NYSE$U

Unity Software Inc. · Q3 2022 earnings

Q3 2022 earnings · · Investor relations

Briefing

Unity's third quarter results aligned with guidance, demonstrating strong performance in Create solutions and continued advancement in Operate, while completing the merger with ironSource.

Unity delivered $322.9 million in revenue during the third quarter of 2022, up 13% year-over-year. The company's third quarter came in line with guidance for revenue and non-GAAP operating income. Unity completed its merger with ironSource, creating an end-to-end platform for mobile app creators.

  • Revenue was $322.9 million, an increase of 13% from the third quarter of 2021.
  • Create Solutions revenue was $128.6 million, an increase of 54%.
  • Operate Solutions revenue was $171.7 million, a decrease of 7%.
  • Basic and diluted net loss per share was $0.84, compared to basic and diluted net loss per share of $0.41 in the third quarter of 2021.

Headline financials

Total Revenue

$323M

Previous: $286M+12.8%
EPS (adj)

-$0.14

Previous: -$0.06-133.3%
Capital Expenditures

-$42.3M

Previous: -$28M-51.5%
Free Cash Flow

-$292M

Previous: -$143M-104.3%
Net Income

-$250M

Previous: -$115M-117.1%
Operating Income

-$240M

Previous: -$127M-89.1%
Gross Profit

$211M

Previous: $223M-5.3%
Cash & Equivalents

$1.24B

Previous: $755M+64.1%
Total Assets

$4.73B

Previous: $2.68B+76.5%
Stock-Based Comp

$154M

Previous: $97.3M+58.7%

Revenue & EPS history

Unity · Revenue · Quarterly

$323M

Q3 2022+12.8%vs Q3 2021
Beat estimate in 13 of 15 quarters(87%)
ActualEstimate

Revenue by segment

Unity · $300M total across 2 segments · Q3 2022

  • Grow Solutions
    $172M-7.2%
  • Create Solutions
    $129M+53.6%

Forward guidance

Unity is providing the following guidance for the fourth quarter and for the full year ending December 31, 2022.

Tailwinds

  • Q4 2022 Revenue Guidance: $425M - $445M
  • Q4 2022 Year-over-year revenue growth: 35% - 41%
  • Q4 2022 Non-GAAP income (loss) from operations: $5M - $15M
  • Q4 2022 Non-GAAP operating margin: 1% - 3%
  • Q4 2022 Fully diluted shares outstanding: 562M

Headwinds

  • Full Year 2022 Revenue Guidance: $1,365 - $1,385
  • Full Year 2022 Year-over-year revenue growth: 23% - 25%
  • Full Year 2022 Non-GAAP income (loss) from operations: ($88)M - ($98)M
  • Full Year 2022 Non-GAAP operating margin: (6%) - (7%)
  • A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q3 2022

Historical avgQ3 2022

+2.1%

Avg return

Earnings day

+3.9%

Avg return

5 days after

+5.8%

Avg return

30 days after

58%

14 / 24 earnings

Positive

+30.4%

Q4 2024

Best reaction

-39.9%

Q1 2022

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026-1.8%-1.7%+6.9%
Q4 2025-26.3%-35.7%-33.1%
Q3 2025+18.1%+20.2%+27.6%
Q1 2025-3.1%+2.4%+17.9%
Q4 2024+30.4%+19.5%+0.4%
Q3 2024-5.4%-11.3%+27.9%
Q2 2024+11.6%+16.7%+13.9%
Q1 2024-10.0%-4.4%-28.3%
Q4 2023-0.8%-7.5%-13.7%
Q3 2023+3.6%+12.0%+25.5%
Q2 2023-9.2%-11.8%-18.1%
Q1 2023+14.8%+6.1%+28.4%
Q4 2022-12.7%-18.8%-21.3%
Q3 2022+17.1%+37.6%+42.8%
Q2 2022+11.7%+17.5%-22.1%
Q1 2022-39.9%-22.4%-18.0%
Q4 2021+6.5%+5.5%-12.7%
Q3 2021+8.2%+20.6%-14.2%
Q2 2020+18.2%+14.0%+26.1%
Q2 2021+10.1%+16.9%+21.7%
Q1 2021+3.3%+7.2%+23.6%
Q4 2020-13.3%-13.7%-36.7%
Q4 2019+9.6%+13.0%+49.9%
Q3 2020+8.7%+11.8%+44.4%
Q1 2020
Q3 2019
Q2 2019
Q1 2019

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