$Unity Software(U.US) first take: Overall, the third-quarter performance was somewhat better than expected, particularly in terms of profits. In terms of revenue, the Grow business still has some drag, while the Create business continues to recover.

The company's guidance for Q4 revenue and earnings slightly exceeded expectations. Although the company raised its full-year guidance, the increase only implied the extent of the Q3 outperformance, so the market reaction is likely to be relatively muted. However, management expressed a cautious attitude towards the guidance during the conference call, and like last quarter, I still believe the Q4 guidance is somewhat conservative.

As for the forward-looking guidance that I am particularly concerned about, it is quite complex, with both positives and negatives. The positive is that deferred revenue, both short-term and long-term, has seen a slight quarter-on-quarter increase. Although the total contract amount to be fulfilled has decreased quarter-on-quarter, the newly signed contracts calculated for the quarter are increasing. However, the concern is that the number of large customers has decreased compared to the previous quarter, and overall revenue from existing customers continues to decline year-on-year (affected by the closure of some major businesses).

In summary, Unity's positive trend remains unchanged, but the pace is still relatively slow. In September, Unity announced the cancellation of Runtime fees, reverting to the original engine price increase model, and the stock price has already reacted positively in advance. However, I believe there are still some questions to be resolved regarding the two major businesses: 1) With the release of Unity 6 in October, I am particularly concerned about how customer return will be after the cancellation of Runtime fees and the release of the new engine? 2) As for the advertising business, there has not yet been a significant recovery, and with Applovin just releasing its Q3 results yesterday, marketing revenue continues to grow significantly, indicating that Applovin is still capturing market share.

What is the specific progress of Unity's advertising technology improvement? These issues are not yet reflected in the financial report, and I will provide a detailed interpretation later in conjunction with the conference call.