaker 2: I'm excited to announce that today, Ziva, my creators are now part of the Unity family.

I'm excited to announce that today Veeva my creators are now part of the Uniti family.

Unity and Veeva have a shared vision of making weird lifelike character.

Speaker 2: Unity and Ziva have a shared vision of making realistic, lifelike character creation accessible and scalable for all artists.

Creation accessible and scalable for all auto.

Regardless of scale level.

Speaker 2: And it's not just for virtual humans like me, but for any kind of creature, monster, or animal imaginable, realistic or stylish.

Not just the virtual humans like knee, but for any kind of creature months that animal imaginable realistic all stylized.

Speaker 2: Jesus leadership in character simulation, deformation and machine learning, along with unity's deep knowledge of real-time technology. Make this an effortless and powerful part.

David's leadership and character simulation deformation and machine learning along with unity deep knowledge of real time technology makes this fitness.

And powerful partnership.

Speaker 2: As we grow together, Unity and Sever will continue serving the many innovative teams, creators and engines that use our technology.

I have the great together unity and Teva will continue serving the many innovative teams creative engines that use our technology.

By acquiring Veeva unity will further democratize EBIT best in class tools to allow artists like Okay. This is Joe characters like me.

Speaker 2: By acquiring Zebra, Unity will further democratise Zebra's best in class tools to allow artists like you to create digital characters like me.

We want to thank you for all of your support over the past seven years, Steve I have learned so much and we couldn't have done any of it without your passion and dedication to incredible digital art.

Speaker 2: We want to thank you for all of your support over the past seven years. Ziva has learned so much and we couldn't have done any of it without your passion and dedication through incredible digital art.

Speaker 2: It's been a whirlwind journey, but I'm certain it's just the start.

It's been a whirlwind Johnny I'm certain it's just the start.

Speaker 3: Thank you, John . Back to a normal real human being here. I've watched this video many, many times and continues to be impressed by the amazing technology. So let's begin with the key financial highlights.

Thank you John .

Back to our normal real human being here.

This video many many times and continue to be impressed by the amazing technology. So let's begin with the key financial highlights.

Speaker 3: Revenue for the fourth quarter of $316 million increased by 43% as compared to the prior year's fourth quarter. These results include $4 million in license fee from what IFX. Excluding this, revenue for the quarter will have increased 41% year over year.

Revenue for the fourth quarter of $316 million increased by 43% as compared to the prior year's fourth quarter. These results include $4 million license fee from what I effects. Excluding this revenue for the quarter, we have increased 41% year over year.

Speaker 3: results for the quarter, be the guidance again. As you would expect, every quarter has risks and opportunities. Since we've prudently assessed risk when constructing guidance, we can be guidance if things fall our way. In the fourth quarter, create accelerated growth, the wet acquisition closed and more earlier than expected, and operate continued to perform very strongly.

Results for the quarter beat guidance again as you would expect every quarter has reached kind of opportunities since we prudently assess risks when constructing guidance. We can deep guidance. If things went our way in the fourth quarter create accelerated growth then went acquisition.

Close somewhat earlier than expected and operate continue to perform very strongly.

Speaker 3: Revenue for the full year of 1.1 billion increased 44% year over year behind strong execution by the Unity team, or performance for the year can significantly abolish initial guidance of revenue growth of 23 to 26%. Importantly,

Revenue for the full year of $1 1 billion increased 44% year over year behind strong execution by the unity team our performance for the year came in significantly above our initial guidance of revenue growth of 23% to 26%.

Importantly, our performance is broad based operate delivered another strong quarter with 45% year over year revenue growth, bringing the full year to $709 million, an increase of 51% from the prior year as we help their customers seem that challenging <unk> environment.

Speaker 3: Operate deliver another strong quarter with 45% year-over-year revenue growth, bringing the full year to $709 million and increase of 51% from the prior year, as we help our customers in a challenging IDFA environment.

Speaker 3: create accelerated again in the fourth quarter and deliver 49% year-to-year revenue growth. This brings creates total revenue to $327 million for the full year and increase of 41% from a year earlier.

<unk> accelerated again in the fourth quarter and delivered 49% year over year revenue growth.

This brings creates total revenue to $327 million for the full year, an increase of 41% from a year earlier.

Speaker 3: Strategic partnerships revenue grew 12% this quarter and delivered $70 million for the full year and increased of 7% from a year earlier.

Strategic partnerships revenue grew 12% this quarter and deliver $70 million for the full year, an increase of 7% from a year earlier.

Speaker 3: We continue to see strong customer success this quarter. Our dollar-based net expansion rate for the fourth quarter was 140% off from 138% in the fourth quarter of 2020. And we continue to grow customers generating more than $100,000 of revenue in the trailing 12 months. From 793 year ago to 1552.

We continue to see strong customer success this quarter.

Base net expansion rate for the fourth quarter was 140% off from 138% in the fourth quarter of 2020, and we continue to grow customers generating more than $100000 of revenue in the trailing 12 months from 793, a year ago to 1052 <unk>.

Speaker 3: Revenue from these customers accounted for 85% of our total revenue in the fourth quarter of 2021, up from 80% in the same quarter a year ago, reflecting a closer, more meaningful partnership with our customers.

<unk> from these customers accounted for 85% upon total revenue in the fourth quarter of 2021 up from 80% in the same quarter, a year ago, reflecting a closer more meaningful partnership with our customers.

Speaker 3: We generated non-GAAP operating loss of $12 million in the fourth quarter, which compares to a non-GAAP operating loss of $20 million in the fourth quarter a year earlier. Our non-GAAP operating margin for the fourth quarter was minus 3.8%, expanded 530 basis points from a year earlier.

We generated non-GAAP operating loss of $12 million in the fourth quarter, which compares to a non-GAAP operating loss of $20 million to fourth quarter, a year earlier, our non-GAAP operating margin for the fourth quarter was minus three 8% expanded 530 basis points from a year earlier.

Speaker 3: This brings the full year non-GAAP operating margin to minus 4.6, an improvement of 200 basis points from 2020. Our performance for the year came in significantly above our initial guidance of non-GAAP operating margin of minus 11 to minus 9%.

This brings the full year non-GAAP operating margin to minus $4 six an improvement of 200 basis points from 2020.

Our performance for the year came in significantly above our initial guidance of non-GAAP operating margin of minus 11% minus 9%.

Speaker 3: or margin expansion comes from improvements in non-gab cross margin and leveraging sales and marketing and general administrative costs.

Our margin expansion.

From improvements in non-GAAP , gross margin and leveraging sales and marketing and general and administrative costs.

Speaker 3: non-GAAP gross margin of 80% for the quarter and the full year are up 160 and 90 basis points from their respective prior year period.

non-GAAP gross margin of 80% for the quarter and the full year are up 160, and 90 basis points from their respective prior year periods.

Speaker 3: The non-gab gross margin improvements are mainly driven by efficiencies in cloud holes and costs.

The non-GAAP gross margin improvements are mainly driven by efficiencies in cloud hosting costs.

Speaker 3: Freak as low of minus 63 million for the fourth quarter was impacted by timing of payroll taxes and normal quarter to quarter working capital fluctuation.

Free cash flow of minus $53 million for the fourth quarter was impacted by timing of payroll taxes and normal quarter to quarter working capital fluctuations free.

Speaker 3: free cash flow margin for the year is minus 14%, including a $50 million one-time charge to terminate a lease agreement in San Francisco, which we recorded in the second quarter. Excluding this charge, free cash flow margin for the year would have been minus 9%.

Free cash flow margin for the year is minus 14%, including a $50 million one time charge to terminate a lease agreement in San Francisco, which we recorded in the second quarter. Excluding this charge free cash flow margin for the year would have been minus 9%.

Acquisitions continue to advance our strategic priorities, we added key capabilities and expanded our addressable market with three acquisitions that closed this quarter, whereas digital and asset purchase which we closed in December enables us to put the incredibly exclusive and sophisticated tools in the hands of millions of.

Speaker 3: Acquisitions continue to advance our strategic priorities. We added key capabilities and expanded our addressable market with three acquisitions that close this quarter. What a digital and asset purchase which we closed in December enables us to put the incredibly exclusive and sophisticated tools in the hands of millions of creators and artists around the world. And once integrated onto the Unity platform, enable the next generation of real-time 3D creativity.

Creators and artists around the world and once integrated onto the unity platform enables the next generation of real time three D creativity.

Speaker 3: which we closed in December , democratizes high-quality character creation for all artists by reducing time and cost, by leveraging state-of-the-art biomechanical simulation and machine learning.

CEVA, which we closed in December Democratizes high quality Karthik creation for all our <unk> by reducing time and cost by leveraging state of the art bio mechanical stimulation in machine learning.

Speaker 3: And finally, SimSketch, which we close in November , enables cloud-based, secure, and effortless collaboration, rapid review, and feedback between remote creators.

And finally since sketch, which will close in November enables cloud based secure and therefore less collaboration rapid review and feedback between remote creators.

Speaker 3: Last, we increased our financial flexibility by issuing an aggregate of 1.725 billion five-year convertible notes with a 0% coupon.

Last we increased our financial flexibility by issuing an aggregate of $1 75 billion five year convertible notes with a cero percent coupon.

Speaker 3: and conversion at $308.72 per share.

And conversion of $308 72 per share.

Speaker 3: We also entered into a cap called transaction to reduce potential dilution caused by the notes with a cap price of $343.00 and two cents per share.

We also entered into a capped call transaction to reduce potential dilution caused by the notes with a cap price of $343 <unk>.

Per share.

Speaker 3: The net proceeds from the issuance of the note were $1.65 billion net of debt issuance costs and cash used to purchase the capped call transactions. Let's dig in.

The net proceeds from the issuance of the notes were $1 65 billion net.

Net of debt issuance cost and cash used to purchase a capped call transactions.

Let's dig in a little bit deeper before we go into guidance.

Speaker 3: Operate had a terrific year. We're passionate about partnering with our customers from the two-person development team who pursue their passion of making games to the large game publishers with millions of players who need to constantly innovate to stay competitive and keep their players engaged.

<unk> had a terrific year, we're passionate about partnering with our customers from the two person development team, who pursue their passion of making gains to the large game publishers with millions of players we need to constantly innovate to stay competitive and keep our players engaged.

Over the past year.

Speaker 3: The Opera team supported more than 200,000 game launches.

We operate teams supported more than 200000 game launches our customers are increasingly harnessing the power of our multi play suite, enabling them to access cross platform multiplayer games, which is an experienced that almost 60% of gamers are looking for.

Speaker 3: Our customers are increasingly harnessing the power of our multiplayer suite, enabling them to access cross-platform multiplayer games, which is the experience that almost 60% of gamers are looking for.

Speaker 3: with our recent launch of Unity Gaming Services for making it even easier for developers to tap into this trend in the fast growing segment of gaming.

With our recent launch of Unity gaming services, we're making it even easier for developers to tap into this trend in the fast growing segment of gaming.

Speaker 3: We also saw strong performance from our sophisticated analytics tools and products such as audience pin pointer that delivers strong return on investment to our customers without my own guess.

We also saw strong performance from our sophisticated analytics tools and products such as audience pinpoint there that deliver strong return on investment to our customers without manual guesswork.

Speaker 3: To win in a highly competitive market, we're constantly innovating, optimizing our machine learning models, improving our campaign and performance models, and generating actionable insights for our customers' campaigns and enabling them to make informed decisions.

To win in a highly competitive market, we're constantly innovating optimizing our machine learning models, improving our campaign and performance models and generating actionable insights for our customers campaigns and enabling them to make informed decisions.

Speaker 3: As a result, we estimate that our monetization business has been, over each of the last five years, including 2021, consistently growing about twice as fast as the market.

As a result, we estimate that our monetization business has been over each of the last five years, including 2021 consistently growing about twice as fast as the market.

Speaker 3: In addition, we're focusing on providing infrastructure for synchronous multiplayer experiences and community service for vibrant social interactions. I also...

In addition, we're focused on providing infrastructure for synchronous multiplayer experiences and community service for vibrant social interactions.

I also want to call out.

Speaker 3: unity, which will launch last quarter. Our offering includes waterfall and bidding to help developers build strong revenue streams by easily optimizing the man from their best performing ad formats and network partners within the same editor and interface they build and manage their game experience. We're seeing strong initial traction in the market in the short period of time since launch, including some of the top publish.

The only deviation, which we launched last quarter, our offering includes waterfall and beating to help developers build strong revenue streams by easily optimizing demand.

From their best performing AD formats and network partners within the same editors and interface build and manage their game experience. We're seeing strong initial traction in the market in the short period of time since launch, including some of our top.

Including some of the top publishers.

Speaker 3: Now moving on to create unity continues to grow within games, increasing our reach with top tier publishers as well as platform providers.

Now moving on to create unity continues to grow with themed games, increasing our reach with top tier publishers as well as platform providers.

Speaker 3: During the fourth quarter, top publishers launched key multi-platform games built on Unity, such as Riot Forge's Ruined King, a League of Legends story, developed in collaboration with Airship Syndicate and published simultaneously across Windows PC, Nintendo Switch, Sony PlayStation 4 and Xbox One.

During the fourth quarter top publishers launched key multi platform gains built in unity. So it just riot forwards linking a league of legends story developed in collaboration with Air ship Syndicate, and public seamless tenuously across Windows, PC, Nintendo switch, Sony Playstation four and export.

One.

Speaker 3: Another example is a partnership with new whists on their multi-platform AAA MMO games. This and many other partnerships enabled unity to expand our market share within the top 1000 mobile games in 2021.

Another example is in partnership with new ways on.

They're multi platform AAA MMO games.

These and many other partnerships enabled uniti to expand our market share within that top 1000 mobile games in 2021.

Speaker 3: Now, the real-time 3D capabilities that game developers lost and use every day are also enabling us to win outside of gaming.

Now the real time, three D capabilities that game developers law and use everyday are also enabling us to win outside of gaming.

Speaker 3: We continue to make progress across industries and use cases and expect to build long-term partnerships as Unity software is embedded into our customers' digital strategy.

We continue to make progress across industries and use cases and expect to be a long term partnerships are unique yourself waste embedded into our customer's digital strategy.

Speaker 3: Our non-gaming business grew over 70% year-over-year in 2021 and now represents 25% of our total create revenue up from 20% in 2020.

Our non gaming business grew over 70% year over year in 2021, and now represents 25% of our total <unk> revenue.

Up from 20% in 2020.

Let me give you a few examples.

Speaker 3: Unity is partnering with Hyundai Motors to connect an actual factory with its digital twin to enhance plant management, drive productivity, and innovate in the manufacturing process.

Unity is partnering with Hyundai motors to connect and actual factory with its digital twins to enhance plant management drive productivity and innovating the manufacturing process.

Speaker 3: Hyundai considers this initiative and partnership with Unity a game-changer.

Hume day considers this initiative in partnership with Unity a game changer.

Speaker 3: Unity is also partnering with eBay to enable sellers to showcase the actual item they are offering with our proprietary interactive 360-degree view. This experience will help buyers shop with greater confidence.

<unk> also partnered with ebay to enable sellers to showcase the actual items. They are offering with our proprietary interactive 360 degree view.

This experience will have buyers shop with greater confidence.

Starting with sneakers.

Speaker 3: We believe that this is the next generation of shopping experience and provides a competitive advantage for sellers and retailers.

We believe that this is the next generation of shopping experience and provides a competitive advantage for sellers and retailers.

Speaker 3: Unity is also partnered with a large carbon manufacturing in Japan, an electric carbon manufacturing in China, a global industrial machinery manufacturer, a large technology education institution, and many others. And our simulation business is also doing well. We're strengthening our partnership with a very large carbon manufacturing German.

<unk> also partnered with a large car manufacturer in Japan.

An electric car manufacturer in China, our global industrial machinery manufacturer, a large technology education institution and many others in our simulation business is also doing well we're strengthening.

Our partnership with a very large car manufacturing in Germany.

Speaker 3: Our competitive advantages are our real-time 3D rendering capabilities, our design visualization tools, and our approach to develop what our customers need versus selling them of the share of solutions that may not work for them.

Our competitive advantages are our real time, three the rendering capabilities, our design visualization tools and our approach to develop when our customers need versus selling them off the shelf solutions that may not work for them.

I want to give you an update on <unk>.

Speaker 3: The integration is progressing as expected. We closed the deal at the beginning of December and have unborted most employees. We're working to productize the award-winning tools such as Manuka, Lombard Jack, Loki, Squid, Harbour Shop, High Death, Shitty Builder, and many more. With Unity's deep expertise in real time 3D, these world class tools will be available to creators and artists on the cloud.

The integration is progressing as expected we closed the deal at the beginning of December and have onboard and most employees were working through prototypes. The award winning tools, so adjustment Luca Lumberjack Lockie Squib barbershop high Def City builder and many more.

With unit is deep expertise in real time three D. These world class tools will be available to creators and artists on the cloud.

Speaker 3: The largest opportunities are within games, film, animation, and advertising.

The largest opportunities are within games film animation and advertising as mentioned prototyping. These tools will take approximately two years.

Speaker 3: As mentioned, prototyping these tools will take approximately two years.

Now onto guidance, we're entering 2022 with good business momentum for the full year, we're guiding revenue to one 485 to $1 $505 billion or <unk>, 34% to 36% year over year revenue growth.

Speaker 3: Now on to guidance. We're entering 2022 with good business momentum.

Speaker 3: For the full year, we're guiding revenue to $1.485 to $1.505 billion, or 34 to 36% year-over-year growth.

As communicated last quarter.

Speaker 3: We expect with FX to contribute approximately $70 million in revenue in 2022 or 66 million incremental to 2021. We will report these revenues.

We expect Voip FX to contribute approximately $70 million in revenue in 2022.

Our $66 million incremental to 2021.

We will report this revenue stream on their create.

Our guidance for the first quarter is consistent with the expectation for the full year of 34% to 36% revenue growth.

Speaker 3: Our guidance for the first quarter is consistent with the expectation for the full year of 34 to 36% revenue growth or 315 to 320 million dollars.

$315 million to $320 million.

Speaker 3: For the full year, at the high end of the range, we expect non-GAAP operating margins to improve by 200 basis points year over year to minus 2.6, which represents a loss of $39 to $41 million.

For the full year at the high end of the range, we expect non-GAAP operating margins to improve by 200 basis points year over year to minus two 6%, which represents a loss of <unk> $39 million to $41 million.

Speaker 3: This assumes incremental operating expenses as we return to more normal working operations and travel.

This assumes incremental operating expenses as we return to more normal working operations from travel.

Speaker 3: For the first quarter, at the high end of the range, we expect non-GAP operating margins of minus 7%, an improvement of 300 basis points from the first quarter of 2020.

For the first quarter at the high end of the range, we expect non-GAAP operating margins of minus 7% an improvement of 300 basis points from the first quarter of 2020.

Yeah.

Speaker 3: Non-cap operating loss is expected between $22 and $23 million. We're forecasting 343 million fully-tyled water shares for Q1.

non-GAAP operating loss is expected between 22 and $23 million, we're forecasting 343 million fully diluted shares for Q1.

Speaker 3: for modeling purposes and in line with our historical performance, we expect the first half of 2022 to account for about 45% of the full year revenue and the second half to account for the balance 55%.

For modeling purposes and in line with our historical performance. We expect the first half of 2022 to account for about 45% of the full year revenue in the second half to account for the balance 55%.

Speaker 3: We expect to create to grow at a faster rate than operating 2022.

We expect create to grow at a faster rate than operating 2022.

Speaker 3: For the full year, we expect positive free cash flow, which includes wireless effects from payment for four years of license fees in the first quarter of 2022.

For the full year, we expect positive free cash flow, which includes white us FX front payment for full four years of license fees in the first quarter of 2022.

Speaker 3: We continue to expect Unity's revenue to grow or above 30% over the long term and to break even on a non-gap basis within 2023. With that, let me turn the call back to Richard.

We continue to expect unit these revenues.

We're about 30% over the long term and to breakeven on a non-GAAP basis within 2023.

With that let me turn the call back to Richard.

Great. Thanks very much.

Speaker 4: Thanks very much. So, okay, we'll open up the call to live questions in just a bit, but before the call I asked.

We will open up the call to live questions in just a bit but before the call I asked.

Richard is still here.

We lost your return.

Interesting.

Mike.

Speaker 1: Richard, are you here? You're here. You're on mute. It says I'm not on mute. Okay, we can hear you, Richard. All right, yeah. I don't know what happened there. I kept getting muted by the host.

Richard are you here you are you on mute that says it says I'm not on mute. Okay. We can hear you Richard Alright, Yes, I don't know what happened there and kept getting muted by the host.

Speaker 1: In any case, no worries. OK, we'll open up the call to questions in a bit. But before the call, we asked the analysts to send us some of their most thought provoking questions. We culled them down to the best three that we will answer now. And right after that, we'll go to live questions from our panel.

No worries.

We will open up the call to questions in a bit but before the call I just ask the analysts to send to some of their most thought provoking questions, we called them down to the best three that we will answer now.

After that we'll go to live questions from our panelists.

Speaker 1: So the first question comes from cash rang and at Goldman Sachs. It might almost be an understatement to say that there's a lot of transitions happening in the software world, 2D to 3D, cross multiple industries, new business models and so on. And of course, that's probably a two hour conversation, but we'll keep it much shorter. But this is a good question, I think, for John to just quickly frame kind of the cross currents how they're playing out and where unity can capitalize on these trends.

So the first question comes from Kash Rangan of Goldman Sachs.

It might almost be an understatement to say that there is a lot of trends transitions happening in the software world <unk> across multiple industries, new business models, and so on and and of course, that's probably a two hour conversation, but we'll keep it shorter but this is a good question I think for John to just kind of quickly frame kind of the cross currents, how they're playing out and where.

Unity and capitalize on these trends.

Speaker 1: So it is a great question. So headline number one is that...

So it is a great question. So headline number one is.

Speaker 1: My expectation is the use of real-time 3D interactive technology is going to expand many forms. I've said this dozens of times from prior to why I view it now. Some people call it the metaverse, but one part of it is industry after industry, they're going to be launching real-time 3D experiences, interactive experiences. And we're seeing that in so many industries now, it's almost hard to keep track.

My expectation is the use of real time three to interactive technology is going to expand many.

Dozens of times from prior to our IPO to now it's some people call it a meta versus.

But one part of it is industry after industry theyre going to be launching real time, <unk> experiences interactive experiences and we're seeing that in so many industries now it's almost hard to keep track <unk>.

Speaker 1: Second part of that is gaming industries continue to expand and of course with unity we're bringing artists out of the platform to substantially increase our revenue take rate as part of

Second part of that is gaming industry is continuing to expand and of course with year to date will bring artists onto the platform to substantially increase our revenue take rate as part of that.

Speaker 1: So headline number one, what's our role? Our role in all of this is first, and I think it's a good analogy to the gold rush, we're Levi's. Lots of people are doing all sorts of things, striking gold in lots of different ways. And we make the underlying technology where most of these real-time 3Ds experiences are built.

So headline number one what's our role.

Our role in all of the US is first.

And I think it's a good analogy to the gold rush, where levis lots.

Lots of people are doing all sorts of things striking golden lots of different ways and we make the underlying technology, where most of these real time through these experiences are built.

Speaker 1: We'll generate subscription revenue, rattleable revenue from us.

We generate.

Subscription revenue ratable revenue per run.

Speaker 1: The second part of it, and the analogy is a little bit more stretched here if I want to think about it as a steam engine, but every one of these websites needs an engine, an engine for monetization, for analytics, for streaming, for the build process. That's what our operate team does.

The second part of it and the anomaly analogy is a little bit more stretched here for what to think about is the steam engine, but every one of these websites needs an engine an engine for monetization for analytics.

Streaming for the build process.

What are operating.

Speaker 1: And so, you know, we're not necessarily out there with with with picks and shovels looking for nuggets of gold. We are serving the entire collection of multiple industry companies that are building and deploying products both to create those products and to help those products operate. And we generate money in both ways.

And so we're not necessarily out there with picks and shovels looking for Nuggets of gold. We are serving the entire collection of multiple industry companies that are building and deploying products both to create those products and to help those products operate and we generate money in both ways and you also mentioned crypto.

Speaker 1: They also mentioned crypto. There's certainly a lot of noise about that. Within the game industry, there's a lot of hate relationship, you know, there's people that explain how it's wonderful and others that explain why it's a misery. I point out that most, if not nearly all, of the NFTs-centric games that have been built and deployed today are built on unity, we think that's really cool.

Theres certainly a lot of noise about that within the game industry. There is a love hate relationship with people like <unk>.

Client, how it's wonderful and others that explain why it's in Missouri.

Went up at most if not nearly all of the NFC centric dams that have been built and deployed today are built on year to date, we have got really cool.

Speaker 1: We see many great things around innovation that can come from some of these new NFC centric designs. We also see a lot of problems around energy consumption, schemers, scammers, a lot of things we don't want.

We see many great things.

Around innovation that can come from some of these new NFC centric designs. We also see a lot of problems around <unk>.

Energy consumption schemers scammers, a lot of things we don't like.

Speaker 1: And one of the things that we think that we have an obligation is when we see innovation like this, if you find a smart way to make sure that the good things happen and the bad things don't.

And one of the things we think that we have an obligation is when we see innovation like this is to find a smart way to up to make sure that the good things happen and the bad thing stock.

Speaker 1: We do that on behalf of our creators and we do that on behalf of their customers.

We do that on behalf of our creators and we do that on behalf of their customers. So unities wall, where all the things that arent the gold nugget finders in this new world huge wind behind our back for this industry, we are making the tools for creation for operation will bring them around to support virtually every meta versus web three application time, you can imagine.

Speaker 1: So Unity's role were all the things that aren't the gold nugget finders in this new world. Huge win behind our back for this industry. We are making the tools for creation, for operation, we'll bring them around to support. Firstly, every metaverse or web3 application time you can imagine.

Speaker 1: And Luis Parker Lane, it's Steve, we'll add a good question about our financial philosophy, kind of how we think about the economy's a scale growth and profitability. You touched on it a bit on your period remarks, but maybe if you just drill down a smidge more on that, it'd be great.

Great. Thanks very much.

And Louise Parker Lane at Stifel at a good question about our financial philosophy kind of how we think about economics, the economies of scale growth in profitability you've touched on it a bit on your prepared remarks, but maybe if you just drill down a smidge more on that would be great.

Speaker 3: Yeah, thank you Richard. A great question. So I think, you know, if I think at a high level, the framework we use to make investment decisions is very simple, which is we invest in those ideas that create the most value to our creators and to our shareholders. So we've talked a lot about.

Yes, Thank you Richard.

Great question. So I think if I think at a high level. The framework, we use to make investment decisions is very simple, which is we invest in those ideas that create the most value to our creators and to our shareholders. So we've talked a lot about.

Speaker 3: Creators so far in this course. So let me spend a little bit more time about you

Creators so far in this call. So let me spend a little bit more time about shareholders or the three shareholder of the three drivers of shareholder value creation that is revenue growth margin expansion and free cash flow efficiency. They want that would make the biggest difference for us.

Speaker 3: of the three shareholders of the three drivers of shareholder value creation, that is revenue growth, margin expansion, and the free cash flow efficiency. The one that will make the biggest difference for us at this particular point in time is revenue growth.

At this particular point in time is revenue growth just think about it we just crossed $1 1 billion and we operate at a $45 billion market. So we are about 2% of the market. The take rate is way too small and we have business momentum. So that is the biggest driver do you think about the difference of growing out of.

Speaker 3: Just think about it, we just crossed $1.1 billion, and we operate at a $45 billion market. So we are about a 2% of the market. The take rate is way too small, and we have business momentum. So that is the biggest driver. Just think about the difference of growing at a 20% figure over several years versus 30 versus 40% and the cash flow potential of that.

20% CAGR over several years versus 30 versus 40% and the cash flow potential of that.

Speaker 3: Now, that doesn't mean we're not going to pay attention to margins and precast, where we definitely will. So if you think about what we've done since 2019, so between 2019 and 2021, we doubled our revenue, right? That's what we did. In the same, during that same period of time, we improve our non-cap operating margins from minus 16.9 to minus 4.6. So significant improvement. And obviously, we made similar progress on precast.

Now that doesn't mean, we're not going to pay attention to margins and free cash flow. We definitely will so if you think about what we've done since 2019. So between 2019 and 2021, we doubled our revenue that's what we did in the same during that same period of time, we improve our non-GAAP operating.

<unk> from minus $16 nine to minus four six so a significant improvement and obviously, we made similar progress on free cash flow.

Speaker 3: So we actually have been driving both or all three drivers. Now, how have we done it? Which I think is very important to understand. We've been able to do that because we've been driving efficiencies in gross margin and at the same time, leveraging sales and marketing in GMA.

So we actually have been driving both.

Or all three drivers now how have we done it which I think is very important to understand we've been able to do that because we've been driving efficiencies and gross margin and at the same time leverage in sales and marketing and G&A.

Speaker 3: But we've actually invested heavily in R&D. In fact, our R&D budget has doubled between 2019 and 2021, which means that we've held the percentage of revenue flat during that period of time. So what can you expect from Unity going forward?

We've actually invested heavily in R&D in fact, our R&D budget has doubled.

Between 2019, and 2021, which means that we've held the percentage of revenue flat during that period of time. So what can you expect from from unit going forward.

Speaker 3: So in terms of revenue growth, not as we just said, you can expect us to grow between 34 and 36% in 2022, and then at least 30% the wrath.

So in terms of revenue growth as we just said you can expect us to grow between 34% and 36% in 2022, and then at least 30% thereafter. So we will continue to drive that this driver which is critical for us at the same time, we'll continue to make progress on on our non-GAAP operating.

Speaker 3: So we will continue to drive that, the on this driver, which is critical for us. At the same time, we'll continue to make progress on non-Gap operating margin, where we expect to improve our margins by 200 basis points in 2022 to break even in 2023. And obviously, we'll continue to make progress to become profitable, they're asked.

<unk>.

We are we are we expect to make to improve our margins by 200 basis points in 2022 to breakeven in 2023, and obviously, we'll continue to make progress to become profitable thereafter.

Speaker 3: And I would expect free cash flow to follow very much in line with our non-cap operating margin improvement.

And I would expect free cash flow to follow very very very much in line with our non-GAAP operating margin improvement.

Speaker 3: The last thing I'll say is that we're very strategic in where we invest our R&D dollars. We basically apply two-foot-

The last thing I'll say is that we're very strategic in where we invest our R&D dollars.

We basically apply to filters filter number one is due to the idea of some prior years generate value on their own for both creators and shareholders and we make sure that everybody. Every project has the potential of doing that and then the second thing. We do is we look at our portfolio across and we make sure that its balanced across businesses.

Speaker 3: Filser number one is do do ideas and projects generate value on their own for both creators and shareholders. And we make sure that everybody every project has the potential of doing that. And then the second thing we do is we look at our portfolio across and we make sure that it's balanced across businesses.

Speaker 3: And we make sure that it's sustainable in growth. We created a methodology that I think other companies use called H1H2H3, which makes sure that we're investing in the short term, in the midterm and in the long term. So that's overall how I would respond to that question, which I hope that's clear.

<unk>.

And we make sure that it's sustainable and growth we created a methodology that I think other companies use called <unk>, III, which make sure that we're investing in the short term in the midterm and in the long term. So that's that's overall, how I would respond to that question Richard I Hope that's clear.

No that's super helpful Alright.

Speaker 1: All right, so one of the things we like to do here is highlight the depth of our management team. And you'll remember last quarter, we introduced Mark Witten who runs Create. So this quarter, we invited Ingrid List.

Alright, so one of the things we like to do here is highlight the depth of our management team and you'll remember last quarter, we introduced Mark Whitton, who runs create so this quarter, we invited Ingrid less steel who is our senior Vice President and general manager of the operate solutions to add some context to some of the questions you might have in that area and so we've had a hand, Ingrid we've had a handful of questions with.

Speaker 1: who's our senior vice president, general manager of the operate solutions to add some context to some of the questions you might have in that area. And so we've had a hand, Ingrid, we've had a handful of questions with a similar theme. Bavon asked that William Blair might cost at Morgan Stanley , Steven Jewett at the...

Similar theme.

<unk> acid at William Blair Mac cost at Morgan Stanley Stephen Ju at.

Speaker 1: at credit Swiss, but the question is basically revolves around this is like we're seeing a lot of consolidation on the studio side and how are you thinking about kind of first-party data approach that seems to be an effort as some of these studios versus the contextual dynamics offered by the

At credit Suisse, but the question is basically revolves around this is like we're seeing a lot of consolidation on the studio side and how are you thinking about kind of first party data approach that seems to be an effort of some of these studios versus the contextual dynamics offered by the unity platform.

Speaker 5: Yeah, hi everyone. Glad to be here. So, you know, our contextual approach provides numerous advantages.

Hi, everyone.

To be here.

So architectural approach provides numerous advantages.

Speaker 5: Even the largest game companies out there have a few hundred million CIOs or so. We reach more than three billion device.

Even the largest game companies out there have a few hundred million.

Also we reached more than 3 billion devices.

Speaker 5: And unlike, you know, any other aspect companies, the majority of mobile games out there are made with units.

And unlike.

Any other AD tech companies the majority of mobile games out there are made with unity.

Speaker 5: using our engine and our game services.

Using our engine and our game services.

Speaker 5: You know, that's not what it's the same as an ad tech company claiming a 3 billion.

Yeah, that's not quite the same as an AD Tech company, claiming at 3 billion Leach.

Speaker 5: We have deep, deep context about gameplay, what the players like to play, when and how they play the game. And in gaming, that has proven to be the most relevant data for advertised.

We have deep deep context about gameplay, what the players like the play when and how they play the game.

And in gaming that has proven to be the most relevant data for advertising.

Speaker 5: And it's going to take quite a while for anyone, you know, even to get to a quarter of the context we bring to our developer audiences every day.

And it's going to take quite a while for anyone even to get to a quarter of the contacts we bring to our developer audiences every day.

Speaker 5: So let's quickly address first body data. Let's assume what talking about.

So let's quickly addressed first party data.

Let's assume we're talking about first party games data.

Speaker 5: First party data is not bulletproof. First games are a hit driven business. And even the best of games have a decay curve.

First party data, it's not bulletproof.

Games are ahead driven business.

And even the best of games have a decay curve.

Speaker 5: So you really have two choices if you're in that business. Either you create the next hip game, which we all know it's pretty hard to do, or you spend by studios that are producing them.

So you really have two choices. If you are in that business either you create the next hit game, which we all know it's pretty hard to do.

Sure.

Spend by studios that are producing them.

Speaker 5: And that's hard to sustain. The second thing is being end to end with first party in this ecosystem is really impossible.

And that.

Hard to sustain.

The second thing is being end to end with put party in this ecosystem.

Nearly impossible so no matter, how many companies anyone acquires.

Speaker 5: So no matter how many companies anyone acquires, you know, contextual data scales in a much more unlimited way. Well, first party is limited to users only coming to your own and operated game.

Contextual data scales and a much more unlimited way, while first party is limited to use there is only coming to your own and operated game.

Speaker 5: So with respect to industry consolidation, where I can say that we've always had competition in this space, all variety of piece of it. And from the day we started eight years ago, and we've consistently executed and taken and gained market share, including again,

So with respect to industry consolidation, where I can say is that we've always had competition in this space.

All varieties of it and from the day, we started eight years ago, and we've consistently executed and taken and gain market share, including again the largest companies in the space.

Speaker 1: Thank you so much. All right, well now we'll open it up to, see a bunch of your virtual hands up there. So virtual hand number one, we'll have cash rang and at Goldman Sachs if you have a question, that'd be great.

Well. Thank you so much alright, well now we'll open it up to let's.

We see a bunch of your virtual hands up there. So virtual hand number one we'll have kash rangan at Goldman Sachs. If you have a question that would be great.

Speaker 6: Hi, thank you very much and really enjoyed the presentation as spectacular results.

Hi, Thank you very much and really enjoyed the presentation.

Actual results.

Speaker 6: Jonathan, you just give us an update on the weather acquisition. I know that to really excited about the expansion into the designer versus the developer audience that you are excited about, just for the follow up on that, how do you think the synergies are playing on since you close the acquisition, you've had a chance to do even more work. Curious how you gauge the synergy between the core technology and how weather can play into synergizing your design business and operate business. Thank you very much.

John If you could just give us an update on the <unk> acquisition.

We're really excited about the expansion into the.

Designer versus the developer audience that Youre excited about just wanted to follow up on that how do you think the synergies are playing out since we closed the acquisition you've had a chance to do even more work.

Curious how you gauge the synergy between the core technology.

<unk> can play in to synergize in your design business and operate business. Thank you very much.

Alright.

Should be on here momentarily sure.

Speaker 1: talking to one microphone and a dead camera. So thanks for the question, great question. So one of these I cash haven't really sort of overwhelmed by.

Talking one at microphone on a dead camera. So thanks for the question Great question. So one of those cash haven't really kind of overwhelmed by.

Speaker 1: And I've had a lot of conversations with light. I'm not going to name the people I'm having conversations with. But if you read the Hollywood rags, these are the names of all the people that matter and similar set of conversations with folks in the game industry. And in the first synergy that comes out of this is

And I've had a lot of conversations with light I'm not going to name the people aren't having conversations with but.

If you read the Hollywood <unk> of the names of all the people that matter and similar set of conversations with folks in the game industry.

And the first centers that it comes out of their shares.

Speaker 1: We just liberated one of the coolest assets that existed all of art and all of technology and all of content creation, the Weta tool set.

We just liberated one of the coolest assets existed all of art in all of technology in all of content creation, whether it's water.

<unk>.

Speaker 1: The number of companies that are knocking on my door to say, we want to be your pilot customer because we want those tools is pretty substantial.

The number of companies that are knocking on my door to say, we want to be your pilot customer because we wont have those tools.

Pretty substantial.

Speaker 1: And so it's, I can't really overstate how much interest there is and engaging now that the tools aren't captive of a single company that's got, if you will, I alum does not want to use tools from, what are they compete? I alum now wants to use tools from Unity. Now I'm using I alum as an example. I'm not,

And so it's.

Not really overstate how much interest there is.

Engagement, we know that.

The tools arent captive.

A single company that Scott.

If you will.

<unk> does not want to use tools from what are they compete Ireland now wants to use tools from unity now amusing Ireland with an example.

Speaker 1: I don't want to point to them. So let me take that last part about the naming of them, but the notion of it is pretty.

Because I want to point to them.

So let me take that last part about the naming of them, but the notion of it is pretty clear.

Speaker 1: The second point I would make is that

The second point I would make is that.

That must.

Speaker 1: This exists not just in the film industry, but in the game industry that wants, there's stuff to look that good. And architecture and other digital twin or whatever, then they want their stuff.

This exists not just in the film industry, but in the game industry that once their stuff to look that good and architecture and other digital twin or where do they want their stuff to look that good.

Speaker 1: And so the liberalization or the democratization of those tools is a winner. The second thing, and this is a little bit more subtle, but just as important.

No.

The the liberalization of the democratization of those tools is a winner.

The second thing and this is a little bit more subtle, but just as important.

<unk>.

Speaker 1: The whole metaverse of the real time 3D revolution means that folks that used to work in 2D are now increasingly something they want to work in 3D in real time. These are gigantic.

The whole met over so the real time <unk> Revolution methods.

Folks that used to work in <unk> are now increasingly want to working with <unk> and real time. These are gigantic.

Speaker 1: datasets. And it is really, really hard to take something from the cloud into your internal system to use it on somebody's individual desktop. In movie things around some people can create and deploy.

Datasets and it is really really hard to take something from from the cloud into your internal system to use onto somebody individual desktop.

And move these things around so people can create and deploy the dev ops problems around that are Legion.

Speaker 1: And so the next part of this is what we take the wetter tools into improved UI. So other people, many of them, not just the people who have been trained on them. And we integrate them with Unity and other tools of put it into the cloud. We solve a really huge problem, which is just the entire creation process, making it simple and accessible.

So.

The next part of us.

While we take the <unk>.

Tools into improved UI, so other venues and not just the people who've been trained on them and we integrated with unity and other tools or put it into the cloud we solve a really huge problem, which is just the entire creation process, making it simple and accessible.

Speaker 1: This is why you saw things like Perseq. My not a minute is much sense when we did it, but we knew other things were coming. When we put all this together, what's exciting about it is it solves massive pain in the creator community across many industries.

This is why you saw things like car segment not about as much sense. When we did it but we knew other things becoming when we put all this together what's exciting about it.

It solves a massive pain and the creator community across many industries and it also puts us in harms way of yet another new ratable business model that I think is going to be.

Speaker 1: And it also puts us in harm's way of yet another new radical business model that I think is going to be unity getting our share of the value of what problems we solve, which is what we've always been doing. So great question because it really gets to two huge parts of the value proposition. This asset, what a dual trend, is much more valuable inside of unity than it was as an independent captive part of what affects.

You're already getting.

Our share of the value of what problems, we saw which is what we've always been doing so.

Great question, because it really gets to huge parts of the value proposition.

What our dual trend is much more valuable inside of the Internet. It was as an independent captive part of what FX and then connecting it to unity and other tools is a super valuable need for people in these industries and that can accrue back to our shareholders.

Speaker 1: and then connecting it to Unity and other tools is a super valuable need for people in these industries and not gonna crew back to Washington.

Speaker 1: Schubert Convelling, thank you so much. Thank you for the rats. Bavann over at the playing place.

Super compelling. Thank you so much thanks Russ.

Levonne over it.

William Blair.

Speaker 7: Great, thanks, Tim, and let me echo the progress that I cast into the spectacular quarter. I guess there's a question maybe, maybe with John and for English, a little bit. So I don't catch asking a special question by Metaverse, but I want to delve into that a little bit more. You know, John , he said, okay, we're not the guys, we're gonna be building those nuggets or finding the nuggets, we're gonna provide that platform. But if we fast forward.

Great. Thanks, Chairman and let me Echo the congrats Catherine.

Second quarter I guess it was a question maybe for John and for Ingrid.

Little bit so I know cash after initial question about manifest, but I want to delve into that a little bit more John you said, okay. We're not the guys are going to be building those nuggets of finding the nuggets were going provider platform, but if we fast forward.

Speaker 7: five years. We've got lots of this stuff that's being developed in Unity.

Five years, we've got lots of the stuff that's being developed immunity.

Speaker 7: I love to walk through how you think the data layer, the way you interoperate between consoles and games and different games ends up being a huge, huge value to you from the operating sites. So imagine being able to target these people across this multi-data layer, multi-metaverse, multi-3D experience. Help me think through how you're thinking about that and what that might look like five, six, seven years down the road.

I'd love to walk through how you think the data layer the way your inter operate between consoles and games in different games ends up being a huge strategic value to from the operating side, so imagine being able to target. These people across multi data layer multimate averse multi three D experience help me think through how you're thinking about that and what that might look like.

567 years down the road, we'll hopefully sooner than that but.

Speaker 1: Hopefully it's shorter than that, but

No.

Speaker 1: most all content you consume today, television, or any other sort of content other than a game, is basically an artifact by the time you have it. It's a model, it's a video, it doesn't change. It is what it is. It is one thick...

Sure.

Most all.

Content that contributed <unk> TV or any other sort of content other than a game.

<unk> is basically an artifact by the timing of it it's a model.

It's video it doesn't change it is what it is that is one.

Thanks.

Speaker 1: And the only software that's typically operating on it might be something to stream it. And that usually a big part of that is a compression and decompression algorithm. So it can go more efficiently over whatever transmission technology is being used over the air or cable or satellite or everything. So you just files are too big to move on.

And the only software, which typically operating on it might be something to stream it.

Usually a big part of that is up.

Compression and decompression algorithm, so I could go more efficiently over whatever transmission technology is being used over the air or.

Cable or satellite or referenced just a pilot retro victim of around.

Speaker 1: And so these artifacts are I think going to be dead and buried by 2030. That's just not the way it's going to

And so these artifacts are.

We're going to be dead and buried by 2030 is just not the way it's going to work the way, it's going to work in the future all of the work that.

Speaker 1: The way it's going to work in the future is all of the work that a Peter Jackson, together with the cinematographers, together with the artists and the technologists.

Peter Jackson together with the Cinematographers together with the artists and the technologists there.

Speaker 1: That's going to be data. It's all a giant piece of data. Now what operates on that data are a set of tools that turn that data into the next frame. And remember, now that frame is being produced in real time in response to user. And...

That's going to be data.

It's all a giant piece of data.

Now what operates on that data our set of tools that turn that data into the next frame and remember now that frame is being produced in real time in response to user input.

Speaker 1: Now, that might be you sitting on a couch, wanting to compose your Christmas picture, put different clothes on your kids, instead of going to Nike or Everlane or all these websites, you say, I want all of us in whatever color, that'll come to you, that'll be the meta-therous version of shopping. But whatever that is, it's gonna be data separated from

That might be you are sitting on a couch wanted to compose your Christmas picture put different close on your kids instead of going to like Nike or ever land are always website, you say I want all of us in whatever color that'll come to you that will be the <unk> version of shopping but whatever that is it's going to be data.

Separated from its on an artifact.

Speaker 1: It's data that gets operated on by tools. And those tools will be things like lumberjack or things like the Manuka rendering system or Unity to create an outcome that you see as a friend, or you see as an immersive experience if you got an ARVR device on, or if you're consuming, you might have seen the Metacast stuff that Peter Moore showed, those kinds of things. So massive amounts of data.

Data that gets operated on bi tools and those tools will be things like lumber dock or things like.

The manuka rendering system or unity to create an outcome that you see is a frame where you see as the immersive experience. If you got an IRR VR device on or if youre consuming Mike you might have seen the Medicare stuff that Peter Moore showed those kinds of things so massive amounts of data really sophisticated tools and these tools.

Speaker 1: really sophisticated tools and these tools create the frame for you to consume in that in the top. So where was Unity going to be?

Create the frame for you to consume.

And the talks were originally youre going to be.

Speaker 1: We finally get to be simple in five, six, seven years. We've been building and operating this hotel at the same time. It's going to be pretty simple. The tools will be there. Users will collaborate. They will go to our cloud offering. They will create what they want to create. It's always going to be up there. They connect their user to it. The user.

We finally get to be simple and 567 years.

In building and operating this hotel at the same time.

It's going to be pretty simple with tools will be there. They will be users will collaborate they will go to our cloud.

Offering they will create what they want to create its always going to be up there the connector user towards the user concerns.

Speaker 1: And we will be able to create, I believe, systems where the most sophisticated high fidelity creators, you know, people making high on film or high on games or high on, you know, car configurators or digital twins. They're going to have access to the finest of tools, you know, multiple layers down in an editor. And we're going to over time simplify it. So your high school kid can make a simple game or simple movie using the same tools. And you know, maybe not the level of the delivery and the level.

And we will be able to create I believe systems, where the most sophisticated high fidelity creators people, making high end film or high end games or high end.

Our configuration errors or digital twins.

We're going to have access to the finest of tools multiple layers down on Internet <unk>.

And we're going to over time simplify it. So your high school kids can make a simple game or a simple multi using the same tools and maybe not to a level of fidelity on the level of complexity and that puts unity in the same business. We're now creating operate that doesn't change, but then there is another business that surrounds ratable.

Speaker 1: And that puts you in the same business for now, you know, create operate that doesn't change. But then there's another business that surrounds, you know, radical business around that cloud instance of what we're doing.

A ratable business around cloud.

Cloud instance of what we're describing and I think we're uniquely positioned to create value for customers in our space because when these files get to be gigabytes of men Petabytes moving it around is really hard.

Speaker 1: And I think we're uniquely positioned to create value for customers in our space because when these files get to be gigabytes and then petabytes, moving it around is really hard. The way it typically works now, and it's a misery for the DevOps side of content creation, is no matter what the art they're trying to produce, whether it's a video or it's a game or it's a digital twin,

The way it typically works now and it's a Missouri for the Dev ops side of content creation.

No matter what the.

They are trying to produce whether it's video or it's a game or it's a digital twin.

Speaker 1: Those pieces of that data are moved onto one PC, or Mac, or PC or Workstation, and another and another and another and the reassembling it and they're pushing it back out again and then moving it into sometimes hosted cloud services and then moving it back so they can operate on it.

Those pieces of that.

<unk> moved under one PC or Mac, or PCR workstation, and another and another and another reassemble out there pushing it back out again, and then moving it into sometimes hosted cloud services and then moving it back so they can operate on it.

Speaker 1: Where they created, it should be where it lives. It should be really awkward. Yeah, just a lot simpler. So the line of sight we have.

Where they created it should be where it lives we really operate.

Just a lot simpler so the.

Your line of sight, we have.

Speaker 1: We've been building something that's got a lot of complexity. As we describe it, you've heard this over the years, been an investor for what?

Is.

We've been building something that Scott.

A lot of complexity as we describe it you've heard this over the years been an investor for a while but now are covering us for a while.

Speaker 1: But now are covering us for a while. You know, the simplicity comes as we get closer to what we've been approaching because it's no longer a trophy of what we're building it just for.

The simplicity comes as we get closer to what we've been approaching because it's no longer a disruption of what we're building. It just works now.

Speaker 1: Now, angry, you might want to speak to one major piece of this to add to Milan's question, which is how important in this is the operate side, and in particular, the cell-served notion of the operate.

Now acreage you might want to speak to one major piece of the just to add.

Ron's question, which is how important is the.

Side and in particular, the self serve notion of the operated side.

Speaker 5: Yeah, thanks, Bobon. So a couple of things, I think if we think about, John talked about the next rendition of metaverse destination. If we think about it, all of those renditions will have wanting that too, which it will be some form of multiplayer experience.

Yeah. Thanks, So a couple of things.

I think if we think about.

John talked about the next rendition of meta versus destination and if we think about it all of those renditions, we'll have one thing thats to which it will meet some form of multi player experiences.

Speaker 5: with at times millions of concurrent users coming together in an experience. And on the data front, an experience like that.

With at times millions of concurrent users coming together.

And in an experience and on the data front.

Like that.

Speaker 5: There's always gonna be some kind of, you know, bad behavior, so you need to moderate intelligent moderation tools. All of those experience will need monetization and that requires obviously some intelligence and data to be able to serve the most relevant monetization solution. And an engagement in whatever, whoever is the creator of that.

It's always going to be some kind of bad behavior. So you need moderate intelligent automation tools.

All of those experience will need monetization and that requires obviously some intelligence and data.

Be able to serve the most relevant monetization solution and an engagement.

Whatever whoever is the creator of that experience with need to engage with their with our users.

Speaker 5: experience with need to engage with their users.

Speaker 5: And they want to run engagement campaigns, et cetera, that requires a similar set of data that we use today to make sure that our developers like successful in running their day.

And they want to run engagement campaigns et cetera that that requires.

A similar set of data.

We use today.

To make sure that.

<unk> successful in running their games.

Speaker 7: Got it, got it. Thanks for the detailed response. That was really helpful. Appreciate it guys. Thank you. Matt Cost.

Got it got it thanks for the detailed response there was really helpful. I appreciate it guys. Thank you.

<unk> cost at Morgan Stanley .

Speaker 8: Great, thanks. I think it says I can't get my video on, but that's very odd. I'll do it on audio. So I guess just on the create side, it says that there goes the video.

Great. Thanks, Tom I think it says I can't get my video on but that's alright ill do it on audio.

So I guess just on the on the creative side.

It says that.

Leo.

Speaker 8: You guys still hear me? Are we here to join? Yeah, okay, cool. Sorry about that. It froze for a second. So on the create side, it looks like you put up, you know, the strongest.

Can you guys still hear me, yes, we.

Okay cool sorry about that approach our sector on the credit side.

It looks like you put up.

Speaker 8: order really ever. I mean, even if you back out $4 million for WEDA, it was bigger dollar ads, you know, then you had last quarter, which I think was already the biggest quarter you had done is a, you know, 1500 basic points acceleration. I guess are there any specific drivers that you would point to and create that that drove this strength and has something changed in the past two quarters?

Strongest quarter really ever I mean, even if you back out $4 million for whether it was bigger dollar AD than you had last quarter, which I think was already the biggest quarter you had done at the.

500 basis point acceleration I guess are there any specific drivers that you can point to and create that growth.

This strengthened has something changed in the past two quarters.

Speaker 1: I'll give a high level to that and Luis you might want to add to this. But the first is we finally got some scale on on non-gaming applications, digital twins and and miracles. And so, you know, we talked a lot about we're having any early product traction and now we're getting more more substantive, you know, more substantive product traction as part of it. The other part is I think we've we've done a really nice job under Mark Wittens' leadership to.

I'll give a high level of Aladdin Luis you might want to you might want to add to this but.

The first is that we finally got into some scale on.

On non gaming applications digital twins.

Vertical and so.

We talked a lot about where how we're getting early product traction and now we're getting more more substantive more substantive product <unk> part of it.

The other part is.

We've done a really nice job under Mark <unk> leadership too.

Speaker 1: help simplify and clarify our go-to-market.

Help simplify and clarify our go to market.

Speaker 1: And then lastly, we've seen, I'd say, an increase in productivity out of R&D and producing products and features that hit the product market fit that you want to see. But it's frankly, the stuff we were talking about, I have to admit, took a little longer to just date.

And then lastly, we've seen.

Say, an increase in productivity out of R&D in producing products and features that hit.

The product market fit that you want to say, but.

It's frankly, it's what the stuff we were talking about half that metric a little longer to gestate.

And Ah.

Speaker 1: I'm happy to be here now, been looking to wanting to be here as I was a year ago, but we feel really good about the underlying trend lines and create.

Im happy to be here now then looking to wanting to be here as I was a year ago, but we feel really good about the underlying trend lines and create a.

Speaker 1: I can point to individual customers, but you see the announcements there. Now starting to happen with, you know, some level of, you know, regulatory. And that happens with things like Hyundai, which you, you know, see in the non-gaming side, or you see, like, you didn't use to see major companies like Riot, reduce multi-platform, produce multi-platform inclusive of console on third-party tech, and now they do with Unity. So you're seeing it in the market.

I mean, I can point to individual customers, but you see the announcements, they're now starting to happen somewhat level.

Alrighty and that happens with things like <unk>, which you see on the non gaming side or you see like you didnt use to see major companies like riot reduce multiplatform British multi platform inclusive of console.

On third party tack in how they deal with unity <unk>.

Speaker 1: I took a little while to catch up on the execution side because some of these things take a while to build the fail

Seeing it in the market.

A little while to catch up on the execution side, because some of these things take a while to build with the sales cycle can be awhile.

Speaker 3: Yeah, thanks, John , just to compliment and in line with what we said earlier, we're getting good traction both in games and I'll try to games, which is just terrific. No, we expanded our market share within games from a pretty healthy base. And as you heard me say earlier, that's coming from AAA games all the way to in this game. So we're covering more and more customers across the board.

Yes, Thanks, John just to complement and in line with what we said earlier.

Getting good traction both in gains on outside of games, which is just terrific note, we expanded our market share within gains from a pretty healthy base and as you as you heard me say earlier that that's coming from AAA games, all the way to win these games, so we're covering more and more customers across the board.

Speaker 3: And I think it was really a good non-game in quarter. I talked about some of the success stories, not a lot of in the auto industry, I mean, from the auto industry to education, to machine manufacturers, right? So we really think a lot of traction with digital twins and we'll continue to try that. No, we think that there is a lot more opportunity ahead.

And I think it was really a good non gaming quarter.

I talked about some of the success stories in a lot of in the auto industry I mean from a auto industry to education to machine manufacturers right. So we're really seeing a lot of traction with digital twins.

And we will continue to drive that we think that there is a lot more opportunity ahead.

Speaker 3: Now, not every quarter will be perfect, right? We always have a quarter there where we struggle, but we're very happy with what we are today. Very, very happy.

Now not every quarter will be perfect or hiseq.

<unk> had a quarter, there where we struggled bad.

We're very happy with where we are today very very happy.

Speaker 1: And for those of you that have seen the sports meta-cast stuff that we put out there in some of the videos, that's basically a digital twin. What are we doing? The cameras are IoT. We're consuming the data of 50 to 120 cameras, depending on the sport and the instance. And then we're presenting it back. But when you look at that and imagine that as a digital twin,

And for those of you that have seen.

The sports Med cast stuff that we put out there and some of the videos that is basically a digital twin what are we doing the cameras or Iot. We're consuming the data of 50 to 120 cameras, depending on the sport. The instance, and then we're presenting it back but when you look at that and imagine out of it.

Speaker 1: Look how dynamic it is. If you look at digital's when applications coming out of most companies, they move about as fast as a painting. Nothing's really happening there. It was some data that's coming off of it. It's a static model. People are starting to see what you can get in the dynamism off their data sets and they like what they see. Unity has competitive advantage in the space and I think it's being internalized by folks across multiple undershacks.

Little twin.

Like how dynamic it is if you look at digital twin applications coming out of most companies.

They move about as fast as a painting nothing is really happening there were some data that's coming off of it it's a static model.

We're starting to see what you can get the dynamism off there after our datasets and they like what they see.

He has competitive advantage in this space and I think it's been internalized by folks across multiple industries.

Speaker 3: We don't talk enough about our net expansion rate, known 140% just massive. No, I mean, very few companies have are able to achieve that. And we've been able to sustain it for a pretty long time. No, and that is both create and operate. So very, very healthy there, as we continue to add new customers, we just wanted to add that piece. Right. Thanks, all Paul.

We don't talk enough about our net expansion rate of 140% just massive I mean very few companies have are able to achieve that and we've been able to sustain it for a pretty long time now and that is both create an operator, so very very healthy there as we continue to add new customers. We just wanted to add that.

<unk>.

Great. Thanks, guys. Thanks, so much Brent <unk>.

Hybrid.

Speaker 9: Thank you. Great to go out and see the team here. I'll just go ahead and ask the question here. I want to drill down into the Operate Business.

Thank you.

Two more <unk>.

Jim here.

I'll just go ahead and ask.

I asked the question here I wanted to drill down into the operating business.

Speaker 9: Obviously, we spent a lot of time with the best of talking about the ad part of operating, but if I look at the Unity Gaming Services suite, and there's eight add-on products.

Obviously, we spent a lot of time with investors talking about the AD part of operate.

If I look at the UT gaming services suite eight add on products. There I'll, let data just trying to think through growth levers for operate maybe for acreage you job.

Speaker 9: They're all in beta, just trying to take through growth levers for operate, maybe for angry to you, John . What's the early feedback on some of these new add-ons? Can they become incremental growth drivers to the add?

What's the early feedback on some of these new add ons can they become incremental growth drivers for the AD.

Speaker 1: you know, business in 2022 or those really seeds to drive growth in 2023, any more color around how we should think about the, the lovers for offering beyond just ads, which obviously you're being shared. So I'm going to take part of it, but I do want to just speak to this one. She runs all of that. And let me just admit, it's fun to be in the same room. I did my one-on-one with her an hour ago. And we spent the last hour with

Business in 2022 or are those just really seeds to drive growth in 2023 of any more color around how we should think about the levers for operate beyond just adds which obviously you're gaining share so I'm going to take part of it but I'm just wondering where to speak to this one she runs all of that and let me just submit it's fun to be in the same room I did my one.

In one month or an hour ago.

And we spent the last hour with this on a whiteboard.

Speaker 1: All of the services, how they plug in together, how they're synergistic, how they draw people into revenue services, how they solve problems.

All of those services, how they plug it together, how they're synergistic how they draw people into revenue services, how they solve problems.

Speaker 1: I think one of the less appreciated, but more important parts of Unity, is just how well this works, and how well it's gonna allow us to scale. And some of the principal components are, just a couple high level points. One is all those game services, typically they have two, three, four, five vendors to do all of these things, all different data types, different data sets, it's impossible in the...

I think one of the less appreciated but more important parts of unity is just how well.

All of this work and how well it's going to allow us to scale.

And some of the principal components are just a couple of high level points. One is all of those game services typically they have 2345 vendors to do all of these things all different data types different datasets, it's impossible along that way.

Speaker 1: It's a mess. And so we solve a mess. All of these things require pretty tricky implementation. Ingrid is maniacally focused on self-serve, hit a button and it just works. And they all connect magic magic to a revenue producing service that we love called multi.

It's a mess and so we saw the mass.

All of these things require pretty tricky implementation Ingrid is maniacally focused on self serve and a button and it just works and they all connect magic magic to a revenue producing service that we love called multiplex.

Speaker 5: So, um, angry, you might want to take it from there. I I'm taking a little parade because it's a fun parade to stand in front of. Oh, thank you, John . So, um, first let me just, you know, you alluded to it to eight, actually. The feet that is unity gaming services combined 14 services.

So.

<unk> you might want to take it from there I'm, taking a little range of its upon parade to stand in front of John So.

First let me just.

You alluded to two eight actually the fee.

That is the unit the gaming services combined <unk> services.

Speaker 5: into one platform, you know, one dashboard, one login. And the John's point about self-service, we made it so, so simple for our developers to quickly launch multiplayer cross-platform games. We just have a few simple clips from the editor.

And the one platform one dashboard, one login and to John's point about self serve we made it. So so simple for our developers to quickly launch multiplayer a cross platform games, we get a few simple clicks from the editor.

Speaker 5: 59% of all Americans are playing multiplayer games.

59% of all Americans are playing multiplayer games. So we are seeing that you didnt see that the interest in building these games.

Speaker 5: So we are seeing at Unity that the interest in building these games is there.

They're from developers from studios of all sizes, but it is just too high.

Speaker 5: from studios of all sizes, but it is just too hard, till then for the small to mid-sized studios. They need to hire an army of like network engineer, a security engineer.

Till then for the small to mid sized studios they need to hire an army of like network Engineers security Engineers and now they have access to a platform like us ours that reduces the resources on the risks.

Speaker 5: And now they have access to a platform like us, ours that reduces their resources and the risks to realize their vision. So we've seen thousands of projects.

Realized our vision. So we've seen thousands of projects started using unit and gaming services in less than three months.

Speaker 5: thought it using unity gaming services in less than three months.

Speaker 5: And the feedback has been really positive, but also helpful. We still have a lot of work to do to round out the performance and feature sets as they need in the platform. And I think what is really exciting is that we are seeing early some of these smaller studios going forward than they've ever had before. And that makes us really excited for this.

And the feedback has been really positive but also helpful.

We still have a lot of work to do and to round out the performance and feature sets.

As they need in the platform and.

And I think what is really exciting is that we are seeing early some of these smaller studios going broader than <unk> ever had before and that makes us really excited for that space.

Speaker 9: That's exciting and 14 instead of eight implies you've been really busy. So great thing you've been and thanks for taking my question.

What's exciting about 14 instead of it implies you've been really busy so great seeing you again and thanks for taking my question. Thank you. Thank.

Speaker 1: All right, well, we have one time from one last question from Martin Yang. Head up.

Thank you alright, well, we have one time for one last question from Martin Yang.

So there is at Oppenheimer Hi, Thank you for taking my question. My question is around digital Avatar and now you have a lot more creation tools. How do you think about providing direct venues for creators to monetize digital creation rigidity.

Speaker 10: Hi, thank you for taking my question. My question is from Digital Avatar. And now you have a lot more creation tools. How do you think about providing direct venues for creators to monetize their digital creation through you?

Speaker 1: There's a lot of pieces on that. Let me just have a little bit of blonde by throwing water on one idea that I think seems to have gotten a lot more.

There are a lot of there's a lot of pieces in that.

Let me just have a little bit of on by throwing water on one idea that I think seems to have gotten.

Speaker 1: you know, currency in the market, then I think it probably deserves. Is the idea that we all want to avatar.

A lot more.

Currency in the market and I think it probably deserves.

Here that we all want one avatar.

Speaker 1: I really don't want to show up in my swimsuit for an RPG with a sword, my hand. If that's my avatar, I think we're gonna want a lot of things that are more dynamic than that.

I really don't want to sharpen my swimsuit for an RPG with assured my hand.

That's why our average I think we're going to want a lot of things that are more dynamic than that.

Speaker 1: The second thing is with the acquisition of Weta and Zeeva and some of the other things we have now on a portfolio, when people are going to try to create avatars, I mean look at the young lady you just saw when she doesn't truly exist, but you know the average creator can do that, look at the movies like Avatar and the Marvel stuff created with the Weta tools, you can do anything in the community.

A second thing.

With the acquisition of water and the zebra and some of the other things we have now in our portfolio. When people are going to try to create avatars I mean look at the young Lady you just saw that she doesn't truly exist, but the average grader can do that look at the movies like avatar and the Marvel self created with a web tools.

You can do anything immunity.

Speaker 1: And so, you know, my sense is that we are going to see a huge amount of creation on that side. You're also going to see something again. He didn't directly ask this, but

So my sense is that we are going to see a huge amount of creation on that side.

You're also going to see something again, it didnt directly asked us but.

Speaker 1: I think it's more interesting when it comes to some of these asset creations. Most NFTs today are just really JPEGs printed on a blockchain. What's interesting and real time 3D is that these assets have utility.

I think what's more interesting when it comes to some of these asset creation. Most entities today are just really JPEG.

Printed on a blockchain, which interesting in real time through data is that these assets have utility and our strength and resilience anybody has quite a game knowhow and asset can have utility and one of the things that we're hot on the trail for.

Speaker 1: you know, strength and resilience. Anybody who's played a game know how an asset can have utility.

Speaker 1: And one of the things that, you know, we're hot on the trail floor is enabling, you know, the assets that a consumer might want to own and setting them up in a smart.

Enabling the assets that a consumer might want to own and setting them up in a smart way. So the underlying registries of value can be built upon and trade it in.

Speaker 1: So the underlying registries of value can be built upon and traded. And so we see a lot of opportunity. We also see a lot of charlatans out there doing some pretty miserable things. And it looks like, you know, some of them look a little bit like Ponzi schemes. And so our eyes are wide open, huge opportunity filled with land.

So we see a lot of opportunity.

We also see a lot of charlatans out there doing some pretty miserable things and.

And it looks like some of them look a little like Ponzi schemes.

And so we at bars are wide open huge opportunity.

Speaker 1: And one of the things that we truly believe is unity is place in the world.

Filled with landmines and one of the things that we truly believe is <unk> place in the world.

Speaker 1: is to help our creators realize the good part of them thing without having to suffer stepping on a landmine.

Is to help our creators realize the good part is something without having to suffer stepping on a landmine.

Speaker 1: And we started that way when we enabled creators to get the multiple.

And we started that way when we enabled creators to get the multiple platforms before unity. Most contract was built with tools from one platform to make the content for that platform and tools for another platform to do it for another platform to expensive time consuming and it resulted in things like some of the best game companies in the world like they took.

Speaker 1: Before Unity, most content was built with tools from one platform to make the content for that platform and tools for another platform to do it for another platform. It's expensive time consuming and it resulted in things like some of the best game companies in the world, like it took, you know, was at Supercell and Clash of Clowns, took them like a year to come out on Android. I mean, that is just massive.

Or that supercell and clash of clans Tacoma, a year to come out on Android.

That is just massive <unk> opportunity.

Speaker 1: And so we help our creators solve these problems and the area you're asking about has lots of problems that we've got our eyes wide open and clear about and ways we think we can help solve them for our customers.

And so.

We help our creators solve these problems in the area you're asking one about has lots of problems that we've got our eyes wide open and clear about in ways. We think we can help solve them for our customers.

Thank you very much alright.

Speaker 1: Well, thank you very much. We, you know, good to have a lot of things to talk about. I'll let John kind of conclude, but just so you know, and you will be at the Baronberg, Daiwu, Morgan Stanley , and Wolf Conference is this quarter.

Thank you very much.

Good to have a lot of things to talk about I'll, let John kind of conclude but just so you know.

It will be at the Baron Berg <unk>, Morgan Stanley and Wolf conferences this quarter.

Speaker 1: All right. Well, hey, everybody. Thanks for being with us today. Good evening to those of you on the East Coast, good afternoon on the West Coast, but we enjoyed it. We hope you did too. So thanks again.

But John if you just want to close up that'd be great.

All right, well, hey, everybody, thanks for being with US today, good evening to those of you on the East coast. Good afternoon on the West coast, but we enjoyed it we hope you did too so thanks again.

Thank you everyone.