What happened
Shares of 3D-software platform Unity Software (U +7.56%) jumped in early trading on the Nasdaq, up 11.1% as of 9:50 a.m. ET.
Unity beat earnings for the fourth quarter of 2021 last night, reporting a non-GAAP (adjusted) loss of $0.05 per share, which was $0.02 better than the $0.07 loss analysts had expected. Sales for the quarter came in at $315.9 million, well ahead of the $295.5 million consensus.
Image source: Getty Images.
So what
Not all the news was good. For one thing, when calculated according to generally accepted accounting principles (GAAP), Unity's loss for the fourth quarter was not $0.05 -- but $0.56 per share, and this was 81% worse than last-year's Q4 loss. For the full fiscal year, losses grew by 14% -- down $1.89 per share.
On the other hand, while Unity remained GAAP unprofitable in Q4, sales for the fiscal fourth quarter leapt 43% year over year. Similarly, full-year revenue of $1.1 billion showed a 44% increase over full-year fiscal 2020 revenue.
Basically, Unity's problem was that, the more business it did, the more money it lost. The company's operating profit margin sank to negative 46% in Q4, and negative 48% for the year.
Now what
Yet Unity remains in this race for the long haul. As CEO John Riccitiello explained: "[W]e believe that the transition from linear 2D to interactive real-time 3D, presents a massive growth opportunity for the next decades. These are strong tailwinds that help us drive growth for years to come."
In the near term, CFO Luis Visoso is focusing on just growing revenue and leaving profits for later. "The business momentum coupled with the quality of our innovation plans gives us confidence to guide to a revenue growth range of 34% to 36% in 2022 [and] we continue to improve margins," he said.
While Unity is making no promises of profits, the company is forecasting $315 million to $320 million in revenue for the first quarter of 2022, and $1.48 billion to $1.5 billion for the year.
