Although lack of profitability appears striking, the company’s transition into hyper-growth mode began only in the latter decade. Unity’s suite of tools supports 20+ platforms ranging from mobile phones to AR/VR devices, clearly dominating the mobile space with ~71% of the top 1,000 mobile games created with its platform.įounded in 2004, they are one of the oldest SaaS businesses remaining focused on growth. Inherently, a game engine can be used for any kind of 2D/3D content development and is not limited to the scope of video games.

Although Unity is known to be a “video game company”, it is more than that. However, I think an important distinction should be drawn here. The company focuses on providing a comprehensive set of software tools for developers to create and monetize real-time 2D/3D content. Unity believes “the world is a better place with more creators in it”. Management is optimistic coming off of recent momentum, raising revenue guidance to ~$242M (+31% YoY) and ~$1.0B for FY21 (+30% YoY). They have made several acquisitions to bolster their core video game development business as well as offerings in adjacent industries, and are continuing to strengthen their dominance (45% market share) in global game development. As end users seek home entertainment from gaming and the imperative to digitally transform legacy industries is strengthened by the pandemic, U is in a strong position to capitalize on the adoption of real-time 3D products. Unity is very much in “growth-mode”: LTM FCF margins are (10%) with 66% and 30% of Q1’21 revenue spent on R&D and S&M as they focus on gaining traction in nascent markets. Their products are among the stickiest best-in-class SaaS solutions with a net dollar retention of 140%, currently fetching a 29.0x ARR multiple.

140% net dollar retention (up from 133% a year ago)ĭespite its inception nearly two decades ago, Unity remains one of the fastest growing B2B SaaS companies, growing at +41% YoY to $939M ARR.$17.8M Strategic Partnership revenue (+12% YoY).$146.6M Operate Solutions revenue (+40% YoY).$70.4M Create Solutions revenue (+51% YoY).

Unity cross sales