Unity (U) Q1 earnings report 2023

Shares of Unity Software popped more than 11% in extended trading Wednesday after the company released first-quarter earnings that beat analysts’ expectations for revenue and raised its full-year revenue forecast.

Here’s how the company did:

• Loss per share: 67 cent loss, not comparable to estimates
• Revenue: $500 million vs. $480 million expected by analysts, according to Refinitiv

The video game software developer’s revenue for the quarter was up 56% year over year. Unity reported a net loss of $254 million, or 67 cents per share, versus a net loss of $178 million, or 60 cents per share, in the year-earlier period. Comprehensive losses were $251 million this quarter, versus $182 million in the year-ago period.

Unity said it expects to report $510 million to $520 million in second-quarter revenue, above analyst estimates of $509 million. For the full year, Unity said it expects between $2.08 to $2.2 billion in revenue. The company said it increased the low-end of its revenue guide by $30 million after considering its “stronger than expected” first quarter.

Founded in 2004, Unity has become a major player in game creation over the past decade by giving developers the tools to create 3D titles for phones, consoles and the web without having to code for each platform. 

Unity said in a release that it is off to a “strong start” in 2023, and that it expects to grow faster than its competitors this year. The company added that it believes it is “well-positioned” to benefit from AI since it already offers four applications and services that support the technology.

“We embraced AI years ago and see the adoption of AI tools as an accelerant to our business based on our structural and sustainable competitive advantages,” Unity said in the release.

Unity also reemphasized its commitment to “excellence in execution,” a series of action plans that will help it reach its “long-term strategies and must-win goals.” As part of this initiative, the company announced plans to cut about 600 jobs, or 8% of its workforce earlier this month, according to a company filing with the Securities and Exchange Commission.

Unity said it will restructure “specific teams” and that the layoffs will help the company position itself for “long-term and profitable growth.” A company spokesperson declined to provide further details to CNBC at the time.

“We expect these decisions will make Unity stronger, and set us up for even stronger long-term profitable growth,” the company said of the layoffs Wednesday.

Unity will hold its quarterly call with investors at 5 p.m. ET.