Unity (U) Reports Earnings Tomorrow: What To Expect

Interactive software platform Unity (NYSE:U) will be reporting results this Wednesday morning. Here’s what investors should know.

Unity beat analysts’ revenue expectations by 3.1% last quarter, reporting revenues of $440.9 million, down 1.9% year on year. It was a strong quarter for the company, with a solid beat of analysts’ billings estimates and an impressive beat of analysts’ EBITDA estimates.

Is Unity a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members.

This quarter, analysts are expecting Unity’s revenue to be flat year on year at $450.1 million, improving from the 18% decrease it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.17 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 vertical software segment, some have already reported their Q3 results, giving us a hint as to what we can expect. Cadence Design Systems delivered year-on-year revenue growth of 10.1%, beating analysts’ expectations by 0.9%, and Agilysys reported revenues up 16.1%, topping estimates by 3.1%. Cadence Design Systems traded down 3% following the results while Agilysys was up 22.7%.

Read our full analysis of Cadence Design Systems’s results here and Agilysys’s results here.

Investors in the vertical software segment have had fairly steady hands going into earnings, with share prices down 1.2% on average over the last month. Unity’s stock price was unchanged during the same time and is heading into earnings with an average analyst price target of $36.88 (compared to the current share price of $37.25).

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