Unity Software (U) Tops Q4 Estimates but Faces Q1 Revenue Reset, Benchmark Maintains Hold

Unity Software Inc. (NYSE:U) ranks among billionaire Stanley Druckenmiller’s 10 best stock picks. On February 12, Benchmark maintained its Hold rating on Unity Software Inc. (NYSE:U), citing the company’s fourth-quarter financial results, which topped forecasts. Unity Software Inc. (NYSE:U) posted revenue of $503 million in the quarter, up 10% year-over-year and exceeding the average forecast of $492.8 million. At the same time, Unity’s adjusted EBITDA came in at $125 million, with a 25% margin, exceeding the average estimate of $117.8 million.

Unity’s first-quarter projection suggests a major reset, despite the company’s impressive fourth-quarter results. Although the company recorded solid actual results, management provided a forecast for first-quarter revenue between $480 million and $490 million, essentially the same range as the initial estimate for the fourth quarter.

Benchmark sees Unity’s position at the forefront of the AI revolution as misguided, arguing that the company remains part of an older development and ad tech stack that is susceptible to reshaping by frontier AI models that will transform both creation and monetization.

Unity Software Inc. (NYSE:U) operates a platform for creating and growing games and interactive experiences for mobile phones, PCs, consoles, and extended reality devices worldwide.

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Disclosure: None. This article is originally published at Insider Monkey.