Unity is migrating its ad network into new AI-powered platform Vector in an effort to keep pace with UA market leader AppLovin.
It revealed the move during its Q4 and full-year earnings call today, which showed reductions in net losses but large year-over-year revenue and EBITDA drops.
The migration of the Unity ad network into Vector begins towards the end of Q1, Unity said, with the first phase of work slated to be complete by the end of Q2 2025.
“Vector is designed to leverage data from across the Unity ecosystem, integrating self-learning artificial intelligence models that will provide deeper insights, optimise performance and deliver better results for customers,” said Unity president and CEO Matt Bromberg in the earnings call.
“Vector enhances targeting precision and increases audience scale through a sharper analysis of richer data sets, and it’s also able to adapt in real time, helping customers navigate an increasingly competitive mobile marketing landscape,” he continued.
Bromberg called for patience as the transition takes place, and said it’d take time for Vector to “mature”. He also said Unity is confident that Vector will make it a “fundamentally stronger competitor” in the UA space.
Bromberg also outlined Vector’s goals – offering marketers better conversion, improved ability to predict “what new game a player would like to play”, and also to “match the most valuable players with the right games”. Enhancing Unity’s “ability to bid effectively into competitive auctions for those players” is also part of the plan.
As for its IronSource network, Bromberg clarified that Unity “will remain in the market very aggressively selling that network”, in addition to Unity Vector.
Q4 results:
- Revenue was $457m, down 25% YoY
- ‘Create’ engine revenue was $152m, down 47% YoY
- ‘Grow’ ad revenue was $305m, down 5% YoY
- Net loss was $123m, down from $254m a year ago
- Adjusted EBITDA was $106m, with a margin of 23%, down from $186m and a margin of 30% a year ago
- Free cash flow was $106m, up from $61m a year ago
The overall 25% year-over-year revenue drop in Q4 was blamed on Unity’s ongoing portfolio reset. The huge 47% YoY revenue drop for its ‘Create’ engine business was attributed to the termination of its deal with Wētā FX, while the YoY drop in its ‘Grow’ ad business was down to the $21m in customer credits it received from IronSource a year ago, making for a more difficult YoY comparison.
The same reasons were cited for the company’s revenue, profitability and losses in its full year results, too.
2024 full year results:
- Revenue $1.813bn, down 17% YoY
- ‘Create’ engine revenue was $614m, down 29% YoY
- ‘Grow’ ad revenue was $1.199bn, down 10% YoY
- Net loss was $664m, down from $826m in 2023
- Adjusted EBITDA was $390m, with a margin of 21%, compared to $448m with a margin of 20% in 2023
“The Company’s fourth quarter results meaningfully exceeded expectations on both revenue and profit, underscoring our progress in building a new Unity,” said Bromberg in the accompanying press release.
