What you need to know
- Unity has reported strong second-quarter results.
- In particular, Unity Operate revenue is 63% year on year.
- One commenter says this is a sign the company has actually benefited from Apple's privacy changes in iOS 14.
New financial results from Unity say the game engine creator has actually benefited from changes made to iOS 14 that let users opt-out of tracking for the purposes of advertising on devices like the iPhone 12 and beyond.
As WSJ notes Unity posted its second-quarter financial results earlier this week. The company reported that Q2 revenue climbed 48%, exceeding expectations and generation $273.6 million. As the report notes, Unity was one of the companies that may have stood to lose from changes made to iOS 14 that will make it much harder to track users across apps and services for the purpose of serving personalized ads:
But since many of the games served by Unity are played on Apple's iOS mobile platform, investors have worried about the impact of recent changes made by the iPhone giant. Those changes limit the ability of companies to make use of Apple's advertising identification tag for users, known as IDFA unless users opted in. Apple announced the changes in June 2020—three months before Unity's initial public offering. Unity thus added a warning to its IPO filing but noted the effect of the proposed changes wasn't yet clear.
However, Unity Operate, the segment of its business that stood to lose the most from the changes actually grew 63% year on year. According to the report, the company says it now captures and analyzes some 50 billion in-app events every day that it can use to help its customers direct advertising spending. According to Credit Suisse's Stephen Ju, "Unity is emerging as a net beneficiary of IDFA for now and appears to be gaining market share." This sentiment was echoed by Unity CFO Luis Visoso who said "While our strong performance is broad-based, we are particularly proud of the performance from our Operate Solutions group that expanded market share in a tough environment. Our strong performance gives us the confidence to raise guidance for the year, again."
