How bad things ultimately get for Unity Software’s stock remains to be seen.
Shareholders of U stock are in for a painful day as the share price craters on news of a weak outlook. Year to date, the technology heavy Nasdaq is down 25%, putting it into a bear market. Investors and analysts are increasingly looking beyond growth to the fundamentals of companies and punishing those that fall short of expectations. The steep selloff in U stock year to date, along with today’s big drop, is yet another example of how unprofitable technology stocks are getting battered in the current market. Unity Software has also placed nine products into open beta and more than 54,000 game developers signed up to test the service.
Last autumn, the company advertised Unity Gaming Services (UGS) as a suite of tools and services that can simplify developer’s ability to create, host and manage video games. “Short-term, we are laser-focused on accelerating growth…” “We remain focused on the massive opportunity we see in front of us long-term,” said CEO John Riccitiello, in a written statement. Unity Software said it had $1.2 billion of cash on hand as of March 31 this year. The company, which is best known for Unity, a licensed game engine that developers use to create video games, said that 1,083 customers each generated more than $100,000 of revenue in the first quarter compared to 837 a year earlier. In addition to lowering its Q1 guidance, Unity Software also lowered its full-year revenue guidance to $1.35 billion to $1.425 billion from an earlier estimate of $1.485 billion to $1.50 billion.
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