Unity shares fall as earnings forecasts disappoint

Shares of Unity Software Inc. fell in late trading Monday after the app monetization company released its latest results and forecasts.

The company expects between $415 million and $420 million in fiscal first-quarter revenue for what it calls its “strategic portfolio,” believing that its non-strategic portfolio will not contribute significantly to revenue going forward. The FactSet consensus was for revenue of $534 million.

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It also expects annual revenue of $1.7 billion to $1.8 billion for the strategic portfolio. Analysts tracked by FactSet were looking for $2.3 billion.

Shares fell more than 17% in Monday’s extended session.

The company’s fiscal first-quarter guidance for adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) was between $45 million and $50 million, while its full-year outlook calls for between $400 million and $425 million. dollars. Analysts had expected $112 million for the quarter and $647 million for the year.

The company reported a fiscal fourth-quarter net loss of $254 million, or 66 cents per share, compared with a loss of $288 million, or 82 cents per share, in the year-earlier quarter. Analysts had expected a loss of 46 cents per share.

Revenues totaled $609 million, while analysts tracked by FactSet estimated $551 million. Unity noted that revenue would have been $510 million excluding a transaction that resulted in the release of Wētā FX’s deferred revenue.

Unity said in its letter to shareholders that it is in the midst of “a two-phase business recovery that we expect will enable Unity to win customers and shareholders in a sustainable manner.”

“With the portfolio and cost structure reset mostly behind us, our full attention is on reigniting revenue growth,” the company said.

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