Game engine maker Unity (NYSE: U) will be reporting results tomorrow before the bell. Here’s what investors should know.
Unity beat analysts’ revenue expectations by 5.9% last quarter, reporting revenues of $457.1 million, down 25% year on year. It was a satisfactory quarter for the company, with a solid beat of analysts’ billings estimates but revenue guidance for next quarter missing analysts’ expectations significantly.
Is Unity a buy or sell going into earnings? Read our full analysis here, it’s free.
This quarter, analysts are expecting Unity’s revenue to decline 9.5% year on year to $416.8 million, a further deceleration from the 8% decrease it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.11 per share.
Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Unity has only missed Wall Street’s revenue estimates once over the last two years, exceeding top-line expectations by 4.5% on average.
Looking at Unity’s peers in the design software segment, some have already reported their Q1 results, giving us a hint as to what we can expect. Cadence delivered year-on-year revenue growth of 23.1%, meeting analysts’ expectations, and PTC reported revenues up 5.5%, topping estimates by 5%. Cadence traded up 5.7% following the results while PTC’s stock price was unchanged.
Read our full analysis of Cadence’s results here and PTC’s results here.
There has been positive sentiment among investors in the design software segment, with share prices up 15% on average over the last month. Unity is up 24.6% during the same time and is heading into earnings with an average analyst price target of $27.20 (compared to the current share price of $21.49).
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