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Tag: Unity Software Inc

  • Unity shares sink on weak guidance

    Unity shares sink on weak guidance

    Pavlo Gonchar | Lightrocket | Getty Images

    Unity Software shares plummeted 17% in extended trading on Monday after the gaming software company issued weaker-than-expected guidance for the current quarter.

    Here’s how the company did:

    • Earnings: Loss of 66 cents per share. The results may not be comparable to the 46-cent loss predicted by analysts, according to LSEG, formerly known as Refinitiv.
    • Revenue: $609 million vs. $596 million as expected by analysts, according to LSEG.

    Unity said it expects first-quarter adjusted earnings of $45 million to $50 million, below the $113 million that analysts were expecting.

    The company said that going forward it would only provide revenue guidance for its “strategic portfolio,” which includes its engine, cloud and monetization business units. Unity said in January that it would cut 1,800 jobs as part of a corporate restructuring plan that included ending efforts deemed to be “non-strategic,” like professional services and the Luna marketing business.

    The company said that first-quarter guidance for its strategic portfolio would come in between $415 million to $420 million. Analysts were expecting total first-quarter revenue of $534 million.

    “We are right sizing our cost structure to grow from a healthy financial position,” Unity said in a shareholder letter. “This includes the previously announced reduction of approximately 25% of our workforce, in addition to cloud hosting cost savings, office footprint consolidation, and software license optimization.”

    Unity said fourth-quarter revenue jumped 35% from $451 million a year earlier, while its net loss narrowed to $254 million from close to $288 million a year ago.

    In October, John Riccitiello retired as Unity’s CEO and was replaced by former Red Hat chief James Whitehurst as interim CEO. Riccitiello’s departure came shortly after Unity announced a pricing change that upset several video game developers.

    “We are committed to increasing shareholder value through revenue growth, margin expansion, and free cash flow generation and we believe that the steps we have taken in the past few months position us for success in 2024 and beyond,” Unity said in its shareholder letter.

    WATCH: Unity Software cutting 25% of workforce

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  • Amazon's latest layoffs hit its Buy with Prime unit

    Amazon's latest layoffs hit its Buy with Prime unit

    A worker delivers Amazon packages in San Francisco on Oct. 5, 2022.

    Bloomberg | Bloomberg | Getty Images

    Amazon is laying off some employees in its Buy with Prime unit, the company confirmed, as it continues to look for ways to trim costs.

    The cuts affect fewer than 5% of staff in the Buy with Prime division, Amazon said. Buy with Prime is a service that lets online stores offer the same two-day shipping benefits available to Prime subscribers. Amazon has expanded the program since its launch in April 2022, including tie-ups with Shopify and Salesforce.

    Amazon didn’t say how many staffers are in its Buy with Prime segment.

    “We regularly review the structure of our teams and make adjustments based on the needs of the business and, following a recent review, we’ve made the difficult decision to eliminate a small number of roles on our Buy with Prime team,” an Amazon spokesperson said in a statement.

    The spokesperson said Buy with Prime remains “a top priority for Amazon” and the company plans to continue investing “significant resources” in the program.

    Some of the affected employees worked in Amazon’s multichannel fulfillment unit, which sits alongside Buy with Prime under the “Project Santos” organization, overseen by Peter Larsen, a longtime vice president at the company, a person with knowledge of the cuts said. Multichannel fulfillment allows merchants to ship and store products using Amazon’s services regardless of whether they’re selling on the home site.

    Amazon has cut more than 27,000 jobs across the company as part of rolling layoffs that began in late 2022. Job reductions have continued this year, with Amazon letting go staffers in its Prime Video, MGM, Twitch, Audible and Amazon Pay units last week. Other tech companies including Google, Discord, Xerox and Unity have also announced layoffs since the start of the new year.

    Amazon said it’s assisting Buy with Prime employees who were laid off in finding new roles elsewhere within the company. Employees will continue to receive their pay and benefits for at least 60 days, and they will be eligible for a severance package.

    WATCH: Amazon lays off hundreds of roles across Twitch, Prime Video and MGM Studios

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  • Unity Software’s stock skids 12% on revenue miss, uncertain outlook

    Unity Software’s stock skids 12% on revenue miss, uncertain outlook

    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.

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  • ARK CEO Cathie Wood says she swerved the Arm IPO frenzy. Here’s why

    ARK CEO Cathie Wood says she swerved the Arm IPO frenzy. Here’s why

    Cathie Wood, CEO of Ark Invest, speaks during an interview on CNBC on the floor of the New York Stock Exchange (NYSE) in New York City, February 27, 2023.

    Brendan McDermid | Reuters

    ARK Invest CEO Cathie Wood said she did not participate in Arm‘s blockbuster initial public offering last week because she finds the British chip designer was overvalued relative to its competitive position.

    Arm, the Cambridge-based company controlled by Japanese investment giant SoftBank, listed on New York’s Nasdaq on Thursday at an IPO price of $51 a share for a valuation of almost $60 billion. Shares jumped almost 25% on the first day of trading to close at $63.59.

    The initial buzz has since fizzled, with the stock suffering successive daily declines to end the Tuesday trade session at $55.17.

    Speaking on CNBC’s “Squawk Box Europe” on Wednesday, Wood said the recent frenzy around AI-exposed companies was justified and that “innovation is undervalued given the enormous opportunities that we see ahead, catalyzed very importantly by artificial intelligence.”

    “As far as Arm, I think there might be a little bit too much emphasis on AI when it comes to Arm and maybe not enough focus on the competitive dynamics out there,” she added.

    Arm CEO Rene Haas and executives cheer, as Softbank’s Arm, chip design firm, holds an initial public offering (IPO) at Nasdaq Market site in New York, U.S., September 14, 2023.

    Brendan Mcdermid | Reuters

    “So we did not participate in that IPO, and we also compare it to the stocks in our portfolios. Arm came out, we think, from a valuation point of view on the high side, and we see within our portfolios much lower priced names with much more exposure to AI.”

    Arm declined to comment.

    The top holdings in Wood’s flagship ARK Innovation ETF include Tesla, Shopify, UiPath, Unity, Zoom, Twilio, Coinbase, Roku, Block and DraftKings.

    After taking a beating during the recent cycle of aggressive interest rate hikes from the U.S. Federal Reserve, the ARK ETF resurged this year, as investors flocked to stocks with AI exposure. Wood said that the anticipation of interest rates peaking would further this trend.

    “The appetite for innovation is stirring here, and I think one of the reasons is because many investors and analysts are starting to look over the interest rate hike moves we’ve seen, record breaking in the last year or so, and to the other side,” she explained.

    With inflation coming down across major economies and with central banks expected to begin unwinding their aggressive monetary policy tightening over the next year, Wood suggested the coming period “should be a very good environment for innovation and global megatrend strategies.”

    ARK Invest on Wednesday acquired British thematic ETF issuer Rize ETF for £5.25 million ($6.5 million), marking the company’s first venture into the European passive investment market.

    Wood said that Europe has not had access to actually invest in the company’s U.S.-based ETFs until now, despite accounting for around 25% of demand for the company’s research since ARK’s inception in 2014.

    “The cost of technology, especially with artificial intelligence now, is collapsing, and therefore it’s going to be much easier to build and scale tech companies anywhere in the world. This is no longer just the purview of Silicon Valley,” Wood said. “We are very open-minded about technologies flourishing throughout the world, including Europe.”

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