Unity Software Inc. (NYSE:U) Q4 2022 Earnings Call Transcript

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On the number of seats. So you’re going to see another effort on the nongaming where we’re really trying to monetize our customers much better, and that includes subscription businesses, that includes consumption business models and really better €“ getting more of the value that we’re creating for our customers.

John Riccitiello: What we €“ why don’t we just add a little color to that. So it may seem counterintuitive that we increased price last year in the game sector, but we expect that to drive sequential quarter-to-quarter growth through 2023. We honor existing contracts at the price that the existing contracts were signed. So as existing contracts reach their termination date and we renew our customers, they renew at a higher price. So it’s €“ pricing is one of the things that’s driving growth for us this year despite the fact that pricing was taken last year because of when our customers come on to it. Second thing, and I think it was in the third quarter call, I framed up our Digital Twin platform, which at that point has just gone into general availability.

What that is, it’s a ratable use-based platform for our Digital Twins. And we’ve got lots of customers coming on to that. And that is incremental ratable revenue that we expect is going to be a major business with €“ for us in the quarters and years to come. So there’s additive in that way, too. So that’s €“ I hope that gets to a little what you’re asking a little more insight.

Unidentified Analyst: Yes. Thanks for the color guys. Appreciate it.

Richard Davis: Okay. Stephen Ju, over at Credit Suisse.

Stephen Ju: All right. So, I was wondering if you can give us the latest in terms of expectations on the time line for the productization. What I guess, bidding game and, I guess, media sectors will probably be the first adopters, but which additional sectors can you see that you can onboard here who you might not have seen before. And also directionally, I think this is a product that’s had a client base of one. So from a pricing perspective, go-to-market sales motion, if you can just add a little bit there. Maybe it’s a little bit too early to talk about that now, but just sort of initial sort of commentary that you might be able to offer as you think about going to market with what will be a productized Weta? Thanks.

John Riccitiello: So I can take part of that, Luis, you might want to add. But €“ when we’re talking about productizing professional artistry, we mean more than just Weta although Weta is obviously the substantial portion of it, but also for tools like Ziva and SpeedTree add to our portfolio in professional artistry. Second point is, there’s a number of the products that we’ve been talking about. Mark talked about a couple of calls ago, within the Weta portfolio that we are commercializing this year. And we’re already in customer conversations. The most interest right now is a combination of the film industry and the game industry. Big surprise. That’s where you’d expect it to be. What I won’t do for you on this call is in conversations that are in flight to close around those products this year to tell you who we’re talking to, but it’s the likely suspects that you would expect, but we don’t preannounced deals that we’re now in the process of negotiating.

But we see, at least according to our own internal plan, we’re tracking well. The products are coming to commercial opportunity and the time frame we had anticipated, if not a tad bit earlier. And we’re finding good interest in the primary markets that we had anticipated. So in a word, I’d say or in a short sentence, it’s going as we anticipated when we made the announcement around why don’t we announced to acquire them. And it feels good to us right now. Luis, would you want to add anything?

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