In this video, I will go over Unity's (U +13.57%) Q3 earnings and talk about the acquisition of Weta Digital. You can find the video below, but here are some of the highlights.
Earnings summary
Unity reported revenue of $286.3 million, up 43% year over year (YOY).
- Create solutions segment revenue grew 34% YOY to $83.7 million.
- Operate solutions segment revenue grew 54% YOY to $185.0 million.
- Strategic partnerships and other segment revenue came in at $17.6 million, a decrease of 3% YOY.
- Customers generating more than $100,000 of revenue in the trailing 12 months reached 973, up from 739 the year prior.
- Dollar-based net expansion rate came in at 142%, down from 144% one year earlier.
As for the full year, Unity now expects to grow revenue by 40%, which is a big increase from the start of the year, when it was expecting growth closer to 20%.
Weta Digital
Unity will acquire Weta Digital for $1.625 billion in cash and stock. Weta Digital's VFX teams will continue to exist as a stand-alone entity known as WetaFX and are expected to become Unity's largest customer in the media and entertainment space. This acquisition will give creators the tools and technology that built characters and scenes from iconic films such as Avatar, Lord of the Rings, and Game of Thrones.
This move, as well as the acquisition of Parsec earlier this year, further increases the value that Unity gives to creators and further increases my confidence in the company's long-term prospects.
For the full insights, do watch the video below, and consider subscribing.
*Stock prices used were the closing prices of Nov. 9, 2021. The video was published on Nov. 10, 2021.
