Unity Software Inc.

Welcome to Unity's fourth quarter 2023 and year-end earnings call. My name is Daniel Meir, VP and Head of Investor Relations. After the closing of the market today, we issued our shareholder letter. That material is now available on our website at investors.unity.com. Today, I'm joined by Jim Whitehurst, our interim CEO, and by Luis Visoso, our CFO. But before we begin, I want to note that today's discussion contains forward-looking statements, including statements about goals, business outlook, industry trends, market opportunities, expectations for future financial performance, and similar items, all of which are subject to risk, uncertainties, and assumptions. And you can find more information about these risks and uncertainties in the risk factors section of our filing at sec.gov. Actual results may differ and we take no obligation to revise or update any forward-looking statements. Finally, during today's meeting, we will discuss non-GAAP financial measures. These non-GAAP financial measures are in addition to and not a substitute for or superior to measures of financial performance prepared in accordance with GAAP. A full reconciliation of GAAP to non-GAAP is available in our shareholder letter and on the sec.gov website. Great. What we'll do now is similar like what we've done in previous quarters. We get a number of inbound questions during the quarter and we will start with two key questions. The first to Jim and then the second one to Luis. So the first question is to Jim. After five months here, can you give your take on Unity and kind of provide us also an update on the CEO search?

Sure. Yeah, I can't believe it's been almost five months. I have to say I'm even more excited now about the opportunity in front of us than I was when I joined. Yeah, we're obviously in the midst of a reset, but let me spend maybe just a minute talking about why I'm so optimistic, and then I'll come back to the CEO search afterwards. So first off, I believe we're making the right interventions to position us to win for our customers, not just today, but for the long term. And let me just quickly hit three of those. So first off, we've substantially focused our portfolio on products where we're confident that we have unique value for our customers and therefore have permission to win. And we're hearing great feedback from our games customers today. They're seeing the focus in our product roadmaps and our attentiveness to their needs. And so we're hearing great feedback there. Same on the industry side, where not just from what we've been doing the last few months, but in particular, our focus on repeatable software and the partnership we announced with Capgemini. I've heard from several customers, really positive view of that direction around focus. We've also instituted a much leaner cost structure that provides us a healthy profile. And then from there, we can scale in a profitable way. And third, we're in the process of improving our growth performance, specifically our user acquisition through better use of data and stronger models. And I'm very confident you'll see accelerating growth in our grow business going forward. The second reason I'm optimistic is that while 2023 was obviously a challenging year for us, we saw some key proof points around the durability of our franchise. So first off, even in the aftermath of the pricing change, our core subscription business, excluding China, grew 18% in Q4. Put it simply, we are essential to the games industry. And then with industry, it was actually our fastest growing segment. And I believe we've just gotten started and we have meaningful growth potential there. And the partnership with Capgemini should even further accelerate growth there. And finally, our engagement with our editor continues to be super, super strong. We saw that at Unite in November, and we plan to exceed our customer expectations with our next releases of the editor through the course of this year. And the final reason I'm optimistic is that obviously the reset work continues through Q1. It obscures our financial progress, but we expect to see strong financials in the back half of this year. To the second part of the question, I don't have a super long update. The board continues to conduct a thorough process to make sure we hire the best leader to write the next chapter of Unity's story. And I'm very committed to supporting the board and the board's decision.

Thank you. Luis, this question is for you. Can you provide additional perspective on the company's direction following the reset?