[ad_1]
The post Unity Stock Jumps on Upbeat Earnings and Parsec Purchase appeared first on Millennial Money.
Shares of Unity Software (NYSE: U) jumped by as much as 10% on Wednesday after the company reported strong second quarter earnings alongside a blockbuster acquisition. The game engine specialist delivered a beat-and-raise as it continues to expand into non-gaming industries.
As of 11:30 a.m. EDT, the stock was up 8%.
An impressive top line beat
Revenue in the second quarter jumped 48% to $273.6 million, crushing the consensus estimate of $242.75 million. That resulted in an adjusted net loss per share of $0.02, which was better than the $0.12 per share in adjusted losses for which Wall Street analysts were modeling.
Both of Unity’s primary operating segments enjoyed robust growth, particularly the Operate Solutions business where Unity helps content creators manage and monetize their apps. Unity’s dollar-based net expansion rate, which measures sales to existing customers, remained strong at 142%.
| Segment | Revenue | YOY Growth |
| Create Solutions | $72.4 million | 31% |
| Operate Solutions | $182.9 million | 63% |
| Strategic Partnerships and Other | $18.3 million | 9% |
“At Unity, our goal is to provide creators with the best tools to succeed as RT3D [real-time 3D] creators,” CEO John Riccitiello commented in a statement. “Unity is designed to enable creators to build anything digital and to instantly deploy their work across dozens of platform types and devices, which is to make participating in building the metaverse accessible to all creators.”
The company is making progress in expanding outside of gaming, adding three automotive manufacturers and other consumer products companies as customers.
Betting on a remote future
Unity has been on a buying spree in recent months, picking up organizations such as the maker of Pixyz, which offers 3D data preparation and optimization software, and Data Visualization, which created the SpeedTree environmental creation platform.
The company is following up those deals with the purchase of Parsec, a remote desktop app that connects gamers and creative professionals and allows them to collaborate from anywhere.
With the wholesale shift to remote working models catalyzed by the COVID-19 pandemic, the Parsec deal better positions Unity for a future where developers and RT3D professionals can work from anywhere. At $320 million in cash, Parsec is Unity’s largest acquisition to date.
Unity notes that many juggernaut studios such as Electronic Arts (NASDAQ: EA), Ubisoft (OTC: UBSFY), and Square Enix (OTC: SQNXF) have already incorporated Parsec into their operations as part of the shift to hybrid work models. The company sees an opportunity to cross-sell and bundle offerings, creating revenue synergies.
Raising guidance
Guidance for the third quarter calls for revenue in the range of $260 million to $265 million, comfortably above the $254.1 million in sales that analysts are looking for. Unity is forecasting an adjusted operating margin of negative 6% to negative 8%.
The company boosted its full-year forecast, with revenue in 2021 now expected to be $1.045 billion to $1.06 billion, up from its prior outlook of $1 billion to $1.015 billion. The consensus estimate for 2021 sales currently sits at $1.01 billion.
The post Unity Stock Jumps on Upbeat Earnings and Parsec Purchase appeared first on Millennial Money.
[ad_2]
Source link