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Unity Software (NYSE:U) provides a powerful platform for creators to build interactive content across various devices. Their suite includes Create Solutions for development and Grow solutions for user engagement and monetization. Investment Thesis 2024 has been a challenging year for Unity. Despite exceeding revenue expectations by 200% in Q1, the stock price has plummeted 53% YTD as it continues to hit new all-time lows. A restructuring plan at the begging of the year that included workforce reduction aime ...

Parkev Tatevosian, CFA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Unity Software. The Motley Fool has a disclosure policy. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool. ...

Investment Rating - The report maintains a "Buy" rating for Unity (U.US) with a target price of $31, indicating a potential upside of approximately 28% from the current price of $24.16 [4][24]. Core Insights - Unity's business is expected to stabilize, with a projected revenue of $1.78 billion for 2024, and an overall adjusted EBITDA margin of 23%. The company is anticipated to reach an inflection point in performance in the second half of the year, with a forecasted 13% year-over-year revenue growth in Q4 [4][20]. - The Create Solutions segment showed stable growth, with Q1 2024 revenue of $133 million, representing a 17% year-over-year increase, driven by subscriptions and strategic partnerships. The upcoming release of Unity 6 in late 2024 is expected to enhance the company's market position in game engines [3][20]. Financial Projections - Revenue projections for Unity are as follows: - FY22: $1.391 billion - FY23: $2.187 billion - FY24E: $1.861 billion - FY25E: $2.030 billion - FY26E: $2.265 billion [2][26]. - Adjusted EBITDA is projected to improve from a loss of $71 million in FY22 to $741 million by FY26 [2][26]. - The report anticipates a gradual recovery in performance, with the first half of 2024 expected to be the lowest point, followed by a recovery in the second half [4][20]. Market Performance - Unity's stock has shown a significant decline, with a 52-week price range of $22.2 to $50.08. The current market capitalization stands at approximately $9.443 billion [24][26]. - The report highlights that Unity's stock performance is currently under pressure but is expected to rebound as the company navigates through competitive challenges and optimizes its offerings [21][20].

Key PointsUnity Software's Q1 2024 report highlights its focus on optimizing its portfolio, integrating AI, and fostering growth across various industries.Unity's core Create Solutions segment grew in Q1 2024.Unity is actively investing in AI integration (Unity Muse and Unity Sentis) to empower creators.5 stocks we like better than Unity SoftwareUnity Software NYSE: U develops and distributes a platform for creating and operating interactive, real-time 3D content. The company released its first quarter 2024 ...

The company announced a new CEO to take the company forward.In this video, I will cover Unity Software's (U 0.25%) first-quarter earnings and explain what the company needs to do to convince me to become a shareholder again.*Stock prices used were from the trading day of May 9, 2024. The video was published on May 10, 2024. ...

Unity Software Inc. (NYSE:U) Q1 2024 Earnings Conference Call May 9, 2024 5:00 PM ET Corporate Participants Daniel Amir - Vice President and Head, Investor Relations Jim Whitehurst - Interim Chief Executive Officer Luis Visoso - Executive Vice President and Chief Financial Officer Conference Call Participants Andrew Boone - JMP Securities Jason Bazinet - Citi Michael Funk - Bank of America Clark Lampen - BTIG Parker Lane - Stifel Josh Tilton - Wolfe Matthew Cost - Morgan Stanley Martin Yang - Oppenheimer Gi ...

Unity Software Inc. (U) came out with quarterly earnings of $0.15 per share, beating the Zacks Consensus Estimate of $0.05 per share. This compares to earnings of $0.06 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 200%. A quarter ago, it was expected that this company would post earnings of $0.19 per share when it actually produced earnings of $0.23, delivering a surprise of 21.05%.Over the last four quarters, the company h ...

PART I—FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) This section presents Unity Software Inc.'s unaudited condensed consolidated financial statements for Q1 2024, including core financial statements and comprehensive notes [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheets show a decrease in total assets and liabilities from December 31, 2023, to March 31, 2024, with stable stockholders' equity Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | March 31, 2024 | December 31, 2023 | | :-------------------------- | :------------- | :---------------- | | Total Assets | $6,753,263 | $7,243,441 | | Total Liabilities | $3,338,539 | $3,829,063 | | Total Stockholders' Equity | $3,189,988 | $3,188,581 | | Cash and cash equivalents | $1,179,962 | $1,590,325 | | Convertible notes (liability) | $2,236,415 | $2,711,750 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Statements of operations indicate an increased net loss for Q1 2024, driven by higher operating expenses despite decreased revenue Condensed Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :------------------------------------------------ | :-------------------------------- | :-------------------------------- | | Revenue | $460,380 | $500,361 | | Gross profit | $315,993 | $338,397 | | Total operating expenses | $690,922 | $593,381 | | Loss from operations | $(374,929) | $(254,984) | | Net loss | $(291,478) | $(253,703) | | Basic and diluted net loss per share attributable to Unity Software Inc. | $(0.75) | $(0.67) | [Condensed Consolidated Statements of Comprehensive Loss](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) Comprehensive loss increased in Q1 2024 due to net loss and a negative foreign currency translation adjustment Condensed Consolidated Statements of Comprehensive Loss Highlights (in thousands) | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :------------------------------------------------ | :-------------------------------- | :-------------------------------- | | Net loss | $(291,478) | $(253,703) | | Change in foreign currency translation adjustment | $(3,461) | $3,157 | | Other comprehensive income (loss) | $(3,461) | $2,830 | | Comprehensive loss | $(294,939) | $(250,873) | [Condensed Consolidated Statements of Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) Stockholders' equity increased from employee equity plans and stock-based compensation, partially offset by accumulated deficit Condensed Consolidated Statements of Stockholders' Equity Highlights (in thousands) | Metric | Balance at Dec 31, 2023 | Issuance from employee equity plans | Stock-based compensation expense | Net loss | Other comprehensive loss | Balance at Mar 31, 2024 | | :----------------------- | :---------------------- | :---------------------------------- | :------------------------------- | :------- | :----------------------- | :---------------------- | | Additional Paid-In Capital | $6,259,479 | $25,997 | $269,288 | — | — | $6,554,787 | | Accumulated Deficit | $(3,071,830) | — | — | $(291,074) | — | $(3,362,904) | | Accumulated Other Comprehensive Loss | $(5,009) | — | — | — | $(2,751) | $(7,760) | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash flows shifted from net cash provided by investing and financing in Q1 2023 to cash used in financing in Q1 2024, due to convertible note repayments Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :------------------------------------------------ | :-------------------------------- | :-------------------------------- | | Net cash used in operating activities | $(7,373) | $(5,099) | | Net cash provided by (used in) investing activities | $(7,190) | $88,111 | | Net cash provided by (used in) financing activities | $(389,001) | $21,971 | | Repayments of convertible note | $(414,999) | — | | Increase (decrease) in cash, cash equivalents, and restricted cash | $(409,766) | $108,134 | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed explanations and disclosures for the condensed consolidated financial statements, covering accounting policies, revenue, financial instruments, and borrowings [1. Accounting Policies](index=10&type=section&id=1.%20Accounting%20Policies) This section outlines the basis of presentation for the financial statements, the use of estimates, and the accounting for employee separation and restructuring costs incurred in Q1 2024 - The company prepared its unaudited condensed consolidated financial statements in accordance with U.S. GAAP and SEC rules for interim financial reporting[29](index=29&type=chunk) - In Q1 2024, the company incurred approximately **$193 million** in employee separation costs, including **$126 million** of incremental stock-based compensation, and **$19 million** in restructuring costs, primarily due to a 25% workforce reduction and the departure of ironSource Ltd. founders[31](index=31&type=chunk) [2. Revenue](index=10&type=section&id=2.%20Revenue) Revenue is disaggregated by source (Create and Grow Solutions) and geography, showing a decline in total revenue Revenue Disaggregated by Source (in thousands) | Revenue Source | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :------------- | :-------------------------------- | :-------------------------------- | | Create Solutions | $163,670 | $187,369 | | Grow Solutions | $296,710 | $312,992 | | Total revenue | $460,380 | $500,361 | Revenue Disaggregated by Geography (in thousands) | Geography | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :------------- | :-------------------------------- | :-------------------------------- | | United States | $139,119 | $132,994 | | Greater China | $59,690 | $59,548 | | EMEA | $166,770 | $186,724 | | APAC | $84,036 | $107,528 | | Other Americas | $10,765 | $13,567 | | Total revenue | $460,380 | $500,361 | - Revenue recognized during Q1 2024 that was included in deferred revenue balances at January 1, 2024, was **$76.3 million**[37](index=37&type=chunk) - As of March 31, 2024, remaining performance obligations for contracts exceeding one year totaled **$357 million**, with approximately **$205 million (57%)** expected to be recognized in the next 12 months[38](index=38&type=chunk) [3. Financial Instruments](index=12&type=section&id=3.%20Financial%20Instruments) This section details the fair value measurement of cash, cash equivalents, and restricted cash, and notes that no adjustments were made to the carrying value of equity investments in unconsolidated entities during the reporting periods Cash, Cash Equivalents, and Restricted Cash (in thousands) | Category | March 31, 2024 | December 31, 2023 | | :------------------------------------ | :------------- | :---------------- | | Cash | $888,092 | $834,877 | | Restricted cash and cash equivalents | $306,409 | $769,390 | | Total cash, cash equivalents, and restricted cash | $1,194,501 | $1,604,267 | - Equity investments in certain unconsolidated entities without a readily determinable fair value totaled **$33.6 million** as of March 31, 2024, and December 31, 2023, with no adjustments to carrying value in Q1 2024 or Q1 2023[40](index=40&type=chunk) [4. Investment in Unity China](index=12&type=section&id=4.%20Investment%20in%20Unity%20China) This section provides information on the redeemable noncontrolling interests in Unity China, where third-party investors hold a 20.5% ownership, and the changes in these interests during the period Changes in Redeemable Noncontrolling Interests (in thousands) | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :------------------------------------------------ | :-------------------------------- | :-------------------------------- | | Balance at beginning of period

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): May 9, 2024 (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation) Delaware 001-39497 27-0334803 (Commission File Number) (I.R.S. Employer Identification No.) 30 3rd Street San Francisco, California 94103‑3104 (Address, including zip code, of princ ...