Unity Software (U - Free Report) reported fourth-quarter 2023 adjusted earnings of 23 cents per share, beating the Zacks Consensus Estimate of 19 cents. The reported figure compared favorably with breakeven earnings in the year-ago quarter.
Revenues of $609.27 million beat the consensus mark by 13.57% and jumped 35.1% year over year.
Quarter Details
Revenues from Grow Solutions (52.4% of total revenues) jumped 26% year over year to $319 million. The figure lagged the Zacks Consensus Estimate by 9.08%.
Industries (beyond games) represent 23% of the total Create Solutions revenues compared with 19% in the fourth quarter of the prior year.
Create Solutions revenues (47.6% of total revenues) increased 47.21% year over year to $290 million. The figure beat the Zacks Consensus Estimate by 56.23%.
Gross profit on a non-GAAP basis climbed 46.87% year over year to $522.7 million in the reported quarter. However, gross margin expanded 2,291 basis points on a year-over-year basis to 85.8%.
Selling and marketing expenses flared up 9.57% year over year to $123.47 million. General and administrative expenses rose 1.48% year over year to $60.06 million. Research and development expenses declined 6% year over year to $153.5 million.
Unity Software reported a non-GAAP operating profit of $185.64 million compared with the year-ago quarter’s profit of $20.7 million.
Balance Sheet and Cash Flow
As of Dec 31, 2023, cash & cash equivalents and restricted cash were $1.604 billion.
Cash flow from operations was $72.1 million in the reported quarter against net cash used in operating activities of negative $49.06 million in the year-ago quarter.
Guidance
Unity Software projects first-quarter 2024 revenues between $415 million and $420 million. The company estimates revenues to decline in the range of 15-16% year over year.
Adjusted EBITDA is estimated between $45 million and $50 million.
For 2024, U expects revenues between $1.76 billion and $1.8 billion. The company estimates revenues to decline in the range of 17-19% year over year.
Adjusted EBITDA is estimated between $400 million and $425 million.
Zacks Rank & Stocks to Consider
Unity Software currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks from the broader Computer and Technology sector are Dell Technologies (DELL - Free Report) , ACM Research (ACMR - Free Report) and Bandwidth (BAND - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of Dell Technologies have jumped 21.3% year to date. DELL is scheduled to release fourth-quarter fiscal 2024 results on Feb 29.
Shares of ACM Research have gained 10.5% year to date. ACMR is set to report its fourth-quarter 2023 results on Feb 28.
Shares of Bandwidth have lost 17.3% year to date. BAND is set to report its fourth-quarter 2023 results on Feb 28.
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Unity Software (U - Free Report) reported fourth-quarter 2023 adjusted earnings of 23 cents per share, beating the Zacks Consensus Estimate of 19 cents. The reported figure compared favorably with breakeven earnings in the year-ago quarter.
Revenues of $609.27 million beat the consensus mark by 13.57% and jumped 35.1% year over year.
Quarter Details
Revenues from Grow Solutions (52.4% of total revenues) jumped 26% year over year to $319 million. The figure lagged the Zacks Consensus Estimate by 9.08%.
Industries (beyond games) represent 23% of the total Create Solutions revenues compared with 19% in the fourth quarter of the prior year.
Create Solutions revenues (47.6% of total revenues) increased 47.21% year over year to $290 million. The figure beat the Zacks Consensus Estimate by 56.23%.
Gross profit on a non-GAAP basis climbed 46.87% year over year to $522.7 million in the reported quarter. However, gross margin expanded 2,291 basis points on a year-over-year basis to 85.8%.
Selling and marketing expenses flared up 9.57% year over year to $123.47 million. General and administrative expenses rose 1.48% year over year to $60.06 million. Research and development expenses declined 6% year over year to $153.5 million.
Unity Software reported a non-GAAP operating profit of $185.64 million compared with the year-ago quarter’s profit of $20.7 million.
Balance Sheet and Cash Flow
As of Dec 31, 2023, cash & cash equivalents and restricted cash were $1.604 billion.
Cash flow from operations was $72.1 million in the reported quarter against net cash used in operating activities of negative $49.06 million in the year-ago quarter.
Guidance
Unity Software projects first-quarter 2024 revenues between $415 million and $420 million. The company estimates revenues to decline in the range of 15-16% year over year.
Adjusted EBITDA is estimated between $45 million and $50 million.
For 2024, U expects revenues between $1.76 billion and $1.8 billion. The company estimates revenues to decline in the range of 17-19% year over year.
Adjusted EBITDA is estimated between $400 million and $425 million.
Zacks Rank & Stocks to Consider
Unity Software currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks from the broader Computer and Technology sector are Dell Technologies (DELL - Free Report) , ACM Research (ACMR - Free Report) and Bandwidth (BAND - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of Dell Technologies have jumped 21.3% year to date. DELL is scheduled to release fourth-quarter fiscal 2024 results on Feb 29.
Shares of ACM Research have gained 10.5% year to date. ACMR is set to report its fourth-quarter 2023 results on Feb 28.
Shares of Bandwidth have lost 17.3% year to date. BAND is set to report its fourth-quarter 2023 results on Feb 28.
Just Released: Zacks Top 10 Stocks for 2024
Hurry – you can still get in early on our 10 top tickers for 2024. Hand-picked by Zacks Director of Research, Sheraz Mian, this portfolio has been stunningly and consistently successful. From inception in 2012 through November, 2023, the Zacks Top 10 Stocks gained +974.1%, nearly TRIPLING the S&P 500’s +340.1%. Sheraz has combed through 4,400 companies covered by the Zacks Rank and handpicked the best 10 to buy and hold in 2024. You can still be among the first to see these just-released stocks with enormous potential.
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