Unity Software fails to provide full-year guidance after mixed Q3 results
Investing.com — Unity Software on Thursday failed to provide full-year guidance after reporting mixed third-quarter results as revenue missed Wall Street estimates following slowing new game launches and weakness in China amid a government crackdown on gaming.
Unity Software Inc (U) slipped 13% in after-hours trading following the report.
The company reported a loss per diluted share of $0.32 on revenue of $544.2 million. Analysts had anticipated a loss of $0.49 on revenue of $554.2M.
Three factors, including Unity game services, professional services, and China, weighed on performance, the company said.
«China revenue declined from continued government restrictions on gaming, and we continue to reduce our reliance on Professional Service,» it added.
Looking ahead, the company said it would share details of a plan on how it intends to streamline its product portfolio.
"[W]e are currently doing too much, we are not achieving the synergies that exist across our portfolio, and we are not executing to our full potential. We aim to address these opportunities to emerge as a leaner, more agile, and faster growing company." the company said.
Unity Software said it expects to start implementing the plan within this quarter and complete all interventions before the end of the first quarter of 2024.
As the exact timing of these interventions is «difficult to estimate,» the company didn't providing guidance for the fourth quarter or the full year 2023, but said it would provide guidance for 2024 with its fourth quarter and full year 2023 results.
Reacting to the Unity results, analysts at Macquarie Equity Research downgraded the stock to Neutral with a $20 per share 12-month price target, stating there are «too many questions.»
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