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Unity Software (U) Q3 Earnings Top Estimates, Revenues Up Y/Y
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Unity Software (U - Free Report) reported third-quarter 2020 loss of 9 cents per share that beat the Zacks Consensus Estimate by 67%. The company had reported a loss of 67 cents per share in the year-ago quarter.
Revenues of $200.8 million beat the consensus mark by 7.6%. Moreover, the figure grew 53.3% year over year.
The company’s dollar-based net expansion rate was 144% in the reported quarter, up from 142% in the last reported quarter. It was primarily driven by strong execution across Create and Operate Solutions.
Moreover, robust demand for Unity Software’s real-time 3D technology from gaming companies globally has aided the top line.
Unity Software Inc. Price, Consensus and EPS Surprise
Revenues from Operate Solutions (60% of total revenues) surged 71.4% year over year to $120 million.
Revenues from Create Solutions (31% of total revenues) soared 46.5% year over year to $63 million.
Strategic Partnerships and Other Revenues (9% of total revenue) remained steady at $18 million.
Gross Profit on a Non-GAAP basis grew 50.6% year over year to $159 million from $105.6 million in the year-ago quarter. However, the gross margin contracted 150 bps year over year to 79.2%
Selling and Marketing expenses rose 30.5% year over year to $60.8 million. General and Administrative expenses jumped 229.8% year over year to $117.5 million. Research and Development expenses surged 82.2% year over year to $116.7 million.
Unity Software reported a non-GAAP operating loss of $8.4 million, down 69.6% year over year. The company reported a non-GAAP operating loss of $27.8 million in the year-ago quarter.
Balance Sheet and Cash Flows
As of Sep 30, 2020, Unity Software had cash & cash equivalents worth $1.8 billion.
Cash flow from operations surged 141.9% year over year to $20.6 million. Moreover, free cash flow jumped 119.5% to $10.9 million.
Guidance
Unity Software expects fourth-quarter 2020 revenues between $200 million and $204 million and revenue growth between 27% and 29%. Non-GAAP operating loss is expected between $35 million and $40 million.
Moreover, the company expects revenues between $752 million and $756 million and a non-GAAP operating loss between $66 million and $70 million for fiscal 2020.
Zacks Rank & Stocks to Consider
Currently, Unity Software carries a Zacks Rank #3 (Hold).
NVIDIA Corporation, Kulicke and Soffa Industries, and Pure Storage are set to release their quarterly results on Nov 18, Nov 19 and Nov 24, respectively.
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Unity Software (U) Q3 Earnings Top Estimates, Revenues Up Y/Y
Unity Software (U - Free Report) reported third-quarter 2020 loss of 9 cents per share that beat the Zacks Consensus Estimate by 67%. The company had reported a loss of 67 cents per share in the year-ago quarter.
Revenues of $200.8 million beat the consensus mark by 7.6%. Moreover, the figure grew 53.3% year over year.
The company’s dollar-based net expansion rate was 144% in the reported quarter, up from 142% in the last reported quarter. It was primarily driven by strong execution across Create and Operate Solutions.
Moreover, robust demand for Unity Software’s real-time 3D technology from gaming companies globally has aided the top line.
Unity Software Inc. Price, Consensus and EPS Surprise
Unity Software Inc. price-consensus-eps-surprise-chart | Unity Software Inc. Quote
Quarter Details
Revenues from Operate Solutions (60% of total revenues) surged 71.4% year over year to $120 million.
Revenues from Create Solutions (31% of total revenues) soared 46.5% year over year to $63 million.
Strategic Partnerships and Other Revenues (9% of total revenue) remained steady at $18 million.
Gross Profit on a Non-GAAP basis grew 50.6% year over year to $159 million from $105.6 million in the year-ago quarter. However, the gross margin contracted 150 bps year over year to 79.2%
Selling and Marketing expenses rose 30.5% year over year to $60.8 million. General and Administrative expenses jumped 229.8% year over year to $117.5 million. Research and Development expenses surged 82.2% year over year to $116.7 million.
Unity Software reported a non-GAAP operating loss of $8.4 million, down 69.6% year over year. The company reported a non-GAAP operating loss of $27.8 million in the year-ago quarter.
Balance Sheet and Cash Flows
As of Sep 30, 2020, Unity Software had cash & cash equivalents worth $1.8 billion.
Cash flow from operations surged 141.9% year over year to $20.6 million. Moreover, free cash flow jumped 119.5% to $10.9 million.
Guidance
Unity Software expects fourth-quarter 2020 revenues between $200 million and $204 million and revenue growth between 27% and 29%. Non-GAAP operating loss is expected between $35 million and $40 million.
Moreover, the company expects revenues between $752 million and $756 million and a non-GAAP operating loss between $66 million and $70 million for fiscal 2020.
Zacks Rank & Stocks to Consider
Currently, Unity Software carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector are NVIDIA (NVDA - Free Report) , Pure Storage (PSTG - Free Report) and Kulicke and Soffa Industries (KLIC - Free Report) . All three companies carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
NVIDIA Corporation, Kulicke and Soffa Industries, and Pure Storage are set to release their quarterly results on Nov 18, Nov 19 and Nov 24, respectively.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot stocks we're targeting >>