We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Unity Software (U) Posts Loss in Q1, Revenues Increase Y/Y
Read MoreHide Full Article
Unity Software (U - Free Report) reported first-quarter 2022 loss of 8 cents per share, in line with the Zacks Consensus Estimate. The company had posted a loss of 10 cents per share in the year-ago quarter.
Revenues of $320.1 million lagged the consensus mark by 0.2% but jumped 36.4% year over year.
The company’s dollar-based net expansion rate was 135% in the reported quarter, down from 140% witnessed in the year-ago quarter. Moreover, the number of customers who contributed more than $100,000 of revenues increased from 837 as of Mar 31, 2021, to 1083 as of Mar 31, 2022.
Unity shares were down 29.36% in pre-market trading. The stock is down 66.3% year to date compared with the Zacks Computer & Technology sector’s decline of 25.9%.
Quarter Details
Revenues from Operate Solutions (57.5% of total revenues) increased 26% year over year to $184 million.
Unity Software Inc. Price, Consensus and EPS Surprise
Create Solutions revenues (36.4% of total revenues) surged 65% year over year to $116.4 million.
Strategic Partnerships and Other revenues (6.1% of total revenues) increased 11% year over year to $19.7 million.
Gross profit on a non-GAAP basis grew 32.7% year over year to $244 million in the reported quarter. However, gross margin contracted 210 basis points on a year-over-year basis to 76.2%
Selling and Marketing expenses flared up 31.9% year over year to $71.5 million. General and administrative expenses rose 21.6% year over year to $53.5 million. Research and Development expenses surged 30.1% year over year to $141.9 million.
Unity reported non-GAAP operating loss of $23 million compared with the year-ago quarter’s loss of $23.4 million.
Balance Sheet and Cash Flows
As of Mar 31, 2022, cash & cash equivalents and restricted cash were $1.2 billion.
Cash flow from operations was $101.3 million in the reported quarter against net cash used in operating activities of $88.9 million in the year-ago quarter.
Free cash flow was $86.4 million compared with free cash outflow of $100.6 million reported in the year-ago quarter.
Guidance
Unity projects second-quarter 2022 revenues between $290 million and $295 million. The company estimates revenue growth in the range of 6-8% year over year.
Non-GAAP operating loss is estimated between $62 million and $64 million.
For 2022, the company expects revenues between $1.35 billion and $1.43 billion. Unity estimates revenue growth in the range of 22-28% year over year.
Non-GAAP operating loss is expected between $60 million and $75 million.
Zacks Rank & Stocks to Consider
Unity Software currently carries a Zacks Rank #3 (Hold).
Image: Bigstock
Unity Software (U) Posts Loss in Q1, Revenues Increase Y/Y
Unity Software (U - Free Report) reported first-quarter 2022 loss of 8 cents per share, in line with the Zacks Consensus Estimate. The company had posted a loss of 10 cents per share in the year-ago quarter.
Revenues of $320.1 million lagged the consensus mark by 0.2% but jumped 36.4% year over year.
The company’s dollar-based net expansion rate was 135% in the reported quarter, down from 140% witnessed in the year-ago quarter. Moreover, the number of customers who contributed more than $100,000 of revenues increased from 837 as of Mar 31, 2021, to 1083 as of Mar 31, 2022.
Unity shares were down 29.36% in pre-market trading. The stock is down 66.3% year to date compared with the Zacks Computer & Technology sector’s decline of 25.9%.
Quarter Details
Revenues from Operate Solutions (57.5% of total revenues) increased 26% year over year to $184 million.
Unity Software Inc. Price, Consensus and EPS Surprise
Unity Software Inc. price-consensus-eps-surprise-chart | Unity Software Inc. Quote
Create Solutions revenues (36.4% of total revenues) surged 65% year over year to $116.4 million.
Strategic Partnerships and Other revenues (6.1% of total revenues) increased 11% year over year to $19.7 million.
Gross profit on a non-GAAP basis grew 32.7% year over year to $244 million in the reported quarter. However, gross margin contracted 210 basis points on a year-over-year basis to 76.2%
Selling and Marketing expenses flared up 31.9% year over year to $71.5 million. General and administrative expenses rose 21.6% year over year to $53.5 million. Research and Development expenses surged 30.1% year over year to $141.9 million.
Unity reported non-GAAP operating loss of $23 million compared with the year-ago quarter’s loss of $23.4 million.
Balance Sheet and Cash Flows
As of Mar 31, 2022, cash & cash equivalents and restricted cash were $1.2 billion.
Cash flow from operations was $101.3 million in the reported quarter against net cash used in operating activities of $88.9 million in the year-ago quarter.
Free cash flow was $86.4 million compared with free cash outflow of $100.6 million reported in the year-ago quarter.
Guidance
Unity projects second-quarter 2022 revenues between $290 million and $295 million. The company estimates revenue growth in the range of 6-8% year over year.
Non-GAAP operating loss is estimated between $62 million and $64 million.
For 2022, the company expects revenues between $1.35 billion and $1.43 billion. Unity estimates revenue growth in the range of 22-28% year over year.
Non-GAAP operating loss is expected between $60 million and $75 million.
Zacks Rank & Stocks to Consider
Unity Software currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the broader Zacks Computer and Technology sector are Analog Devices (ADI - Free Report) , Broadcom (AVGO - Free Report) and Cisco Systems (CSCO - Free Report) . All the three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Analog Devices shares have outperformed the sector year-to-date, declining 11.7%.
ADI is set to report second-quarter fiscal 2022 results on May 18.
Broadcom’s shares have outperformed the sector year to date, declining 12.6%.
AVGO is set to report second-quarter fiscal 2022 results on June 2.
Cisco’ shares have outperformed sector year to date, declining 21.8%.
CSCO is set to report third-quarter fiscal 2022 results on May 18.