A：Vector is expected to grow significantly, with the quarterly revenue run rate forecast to exceed a billion dollars by the end of 2026. The decline in the IronSource ad network will become a smaller component of Unity's financial profile over time, as the business shifts from commoditized, lower-margin ad network revenue to deeply differentiated AI platform revenue. The success in the advertising business is paralleled by the return to growth of the software business, indicating a positive trajectory for both segments.

A：Unity's software is significant in the global video game market for its global interoperability, allowing developers to write once and deploy on multiple platforms without choosing between building for specific channels like WeChat or high-end devices. This capability enhances the ability of developers to reach global markets and supports the creation of high-quality interactive assets, which is a massive opportunity for Unity.

A：Innovations anticipated to drive Unity's growth include new creative tools that allow the generation of high-quality interactive assets from simple no-code prompts. This will enable customers to create full-fledged games directly within the Unity platform, integrating native AI to simplify the creation process. As the amount of content increases, the primary challenge will be helping consumers discover new games, which Vector will address by becoming more efficient at understanding consumer preferences and making high-quality recommendations.

A：In 2026, the strategy for the advertising business in Unity will involve scaling the testing of runtime engine data with the goal of having it live in Vector during Q2. The inclusion of this data is expected to result in significant compounding model improvements over time, enhancing the value for advertising customers. Additionally, the Day 28 ROS feature, already in beta and having a positive impact, will enable customers to manage their campaigns based on longer time horizons, which is expected to boost the impact of everything in the create business.

A：The two main areas of focus for Unity in 2026 are collaboration and AI-driven authoring.

A：For software developers in 2026, collaboration will become accessible through a web browser without the need for downloads. They will be able to share project and gameplay views with one click, enabling seamless collaboration with various team members including artists, designers, product managers, back-end developers, and executives.

A：Unity plans to make game development more accessible and profitable for new creators by removing friction from the creative process through its enhanced in-app purchase commerce offerings, AI integration, and the democratization of game development. This strategy is in line with Unity's commitment to the democratization of game development.

A：Unity had exceptional momentum in the fourth quarter of 2025, resulting in the fastest growth and highest margin in two years. Revenue grew with Gros revenue at $338 million, up 6% sequentially and 11% year over year, with Vector experiencing mid-teen sequential growth. Vector grew 56% of grow revenue, and the free revenue grew by 165 million, up 8% year over year.

A：The acquisition of Iron Source led to a $7 million sequential revenue decline in the fourth quarter, which represented 11% of grow revenue for the quarter. However, Vector's ongoing strength was attributed to incremental advertiser demand and improved conversion performance rather than a shift from customers reducing spend with Iron Source.

A：The adjusted EBITDA for the quarter was 125 million, with margins at 25%, representing a year-over-year improvement of 200 basis points and a sequential improvement of 100 basis points. Factors influencing these figures included sales and marketing spend, additional accruals associated with sales commissions and bonuses, and elevated R&D spend due to cloud increases and AI hiring.

A：Key financial highlights for 2025 include accelerating organic year-over-year revenue growth in both create and grow segments, improved profitability with adjusted EBITDA margins of 22% and conversion of 99% of adjusted EBITDA to free cash flow, and an expansion of free cash flow margins by 600 basis points. Unity also made progress toward GA profitability, with a reduction in stock comp expense.

A：Unity's forecast for the first quarter of 2026 is a total revenue of 480 million to 490 million and adjusted EBITDA of 105 million to 110 million. They expect Vector to grow 10% sequentially in the first quarter, with a return to sequential growth in the second quarter, powered by continued strength from Vector.

A：Unity is forecasting double-digit year-over-year revenue growth in the first quarter, excluding non-strategic revenue. They expect adjusted EBITDA margins to expand by 300 basis points year over year in the first quarter and for adjusted EBITDA margins to improve throughout the year, driving solid overall margin expansion for Unity in 2026.

A：Vector has been a significant contributor to Unity's strong financial performance, with growth of more than 70% and continues to meet and exceed expectations. This growth is considered substantial and is expected to have a long-term positive impact on Unity's business, particularly with the inclusion of runtime data in their models.

A：IronSource is considered a legacy business for Unity and is expected to become less significant over time, contributing minimally to the company's overall financial picture. As such, it is not considered an important component of Unity's revenue going forward, with the growth of Vector being the primary focus.

A：Customers have shown strong interest and excitement for Unity's commerce product, which is currently in early access and will be generally available by Q2. The feedback indicates that customers appreciate the ability to accelerate their response to regulatory changes and to enhance their purchase behavior models. The product's organic integration into the platform is also seen as a benefit for easy adoption by current and future customers.

A：The market has shown concern over Meta's entry into the mediation market through Cloud X, and its potential impact on the industry. Unity, however, views this as positive for the industry and the mobile ecosystem, supporting efforts to make mediation more transparent and effective. Unity's mediation business is not considered material to their overall results and they remain focused on their direct connections with customers through their engine and runtime. They are also open to bidding on any fair and transparent mediation platforms.

A：The speaker believes that AI will be a massive tailwind for the video game industry by increasing leisure time and game play, and by making the creation of video games more efficient and less expensive. AI is expected to aid in building the sophisticated systems that power games as live services and as features, allowing creators to focus more on differentiation and innovation. The impact is anticipated to be significant in terms of the time to innovation.

A：The speaker indicates that world models are intended to be a source of inspiration and assets for creators and are complementary, not duplicative, to game engines. They are designed to leverage video-based generation and will enhance AI workflows by integrating 3D assets into the engine for use in game development.

A：Unity is agnostic about how 3D assets are created and where they come from, seeing itself as an assembly point for building interactive experiences. The company has a long-term relationship with Google and is developing relationships with other stakeholders in the space.

A：The economics of the commerce transactions involve a high margin but modest revenue, and the focus is not on making large profits on transactions but on delivering value to customers and enabling a tightly integrated commerce experience with other systems built on Unity. Over time, the goal is to optimize and improve commerce capabilities and engagement in games, which is expected to enhance the operation of Unity, make it more valuable to customers, and also enhance the value of Vector, as optimization around engagement and experiences leading to transactions and revenue growth is crucial for building a game and understanding the video game consumer.

A：Vector grew mid-teens in the fourth quarter, and January was a record for the business with revenues higher than December, which was also a record. It is expected that the first quarter of 2026 will show an incremental 10% growth sequentially for Unity Vector, on top of the three consecutive quarters of mid-teens growth, resulting in a year-over-year growth in January of more than 70%.

A：The 'Create' business is experiencing incredible strength, marking a turnaround from a few quarters ago when it was shrinking. The business is showing significant growth, with the largest ad business up 70% and the crate business up 16%. The improvements in quality, stability, and the clarity around investment roadmaps have been well received by customers, leading to more consistent value delivery. Customer interactions have markedly improved, making it a pleasure to engage with them, and this strength is present across the business, not just in the West but also in China.

A：The UN 6 release is being downloaded and adopted faster than any previous release, indicating a positive reception and feedback from customers regarding its business implications.

A：The speaker expresses excitement about the potential impact of upcoming collaboration-centric enhancements to Unity, which will make the software accessible through the browser, significantly expanding the user base beyond just software developers. This change is expected to unlock substantial growth for the business by allowing a broader creative team to share, build, and progress projects together.

A：The integration of AI in Unity is expected to facilitate the creation of interactive entertainment by tens of millions more people, especially with the increased accessibility of the tools. This will lead to greater market share in PC and mobile sectors, with the company feeling optimistic about the product enhancements and future prospects.

A：The expansion of the customer base due to increased product accessibility may necessitate considering more tiers of products to cater to a broader end of the potential new community. Additionally, as the commerce business matures and grows, it may enable the company to become more competitive from a pricing standpoint by providing high-value-added services and products.

A：The company is very flexible and open-minded regarding its business model, intentionally not being entrenched in a particular pricing model. With a large free user base and the addition of commerce and AI enhancements in the advertising business, there are many interesting ways to offer high-value products and generate meaningful business. The company is also open to fundamental shifts in its approach and is not afraid to evolve its business model as opportunities arise.