Unity names a permanent CEO while reporting better-than-expected results

By Emily Bary

Matt Bromberg, previously Zynga's chief operating officer, will take over as Unity's CEO later in May

Unity Software Inc. shares declined in Thursday's extended session as overall revenue beat expectations but still declined.

The videogame-engine and ad-monetization company also announced that Matt Bromberg, previously Zynga's chief operating officer, is taking over as Unity's (U) chief executive later this month from the interim CEO, Jim Whitehurst, who will be moving to the executive-chair role.

Unity's net loss for the first quarter came in at $291 million, or 75 cents a share, compared with a loss of $254 million, or 67 cents a share, in the year-before period. The loss figure for the latest quarter reflects $212 million in restructuring expenses as well as a $61 million gain tied to the company's repurchase of convertible notes.

Analysts were expecting a 64-cent per-share loss on a GAAP basis.

Unity also posted adjusted earnings before interest, taxes, depreciation and amortization of $79 million, up from $29 million a year before, while analysts tracked by FactSet had been modeling $49 million.

The company saw an 8% decline in revenue to $460 million, which Unity said was "driven primarily by our portfolio choices." The FactSet consensus was for $433 million.

Unity noted a $426 million increase in "strategic revenue," which it said was above its $415 million to $420 million forecast for the metric.

The stock fell about 4% in Thursday's extended session.

"The portfolio and cost reset that we started a few months ago is completed," executives said in a shareholder letter. "While we will always look for efficiencies, our attention turns to accelerating revenue growth while operating at attractive profit and cash-flow margins."

For the second quarter, Unity models $420 million to $425 million in strategic revenue. It's "confirming" its full-year strategic revenue outlook of $1.76 million to $1.80 million.

-Emily Bary

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05-09-24 2015ET

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