Unity Software Inc.
Q1 2022 Earnings Call
May 10, 2022, 5:00 p.m. ET
Contents:
- Prepared Remarks
- Questions and Answers
- Call Participants
Prepared Remarks:
Richard Davis
[Audio gap] future financial performance and similar items, all of which are subject to risks, uncertainties, and assumptions. But you can find more information about these risks and uncertainties in the Risk Factors section of our filings at sec.gov. Actual results may differ. We take no obligation to revise or update any forward-looking statements.
We will also be discussing our non-GAAP financial measures today and reconciliations between our GAAP and non-GAAP financial results and discussions of limitations of non-GAAP financial measures can be found in the Investor Relations website. With that let me turn it over to John.
John Riccitiello -- President, Chief Executive Officer, and Executive Chairman
So good afternoon, everyone. Thanks, Richard, and I'm going to start launching into our script today. Before discussing earnings, I want to express our sincere thoughts for the people of Ukraine and hope that there's a peaceful resolution to the conflict as soon as possible. Our report today is a tale of two cities.
First, we experienced challenges in monetization of negatively affected revenue in February and March and more persists through the third quarter with minimal impact on the fourth. Second, we continue to perform very well in Create both with our gaming customers and with our non-game digital twins business where we saw meaningful growth, a trend we expect to continue. For the total company, revenue of $320 million was up 36% from a year earlier and came in at the top end of our guidance range. Upside to the forecast in Create was offset by challenges in Operate's monetization business.
Non-GAAP operating margin of minus 7.2% improved 280 basis points from the first quarter of last year as we continued to invest in innovation to capture the very large opportunity in front of us, while improving non-GAAP operating margins. I'd like to address our Operate business first. Operate started the year strong in January, but then significantly slowed down in February and March. This resulted in first-quarter revenue of $184 million, an increase of 26% year on year.
While there are external factors to consider, the Operate challenge is mostly caused by internal factors in Unity monetization in an otherwise healthy market. We see these challenges as temporary and not structural and do not expect them to impact future prospects of our business beyond 2022. The most succinct framing for the challenges we are facing is that we built more for growth and less for resiliency. Following years of rapid growth and working through the challenges of Apple's privacy changes, we got hit hard by two issues.