Unity Software Inc. reported its financial results for the quarter and nine months ended September 30, 2024, revealing a decline in revenue and continued operating losses. For the third quarter of 2024, Unity generated revenue of $446.5 million, a decrease from $544.2 million in the same period of 2023. For the nine months ended September 30, 2024, total revenue was $1.36 billion, down from $1.58 billion year-over-year. The decline in revenue was attributed to decreased performance in the Grow Solutions segment due to competitive pressures and a significant drop in Create Solutions revenue following the termination of a subscription agreement with Wētā FX Limited.

Operating expenses for the third quarter were $461.6 million, down from $520.3 million in the prior year, while total operating expenses for the nine months were $1.62 billion, compared to $1.68 billion in 2023. Despite the reduction in expenses, Unity reported a loss from operations of $127.1 million for Q3 2024, slightly improved from a loss of $127.4 million in Q3 2023. The net loss for the quarter was $124.5 million, compared to $125.3 million in the previous year. For the nine-month period, the net loss was $541.8 million, a decrease from $572.3 million in 2023.

Unity incurred approximately $205 million in employee separation costs during the nine months, including $127 million in stock-based compensation. The company also recorded $45 million in restructuring costs primarily related to office closures and workforce reductions, which involved eliminating about 25% of its workforce in early 2024.

In terms of cash flow, Unity reported net cash provided by operating activities of $203.4 million for the nine months ended September 30, 2024, an increase from $162.6 million in the same period in 2023. The company had cash and cash equivalents totaling $1.42 billion as of September 30, 2024, down from $1.60 billion at the end of 2023.

Strategically, Unity has made significant changes, including a reversal of recent pricing adjustments for its Create Solutions, which had led to negative customer feedback. The company has also undergone executive transitions, with Jarrod Yahes set to become the Chief Financial Officer in January 2025. Unity continues to focus on its core business areas, including the Unity Engine, Cloud, and Monetization, while limiting investments in non-core segments.