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Open platformOpen platform

Unity Software Q3 revenue rises 32%, beats estimates

By Reuters News


Overview

  • Game engine provider's Q3 revenue rose 32%, beating analyst expectations

  • Adjusted EPS and adjusted EBITDA for Q3 beat analyst estimates

  • Company posts first GAAP profitable quarter since IPO


Outlook

  • Unity forecasts Q4 strategic revenue of $683 mln to $691 mln, up 65%-67% YoY

  • Company expects Q4 strategic Grow revenue of $515 mln to $520 mln, up 105%-107% YoY

  • Unity projects Q4 adjusted EBITDA of $290 mln to $295 mln, up 132%-136% YoY


Result Drivers

  • VECTOR GROWTH - Co said Unity Vector drove 126% year-over-year growth in its advertising business

  • UNITY ADS NETWORK - Co attributed higher Grow Solutions revenue to growth in Unity Ads Network, partially offset by decreases in ironSource Ads Network

  • SUBSCRIPTION REVENUE - Co said Create Solutions revenue increase was driven by higher subscription revenue, partially offset by lower cloud and hosting services revenue


Company press release:


Key Details

Metric

Beat/Miss

Actual

Consensus Estimate

Q3 Revenue

Beat

$622 mln

$567.44 mln (20 Analysts)

Q3 EPS

Beat

$0.25

$0.05 (10 Analysts)

Q3 Net Income

$122 mln

Q3 Adjusted EBITDA

Beat

$257 mln

$189.13 mln (19 Analysts)

Q3 Free Cash Flow

$220 mln


Analyst Coverage

  • The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 24 "strong buy" or "buy", 4 "hold" and no "sell" or "strong sell"

  • The average consensus recommendation for the software peer group is "buy"

  • Wall Street's median 12-month price target for Unity Software Inc. is $50.00, about 17.8% above its November 4 closing price of $42.46

  • The stock recently traded at 45 times the next 12-month earnings vs. a P/E of 576 three months ago


Reuters Recommended Reads

  • Nov 3 - Duolingo Q3 daily active users accelerated to 29% on gains in every region; shares soar

  • Nov 4 - Amplitude Q3 revenue beats analyst estimates on increased AI solutions demand

  • Nov 2 - Roku Q3 revenue beats estimates on advertising, subscription growth


For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.


(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)

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