Unity loses less than feared, trims outlook as Applovin makes $20 billion bid for software company

On the same day it received an offer to acquire the company for roughly $20 billion, Unity Software Inc. reported a loss that was less than feared and pulled back on its guidance for the year, and shares slipped in the extended session.


which produces videogame-engine software that competes with Epic Games Inc.’s Unreal Engine and helps developers monetize their games, reported a second-quarter loss of $205.8 million, or 69 cents a share, compared with $148.3 million, or 53 cents a share, in the year-ago period. The adjusted loss, which excludes stock-based compensation expenses and other items, was 18 cents a share, compared with a loss of a penny a share in the year-ago period.

Revenue rose to $297 million from $273.6 million in the year-ago quarter.

Analysts surveyed by FactSet had forecast a loss of 21 cents a share on revenue of $299.7 million, based on Unity’s forecast of $290 million to $295 million in revenue.

That comes following an offer from app monetization company Applovin Inc.

to buy Unity for $20 billion in cash and stock. Unity did not comment on the offer in its statements. Shares of Applovin finished the day down 10.3% at $36.01, leaving it a $13.6 billion cap company, according to FactSet.

That offer comes following flak that Unity recently caught about its own M&A plans, with the most recent being Unity’s $4.4 billion offer to buy IronSource. Unity shares recently rose on reports that it was looking to spin off its business in China. Shares declined 3% after hours Tuesday, following a 1.2% rise in the regular session to close at $50.35, giving the company a market cap of about $15 billion, according to FactSet data.

“We are encouraged by the progress we are making to get Operate Solutions back on stable footing,” Unity Chief Executive John Riccitiello said in a statement. The CEO was referencing Unity’s previous earnings report, which was marred by a disclosure that its ad-targeting tools contained a flaw, the same tools that had been credited with finding a workaround to Apple Inc.’s

opt-out of using Identifier for Advertisers, or IDFA.

Unity forecast third-quarter revenue of $315 million to $335 million, and full-year revenue between $1.3 billion and $1.35 billion for the year, compared with its previous forecast of $1.35 billion to $1.43 billion.

“In Create we have momentum with customers in and outside of Games,” said Luis Visoso, Unity’s chief financial officer, in a statement. “Our Business outside of Games is growing even faster and now represents 40% of our total Create Solutions revenue, up from 25% in 2021.”

Analysts estimate a loss of 7 cents a share on revenue of $343.7 million for the third quarter, and a loss of 37 cents a share on revenue of $1.36 billion for the year.

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