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Unity announce 9% revenue growth, but lower annual guidance in Q2 results - no comment on Applovin deal

This call should be of considerable interest due to AppLovin's acquisition plans
Unity announce 9% revenue growth, but lower annual guidance in Q2 results - no comment on Applovin deal

In a call with investors, Unity unveiled their financial growth over the last quarter.

Revenue increased by 9 per cent year-on-year, slightly above the guidance of $290 to $295 million. However, guidance lowered its estimated full-year revenue to $1.3-$1.35 billion.

Of course, the call couldn't take place without discussing the biggest news involving Unity of late, AppLovin's planned takeover of the company, which would see Unity CEO John Riccitiello installed as the CEO of the combined entity. Riccitiello addressed the rumours early in the call, but declined to comment in-depth, saying only "Before we dive in, I want to address what everyone is aware of, the AppLovin proposal. I acknowledge we received a proposal, and I want you to know that we aren't going to make any comments at this time."

However, Riccitiello did bring attention to Unity's belief that "the world is a better place with more creators in it", perhaps hinting that it doesn't wish to accept the proposed deal.

"It is this belief that has guided us over the years and continue to guide our decisions across the company. Through years of innovation, investments and hard work by everyone at Unity," stated Riccitiello.

"Unity has become the world's leading platform for real-time 3D content creation designed to enable creator success and ultimately led to Unity having two main lines of business: create to help creators make real-time 3D content and operate where we help these creators find operational and business success with their content."

As part of the proposed deal, Unity would need to scrap a planned merger with IronSource, and Riccitiello's statement on these plans could point to the company's feelings regarding AppLovin's offer: "We're confident that the ironSource merger will make us stronger as we offer our customers an end-to-end platform that will benefit creators and shareholders."

China appears to be key to Unity's growth strategy going forward, with Riccitiello stating "Finally, as you may have seen, we're also working to accelerate innovation and growth in a key market, China. Recently, we entered into an agreement with some of our leading partners in China to form a new joint venture that work on in Unity China. To form this venture, Unity will contribute all of its operation in China other than Unity ads."

Riccitiello noted the company's success in the mobile games space, stating that Unity Power accounts for more than 70 per cent of top mobile games. He brought attention to both the release of Disney Mirrorverse and the tenth anniversary of Subway Surfers, which topped 3 billion downloads in 2020, as examles of the power and longevity of Unity's engine.

Last year, we listed Unity as one of the year's top 50 mobile game makers.