Latest news with #MattBromberg
Yahoo
6 days ago
- Business
- Yahoo
Unity CEO breaks down Q2 beat & video game industry
Unity (U) stock falls despite beating second quarter expectations, as guidance came in slightly below forecasts. Unity CEO and president Matt Bromberg joins Asking for a Trend to break down the results but share how the company's new artificial intelligence (AI) ad platform is fueling ad growth. To watch more expert insights and analysis on the latest market action, check out more Asking for a Trend. Matt, great to see you on the show. Let let's start with that earnings report, Matt, because you all did report. I did see the stock finish lower today by about uh 6%. I saw analysts at City, uh Matt cited saying the results beat expectations, but they did say the outlook slightly below consensus on a midpoint basis. But but I'm interested to get your thoughts on the report, Matt. Walk us through the results. What what are you seeing in the business? Yeah, I will thank you for having me. It won't surprise you to hear from me that where the stock moves on any given day is not not much of a concern. I think when with the benefit of time, what folks will do when they look back at the second quarter of 2025, is they'll understand that this was really the inflection point for the unit's turnaround. When investments in fundamental investments in in product development and velocity and relationships with our customers really started to show uh financial performance on our top line. Uh and that's mostly what this quarter was about. We we handily beat both on the top and bottom in Q2 and also guided Q3 really aggressively for renewed growth in our advertising business. So in general, we're feeling really terrific. Matt, in terms of those creation tools that you're offering folks, how much do those tools uh cost, Matt? And how much pricing leverage do you have? Could you could you charge more? Yeah, the the vast majority of the of the folks who use Unity pay nothing because we uh invest very much in the support of our broader community so that people can learn to use Unity, so that they can create freely, uh and they can invest their time and creative energies with us. At the high end, large corporate customers who are operating significant businesses with Unity, um do pay uh substantial sums for unity. And um I so we think we've we've priced the of offering fairly. Um, we did have a price increase um earlier this year and uh it seems to be being tolerated and embraced uh really well by customers. So we think we're in a pretty good place. Um, that's and that's sort of how we feel about it. In terms of the you have this new AI powered ad platform, Matt, called Vector. Can you walk us through that product, what it means for your business and the customers and and how you think it it compares and contrasts with what what what uh the competition offers? Yeah, a year ago when we when we began here at Unity, we were fundamentally uncompetitive in the advertising space. And we immediately realized that we were going to have to invest significantly to build a new neural network uh driven engine to power our ad business forward. And so we set to work immediately and over the last 10 weeks since the launch of Unity vector, what we've seen is that those investments are really starting to pay off. Um the Unity ad network grew 15% in the second quarter, expected to grow um mid-single digits in next quarter. And really from a standing start, we've been delivering uh significantly more value and more return to customers. And we think that there's multiple years of runway available for us in this space. Performance advertisers in our world who are buying installs for their uh for their games will spend effectively infinitely up to their return targets. So as we develop um uh better products, we deliver more return to those customers, they will spend more with us and we're feeling great about that over the long term. Matt, I talked to an analyst today who knows your company in the industry and he brought up a question, want to ping it off you. He said, you know, what what if and he was talking about the Apple Epic fight, right? which has dragged on for a long time, as you know, what if he said those developers that ended up they didn't have to pay Apple and it freed up a whole bunch of money. What could that mean for unity? Could that mean, for example, an uptick and ad spend? How do you answer that question? Listen, I think if you're in a business where overnight that business becomes, you know, more compete a more profitable, call it double digit and a double digit amount. Well, you're typically going to see is those game developers will invest a significant portion of that savings in growth. Uh and when they look to do that, they absolutely will come to us. Um and and and that's one of the most exciting things about um about the environment we find ourselves and the environment is so dynamic. Um and there's so much interest in uh in growth and investment and we feel really well positioned to take advantage of it. Broader question, Matt, you know, we got some data points recently which suggests maybe the economy is is showing some weakness here. If the economy were to wobble, Matt, if, you know, the consumer comes under some more pressure, what would that mean potentially for unity? I think by and large over time, the games uh video game business has proven to be pretty recession resistant. Um especially when you're talking about free to play mobile games and 70% of the top mobile games in the world are built on unity. That's a very, very nice price to value uh equation for consumers. free. So, you know, we feel like we're in a really good spot and you know, I'm hopeful that that won't happen to the economy, but uh, you know, we've been through cycles before and and we tend to weather them just fine. Uh you know, you've worked in the video game industry for for a while. I'm curious to get your just your general thoughts on the industry. You know, you got the new the new switch just came out, Grand Theft Auto, that that's on the way, that's on deck. How generally excited, how enthusiastic are you about the industry right now? What do you see ahead? I'm enormously optimistic about the future of our industry. I I know there's from time to time folks will say that growth is slowing and there have been some some games that haven't haven't released well, there've been some layoffs, but I see this as a period of creative destruction um and dynamism. To your point, I've been in this business for a while. I've seen some hardware cycles and right now we're at the end of a hardware cycle and that always tends to be a point of a little bit slower growth. But as you've seen from the release of the switch 2, which is now the fastest growing uh game console in history, there's a lot of dynamism in this market. And when you make hit games, consumers will buy them. We'll have Grand Theft Auto, the Grand Theft Auto coming out. Um we're going to have innovation in the space, um and there will be some changes, but this space will grow and it'll grow durably for many years to come. Related Videos Opendoor's Q2 beat isn't enough: Here's what's holding them back Applovin, DraftKings, E.l.f. Beauty: After-hours trending stocks Fed's Mary Daly says it's time to cut rates Lyft stock tumbles on Q2 earnings miss Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Bloomberg
6 days ago
- Business
- Bloomberg
Unity CEO: Company at an 'Inflection Point'
Unity Software CEO Matt Bromberg says the dip in his company's shares post-earnings is likely due to the run-up Unity shares have seen over the past year. Bromberg discusses what he calls the company's successful turnaround effort with Caroline Hyde and Ed Ludlow on 'Bloomberg Tech.' (Source: Bloomberg)
Yahoo
6 days ago
- Business
- Yahoo
Unity's (NYSE:U) Q2 Sales Top Estimates But Quarterly Revenue Guidance Slightly Misses Expectations
Game engine maker Unity (NYSE:U) reported Q2 CY2025 results exceeding the market's revenue expectations , but sales fell by 1.9% year on year to $440.9 million. On the other hand, next quarter's revenue guidance of $445 million was less impressive, coming in 0.6% below analysts' estimates. Its non-GAAP profit of $0.18 per share was 22% above analysts' consensus estimates. Is now the time to buy Unity? Find out in our full research report. Unity (U) Q2 CY2025 Highlights: Revenue: $440.9 million vs analyst estimates of $427.5 million (1.9% year-on-year decline, 3.1% beat) Adjusted EPS: $0.18 vs analyst estimates of $0.15 (22% beat) Adjusted EBITDA: $90.5 million vs analyst estimates of $77.49 million (20.5% margin, 16.8% beat) Revenue Guidance for Q3 CY2025 is $445 million at the midpoint, below analyst estimates of $447.6 million EBITDA guidance for Q3 CY2025 is $92.5 million at the midpoint, below analyst estimates of $93.25 million Operating Margin: -26.9%, up from -28.8% in the same quarter last year Free Cash Flow Margin: 28.7%, up from 1.7% in the previous quarter Market Capitalization: $14.11 billion "We believe the second quarter of 2025 will be remembered as an inflection point in the Unity story, where our commitment to accelerating product innovation and delivering for our customers translated to markedly better performance," said Matt Bromberg, President and CEO of Unity. Company Overview Started as a game studio by three friends in a Copenhagen apartment, Unity (NYSE:U) is a software as a service platform that makes it easier to develop and monetize new games and other visual digital experiences. Revenue Growth A company's long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last three years, Unity grew its sales at a 13.4% compounded annual growth rate. Although this growth is acceptable on an absolute basis, it fell short of our standards for the software sector, which enjoys a number of secular tailwinds. This quarter, Unity's revenue fell by 1.9% year on year to $440.9 million but beat Wall Street's estimates by 3.1%. Company management is currently guiding for flat sales next quarter. Looking further ahead, sell-side analysts expect revenue to grow 4.3% over the next 12 months, a deceleration versus the last three years. This projection doesn't excite us and indicates its products and services will see some demand headwinds. Software is eating the world and there is virtually no industry left that has been untouched by it. That drives increasing demand for tools helping software developers do their jobs, whether it be monitoring critical cloud infrastructure, integrating audio and video functionality, or ensuring smooth content streaming. Click here to access a free report on our 3 favorite stocks to play this generational megatrend. Customer Acquisition Efficiency The customer acquisition cost (CAC) payback period represents the months required to recover the cost of acquiring a new customer. Essentially, it's the break-even point for sales and marketing investments. A shorter CAC payback period is ideal, as it implies better returns on investment and business scalability. Unity's recent customer acquisition efforts haven't yielded returns as its CAC payback period was negative this quarter, meaning its incremental sales and marketing investments outpaced its revenue. The company's inefficiency indicates it operates in a highly competitive environment where there is little differentiation between Unity's products and its peers. Key Takeaways from Unity's Q2 Results We were impressed by how significantly Unity blew past analysts' EPS and EBITDA expectations this quarter. We were also happy its revenue outperformed Wall Street's estimates. On the other hand, its revenue and EBITDA guidance for next quarter fell slightly short of Wall Street's estimates. Overall, this print was mixed but still had some key positives. The market seemed to be hoping for more, and the stock traded down 4.9% to $32.30 immediately after reporting. So do we think Unity is an attractive buy at the current price? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it's free.
Yahoo
30-05-2025
- Business
- Yahoo
Why Unity Software Inc. (U) Soared On Wednesday
We recently published a list of . In this article, we are going to take a look at where Unity Software Inc. (NYSE:U) stands against other best-performing stocks. Unity Software increased by 12.52 percent on Wednesday to close at $24.54 apiece despite the lack of fresh catalyst to spark buying appetite. In recent news, Unity Software Inc. (NYSE:U) announced that it narrowed its net loss by 73 percent in the first quarter of the year to $77.9 million from the $291.5 million registered in the same period last year, while revenues declined by 5.4 percent to $435 million from $460 million year-on-year on the back of lower revenues from its core businesses. For the second quarter of the year, Unity Software Inc. (NYSE:U) said that it is targeting to hit revenues between $415 million and $425 million, as well as adjusted EBITDA of $70 million to $75 million. A software engineer coding while surrounded by the latest industry tools and technology. Last month, Unity Software Inc. (NYSE:U) launched its AI-powered platform called Vector, as it aims to keep pace with AppLovin Corp. 'Vector is designed to leverage data from across the Unity ecosystem, integrating self-learning artificial intelligence models that will provide deeper insights, optimize performance, and deliver better results for customers,' said Unity President and CEO Matt Bromberg in the company's last earnings call. Overall, U ranks 4th on our list of best-performing stocks. While we acknowledge the potential of U, 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 AI stock that is more promising than U and that has 10,000x upside potential, check out our report about this cheapest AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
28-05-2025
- Business
- Yahoo
Design Software Stocks Q1 Teardown: Unity (NYSE:U) Vs The Rest
As the craze of earnings season draws to a close, here's a look back at some of the most exciting (and some less so) results from Q1. Today, we are looking at design software stocks, starting with Unity (NYSE:U). The demand for rich, interactive 2D, 3D, VR and AR experiences is growing, and while the ubiquitous metaverse might still be more of a buzzword than a real thing, what is real is the demand for the tools to create these experiences, whether they are games, 3D tours or interactive movies. The 5 design software stocks we track reported a satisfactory Q1. As a group, revenues beat analysts' consensus estimates by 2.6% while next quarter's revenue guidance was in line. In light of this news, share prices of the companies have held steady as they are up 2.2% on average since the latest earnings results. Started as a game studio by three friends in a Copenhagen apartment, Unity (NYSE:U) is a software as a service platform that makes it easier to develop and monetize new games and other visual digital experiences. Unity reported revenues of $435 million, down 5.5% year on year. This print exceeded analysts' expectations by 4.4%. Despite the top-line beat, it was still a mixed quarter for the company with an impressive beat of analysts' billings estimates but revenue guidance for next quarter slightly missing analysts' expectations. "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. Unity delivered the slowest revenue growth of the whole group. The stock is down 2.8% since reporting and currently trades at $20.73. Is now the time to buy Unity? Access our full analysis of the earnings results here, it's free. Used to manage the multi-year expansion of the Panama Canal that began in 2007, Procore (NYSE:PCOR) offers a software-as-service project, finance, and quality management platform for the construction industry. Procore reported revenues of $310.6 million, up 15.3% year on year, outperforming analysts' expectations by 2.6%. The business had a strong quarter with accelerating customer growth and a solid beat of analysts' EBITDA estimates. The market seems happy with the results as the stock is up 7% since reporting. It currently trades at $67.61. Is now the time to buy Procore? Access our full analysis of the earnings results here, it's free. One of the most well-known Silicon Valley software companies around, Adobe (NASDAQ:ADBE) is a leading provider of software as service in the digital design and document management space. Adobe reported revenues of $5.71 billion, up 10.3% year on year, exceeding analysts' expectations by 1%. Still, it was a mixed quarter as it posted EPS guidance for next quarter meeting analysts' expectations. Adobe delivered the weakest full-year guidance update in the group. As expected, the stock is down 12.5% since the results and currently trades at $383.75. Read our full analysis of Adobe's results here. Used to design the Airbus A380 and Boeing 787 Dreamliner commercial airplanes, PTC's (NASDAQ:PTC) software-as-service platform helps engineers and designers create and test products before manufacturing. PTC reported revenues of $636.4 million, up 5.5% year on year. This result surpassed analysts' expectations by 5%. Taking a step back, it was a mixed quarter as it also recorded a solid beat of analysts' EBITDA estimates but EPS guidance for next quarter missing analysts' expectations significantly. PTC pulled off the biggest analyst estimates beat and highest full-year guidance raise among its peers. The stock is up 11.7% since reporting and currently trades at $172.97. Read our full, actionable report on PTC here, it's free. With the name chosen to reflect the idea of a repeating pattern or rhythm in electronic design, Cadence Design Systems (NASDAQ:CDNS) offers a software-as-a-service platform for semiconductor engineering and design. Cadence reported revenues of $1.24 billion, up 23.1% year on year. This print was in line with analysts' expectations. Zooming out, it was a satisfactory quarter as it also logged a solid beat of analysts' EBITDA estimates but a slight miss of analysts' billings estimates. Cadence scored the fastest revenue growth but had the weakest performance against analyst estimates among its peers. The stock is up 7.6% since reporting and currently trades at $307.40. Read our full, actionable report on Cadence here, it's free. Thanks to the Fed's rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn't send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump's November win lit a fire under major indices and sent them to all-time highs. However, there's still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy. Want to invest in winners with rock-solid fundamentals? Check out our Hidden Gem Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate. Join Paid Stock Investor Research Help us make StockStory more helpful to investors like yourself. Join our paid user research session and receive a $50 Amazon gift card for your opinions. Sign up here. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
