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Unity Software (U) to Post Q4 Earnings: What's in the Cards?

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Unity Software (U - Free Report) is set to report fourth-quarter 2022 results on Feb 22.

The company expects fourth-quarter revenues between $425 million and $445 million. The Zacks Consensus Estimate for revenues is pegged at $434.2 million, indicating an increase of 37.4% from the year-ago quarter’s reported figure.

The consensus mark for earnings has remained steady at 1 cent per share in the past 30 days.

Unity’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters while matching the same once, delivering an earnings surprise of 9.64% on average.

Unity Software Inc. Price and EPS Surprise

Unity Software Inc. Price and EPS Surprise

Unity Software Inc. price-eps-surprise | Unity Software Inc. Quote

Factors Likely to Influence Fourth-Quarter Results

Unity’s fourth-quarter top line is expected to have benefited from steady demand for its software solutions from content creators like game developers, architects, automotive designers and filmmakers.

The strong adoption of the company’s subscription-based Create Solutions and Operate Solutions is likely to have driven the momentum.

Unity has been expanding its platform by introducing new product capabilities, which is likely to have been a major growth driver.

Steady demand for interactive, real-time 2D and 3D content for mobile phones, tablets, PCs and virtual reality devices is likely to have aided the company’s top line.

Acquisitions like Parsec and SyncSketch, which enables cloud-based, secure collaboration between separated creators and artists, are expected to have driven top-line growth.

Key Developments in Fourth-Quarter

On Nov 7, the company announced that it has completed its merger with ironSource. The transformational combination allows Unity’s game engine, ad platform and gaming services to merge with IronSource’s mediation, publishing and monetization solutions. The combined company is expected to be highly profitable and generate positive free cash flow.

What Our Model Says

According to the Zacks model, the combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

Unity has an Earnings ESP of 0.00% and a Zacks Rank #2. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases:

Grid Dynamics (GDYN - Free Report) has an Earnings ESP of +4.76% and a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Grid Dynamics is scheduled to release its fourth-quarter 2022 results on Feb 23. The Zacks Consensus Estimate for GDYN’s earnings is pegged at 11 cents per share, unchanged over the past 60 days.

Splunk has an Earnings ESP of +0.39% and a Zacks Rank #2 at present.

Splunk is scheduled to release its fiscal fourth-quarter 2023 results on Mar 1. The Zacks Consensus Estimate for  SPLK’s earnings has moved north by 0.9% to $1.11 per share in the past 60 days.

Salesforce (CRM - Free Report) has an Earnings ESP of +0.32% and a Zacks Rank #2 at present.

Salesforce is scheduled to release its fiscal fourth-quarter 2023 results on Mar 1. The Zacks Consensus Estimate for CRM’s earnings has been stable at $1.36 per share in the past 60 days.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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