Key Points
Unity posted sales and earnings beats with its third-quarter report.
Strong performance for the company's digital-marketing platform powered significant sales growth.
Unity's turnaround is proceeding at an encouraging pace.
Unity Software (NYSE: U) stock is posting big gains Wednesday on the heels of the company's recent quarterly report. The company's share price was up 6.4% as of 11:30 a.m. ET, and had been up as much as 17.6% earlier in the session.
Unity published its third-quarter results after yesterday's market close and posted better-than-expected sales and earnings. The stock is now up 92% across this year's trading.
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Unity stock rallies on strong Q3 print
Unity recorded non-GAAP (generally accepted accounting principles) adjusted earnings per share of $0.20 on revenue of $471 million in the third quarter. For reference, the average Wall Street analyst estimate had called for adjusted earnings per share of $0.17 on revenue of $453.06 million. Sales unexpectedly increased 5% year over year, driven by strong momentum for the company's new digital-advertising platform and network.
What's next for Unity?
Unity is guiding for mid-single-digit sequential quarterly revenue growth in Q4. Revenue for the period is projected to come in between $480 million and $490 million. Meanwhile, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) is projected to be between $110 million and $115 million for the quarter.
The integration of artificial intelligence (AI) tools and automation in the company's ad platform appears to be paying off in a big way, and the company's turnaround initiatives are showing encouraging momentum.
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Keith Noonan has positions in Unity Software. The Motley Fool has positions in and recommends Unity Software. The Motley Fool has a disclosure policy.