Earnings To Watch: Unity (U) Reports Q3 Results Tomorrow

Radek Strnad /
2022/11/08 2:17 am EST

Game engine maker Unity (NYSE:U) will be announcing earnings results tomorrow afternoon. Here's what to expect.

Last quarter 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. The company added 2 enterprise customers paying more than $100,000 annually to a total of 1,085.

Is Unity buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting Unity's revenue to grow 13.8% year on year to $326 million, slowing down from the 42.6% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted loss is expected to come in at -$0.15 per share.

Unity Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company missed Wall St's revenue estimates twice over the last two years.

Looking at Unity's peers in the vertical software segment, some of them have already reported Q3 earnings results, giving us a hint of what we can expect. 2U's revenues decreased 0.05% year on year, beating analyst estimates by 0.09% and Q2 Holdings reported revenues up 14.2% year on year, missing analyst estimates by 1.37%. Q2 Holdings traded down 5.64% on the results, and 2U was up 1.88%. Read our full analysis of 2U's results here and Q2 Holdings's results here.

Tech stocks have had a rocky start in 2022 and while some of the vertical software stocks have fared somewhat better, they have not been spared, with share price declining 6.47% over the last month. Unity is down 23% during the same time, and is heading into the earnings with analyst price target of $53.7, compared to share price of $24.35.

Unity previously announced that it has entered into an agreement to merge with ironSource.

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The author has no position in any of the stocks mentioned.