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Unity Earnings: What To Look For From U

U Cover Image

Game engine maker Unity (NYSE:U) will be reporting earnings tomorrow after the bell. Here’s what you need to know.

Unity beat analysts’ revenue expectations by 1.7% last quarter, reporting revenues of $449.3 million, down 15.8% year on year. It was a decent quarter for the company, with an impressive beat of analysts’ EBITDA estimates.

Is Unity a buy or sell going into earnings? Read our full analysis here, it’s free.

This quarter, analysts are expecting Unity’s revenue to decline 21.3% year on year to $428.2 million, a reversal from the 68.5% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.14 per share.

Unity Total Revenue

The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Unity has missed Wall Street’s revenue estimates twice over the last two years.

Looking at Unity’s peers in the vertical software segment, some have already reported their Q3 results, giving us a hint as to what we can expect. Cadence delivered year-on-year revenue growth of 18.8%, beating analysts’ expectations by 2.9%, and Procore reported revenues up 19.4%, topping estimates by 2.9%. Cadence traded up 12.5% following the results while Procore was also up 4.8%.

Read our full analysis of Cadence’s results here and Procore’s results here.

There has been positive sentiment among investors in the vertical software segment, with share prices up 7% on average over the last month. Unity is up 2% during the same time and is heading into earnings with an average analyst price target of $20.58 (compared to the current share price of $21.62).

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