Daniel Amir:

Good morning, and welcome to Unity's First Quarter 2025 Earnings Call. My name is Alex Giaimo, and I recently joined Unity's to lead Investor Relations. I'm thrilled to join the team and look forward to working with all of you. Today, I'm joined by Matt Bromberg, our CEO; and Jarrod Yahes, our CFO. But before we begin, I'd like to note that this conference call includes forward-looking statements, including statements about goals, business outlook, industry trends, market opportunities, financial performance and similar items, all of which are subject to risks, uncertainties and assumptions that could cause actual results to differ from those expressed in these forward-looking statements. We undertake no obligation to update any of our forward-looking statements. For more information about factors that may cause results to differ, please refer to the risks described in our most recent Form 10-K, particularly in the section entitled Risk Factors as updated by additional filings we make with the SEC from time to time. Today's call will include both GAAP and non-GAAP financial measures. Non-GAAP financial measures are in addition to and not a substitute for or superior to GAAP results. A full reconciliation of GAAP to non-GAAP financial results is available in our earnings release, which can be found on our Investor Relations website and on the sec.gov website. With that, I'll pass the call over to Matt.

Matthew Bromberg:

Thanks, Alex. That's really good to have you with us, and good morning, everybody. On behalf of all the people of Unity, I'd like to thank each of you for joining us today. The transformation of our company gained significant momentum in the first quarter. Through our commitment to building a culture of execution and discipline, reestablishing trust with our customers and the community and accelerating both the pace and quality of our product innovation, we're creating the conditions to catalyze rapid growth at Unity. In the first quarter, strength across both the Grow and Create segments helped drive results that exceeded expectations, beating the high end of our guidance for revenue by 5% and adjusted EBITDA by 29%.

Matthew Bromberg:

The progress in our Grow business has been particularly encouraging. Last quarter, we announced the intention to migrate the Unity Ad network to our new AI platform, Unity Vector, by the end of Q2. Today, we're excited to report that this migration has already been fully completed with all of the iOS and Android traffic on the Unity Ad Network now running on Vector well ahead of schedule. This is a significant first milestone and a testament to our commitment to rapid continuous product innovation in our Advertising business. With Vector now operational, we can begin to leverage data from across the Unity ecosystem to provide deeper insights, optimize performance and deliver better return on investment for our customers. Our journey to compete in a fundamentally new way has now officially started as our self-learning models adapt in real time, helping customers navigate an increasingly competitive mobile marketing landscape. The accelerated time frame of the Vector rollout means that our customers are already experiencing a lift in the return they're seeing from spending with Unity. In iOS, where we've now had enough time to develop reliable data, Vector is providing a 15% to 20% lift in both the number of installs and the value of in-app purchases when compared to our old model. That means more players and more players who spend more, providing our advertisers with a higher return on their investment with us. Although our Android migration is more recent, it's happily on a similar trajectory to where iOS was during the same period of development. Now we look forward to the next phase of our plan, where we'll work closely with our customers to help optimize and enhance the performance of their user acquisition capabilities over time while also continuing to invest in improving the fundamental AI each day. These strong early results not only provide confidence that we're on the right track with Vector, they also enable us to continue to take an aggressive approach with respect to the modernization of our Ad business overall. Our primary focus is on creating meaningful, sustainable revenue growth over the long term. That means we don't hesitate to move resources to our best-performing products, short-term revenue impacts notwithstanding. As a consequence, in Q2, investors won't yet fully see the vector-driven lift in our financial results. That said, our confidence in the future of our Grow business has never been stronger.

Matthew Bromberg:

We're equally excited about progress in the Create business. Unity 6, the most stable and performant version of Unity we've ever shipped, has now registered more than 4.4 million downloads since launch. 43% of our active users have already moved to Unity 6 with recent survey data suggesting that more than 80% of users are currently intending to upgrade. And we can see this enhanced connection to our customers flowing through to our financial results as well, with subscription revenues in Create growing double digits year-over-year in the quarter. In April, we launched Unity 6.1, 6.1 is the first release to leverage our new production testing methodology, which validates our software in real production environments to ensure that our customers never again have to choose between adopting new features and maintaining stability. Unity 6.1 also significantly enhances the number of platforms our developers can reach, including day 1 support for Nintendo Switch 2, Meta Quest, Android XR, foldable Android screens, instant games and webGPU. For the Switch 2, we battle-tested Unity through a first-of-its-kind partnership with KONAMI, where our internal teams built a full launch title called Survival Kids. The valuable feedback obtained during the development process of this game will drive future enhancements to the Unity engine. We're particularly optimistic about the future potential of AR and VR gaming and entertainment, with recent research from NewGenApps predicting the market will reach 216 million players worldwide by 2025. Our goal is to stay at the forefront of this evolution and for Unity to continue to be the go-to platform powering AR and VR experiences, where we're already powering the majority of the top applications in the marketplace. As one measure of Unity's continued strength with the next generation of game developers, not 4 or 5, but all 9 of the 9 game categories at the Independent Gaming of Festival Awards of 2025 (sic) [ Independent Games Festival Awards of 2025 ] went to games made with Unity. In addition, Neva by Nomada Studios and Thank Goodness You’'re Here by Coal Supper, both won 2025 BAFTA Awards with Made with Unity titles, an incredible recognition of the talent and creativity in our community. And finally, the growth of the Unity platform beyond games into other industry verticals continues to represent the fastest-growing part of our Subscription business. Consistent strong demand across a wide variety of industries and use cases has resulted in both 9 straight quarters of sequential revenue growth as well as meaningful year-over-year revenue growth as well. New customers include Philips using Unity for minimally invasive surgery simulation, Siemens, who is modernizing its training and workforce development and Toshiba Elevator and Building Systems, who is creating digital twins of installation sites. The Unity platform has tremendous potential outside of gaming, and we are increasingly optimistic about our ability to capitalize on this opportunity at scale. I'd like to thank all of our teams globally for their relentless efforts as we continue to transform Unity and earn our customers' trust each day. As the only company we know of that can deliver value to developers of games and interactive experiences across the entire life cycle, Unity plays a unique role in helping our customers move from prototype to profitability faster and more efficiently than ever before. It's a role we feel privileged to play. Thank you again for your time and attention this morning. I'd like now to extend a warm welcome to Jarrod Yahes, our new CFO. Jarrod is an outstanding addition to our leadership team, and we're all really looking forward to working closely with him. I'll turn it over to Jarred now for an overview of our financial performance.

Jarrod Yahes:

Thanks, Matt. I'm pleased to report that Unity exceeded the top end of our guidance on all measures in the first quarter. Revenue exceeded the top end of our guidance by $20 million, with adjusted EBITDA coming in $19 million above the top end of our guidance. Grow revenue in the first quarter was $285 million, down 4% year-over-year, with revenue upside compared to our guidance, partially driven by an acceleration of the rollout of Unity Vector, where we're seeing better performance than expected at this early stage. In Create, revenue was $150 million, down 8% year-over-year, driven by our transition away from the low-margin Professional Services business. Through this deliberate transformation, we've optimized our revenue mix with high-margin Subscription business now representing nearly 80% of Create revenue. Our core Subscription business continues to demonstrate strong momentum, delivering double-digit year-over-year growth this quarter, positioning us for sustainable, profitable expansion. Turning from revenue to non-GAAP profitability. Adjusted EBITDA for the quarter was $84 million with 19% margins. Adjusted EBITDA margins expanded 200 basis points year-over-year in the first quarter, driven by operating leverage in the platform and solid cost management across expense lines, particularly in G&A and sales and marketing, where total expense was down roughly $20 million year-over-year. R&D costs are up $10 million over the last few quarters as a result of heavy investment in Unity Vector. We would expect those costs to normalize in the back half of the year as we transition away from running both our legacy and new Unity ad models in parallel. Free cash flow in the first quarter was $7 million, an improvement of $22 million year-over-year. The first quarter is traditionally the most modest seasonally from a free cash flow standpoint, given the concentration of prepaids, personnel costs as well as payments to the supply side of the Grow network. As we focus on driving per share returns, in the first quarter, we've started to report out on adjusted EPS in our disclosures. Adjusted EPS in the first quarter was $0.24, and investors should expect to see a sharper focus on minimizing shareholder dilution and stock comp expense, which came down nearly $45 million year-over-year as we lapped M&A-related vestings. In terms of our balance sheet, cash at the end of the quarter was $1.5 billion and debt was $2.2 billion. In February, we priced a $690 million convert and the offering was extremely well received. The deal was upsized and priced with 0% coupon and a capped call with a cap price of $47.74. We used the proceeds of the offering to repurchase $688 million of principal balance of 2026 notes and effectively extend those maturities into 2030. This transaction ensures that Unity has the capital structure with a smoother debt maturity profile, and we now feel extremely comfortable with where we are from a financing standpoint. With that, I'd now like to turn to guidance for the second quarter. We're expecting total second quarter revenues of $415 million to $425 million and adjusted EBITDA of $70 million to $75 million. In Grow, we expect steady sequential revenues driven by improved performance of Unity Vector. This revenue growth is expected to be offset by declines in select legacy ad products in the second quarter. However, as the performance of Vector continues to improve, we expect to see the overall Grow business return to revenue growth with the performance improvement from Vector outpacing any other headwinds we face. In Create, we expect continued momentum in our Subscription business across the gaming and industry verticals. However, we're forecasting a slight sequential decline in Create due to an expected runoff in nonstrategic revenues. Before turning the call over for questions, I'd like to extend a warm welcome to Alex Giaimo, who recently joined Unity as our new Head of Investor Relations. And with that, I'd like to thank you for joining us on Unity's First Quarter 2025 Conference Call. And let me turn the call over to Daniel so that we can take your questions.

Daniel Amir:

[Operator Instructions] All right. So the first question is from Matt Cost at Morgan Stanley.

Matthew Cost:

I guess I just want to start with the guide, just to make sure we can break down the pieces here. So I think it's a step down of like $40 million to $50 million quarter-on-quarter. How much of that is reduction in the strategic revenue, which I think was $15 million in 4Q. How much of that is driven by step-downs in kind of the legacy ad products in Grow? And is there any offset in there from the new ad model stepping in? And then I have one follow-up.

Matthew Bromberg:

Matt, thanks very much for your question. I'll let Jarrod take most of this question, but I just want to reiterate where we open, which is that -- at the end of the day, most of this is just driven by some prudence about precisely the timing of the revenue lift we're going to get through this transition. It's a big product rollout and one that takes time to take root as we operate the models at scale, and that's really the principal driver. But I'll leave it to Jarrod to go into a little bit more detail.

Jarrod Yahes:

Yes, Matt, just a couple of comments. Number one, I think we gave some disclosures around our nonstrategic revenue for the quarter at being $15 million for the fourth quarter. We'd expect that to roll forward. The majority of the prudence and the conservatism is really around the transformation that's taking place in the ad business. As you would have seen in the fourth quarter, seeing great strong growth in Create and the growth in our subscription business. We feel good about that. Our existing models performed well in the fourth quarter. We're proactively deciding to make a shift. We think this is a necessary shift where we can be more competitive and ultimately accelerate the revenue growth of the company.

Matthew Cost:

Great. And then on the subscription side, you noted kind of strong growth in the subscription revenue. You're seeing a lot of adoption of Unity 6, it seems, which is great. Is this mostly being driven by people being -- customers becoming subject to the higher pricing on Unity 6? Or is there a meaningful element of subscriber growth in that subscription revenue growth as well?

Matthew Bromberg:

Yes, Matt, you'll remember that we had a prior round of price increases that have been flowing through and are reflected there. And I'd say that the other main driver is just some real velocity and reconnection that we've had with our customers, not literally as much because we're seeing the pricing -- the new pricing increases flow through, but because we were effectively kind of in a little bit of a frozen mode prior. As you recall, the looming price increases were tied to the upgrades to Unity 6 and had sort of -- again, it sort of frozen conversations we had with folks, lots of ongoing conversations about new deals and expanding relationships. So this reconnection we've had with our customers is just related to more deal velocity and put us in a much better place.

Daniel Amir:

The next question is Gili Naftalovich from Goldman Sachs.

Gili Naftalovich:

Confirm me, you can hear me, okay? Okay. Perfect. Nice to talk to you guys. I'm curious, Matt, as you talk to customers this quarter, how is the cancellation of the runtime fee and the official launch of Unity 6 changed the perception or willingness of customers to adopt the new game engine. Curious to know how maybe key metrics you are evaluating such as new game starts or adoption are trending?

Matthew Bromberg:

Gili, Nice to hear from you. Yes, indeed, it is tracking really well. And we do think it's tracking more positively than prior new releases we had. So we're really, really encouraged about it. You'll recall that when we launched Unity 6, again, in addition to what we thought was more customer-friendly pricing, we also really helped our customers understand that we want to focus on core values that are really, really important to them: Stability, performance and ease of upgrade. And we want to really kind of lean into those values while also, of course, pushing the binary forward and adding internal features, but really, really making sure that we're delivering on the core. And I think that message has really landed in a positive fashion for our customers. And that -- again, keep in mind that our big live service customers could be operating on Unity 6 for many, many years. So making this transition in the right way, and leaning into some core values that are going to make it easier and better for customers who use Unity than ever before. It's just really important, and we're seeing a lot of really positive velocity from it.

Gili Naftalovich:

Perfect. And one more, if I may. On your previous comments around expanding your existing customer relationships, how have your thoughts or strategy evolved around driving a stronger flywheel between the 2 parts of the business? And like what routes do you see being available to you?

Matthew Bromberg:

Yes. And maybe this is a little bit inside baseball, Gili, but you know that expression, you ship your org chart. The first thing we did, and this was months ago, was to combine -- we used to have a separate division that made these other, we call them game services products. And that division was separate from the group of folks who built our editor. And the first thing we did was recognize that the greatest value we can provide is deep fundamental integration of these new products into the core editor experience. And so bringing those 2 teams of product designers and engineers together was the first really important step to understanding how to deliver better product. The second one we talked a little bit about a couple of minutes ago, which was ensuring that we're going to design products and inflect our road map with a real understanding of what the actual production reality is. And the third thing that we did there that we're feeling really good about is we elevated a new Head of Product and a new Head of Engineering, both of whom have very, very deep backgrounds as game developers and working with game developers and have a real intuitive, authentic understanding of what needs to be delivered to move the needle for customers. And all those things together have been really helpful alongside some modifications in how we're going to market. So we also merged the sales teams that are going to be selling those -- our core engine and editor with these game services. We used to sort of have it spread out in all sorts of different ways. So again, maybe a little inside baseball, maybe not the most exciting, but the execution layer of how you bring these to customers in the right way, integrate in the right way, priced the right way is really important to having success.

Daniel Amir:

Next question is Matthew Cost from Morgan Stanley.

Matthew Cost:

I guess, Matt, in the prepared remarks and in the shareholder letter, you sounded really enthusiastic about some of the non-gaming opportunities still ahead for the company. Obviously, this is a business that's been part of the story for a long time, but I think it would be fair to say, has scaled slower than investors hoped for many years. So what are you seeing in that business that makes you excited about it and that makes you feel excited to recommit to it, focus on it and try to drive growth there going forward?

Matthew Bromberg:

Yes, Matt, thanks so much for the question. Just not to geek out too much, but I think the first thing that's incredibly exciting is really getting into the products that are being created and how incredibly interesting and impactful they are and how broad-based they are, right? So across auto, retail, manufacturing, we see really cool stuff being developed on Unity every day. As I mentioned, KLM has built these cockpit training applications that allows pilots to practice and hone their skills and enhance their situational awareness. Deutsche Bahn has used Unity to help train system simulations for train dispatchers. And it's just -- we've seen in health care, this like incredibly moving product that was launched by [ Charles ] Hospital that was a no-cost 3D model that for pediatric care, where the viewing software allowed clinicians at any hospital anywhere in the world to interact with virtual 3D reconstructions of patient anatomy. So it's just -- and by the way, not to mention like most of the automotive businesses globally are using Unity for human machine interfaces in their cars. So incredibly broad-based adoption. So that -- part of that was just enthusiasm about seeing the demand, if you will. I think the second piece that kind of underlies your question around the execution layer is I think we have -- we allowed our enthusiasm to maybe make us a little bit more ambitious than strictly speaking, was ideal. There is a real difference between doubling down on 3D visualization layer, the importing of 3D assets and then the manipulation of those assets and the building of applications on top of that, that can be distributed through our runtime on any device. That's our -- that's going to be our core business here. That's not getting really deep into the tech -- the industrial tech stack of digital twins and doing simulations of nuclear reactors. That's not likely to be in the near term for us. So focusing on what our strengths were on where in the tech stack we can come to customers reliably and where they can really understand how to build us in, that was really, really important. And the third piece was -- and it was a little bit like the question that Gili was asking was going to market in a more disciplined way, creating the right relationships with systems integrators, with solution providers so that we can really kind of in high volume begin to close the scale and size of deals that you're starting to see now with much more effectiveness and efficiency. And so doing that in a methodical way is starting to really kind of provide some real benefit for us. So it's that kind of enthusiasm matched with focus and execution that we're really getting behind.

Matthew Cost:

Great. And then if I could, just on the transition from Plus to Pro. I think we're about a year out from that where people made the transition on the old pricing. As people start to renew on the Pro pricing, I would expect that, that would be a tailwind to create results. Is that something that we should expect to see in the fourth quarter? Or does that play out more in 2025?

Matthew Bromberg:

Our price increases tend to play out a little bit slowly over time because they're tied to upgrade cycles or renewal cycles to your point. So I think you're right to identify that as an advantage and something we're going to start seeing. But we'll start seeing that as well as the impact of our other price increases over time.

Daniel Amir:

Next question is Ross Sandler from Barclays.

Ross Sandler:

Great. Can you guys hear me?

Daniel Amir:

We can.

Ross Sandler:

All right. Excellent. So I've got to ask the obligatory Gen AI question. So Matt, there's a bunch of start-ups that are building asset creation tools for gaming, and there's even new like entire environments like Google DeepMind launched this thing called Genie a few months ago that attempt to replicate elements of the Create stack. And admittedly, a lot of this is still pretty crappy. But if you look at the pace of improvement of these diffusion models and of AI in general, it gets pretty good pretty quickly. So I guess just as you look at the industry, how do you see and how are your customers integrating Gen AI into their workflow? How do you think this might impact your business, either from pricing or from a cost perspective? And how do you see this all kind of getting integrated over the next couple of years?

Matthew Bromberg:

Yes. Thanks, Ross. I appreciate the question, and it's a really important one. Look, we know that AI has a fundamental role to play with our customers in terms of, as I mentioned earlier, making the process of building video games faster and easier and more engaging and innovative. So we are a platform and an assembly point for games and other applications. So -- and our extensibility is really our greatest strength. So we feel perfectly positioned to help developers integrate these tools. Keep in mind that from our perspective, we're agnostic as to where and how the 3D assets get created. We're about being an assembly point, providing close control, the pipelines you need to build, helping your team collaborate to do that building and then ultimately, cross-platform distribution through the runtime. So the explosion of Gen AI from our perspective, if it helps our customers, then we're going to kind of benefit from a seamless integration of the best first-party and third-party AI functionality inside our editors -- inside the editor. And we're going to offer those -- that to customers. So we feel very good about that, and we're not kind of fighting that at all. In fact, we're really excited about it. I think the second piece that I mentioned a little bit is we really believe that our focus should be on using AI to obfuscate some of the complexity in our tool to help unblock and accelerate difficult time-consuming tasks and workflows that our creators are already doing in our tool. That's why -- and that is just -- we can have a massive impact, again, on the equation that game companies make that they're working through this equation on how many new starts can I have every year, right? I've got a certain amount of dollars, a couple of points of EBITDA I'm going to use to make new games. How many games can I make? The more efficiently and the more quickly they can make games, the more starts we'll have, the more innovation we'll have. So it's -- I believe it really at the core of the next stage of growth of our industry, and we mean to play a really important part in that. The last thing I'd say is, interestingly, to your DeepMind examples, DeepMind is a Unity customer, and much of that work is -- leverages our technology. So we do have a really fundamental role to play here really throughout the AI ecosystem. And it's one I think we can get smarter and better at over time, and it's one we're spending a lot of time on.

Daniel Amir:

Next question is Andrew Boone from JMP Securities.

Andrew Boone:

I'll stick with advertising. Matt, can you talk about the opportunity to better integrate data sources into the ad stack? How much does Vector incorporate in terms of just taking additional information that you guys have available as Unity versus kind of what was the previous model? And then looking at some of your competitors, there's been an expansion of the gaming advertising category into other kind of verticals. Can you talk about that broader opportunity of what may e-commerce look like or other kind of industries that may be available over time?

Matthew Bromberg:

Absolutely. Thanks for the question. Yes, listen, as we said before, we believe the Unity platform has some unique value, and that ultimately, our deep understanding of player behavior globally is an asset that through incorporation into our data models is going to have a meaningful impact. Again, keep in mind that we have nearly 5 billion DAU of players that interact with our run time globally. And historically, we've not leveraged this connection -- this first-party connection with players at all. And that's a connection that dwarfs the size of other networks in the world. And we were working really hard to change this and to building these capabilities in a privacy safe manner, where we're getting opt-in permission wherever that's necessary. And all the fundamental work we're doing is designed to create an environment where we can incorporate more and more of that data over time. So it's very much part of our plans and part of the work that we're doing. As it relates to sort of e-commerce and other verticals, I'm really bullish on the opportunities that we have there. I think that what folks are waking up to is that the quality of the relationships that we and others have in the space and the scale of our audiences are going to be really valuable across other verticals and other ad types and that's because gamers are basically everyone. And to the extent we've developed a really detailed understanding of consumer behavior and really good systems, that's going to benefit us and the industry in lots of different ways. For us, we're focused primarily in the near term here in the gaming vertical and in fundamentally improving the way we address our core customers. But we're also really bullish over time that there are -- that there is expansion there and excited that the market is waking up to that.

Daniel Amir:

Next question is Ross Sandler from Barclays.

Ross Sandler:

Can't let Jarrod get off the hook here without asking a cost and margin question on his debut here. So Jarrod, I guess the overall comments about improving margins in 2025 and beyond. You guys mentioned increased cloud costs for Vector model rebuild. Could you just put some numbers around that? And maybe around like your go-to-market once Vector is launched? And I guess, broadly as we look out over the next couple of years, if Vector revenue does start picking up, should we see the kind of high incremental margins that we see broadly in the digital ad market starting to show up here?

Jarrod Yahes:

Sure, Ross. And I really appreciate you not letting me off the hook on my first call. We have done a great job as a company in driving margin and really making sure that we have the right cost structure for where we are as a business today. If you look at the EBITDA margins of the business, EBITDA is up by 1% year-on-year. We've done a good job in bringing down G&A costs. We've done a good job in bringing down -- bringing up gross margins for the business. So we feel really good about what we've done. And we've done that all the while making the requisite investments in Vector. If you look over the past couple of quarters and you look at cost of goods sold, where a lot of our cloud costs reside and you look at R&D costs, those have gone up by about $10 million a quarter over the past couple of quarters, evidencing some of the investment that we've been making. So we've been at the same time, driving margin expansion and making the requisite investments in Vector, which we think is the right thing to do for the business. This is a business with 80% plus adjusted gross margin. There's a lot of leverageability in our model and a lot of operating leverage in that model. And so as you would expect, it's going to become even easier for us to expand margins as our business starts to grow and as that acceleration takes place. So we're going to get that benefit of Vector, both in terms of revenue growth, but also in terms of operating leverage and margin expansion. And I think we look forward to that. Right now, our near-term priority is to make the required investments in Vector to get back to a pace of revenue growth that we're comfortable with and we're pleased with so that's going to be the near-term focus. But we think we can walk and chew gum. We think we can continue to drive margin, plus also make those investments.

Daniel Amir:

Next question is Chris Kuntarich from UBS.

Christopher Kuntarich:

I just want to touch on Vector here for a second and really focus around 2Q and the migration that's going to be kind of unfolding here. How should we be thinking about this more tactically. Are certain advertisers going to be seeing this earlier in the quarter, and it's going to be rolled out more so on a regional basis? Or should we be thinking about some of this functionality and your ability improving around conversion and matching the right user with the right game in the efficiency of your bids within the auctions just kind of improving through the quarter and all advertisers will be seeing this really at kind of the start of 2Q?

Matthew Bromberg:

Chris, thanks for the question. Yes, the way to think about it is this, the integration first -- will take first iOS traffic and later Android traffic. So there's a step -- there's kind of 2 steps there. And then the first part of the work focuses really hard on our conversion models to create better conversion. The second part of the work, and that spins out over time, works on kind of user value, so matching the most valuable players with the right games and the bidding models, and aiding us in effectively bidding in these competitive auctions for players. So that's the sense in which we're kind of taking that one step at a time and why it grows over time.

Daniel Amir:

Next question is Michael Funk from Bank of America.

Michael Funk:

First point of clarification, on Vector and the timing of the rollout. You're now saying migration end of 1Q. I think previously, you said midyear. That was the first part. And then second, the first quarter guidance, how much of that incorporates disruption to the Grow business due to the migration versus, say, seasonality?

Matthew Bromberg:

Thanks for the call -- for the question, Michael. Yes, the rollout is -- has gone more quickly than we anticipated. So the work has gone really well. It's gone more efficiently. And we're really pleased to be doing it -- to beginning to roll out about kind of a quarter before we expected, although, as I said, it's an iterative process. So you're right about that. And as it relates to the kind of the prudence in our guide for the first quarter, yes, it is anticipating some disruption in our existing ad business as we transition from one to the other.

Michael Funk:

And can you share any performance comparison, new versus old model, maybe genres, geos or devices, what you're seeing?

Matthew Bromberg:

Yes. That work is kind of ongoing and not something we're talking about just yet. But at a high level, this is brilliant flash of the obvious. Our goal is for the new models to outperform the old models over time.

Daniel Amir:

And the last question will come from Clark Lampen from BTIG.

William Lampen:

I just want to make -- I guess, clarify some of the questions and I guess sort of answers that we've gotten around the Vector transition. So essentially, what we're seeing happen right now is a consolidation of a couple of different operating assets previously. I guess if we're thinking about like ironSource, Tapjoy and Unity ads independently. They're getting consolidated down to one asset. And is the expectation now that maybe as part of that migration, some customers might not fully migrate budgets. I'm just curious if you're seeing -- one, if that's correct? And two, if you're seeing any evidence of either less than 100% migration or any sort of pause on a like-for-like basis along the way so far?

Matthew Bromberg:

Thanks for the question. The work around Vector is principally work that's being done around the Unity Ad Network. We're excited and supportive and continue to be bullish about the opportunities we have for the ironSource ad network as well, and we will remain in the market very aggressively selling that network as well. But to your point, the overall in the migration, we are taking several assets we have, including Tapjoy and others and consolidating the data around each of those what have been prior been vertical businesses and migrating them into one central data source, which we think improves all the products, but isn't the same as collapsing those products in.

William Lampen:

Understood. And if I can just ask one more sort of clarification around Create performance this quarter. I think Matt sort of at the top of the order asked the question around sort of what's embedded here. Maybe to put a finer point on that, was there a Plus to Pro migration benefit in 4Q? And as we're thinking about sort of organic growth and the trajectory of the nongaming editor business, any directional commentary you can give us for '25 or the contribution for the former item?

Matthew Bromberg:

Yes, it's my pleasure. Thank you. Yes, there was some impact of the Plus the Pro migration to your point, there was definitely impact and increased velocity in our industry business, which we're really, really excited about as well as the impact, as I said, of just resetting our relationships with our customer base and spending more positive time with customers. We think all those -- all 3 of those trends will continue. And then we'll see in 2025, in addition to those 3 trends, is the beginning of the rolling in of the major price increases around our subscription business, which we'll -- you'll see in addition over '25 and '26.

Daniel Amir:

Thanks, Clark. So with that, we'll wrap up. So thank you for dialing in today. We look forward to seeing you at one of our upcoming investor conferences that we're going to have this quarter, and have a great day.