Unity Stock Suffers Post-Earnings Decline

The company released its fourth quarter (Q4) fiscal 2023 earnings the morning of February 27. It reported revenues of $609 million, which beat analyst estimates. Revenues from its Grow Solutions segment jumped 26% year-over-year to $319 million. Moreover, its Industries segment made up 23% of Create Solutions revenues compared to 19% in the prior year. Create Solutions revenues, which made up nearly half of Unity’s total revenues, jumped 47% year-over-year to $290 million.

Non-GAAP gross profit climbed 46% year-over-year to $522 million in Q4 FY2023. Meanwhile, its gross margin expanded over 2,200 basis points to 85.8%. Selling and merchandise expenses also increased 9.5% compared to the previous year to $123 million.

Looking ahead, Unity Software is projecting first quarter (Q1) fiscal 2024 revenues between $415 million and $420 million. Overall, it expects revenues to suffer a decline in the range of 15-16% in the year-over-year period. EBITDA stands for earnings before interest, taxes, depreciation, and amortization, aiming to give a clearer picture of a company’s profitability. This company expects adjusted EBITDA between $45 million and $50 million in Q1 FY2024 and full year adjusted EBITDA between $400 million and $450 million.