Latest news with #GrowSolutions
Yahoo
4 days ago
- Business
- Yahoo
Unity Software (U) Surges 12.35% on Market Optimism
We recently published Unity Software Inc. (NYSE:U) is one of the best-performing stocks on Tuesday. Unity Software snapped a two-day losing streak on Tuesday, jumping 12.35 percent to close at $37.29 apiece, mirroring a broader market optimism thanks to cooler-than-expected inflation data. In recent news, Unity Software Inc. (NYSE:U) narrowed its attributable net loss in the second quarter of the year by 13 percent to $108.8 million from $125.6 million in the same period last year. Revenues dipped by 1.8 percent to $440.9 million from the $449 million in the same comparable period, dragged by 4 percent lower revenues from its Grow solutions segment, which offset a 2-percent uptick in revenues from its Create solutions. Attributable net loss in the first six months also shrank by 55 percent to $186.4 million from $416.6 million in the same comparable period. Revenues declined by 3.7 percent to $875.9 million from $909.6 million year-on-year. For the third quarter of the year, Unity Software Inc. (NYSE:U) said it expects revenues to hit $440 million to $450 million, with Grow to rise on a quarter-on-quarter basis by mid-single digits, and with Create to dip in the same comparable period due to the impact of a larger customer base in the second quarter. It also expects adjusted EBITDA to hit $90 million to $95 million. While we acknowledge the potential of U as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the . Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Yahoo
08-05-2025
- Business
- Yahoo
Unity Earnings: Vector Launches Early
Unity beat expectations for the first quarter but suffered declines in revenue and adjusted EPS as the portfolio reset continued. The AI-powered Vector advertising platform launched earlier than expected, providing a tailwind for the Grow Solutions business. Unity's outlook was a bit weak, possibly due to economic conditions. Here's our initial take on Unity Software's (NYSE: U) financial report. Metric Q1 2024 Q1 2025 Change vs. Expectations Revenue $460 million $435 million (5%) Beat Earnings per share (adjusted) $0.28 $0.24 (14%) Beat Create Solutions revenue $164 million $150 million (9%) n/a Grow Solutions revenue $297 million $285 million (4%) n/a Unity revenue declined by 5% year over year in the first quarter, but with the video game engine developer's "portfolio reset" nearly in the rearview mirror, a return to growth is inching closer. Driving any growth will be Unity's subscription business within the Create Solutions segment. The company dropped a plan to charge developers onerous fees based on the number of game installs last year and instead boosted its subscription pricing. Unity noted that while professional services revenue and consumption services revenue slumped in the first quarter, subscription revenue enjoyed strong growth. In the Grow Solutions segment, which houses the company's advertising business, revenue was down just 4% as the early rollout of Unity's new Vector platform helped offset declines elsewhere. Vector is an AI-powered rebuild of the company's core advertising technology that aims to boost results for advertisers through better targeting and other improvements. Unity posted a GAAP loss in the first quarter, but both adjusted earnings per share and free cash flow were in positive territory. Adjusted EPS was down 14% to $0.24, while free cash flow rose to positive $7 million from negative $15 million in the prior-year period. For the second quarter, Unity expects revenue between $415 million and $425 million along with adjusted EBITDA between $70 million and $75 million. Unity stock was up about 2% in premarket trading on Wednesday soon after the release of the first-quarter report. The company beat expectations for revenue and earnings per share, but the revenue outlook for the second quarter was slightly below analyst estimates. Shares of Unity went into the earnings report down 5% year to date and down 89% from their all-time high. Unity's earnings call on Wednesday morning should shed some light on how the company views the current macroeconomic environment. Neither the video game industry nor the advertising industry is immune from an economic slowdown, and Unity's advertising comeback could come under pressure if advertisers pull back on spending. The company's weak outlook for the second quarter could be a reflection of that uncertainty. Full earnings report Investor relations page Ever feel like you missed the boat in buying the most successful stocks? Then you'll want to hear this. On rare occasions, our expert team of analysts issues a 'Double Down' stock recommendation for companies that they think are about to pop. If you're worried you've already missed your chance to invest, now is the best time to buy before it's too late. And the numbers speak for themselves: Nvidia: if you invested $1,000 when we doubled down in 2009, you'd have $294,438!* Apple: if you invested $1,000 when we doubled down in 2008, you'd have $37,636!* Netflix: if you invested $1,000 when we doubled down in 2004, you'd have $613,546!* Right now, we're issuing 'Double Down' alerts for three incredible companies, available when you join , and there may not be another chance like this anytime soon.*Stock Advisor returns as of May 5, 2025 Timothy Green has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Unity Software. The Motley Fool has a disclosure policy. Unity Earnings: Vector Launches Early was originally published by The Motley Fool
Business Wire
07-05-2025
- Business
- Business Wire
Unity Reports First Quarter 2025 Financial Results
SAN FRANCISCO--(BUSINESS WIRE)--Unity (NYSE: U), the leading platform to create and grow games and interactive experiences, today announced financial results for the first quarter ended March 31, 2025. "The Company's first quarter results once again meaningfully exceeded expectations on both revenue and Adjusted EBITDA, highlighting our progress as we continue to build a culture of execution and discipline,' said Matt Bromberg, President and CEO of Unity. 'The early success of Unity Vector and continued strong demand for Unity 6 underscore our positioning as the leading integrated platform supporting developers across the full lifecycle of game development,' Bromberg continued. First Quarter 2025 Results: Revenue was $435 million, compared to $460 million in the first quarter 2024. Create Solutions revenue was $150 million, compared to $164 million in the first quarter 2024. Grow Solutions revenue was $285 million, compared to $297 million in the first quarter 2024. GAAP net loss was $78 million, with a margin of (18)%. GAAP basic and diluted net loss per share was $0.19. Adjusted EBITDA was $84 million, with a margin of 19%. Adjusted EPS was $0.24. Net cash provided by operating activities was $13 million. Free cash flow was $7 million. Revenue Revenue was $435 million, down 6% year-over-year driven by our portfolio reset. Create Solutions revenue was $150 million, down 8% year-over-year, primarily due to a decrease in professional services revenue and consumption services revenue, both caused by the portfolio reset. The year-over-year decrease was partially offset by strong growth in subscription revenue. Grow Solutions revenue was $285 million, down 4% year-over-year. The change was driven by declines in select Grow products, partially offset by the earlier than expected rollout of Unity Vector. Basic and Diluted Net Loss per share Basic and diluted net loss per share was $0.19, as compared to $0.75 for the same period in 2024. Net Loss and Net Cash Provided by or Used in Operating Activities Net loss for the quarter was $78 million, compared to $291 million in the first quarter of 2024. Net loss margin was (18)%, compared to (63)% in the first quarter of 2024. Net cash provided by operating activities for the quarter was $13 million, compared to net cash used in operating activities of $7 million in the first quarter of 2024. Adjusted EBITDA, Free Cash Flow, and Adjusted EPS Adjusted EBITDA for the quarter was $84 million, with a margin of 19%, compared to $79 million in the first quarter of 2024, with a margin of 17%. The better than expected adjusted EBITDA margin in the first quarter of 2025 was due to better cost control and higher than expected revenue. Free cash flow for the quarter was $7 million, compared to negative $15 million in the first quarter of 2024. Adjusted EPS for the quarter was $0.24, compared to $0.28 in the first quarter of 2024. Liquidity As of March 31, 2025, our cash and cash equivalents, and restricted cash was $1,552 million, and increased by $24 million, as compared with $1,528 million as of December 31, 2024. This increase was primarily driven by proceeds from issuance of common stock from employee equity plans, and from our operations, offset by the net cash outflows from our debt refinancing. Q2 2025 Guidance 1 Revenue of $415 to $425 million. Adjusted EBITDA of $70 to $75 million. About Unity Unity [NYSE: U] offers a suite of tools to create, market and grow games and interactive experiences across all major platforms from mobile, PC, and console, to extended reality (XR). For more information, visit UNITY SOFTWARE INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except par share data) (Unaudited) As of March 31, 2025 December 31, 2024 Assets Current assets: Cash and cash equivalents $ 1,541,170 $ 1,517,672 Accounts receivable, net 552,958 573,884 Prepaid expenses and other 144,514 133,795 Total current assets 2,238,642 2,225,351 Property and equipment, net 89,972 98,819 Goodwill 3,166,304 3,166,304 Intangible assets, net 980,584 1,066,235 Other assets 170,453 180,698 Total assets $ 6,645,955 $ 6,737,407 Liabilities and stockholders' equity Current liabilities: Accounts payable $ 16,538 $ 13,948 Accrued expenses and other 273,444 294,951 Publisher payables 339,129 394,284 Deferred revenue 188,490 186,304 Total current liabilities 817,601 889,487 Convertible notes 2,232,143 2,238,922 Long-term deferred revenue 14,710 16,846 Other long-term liabilities 154,863 165,004 Total liabilities 3,219,317 3,310,259 Commitments and contingencies Redeemable noncontrolling interests 234,740 230,627 Stockholders' equity: Common stock, $0.000005 par value: Authorized shares - 1,000,000 and 1,000,000 Issued and outstanding shares - 415,406 and 409,393 2 2 Additional paid-in capital 7,008,134 6,936,038 Accumulated other comprehensive loss (8,501 ) (9,425 ) Accumulated deficit (3,813,586 ) (3,735,944 ) Total Unity Software Inc. stockholders' equity 3,186,049 3,190,671 Noncontrolling interest 5,849 5,850 Total stockholders' equity 3,191,898 3,196,521 Total liabilities and stockholders' equity $ 6,645,955 $ 6,737,407 Expand UNITY SOFTWARE INC. (In thousands, except per share amounts) (Unaudited) Three Months Ended March 31, 2025 2024 Revenue $ 435,000 $ 460,380 Cost of revenue 113,957 144,387 Gross profit 321,043 315,993 Operating expenses Research and development 220,625 282,728 Sales and marketing 162,013 230,625 General and administrative 66,340 177,569 Total operating expenses 448,978 690,922 Loss from operations (127,935 ) (374,929 ) Interest expense (5,891 ) (6,035 ) Interest income and other income (expense), net 58,111 76,643 Loss before income taxes (75,715 ) (304,321 ) Provision for (benefit from) Income taxes 2,192 (12,843 ) Net loss (77,907 ) (291,478 ) Net loss attributable to noncontrolling interest and redeemable noncontrolling interests (265 ) (404 ) Net loss attributable to Unity Software Inc. (77,642 ) (291,074 ) Basic and diluted net loss per share attributable to Unity Software Inc. $ (0.19 ) $ (0.75 ) Weighted-average shares used in computation of basic and diluted net loss per share 411,852 387,151 Net loss (77,907 ) (291,478 ) Change in foreign currency translation adjustment 1,178 (3,461 ) Comprehensive loss $ (76,729 ) $ (294,939 ) Net loss attributable to noncontrolling interest and redeemable noncontrolling interests (265 ) (404 ) Foreign currency translation attributable to noncontrolling interest and redeemable noncontrolling interests 254 (710 ) Comprehensive loss attributable to noncontrolling interest and redeemable noncontrolling interests (11 ) (1,114 ) Comprehensive loss attributable to Unity Software Inc. $ (76,718 ) $ (293,825 ) Expand UNITY SOFTWARE INC. (In thousands) (Unaudited) Three Months Ended March 31, 2025 2024 Operating activities Net loss $ (77,907 ) $ (291,478 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 96,217 101,810 Stock-based compensation expense 98,790 265,877 Gain on repayment of convertible note (42,744 ) (61,371 ) Impairment of property and equipment 3,470 13,598 Other (218 ) 2,918 Changes in assets and liabilities, net of effects of acquisitions: Accounts receivable, net 21,022 (9,740 ) Prepaid expenses and other (10,602 ) (16,779 ) Other assets 10,023 (2,399 ) Accounts payable 2,198 5,273 Accrued expenses and other (21,029 ) (4,269 ) Publisher payables (55,155 ) 25,558 Other long-term liabilities (10,919 ) (23,584 ) Deferred revenue (120 ) (12,787 ) Net cash provided by (used in) operating activities 13,026 (7,373 ) Investing activities Purchases of property and equipment (5,718 ) (7,190 ) Net cash used in investing activities (5,718 ) (7,190 ) Financing activities Proceeds from issuance of convertible notes 690,000 — Purchase of capped calls (44,436 ) — Payment of debt issuance costs (13,236 ) — Repayments of convertible note (641,691 ) (414,999 ) Proceeds from issuance of common stock from employee equity plans 21,611 25,998 Net cash provided by (used in) financing activities 12,248 (389,001 ) Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash 4,197 (6,202 ) Increase (decrease) in cash, cash equivalents, and restricted cash 23,753 (409,766 ) Cash, cash equivalents, and restricted cash, beginning of period 1,527,881 1,604,267 Cash, cash equivalents, and restricted cash, end of period $ 1,551,634 $ Expand About Non-GAAP Financial Measures To supplement our consolidated financial statements prepared and presented in accordance with generally accepted accounting principles in the United States (GAAP) we use certain non-GAAP financial measures, as described below, to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe the following non-GAAP measures are useful in evaluating our operating performance. We are presenting these non-GAAP financial measures because we believe, when taken collectively, they may be helpful to investors because they provide consistency and comparability with past financial performance. However, non-GAAP financial measures have limitations in their usefulness to investors because they have no standardized meaning prescribed by GAAP and are not prepared under any comprehensive set of accounting rules or principles. In addition, other companies, including companies in our industry, may calculate similarly-titled non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. As a result, our non-GAAP financial measures are presented for supplemental informational purposes only and should not be considered in isolation or as a substitute for our consolidated financial statements presented in accordance with GAAP. We define adjusted EBITDA as GAAP net income or loss excluding benefits or expenses associated with stock-based compensation, amortization of acquired intangible assets, depreciation, restructurings and reorganizations, interest, income tax, and other non-operating activities, which primarily consist of foreign exchange rate gains or losses. We define adjusted EBITDA margin as adjusted EBITDA as a percentage of revenue. We define adjusted gross profit as GAAP gross profit excluding expenses associated with stock-based compensation, amortization of acquired intangible assets, depreciation, and restructurings and reorganizations. We define adjusted gross margin as adjusted gross profit as a percentage of revenue. We define adjusted cost of revenue as GAAP cost of revenue, excluding expenses associated with stock-based compensation, amortization of acquired intangible assets, depreciation, and restructurings and reorganizations. We define adjusted research and development expense as research and development expense, excluding expenses associated with stock-based compensation, amortization of acquired intangible assets, depreciation, and restructurings and reorganizations. We define adjusted sales and marketing expense as GAAP sales and marketing expense, excluding expenses associated with stock-based compensation, amortization of acquired intangible assets, depreciation, and restructurings and reorganizations. We define adjusted general and administrative expense as general and administrative expense excluding expenses associated with stock-based compensation, depreciation, and restructurings and reorganizations. We define free cash flow as net cash provided by (used in) operating activities less cash used for purchases of property and equipment. We define adjusted EPS as net income or loss excluding benefits or expenses associated with stock-based compensation, amortization of acquired intangible assets, depreciation, restructurings and reorganizations, and the income tax impact of the preceding adjustments (cumulatively "adjusted net income"), increased by the tax effected impacts from any relevant dilutive securities, divided by the diluted weighted-average outstanding shares. The effective tax rate used in calculating adjusted EPS is estimated for each period, based on the net income or loss adjusted for the items noted above, and may differ from the effective rate used in our financial statements. Shares of common stock that are excluded in our calculation of GAAP diluted net loss per share due to their antidilutive impact on such calculations, are included in the diluted weighted average outstanding shares used in our calculation of adjusted EPS, to the extent they have a dilutive impact on adjusted EPS given the adjusted net income in each period. Cautionary Statement Regarding Forward-Looking Statements This press release and the earnings call referencing this press release contain 'forward-looking statements,' as that term is defined under federal securities laws, including, but not limited to, statements regarding Unity's outlook and future financial performance, including: (i) Unity's ability to further enhance its platform, accelerate product innovation and enhance financial performance; (ii) expectations regarding Vector, including the impact on financial results, as well as expectations regarding Vector's improvements over time and Unity's ability to mature the product and operate it at scale; (iii) Unity's opportunities in the AR and VR gaming and entertainment market; (iv) expectations regarding revenue from non-strategic portfolio; and (v) Unity's financial guidance for the second quarter 2025. The words 'aim,' 'believe,' 'may,' 'will,' 'estimate,' 'continue,' 'intend,' 'expect,' 'plan,' 'project,' and similar expressions are intended to identify forward-looking statements. These forward-looking statements are subject to risks, uncertainties, and assumptions. If the risks materialize or assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. Risks include, but are not limited to, those related to: (i) the impact of macroeconomic conditions, such as inflation, high interest rates, tariffs, sanctions and trade barriers, and limited credit availability which could further cause economic uncertainty and volatility; (ii) competition in the advertising market and Unity's ability to compete effectively; (iii) ongoing restrictions related to the gaming industry in China; (iv) ongoing geopolitical instability, particularly in Israel, where a significant portion of the Grow operations is located; (v) Unity's ability to recover or reengage its customers, or attract new customers; (vi) the impact of any decisions to change how Unity prices its products and services; (vii) Unity's ability to achieve and sustain profitability; (viii) Unity's ability to retain existing customers and expand the use of its platform; (ix) Unity's ability to further expand into new industries and attract new customers; (x) the impact of any changes of terms of service, policies or technical requirements from operating system platform providers or application stores which may result in changes to Unity or its customers' business practices; (xi) Unity's ability to maintain favorable relationships with hardware, operating system, device, game console and other technology providers; (xii) breaches in its security measures, unauthorized access to its platform, data, or its customers' or other users' personal data; (xiii) Unity's ability to manage growth effectively and manage costs effectively; (xiv) the rapidly changing and increasingly stringent laws, regulations, contractual obligations and industry standards that relate to privacy, data security and the protection of children; (xv) the effectiveness of the company reset; (xvi) Unity's ability to successfully transition executive leadership; (xvii) Unity's ability to adapt effectively to rapidly changing technology, evolving industry standards, changing regulations, or changing customer needs, requirements, or preferences; and (xviii) the effectiveness of Vector. Further information on these and additional risks that could affect our results is included in our filings with the Securities and Exchange Commission (SEC), including our Annual Report on Form 10-K, filed with the SEC on February 20, 2025 and our Quarterly Report on Form 10-Q, filed with the SEC on May 7, 2025, and our future reports that we may file with the SEC from time to time, which could cause actual results to vary from expectations. Copies of reports filed with the SEC are available on the Unity Investor Relations website. Statements herein speak only as of the date of this release, and Unity assumes no obligation to, and does not currently intend to, update any such forward-looking statements after the date of this release except as required by law.
