Unity posts first profitable quarter on non-GAAP basis, expects to be profitable in 2023

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Unity has posted its first profitable quarter in the company's 18-year history, albeit on a non-GAAP basis.

In a letter to shareholders, the company reported a non-GAAP operating profit of $13 million for the three months ended December 31, 2022. For the first three quarters of this year, Unity posted a non-GAAP operating loss of $22 million, $44 million and $37 million respectively.

The company also reported record full-year revenues at $1.39 billion.

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In an earnings call, senior vice president and chief financial officer Luis Visoso told investors that while Unity was only profitable (on a non-GAAP basis) in Q4 2022, the company expects to be "profitable every single quarter" in 2023.

He said the profitability improvement is roughly equal between Create Solutions – the segment of the business that focuses on the Unity Engine – and Grow Solutions, a new reporting segement that handles Unity's ads products and services.

"Going forward, Create Solutions will include all products that were included in Create Solutions in 2022 plus Unity Gaming Services, which was previously reported under Operate, and Strategic Partnerships, which was previously reported separately," the company explained.

"Grow Solutions will include our Ads products, Supersonic, Aura and Luna."

Also included in Grow will be IronSource, which Unity acquired last year. The company told shareholders the integration of IronSource is "progressing as planned."

Visoso added that Unity is taking other measures to improve profitability, such as last month's announcement it would be eliminating up to 300 roles at the company. This followed another 225