Unity Software Inc. (NYSE:U) is one of the best metaverse stocks to buy, according to analysts. On March 9, Citizens reiterated a Market Outperform rating on Unity Software Inc. (NYSE:U) and a $37 price target. According to the research firm, the stock’s selloff is overdone, and the current valuation supports it as a bounce-back play. Citizen’s Strategists Insists Unity Software Inc. (U) Sell-off is Overdone The research firm remains bullish about Unity Software despite the company not doing much to prom ...

Eve Holding (NYSE:EVEX) Q4 2025 Earnings call March 17, 2026 08:00 AM ET Speaker9Good day, and welcome to the Eve Holding, Inc. fourth quarter 2025 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touch-tone phone. To withdraw your question, please p ...

Unity Software Inc (NYSE:U) shares are trading higher on Monday after Citizens reiterated its Market Outperform rating and $37 price target. Here’s what you may want to know.Unity Software stock is moving in positive territory. What’s driving U shares up?Citizens reaffirmed its bullish stance on Unity, saying the stock now looks compelling after a steep six‑month slide that pushed shares down 56% to $19.85 from a 52‑week high of $52.15, according to Investing.com.The firm also pointed to signs of stabilizat ...

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Core Viewpoint - Unity Software Inc. reported strong fourth-quarter financial results but provided first-quarter revenue guidance that fell short of analyst expectations [1][2]. Financial Performance - The company achieved adjusted earnings per share of 24 cents, surpassing the consensus estimate of 20 cents [1]. - Unity's revenue for the fourth quarter was $503.08 million, exceeding the consensus estimate of $491.42 million [1]. Future Guidance - For the first quarter, Unity anticipates revenue between $480 million and $490 million, which is below the consensus estimate of $493.93 million [2]. - The company expects flat sequential revenue in the Grow segment, while the Create segment is projected to deliver double-digit year-over-year growth, excluding non-strategic revenue [2]. Management Commentary - CEO Matt Bromberg highlighted that the fourth-quarter results exceeded guidance, driven by strong performance from the Vector segment, which saw its third consecutive quarter of mid-teen sequential revenue growth [3]. Market Reaction - Following the earnings announcement, Unity shares experienced a slight decline of 0.1%, trading at $21.40 in pre-market [3]. Analyst Ratings - BTIG analyst Clark Lampen maintained a Buy rating on Unity but reduced the price target from $60 to $41 [4]. - Needham analyst Bernie McTernan also maintained a Buy rating while lowering the price target from $50 to $35 [4].

Financial Data and Key Metrics Changes - Unity experienced exceptional momentum in Q4 2025, achieving the fastest growth and highest margin in the past two years, with Grow revenue at $338 million, up 6% sequentially and 11% year-over-year [20][21] - Adjusted EBITDA for the quarter was $125 million, representing 25% margins, an improvement of 200 basis points year-over-year and sequentially [22] - Free cash flow grew 41% in 2025 to just over $400 million, with a conversion rate of 99% of Adjusted EBITDA to free cash flow [24] Business Line Data and Key Metrics Changes - Grow revenue was significantly driven by Vector, which represented 56% of Grow revenue, up from 49% two quarters ago, and experienced mid-teen sequential growth for three consecutive quarters [21] - Create revenue was $165 million, up 8% year-over-year, with a healthy 16% growth when excluding non-strategic revenue [22] - The Create business saw nearly 50% growth in China, driven by interoperability with local platforms [8] Market Data and Key Metrics Changes - The ironSource ad network's revenue declined by $7 million sequentially, representing 11% of Grow revenue for the quarter, but is expected to diminish as Vector grows [21][6] - January 2026 was Vector's best revenue month ever, 72% larger than January of the previous year, indicating strong market demand [6] Company Strategy and Development Direction - Unity is focusing on enhancing its advertising business through Vector, with expectations of significant growth and improved profitability as the ironSource ad network diminishes [6][12] - The company plans to transform its Create business by making authoring workflows accessible via web browsers and integrating AI-driven authoring tools [15][17] - Unity aims to democratize game development, making it accessible to a broader audience through AI and enhanced collaboration tools [19][69] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth trajectory of Vector, indicating no natural ceiling for its future growth [32] - The company is confident in its ability to compete with major players like Meta and Google, emphasizing its focus on the gaming industry [42] - Management highlighted the positive impact of AI on the video game industry, predicting increased leisure time and efficiency in game creation [47] Other Important Information - Unity successfully refinanced $690 million of its 2026 convertible notes, extending maturities to 2030, and exited the year with over $2 billion in cash [25] - The company is moving towards GAAP profitability, reducing stock compensation expenses significantly [24] Q&A Session Summary Question: Growth trajectory of Vector and impact of ironSource - Management expressed excitement about Vector's growth, indicating it has exceeded expectations and is not significantly impacted by the declining ironSource business [31][33] Question: Demand for commerce tools - Initial customer reactions to the commerce tools have been very positive, with strong interest across various segments [34][35] Question: Competitive landscape with Meta - Management noted that Meta has been competitive but has not significantly impacted Unity's growth, emphasizing their focus on the gaming sector [42] Question: AI's impact on game development - Management believes AI will enhance efficiency in game creation, allowing developers to focus on innovation [47][49] Question: Economics of the commerce solution - Unity participates in the economics of commerce transactions at high margins, aiming to enhance customer value and engagement [54][56]

Financial Data and Key Metrics Changes - Unity experienced exceptional momentum in Q4 2025, achieving the fastest growth and highest margin in the past two years, with Grow revenue at $338 million, up 6% sequentially and 11% year-over-year [18][19] - Adjusted EBITDA for the quarter was $125 million, representing 25% margins, an improvement of 200 basis points year-over-year and sequentially [20][21] - Free cash flow grew 41% in 2025 to just over $400 million, with a conversion rate of 99% of Adjusted EBITDA to free cash flow [23] Business Line Data and Key Metrics Changes - Grow revenue in Q4 was significantly driven by Vector, which represented 56% of Grow revenue, up from 49% two quarters ago, with Vector experiencing mid-teen sequential growth [19] - Create revenue was $165 million, up 8% year-over-year, with a healthy 16% growth when excluding non-strategic revenue [20] - The Create business saw nearly 50% growth in China, driven by interoperability with local platforms [6] Market Data and Key Metrics Changes - The ironSource ad network is expected to represent less than 6% of total Unity revenue in Q1 2026, indicating a shift towards higher-quality AI platform revenue [5][6] - Unity's advertising business is anticipated to benefit from the growth of Vector, which is expected to exceed a $1 billion annual revenue run rate by the end of 2026 [5][19] Company Strategy and Development Direction - Unity is focusing on enhancing its advertising business through Vector and integrating AI into the creation process, aiming to democratize game development [9][17] - The company plans to make authoring workflows accessible via web browsers, expanding its addressable market by allowing collaboration among various stakeholders [12][13] - AI-driven authoring tools are set to be unveiled, enabling developers to create games using natural language prompts, which will lower barriers to entry for new creators [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth trajectory of Vector, emphasizing that the business is in the early stages of a multi-year growth story [19][32] - The company is confident in its ability to compete with major players in the industry, noting that competition from companies like Meta has not significantly impacted its growth [42] - Management highlighted the importance of AI as a tailwind for the video game industry, predicting increased leisure time and efficiency in game creation [47] Other Important Information - Unity successfully refinanced $690 million of its 2026 convertible notes, extending maturities to 2030, and ended the year with over $2 billion in cash [24] - The company is focused on cost discipline and prudent capital allocation, which has positively impacted profitability and cash flow [22] Q&A Session Summary Question: What is the growth outlook for Vector and the impact of ironSource? - Management expressed excitement about Vector's growth, noting January was its best month ever, and indicated that ironSource will become less material to overall revenue as Vector continues to grow [31][33] Question: What is the demand for the commerce tools? - Management reported strong customer interest in the upcoming commerce tools, highlighting benefits such as accelerated adaptation to regulatory changes and integration with existing systems [34][35] Question: How is Meta's competition affecting Unity? - Management stated that Meta has been competitive for some time but emphasized that it has not had a meaningful impact on Unity's growth, maintaining focus on its core business [42] Question: What are the implications of AI advancements for Unity? - Management believes AI will significantly enhance game development efficiency and create opportunities for monetization, allowing for a larger customer base [47][75]

Core Insights - Datadog's stock surged nearly 15% following its fourth-quarter results, which exceeded Wall Street's expectations [2] - The company's revenue reached approximately $953 million, reflecting a year-over-year growth of about 29% [2] - Earnings per share (EPS) surpassed expectations by roughly 6 to 7 percent, while forward guidance was set between $4.06 billion and $4.10 billion, slightly below the prior consensus of $4.11 billion [2] Financial Performance - Revenue for the fourth quarter was around $953 million, marking a 29% increase year-over-year [2] - EPS exceeded market expectations by approximately 6 to 7 percent [2] - Forward guidance for the upcoming year is projected at $4.06 to $4.10 billion, which is marginally below previous consensus estimates [2] Market Position and Risks - Despite strong quarterly results, there are concerns regarding customer concentration risk, particularly with OpenAI being one of Datadog's largest customers, contributing about $170 million annually [4] - OpenAI's spending on Datadog could potentially reach hundreds of millions annually, raising concerns about reliance on a single customer [4] - The broader SaaS market remains under pressure, and Datadog's ability to maintain its market position may depend on the pace of AI adoption [5]

Core Viewpoint - Unity Software is experiencing a significant divergence between analyst optimism and investor skepticism, with analysts highlighting a turnaround story while the stock has declined 5% year-to-date [1] Analyst Perspective - Analysts are bullish on Unity Software, citing a surprise profit in Q3 2025 with earnings per share of $0.20 against an expected loss of $0.23, marking a 187% beat [2] - Revenue for Q3 reached $471 million, reflecting a 5.4% growth, and adjusted EBITDA margins improved by 200 basis points to 23% [2] - CEO Matthew Bromberg described Q2 2025 as an inflection point for the company, driven by the AI-powered advertising platform, Vector, which saw an 11% sequential growth in Q3 [3] - Analyst ratings include four Strong Buy and twelve Buy, with a consensus target price of $47.60, indicating a potential upside of 14% from current levels around $42 [4] Insider Activity - Despite analyst upgrades, insiders sold 1.7 million shares between October and January, with no offsetting purchases, raising concerns about the company's future [5] - Notable sales included Director David Helgason selling 708,000 shares at $49 to $51 in December, and significant sales by CEO Bromberg and other executives [5][6] - The stock was sold during a recovery from $37 to $52, coinciding with increased analyst upgrades, leading to questions about the authenticity of the turnaround [6] Developer Sentiment - Developer sentiment towards Unity has deteriorated, with Reddit scores dropping from neutral (38-42) to bearish (22-28) in January, indicating a loss of trust following the 2023 runtime fee pricing issues [7] Upcoming Earnings Outlook - Q4 earnings are anticipated to clarify whether Q3's performance was a genuine inflection point or an anomaly, with management guiding for revenue of $480-490 million and a slowdown in growth from Q3's 11% [8] Financial Performance and Valuation - While Vector is generating revenue and margins are expanding, insiders' selling, developer skepticism, and high valuation multiples suggest that the market may be overly optimistic about Unity's future [9] - Unity currently trades at 10x sales with a net loss of $435 million over the past twelve months and negative operating margins of 27% [6]

Core Insights - 2026 is projected to be a pivotal year for AI technology validation, shifting market focus from capital expenditure to practical utility and commercialization returns [1] - The report by Goldman Sachs indicates that the adoption of general large language models (LLMs) and chatbots will significantly increase in 2025, marking a turning point in consumer computing [2] Group 1: Capital Expenditure and Investment Trends - Despite concerns over "overbuilding," Goldman Sachs expects AI-related capital expenditures to remain high in 2026, with capital spending expectations for Amazon, Google, and META raised by approximately 46% and 80% for the fiscal years 2025 and 2026, totaling an increase of about $250 billion [2] - The ability of these substantial investments in AI development to translate into visible profit returns will be a key factor influencing investor sentiment and company performance over the next 12 to 18 months [2] Group 2: Evolution of Consumer AI Landscape - The discussion around AI is shifting from infrastructure to application, with 2026 potentially being a critical point for changes in consumer computing habits, focusing on diverse monetization models beyond paid subscriptions [2] - The integration of "agentic AI" that can plan multi-step processes and make autonomous decisions is expected to blur the lines between search and applications, significantly impacting consumer behavior [2] Group 3: Advertising and E-commerce Dynamics - The boundaries between traditional advertising and e-commerce are dissolving, with social platforms enhancing user experiences and logistics partnerships to accelerate social commerce [3] - Amazon's advertising business is projected to maintain an annual compound growth rate of about 8% from 2025 to 2030, with the creator economy playing a crucial role in driving traffic and conversions [3] Group 4: AI's Impact on Advertising Landscape - Digital advertising is currently the most mature vertical for AI product development and adoption, with platforms like Google's Performance Max and META's Advantage+ leading in AI automation tools [5] - AI is expected to redistribute profit pools within the advertising industry, with large platforms benefiting from their data and computational advantages [6] Group 5: Local Business Competition Dynamics - On-demand delivery platforms like UBER, DASH, and CART are expanding product categories to improve user retention and engagement, particularly in grocery and retail sectors with low online penetration [8] - Cross-platform consumer retention rates are higher, with spending three times that of single-use consumers, leading to intensified competition in delivery speed [9] Group 6: Future of Mobility Networks - Discussions around autonomous vehicles (AVs) focus on partnerships, urban expansion, and market share, with large-scale adoption expected over the next 5-7 years [10] - Waymo is expanding its operations as a leading AV operator in the U.S., with costs expected to decrease as dedicated hardware scales, enhancing affordability and penetration in shared mobility [10] Group 7: Evolution of Interactive Entertainment - Interactive entertainment companies are increasing consumer touchpoints by expanding into new media and verticals, with trends including the integration of live entertainment and AI to enhance content development efficiency [11] Group 8: Transition to Spatial Computing - Major companies like META, Google, and Apple are investing in spatial computing, transitioning from mobile devices to more immersive interaction methods, with advancements in hardware, software, and connectivity being crucial [12][13] Group 9: Health and Wellness Market Opportunities - Post-pandemic, consumer focus on health outcomes has increased, with a trend towards the integration of hardware and software in health tracking, driving downloads and subscriptions for related applications [14] Group 10: Balancing Growth and Incremental Investment - Companies are showing a divergence in balancing growth investments with profit margins, with some prioritizing long-term growth plans over short-term profit maximization [15]