Unity Software Inc (NYSE:U) reported fourth-quarter financial results after the market close on Monday. Here’s a rundown of the report.
Q4 Earnings: Unity said fourth-quarter revenue increased 35% year-over-year to $609 million, beating the consensus estimate of $562.71 million. The company reported a quarterly loss of 66 cents per share, which missed estimates for a loss of 42 cents per share, according to Benzinga Pro.
Create Solutions revenue came in at $290 million, up 47% on a year-over-year basis. Grow Solutions revenue totaled $319 million, up 26% year-over-year. Cash provided by operations was $72 million in the quarter and free cash flow totaled $61 million.
Unity provided an update on its portfolio reset which includes narrowing investments in new businesses and exiting businesses where the company does not believe it can provide unique value for customers. Professional Services will now be limited to a few strategic engagements. The company will also exit the hardware components of its multi-layer business, halt development of independent artistry tools and exit its Luna business.
“We are focused on delivering value for our customers. We believe that we are making the right interventions to win with customers for many years to come through a more focused portfolio, a leaner cost structure, and innovation that customers value,” the company said in a letter to shareholders.
“We are committed to increasing shareholder value through revenue growth, margin expansion, and free cash flow generation and we believe that the steps we have taken in the past few months position us for success in 2024 and beyond.”
Outlook: Unity sees first-quarter strategic portfolio revenue in the range of $415 million to $420 million. The company anticipates full-year 2024 revenue of $1.76 billion to $1.8 billion for its strategic portfolio business.
Unity’s management team will hold a conference call to discuss its fourth-quarter results at 5 p.m. ET. It’s worth noting that this was Unity’s first quarter under new leadership. Former chairman and CEO John Riccitiello stepped down in October 2023 after Unity faced backlash over changes to its Runtime Fee policy.
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U Price Action: Unity shares were down 15.9% after hours at $27.75 at the time of writing, according to Benzinga Pro.
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