Game engine maker Unity (NYSE: U) will be announcing earnings results this Wednesday morning. Here’s what investors should know.
Unity beat analysts’ revenue expectations by 4.4% last quarter, reporting revenues of $435 million, down 5.5% year on year. It was a mixed quarter for the company, with a solid beat of analysts’ billings estimates but revenue guidance for next quarter missing analysts’ expectations significantly.
Is Unity a buy or sell going into earnings? Read our full analysis here, it’s free.
This quarter, analysts are expecting Unity’s revenue to decline 4.8% year on year to $427.5 million, improving from the 15.8% decrease it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.15 per share.
The majority of analysts covering the company have 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 design software segment, some have already reported their Q2 results, giving us a hint as to what we can expect. PTC delivered year-on-year revenue growth of 24.2%, beating analysts’ expectations by 10.4%, and Cadence reported revenues up 20.2%, topping estimates by 1.8%. PTC traded up 5.7% following the results while Cadence was also up 9.8%.
Read our full analysis of PTC’s results here and Cadence’s results here.
The outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. While some of the design software stocks have shown solid performance in this choppy environment, the group has generally underperformed, with share prices down 3% on average over the last month. Unity is up 22.8% during the same time and is heading into earnings with an average analyst price target of $27.57 (compared to the current share price of $34.20).
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