Unity Software Inc.’s stock fell about 12% in extended trading Thursday after the company reported a revenue miss and withheld from offering guidance.
“Our results in the third quarter were mixed,” Unity
U,
-3.15%
said in a letter to shareholders. “While revenue came in within guidance, we believe we can do better.”
The beleaguered game-engine software company has been whipsawed by a series of missteps and departures. In September, it announced new fees based on the number of people who install games built with Unity’s editor software — only to backtrack and revamp its plan following a chorus of complaints that dented the stock. Last month, John Riccitiello announced he was retiring as chief executive, effective immediately.
Also read: Opinion: Unity Software has a fleeting moment to win back developers — and investors
“While we did not expect the introduction of the fees to be easy, the execution created friction with our customers and near-term headwinds,” Unity said in the letter. “We expect the impact of this business-model change to have minimal benefit in 2024 and ramp from there as customers adopt our new releases.”
Unity executives are mulling several new strategies that include layoffs, a reduction in office space and product discontinuations, but it did not offer timing or guidance, according to the shareholder letter.
Unity reported a fiscal third-quarter net loss of $125.3 million, or 32 cents a share, compared with a net loss of $250 million, or 84 cents a share, in the year-ago quarter.
Revenue was $544.2 million, up from $322.9 million a year ago.
Analysts surveyed by FactSet had expected revenue of $554 million.
Shares of Unity have dipped 12% this year. The broader S&P 500 index
SPX,
-0.81%
is up 13% in 2023.
Read the full article here
