Unity Earnings: What To Look For From U

Adam Hejl /
2023/02/21 3:12 am EST

Game engine maker Unity (NYSE:U) will be reporting results tomorrow afternoon. Here's what to look for.

Last quarter Unity reported revenues of $322.8 million, up 12.7% year on year, missing analyst expectations by 0.85%. It was a weaker quarter for the company, with a decline in net revenue retention rate and decelerating growth in large customers. The company lost 10 enterprise customers paying more than $100,000 annually and ended up with a total of 1,075.

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 38.7% year on year to $438.2 million, slowing down from the 43.3% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.01 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 three times over the last two years.

Looking at Unity's peers in the vertical software segment, some of them have already reported Q4 earnings results, giving us a hint what we can expect. Toast delivered top-line growth of 49.3% year on year, beating analyst estimates by 2.1% and Upstart reported revenue decline of 51.8% year on year, exceeding estimates by 10.6%. Toast traded down 6.2% on the results, Upstart was up 0.89%. Read our full analysis of Toast's results here and Upstart's results here.

There has been positive sentiment among investors in the software segment, with the stocks up on average 7.77% over the last month. Unity is up 13.7% during the same time, and is heading into the earnings with analyst price target of $36.03, compared to share price of $39.98.

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