Unity Software Stock Gets A Boost From Q2 Earnings: What's Going On?

Unity Software Inc U shares are trading higher in Wednesday's after-hours session following the company's quarterly results.

Q2 Earnings: Unity said second-quarter revenue increased more than 80% year-over-year to $533.48 million, which beat the consensus estimate of $514.18 million, according to Benzinga Pro. The company reported a quarterly loss of 51 cents per share, which may not compare to estimates. 

Adjusted EBITDA came in at $99 million, representing an improvement of $136 million on a year-over-year basis. Free cash flow totaled $33 million in the quarter. The company said its free cash flow results were reduced by one-time payments related to restructuring. 

"We estimate that for the second quarter of 2023, we grew revenue faster than the markets in which we compete, and expect to continue to do so for the balance of the year," the company said in a letter to shareholders. 

"We are encouraged by the progress on profitability with second quarter adjusted EBITDA margins of 18.5%, which compares to 6.5% in the first quarter of this year and negative 12.7% in the second quarter of the prior year."

Outlook: Unity sees third-quarter revenue of $540 million to $550 million, much higher than the estimates of $500.20 million. It sees an adjusted EBITDA of $90 million to $100 million.

The company raised the low end of its full-year guidance range by $40 million, bringing new full-year revenue guidance to a range of $2.12 billion to $2.2 billion. Unity also raised its full-year adjusted EBITDA guidance from $250 million to $300 million to a new range of $320 million to $340 million.

Management will hold a conference call to discuss these results at 5 p.m. ET.

See Also: Activision Lost Old Transformers Games, Hasbro Hopes They'll Be Found If Microsoft Deal Goes Through

U Price Action: Unity shares were up 4.83% after hours at $43.45 at the time of publication, according to Benzinga Pro.

Photo:  Joshua Woroniecki from Pixabay.