As Q2 earnings season comes to a close, it’s time to take stock of this quarters’ best and worst performers amongst the design software stocks, including Unity (NYSE:U) and its peers.
The demand for rich, interactive 2D, 3D, VR and AR experiences is growing, and while the ubiquitous metaverse might still be more of a buzzword than a real thing, what is real is the demand for the tools to create these experiences, whether they are games, 3D tours or interactive movies.
The 4 design software stocks we track reported a weaker Q2; on average, revenues missed analyst consensus estimates by 1.51%, while on average next quarter revenue guidance was 0.61% above consensus. Tech stocks have been hit the hardest as investors start to value profits over growth and design software stocks have not been spared, with share prices down 22.4% since the previous earnings results, on average.
Slowest Q2: Unity (NYSE:U)
Started as a game studio by three friends in a Copenhagen apartment, Unity (NYSE:U) is a software as a service platform that makes it easier to develop and monetize new games and other visual digital experiences.
Unity reported revenues of $297 million, up 8.58% year on year, missing analyst expectations by 0.67%. It was a weak quarter for the company, with guidance for both the next quarter and full year missing analysts' expectations. Unity previously announced that it has entered into an agreement to merge with ironSource.
“The second quarter of 2022 was consistent with our guidance with strong performance in Create Solutions,” said John Riccitiello, President and Chief Executive Officer, Unity.
Unity delivered the weakest full year guidance update of the whole group. The company added 2 enterprise customers paying more than $100,000 annually to a total of 1,085. The stock is down 32.1% since the results and currently trades at $34.
Is now the time to buy Unity? Access our full analysis of the earnings results here, it's free.
Best Q2: Matterport (NASDAQ:MTTR)
Founded in 2011 before any mass market VR headset was released, Matterport (NASDAQ:MTTR) provides the hardware and software necessary to turn real world spaces into 3D visualization.
Matterport reported revenues of $28.4 million, down 3.47% year on year, missing analyst expectations by 6.22%. It was a mixed quarter for the company, with a very optimistic guidance for the next quarter but a slow revenue growth.
Matterport achieved the highest full year guidance raise but had the weakest performance against analyst estimates and weakest performance against analyst estimates among its peers. The company added 54,000 customers to a total of 616,000. The stock is down 22.9% since the results and currently trades at $4.
Is now the time to buy Matterport? Access our full analysis of the earnings results here, it's free.
One of the most well-known Silicon Valley software companies around, Adobe (NASDAQ:ADBE) is a leading provider of software as service in the digital design and document management space.
Adobe reported revenues of $4.43 billion, up 12.6% year on year, inline with analyst expectations. It was a weaker quarter for the company, with an underwhelming revenue guidance for the next quarter and a slow revenue growth.
Adobe has announced it has entered into a definitive merger agreement to acquire Figma for ~$20 billion in cash and stock
The stock is down 24.3% since the results and currently trades at $281.26.
Founded in 1982 by John Walker and growing into one of the industry's behemoths, Autodesk (NASDAQ:ADSK) makes computer-aided design (CAD) software for engineering, construction, and architecture companies.
Autodesk reported revenues of $1.23 billion, up 16.7% year on year, in line with analyst expectations. It was a mixed quarter for the company, with an optimistic revenue guidance for the next quarter but a slow revenue growth.
Autodesk achieved the strongest analyst estimates beat and fastest revenue growth among the peers. The stock is down 10.2% since the results and currently trades at $192.23.
The author has no position in any of the stocks mentioned