Unity Software Inc.

and we're live. Great. Hey, thank you very much. My name is Richard Davis, and welcome everyone to Unity's Financial Results Webcast. Today, we'll be highlighting our results for the March first quarter. So with me on the call today is John Riccatello, President, Chief Executive Officer, and Executive Chairman, and Luis Visoso, Senior Vice President and Chief Financial Officer. So as we did last quarter, we will open up with introductory remarks by John and Louise. And then we've collected and sorted questions from our analysts. And the goal, as before, was to help investors understand our business model and outlook in the most efficient way possible. And then finally, time permitting, we will have the last 10 minutes or so for panelists to ask additional questions. So let's go on with the safe harbor statement. I'd like to remind everyone, the participants, that during this conference call, We were making forward-looking statements, including our financial outlook for the second quarter and full year of 2021, as well as statements about goals and business outlooks. and industry trends and market opportunities, expectations for future financial performance, and similar items, all of which are subject to risks, uncertainties, and assumptions. Now, you can find more information about these risks and uncertainties in the risk factors section of our filings at the SEC at sec.gov. We remind everyone that our actual results may differ and we undertake no obligation to revise or update any forward-looking statements. And finally, we will be discussing non-GAAP financial measures today and reconciliations between our GAAP and non-GAAP financial results and discussions of the limitations of our non-GAAP financial measures can be found in our earnings press release, which was issued earlier today. So with that, let me turn this over to John for some introductory remarks.

Thank you, Richard, and thank you, everyone, for joining us tonight for our fiscal quarter 2021 earnings call. Now, while society has and likely always will face many challenges, it's reassuring, at least in a large part of the world, to see some light at the end of the tunnel with regard to the COVID pandemic. At Unity, we remain focused on our North Star, our guiding principle, which is that we believe the world is a better place with more creators. Our focus, as always, is to enable these creators and to help them succeed. Our financial results reflect the power of this theme. In Q1, we grew revenue 41% year over year to $235 million. This is the 10th consecutive quarter of 30% plus revenue growth. We believe the transition from linear 2D to real-time 3D is a transformative theme and one of the most important changes in how creators will tell their stories and bring their visions to life. It's also one of the most important changes in how people interact with technology in many years. We support our customers on many platforms and in numerous geographies and today are the only high-scale solution for creating and operating real-time 3D globally. We believe it's inevitable that a large portion of the world's creators will over time become primarily real time 3D creators. The role of interactivity through 3D in real time is so much greater than with alternative forms of media. Our goal is to enable these real time 3D creators, or to use a popular phrase, enable, empower much of the metaphors. We intend to enable this at extreme scale. Unity seeks to enable millions of endpoint locations, both with our create tools and our operate solutions. Now, we recognize that we are in a privileged position relative to under other content creation tools. Content built with Unity gives end users agency over what they see. The distinctive characteristic is a fundamentally different, more engaging, and we believe, better way to interact with content. And I think it's worth noting that there are many thousands of developers that transitioned into productive 21st century jobs in part as a result of learning and using Unity. One of our key competitive advantages is we've built Unity platform to be relevant for a developer throughout their career, from a high school hobbyist to their first job and beyond. We will continue to invest to enable more creators to join this 21st century economy. Now, what do I mean when I say scale the creator throughout their career? Well, we believe that our commitment to R&D competitively differentiates us from less sophisticated platforms that aspire to catch up with us in terms of technology or market share. For example, with Unity, you only write once and you can publish anywhere. We built our editor so it A full range of users, from beginners to advanced developers, can build real-time 3D applications. This means you can start with visual scripting, move to C-sharp programming, and for more advanced developers, you can work directly with Unity source code if needed. With these on-ramps to Unity, we enable creators to develop and operate many application types, from games to car configurators, or run high-scale AI simulation. It's not easy to make the complexity of this easy. This is our role and our strategy to enable more and more creators to be successful. Technologies that support the successful growth in real-time 3D applications are quickly reaching scale. Massive bandwidth with 5G, multi-core processors, scalable AI, AR, VR devices, cloud compute, and more. Now is the time for real-time 3D to scale across games, across industries, and across user types. What was once 2D will become 3D. That which was linear becomes interactive. And what was not real-time becomes real-time. As we saw when the cloud displaced on-premises, the crypt can replace perpetual license. The shift to real-time 3D has the potential to create multi-billion dollar opportunities. Our vision is to ensure Unity is a once-in-a-generation company, a true platform that enables creation and operation of real-time 3D applications at extreme scale. We envision a world where we have hundreds of millions of creators on our platform, from consumer creators to professionals in gaming and dozens of industries. By executing on this vision, we believe we can build a company that delivers revenue growth of approximately 30% over the long run. Of course, businesses like life are not linear, so it is likely that some quarters in years will be higher or lower than we expect. But even so, we believe the opportunities in front of us make such a goal achievable. Let's move on to financials. First off, I want to thank Kim Jamal for all her contributions to Unity. I believe many of you know our new CFO, Luis Visoso, from his time at Palo Alto Networks, Amazon, and AWS, where he oversaw significant growth and scale. I am thrilled that Luis agreed to step into the CFO role at Unity. Luis served on our board and joined us from a position of knowledge with energy and passion to drive the business. I know Luis will have a great impact on Unity and look forward to working together to continue to build this great company. With that, I'll turn the call over to Luis.

Thank you, John. And thanks to everyone at Unity for the very warm welcome. I'm very happy to be here. I believe that the opportunity in front of us is almost limitless as Unity enables the transition from 2D to real-time 3D in games and across industries. We deliver another strong quarter with excellent execution by the Unity team, beating guidance and sweet expectations. Q1-21 revenue of $235 million grew 41% year-over-year, with strong performance across the board. CRE revenue of $70 million was up 51% year-over-year. Operating revenue of $147 million was up 40% year-over-year. And strategic partnership revenue of $18 million was up 12% year-over-year.