NEW YORK - Unity Software Inc . (NYSE:U) reported mixed second-quarter results but saw its stock plummet 8% in after-hours trading as the company slashed its full-year outlook, citing a cautious approach to recovery in its Grow Solutions business.
The game development platform provider posted revenue of $449.3 million for the quarter, surpassing the analyst consensus of $438.37 million and marking a 12% increase YoY. However, Unity's adjusted earnings per share came in at -$0.32, significantly below the $0.13 estimate.
Unity's guidance for the full year 2024 disappointed investors. The company now expects revenue of $1.68-1.69 billion, down from its previous forecast of $1.76-1.8 billion and well below the $1.84 billion analyst consensus. This revised outlook represents a 2-3% YoY decrease.
CEO John Riccitiello commented on the company's potential, stating, "We have everything we need to get Unity back to healthy, sustainable growth. The focus now is on fostering a culture of execution, discipline, and accountability."
For the third quarter, Unity projects revenue for its strategic portfolio to be between $415-420 million, down 4-6% YoY. The company also adjusted its full-year Adjusted EBITDA guidance to $340-350 million, down from the previous $400-425 million range.
Unity attributed the lowered guidance to a more cautious approach to recovery in its Grow Solutions business and the time required for investments in product enhancements to yield results. The company expects revenue growth in the second half to come primarily from game subscriptions and continued growth in Industries.
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