Unity Earnings: What To Look For From U

Radek Strnad /
2022/08/08 4:17 am EDT
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Game engine maker Unity (NYSE:U) will be announcing earnings results tomorrow after market hours. Here's what investors should know.

Last quarter Unity reported revenues of $320.1 million, up 36.3% year on year, missing analyst expectations by 0.31%. It was a weak quarter for the company, with revenue guidance for both the next quarter and the full year below analysts' estimates. The company added 31 enterprise customers paying more than $100,000 annually to a total of 1,083.

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 9.11% year on year to $298.5 million, slowing down from the 48.4% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted loss is expected to come in at -$0.21 per share.

Unity Total Revenue

The analysts covering the company have been growing increasingly bullish about the business heading into the earnings, with revenue estimates seeing four upwards revisions over the last thirty days. The company only missed Wall St's revenue estimates once over the last two years, and has on average exceeded top line expectations by 7.17%.

Looking at Unity's peers in the vertical software segment, some of them have already reported Q2 earnings results, giving us a hint of what we can expect. Q2 Holdings delivered top-line growth of 13.5% year on year, beating analyst estimates by 0.03% and 2U reported revenues up 1.79% year on year, missing analyst estimates by 5.03%. Q2 Holdings traded down 4.01% on the results, and 2U was down 3.18%. Read our full analysis of Q2 Holdings's results here and 2U's results here.

There has been positive sentiment among investors in the software segment, with the stocks up on average 8.2% over the last month. Unity is up 16.7% during the same time, and is heading into the earnings with analyst price target of $51.8, compared to share price of $48.32.

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