Unity stock tanks 28% as outlook falls short of expectations

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Unity’s stock price fell 28% in after-hours trading after the company reported earnings that met analyst expectations but fell short on the outlook. Unity reported a loss of eight cents a share (adjusted) on sales of $320.1 million. Those numbers met expectations on the loss and fell slightly short on sales. But Unity said that second-quarter sales would be $290 million to $295 million, well below estimates for $360.97 million.

The company also lowered its full-year revenue guidance to $1.35 billion to $1.425 billion, down from its earlier estimate of $1.485 billion to $1.50 billion.

“Unity delivered record quarterly revenue in the first quarter of 2022, the highest in the company’s history, up 36% compared with the first quarter of 2021, with Create over-performing at 65% year-over-year growth, offset by slower growth in Operate,” said Unity CEO John Riccitiello, in a statement. “We remain focused on the massive opportunity we see in front of us long-term. Short-term, we are laser-focused on accelerating growth in Operate.”

Unity’s after-hours stock price has dropped 28% to $34.60 a share. Earlier, it was down as 38%.

“In the first quarter, we continued to add new customers across industries and expand our business with existing customers as we made strategic investments to support long-term value creation while improving margins,” said Luis Visoso, chief financial officer at Unity, in a statement. “We believe we are in the early stages of one of the largest transformations in tech: the move to real-time 3D. We will continue to invest to capture the opportunity while quickly driving to sustainable and growing