Unity Software Inc.

Ladies and gentlemen, thank you for joining us and welcome to the Unity Technologies Q2 earnings call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please raise your hand. If you have dialed into today's call, please press star nine to raise your hand and star six to unmute. I will now hand the conference over to Alex Giamo, head of investor relations. Alex, please go ahead.

Thanks, Nicole. Good morning, everyone. Welcome to Unity's second quarter 2025 earnings call. We're joined this morning by Matt Bromberg, our CEO, and Jared Yays, our CFO. Before we begin, I'd like to note this conference call includes forward-looking statements, including statements about goals, business outlook, industry trends, expectations for future financial performance, and similar items which are subject to risks, uncertainties, and assumptions that could cause actual results to differ from those expressed in these forward-looking statements. We undertake no obligation to update any of our forward-looking statements. For more information about factors that may cause actual results to differ, please refer to the risks described in our most recent form 10-K, particularly in the section entitled risk factors, as updated by additional filings we make with the SEC from time to time. Today's call will include both GAAP and non-GAAP financial measures. Non-GAAP financial measures are in addition to and not substitute for or superior to GAAP results. A full reconciliation of GAAP to non-GAAP financial results is available in our earnings release, which can be found on our investor relations website and on the sec.gov website. With that, I'll pass it over to Matt.

Thank you, Alex, and good morning, everybody. On behalf of everyone at Uni from across the globe, I'd like to thank each of you for joining us today. It's a distinct pleasure and a privilege for me to showcase our team's progress each quarter. After a full year leading this company, my enthusiasm about the opportunity we have in front of us has never been more profound. We believe that the second quarter of 2025 will be remembered as an inflection point where accelerated product innovation and enhanced delivery of customer value came together to spark demonstrable, sustainable growth, led by the full emergence of Unity Vector, which has far exceeded our expectations at this early stage of its development. Strength in the second quarter across both Grow and Create helped drive results that once again exceeded expectations, substantially beating the high end of our guidance for both revenue and adjusted EBITDA. Let's begin in the Grow segment. To fully understand our enthusiasm, it helps to narrow the focus a little bit. Vector-led performance inside the Unity ad network sparked 15% sequential revenue growth in the second quarter, growth which we are seeing continue into the third quarter as well. You'll recall we anticipated some softness across our other ad products during Q2, driven in part by redeployment of technical and -to-market resources towards the launch of Vector. And that dynamic did indeed temper the impact of the Unity ad network's growth on the overall ad segment revenue in Q2. However, we're anticipating that the third quarter will evidence a very different trajectory for three primary reasons. First, we're now seeing clear stabilization outside of the Unity ad network, as product enhancements and greater operating discipline bring results back into line and we begin to spread our AI-driven capabilities across our broader ad portfolio. Second, the Unity ad network now comprises approximately half of total Grow revenue, and we expect that percentage to continue to increase. As a consequence, our fastest growing product should have a greater impact on overall results in the quarters ahead. And finally, we're seeing continued increases in the value that Vector is bringing to our customers as we continue to invest in the development of the quality of our AI. Last quarter, we talked about the 15 to 20% lifts we are seeing in both the volume and quality of new users delivered through Unity Vector. In the second quarter, those results continued to climb. We now believe that the combined impact of these three factors should drive -single-digit sequential growth across the total combined growth segment in the third quarter of this year. It's worth taking a moment to understand precisely how delivering stronger results to our partners translates directly into a willingness to scale spend with Unity. Remember that performance advertisers are not allocating budget in the traditional sense, nor are they necessarily pulling share from competitors. Performance advertisers consistently increase spend up to the limit of their return requirements all the way across the efficient frontier. We are already working with 85 of the top 100 mobile games in the world, and as we strive to deliver better returns, we expect our partners will continue to invest in growth and our business will grow alongside. We also anticipate that Vector will move from strength to strength in the years ahead, as the quality and efficiency of the AI that powers our performance engine continues to improve, and we continue to extend Vector's capabilities to enhance some of the other ad products in our portfolio. The increase in confidence we have in the future of our business is actually partially derived from the fact that we've not yet tapped into our biggest competitive advantage. The deep consumer understanding we possess by virtue of Unity's position as the operating system for games globally. Unity is the leading provider of the software used to build, distribute, and run gaming applications used by billions of consumers worldwide. 70% of the top mobile games in the world are built on Unity. In our advertising business, this unique vantage point will provide our Vector AI Engine access to new and highly differentiated behavioral data, will provide a significant potential future catalyst for enhanced performance and growth. We anticipate seeing the impact of our work in this area beginning in 2026 and extending well into the future. As excited as we are today about Unity, we're equally sure that this is just the beginning. The foundation for this next generation of Unity is being launched this summer with the Unity which includes the introduction of the Developer Data Framework. The Developer Data Framework is a unified system featuring privacy dashboards that allow developers to control how data is collected, shared, and used in the production and operation of the interactive applications they build with Unity. This launch marks a critical step to ensure transparency, safety, and privacy as we improve the quality and utility of the tools that game developers use to build and grow their audiences. Since we're discussing Unity 6.2, let's take the opportunity now to transition to discussion of our Create segment, where a transformation in the way we build and support our software is now well underway. Our rededication to quality, stability, and improving the developer experience is catalyzing strong financial results in Create, including another quarter of double-digit subscription growth in Q2. We're also seeing momentum around the continued adoption of UD6, the most stable and performant version of Unity we've ever shipped, which has now registered more than 6.6 million downloads, up 50% from last quarter. The transition we're making from Unity 6 from prior versions is taking place quickly and far more smoothly than at any previous point in our history. The beta feedback we received for the Unity AI in 6.2, which is still in very early stages of development, has been both positive and extraordinarily helpful. With Vector now successfully underway, you'll see us substantially ramping our ambitions for the role AI will play in the core Unity content creation experience. Within the financial parameters we've already established, we're making significantly increased investments in talent and product in this area, and expect to be talking about it much more in the quarters ahead. Just as data from applications that are distributed on the Unity runtime have the potential to provide a long-term competitive advantage in our ad business, data from applications developed in Unity will enable our AI to transform the content creation experience, leveraging our awareness of each product and each project to predict the needs of each developer, transforming the way content is built, empowering the future of our create business. As Unity reconnects with its customers and community and fully embraces the role it plays as the operating system for games, the opportunities available for partnerships in create also move into new territory. This quarter we were proud to announce major multi-year partnerships with Tencent, one of the largest developers and publishers of games in the world, and Scopely, creator of one of the world's top-grossing mobile games, Monopoly Go. With Tencent, our expanded multi-year partnership will keep Unity at the core of some of the most popular multi-platform titles in the world for many years to come. It also highlights the continued strength of our business in China, the largest market for games in the world. We are the only company we know of able to support development seamlessly across the entire ecosystem in China, including with Open Harmony, a rapidly growing mobile operating system in that country. With Scopely, we're embarking on a new multi-year agreement that includes a long-term technical partnership across both create and grow, designed both to support the growth and operation of Scopely's games as well as to improve the Unity engine for all of our customers. On the platform side, we announced an exciting multifaceted partnership with Nintendo, who's experiencing tremendous success with the launch of the Switch 2. Our collaboration ensured that Unity 6 would be fully optimized on day one for the release of the Switch 2, so that Unity could play a foundational role in the growth and support of Nintendo's ambitions for third-party game development, commerce, and live service operations on their platform. These new partnerships are not built around selling seats. Rather, our goal is to create new business opportunities for our partners by leveraging our platform and portfolio of products in new ways. And finally, on industry, we remain extremely excited about the momentum we are seeing outside of gaming, which once again was our fastest growing subscription business, increasing sequentially for the 10th straight quarter. In automotive this quarter, we announced a deepening of our relationship with BMW, who uses Unity Asset Manager to power its groundbreaking 3D asset management platform globally. Unity's 3D technology has also been integrated into the Mercedes-Benz operating system to enhance the in-car experience of the new Mercedes-Benz CLL. In healthcare, Specto Medical is redefining pre-surgical planning and patient communication through immersive 3D visualization tools built on Unity. The use cases continue to expand, and we're more confident than ever in the long-term growth opportunity across a broad range of categories and applications. I'd like to thank all of our teams globally for their relentless effort as we transform Unity and earn our customers' trust each day and express our continued gratitude for the support of our partners and our community worldwide. We believe Unity is just one of a few companies in the world poised to benefit from the incredible opportunities that abound at the intersection of AI, digital content creation, digital advertising, and interactive entertainment. And all of us here are dedicated to making that future a reality. Thank you again for your time and attention this morning. With that, I'll pass it over to Jared for an overview of our financial performance.