Unity Software Inc. (NYSE: U) reported Q3 EPS of ($0.09), $0.06 better than the analyst estimate of ($0.15). Revenue for the quarter came in at $200.8 million versus the consensus estimate of $186.87 million.

Third Quarter 2020 Financial Highlights

• Revenue was $200.8 million, an increase of 53.3% from the third quarter of 2019.
• Loss from operations was $141.7 million, or 70.6% of revenue, compared to loss from operations of $41.7 million, or 31.9% of revenue, in the third quarter of 2019. Our third quarter results were impacted by a one-time charge associated with restricted stock unit expense recognition in connection with our initial public offering (“IPO”), as well as a charge related to the donation of 750,000 shares of our common stock to a charitable foundation upon closing of our IPO.
• Non-GAAP loss from operations was $8.4 million, or 4.2% of revenue, compared to a non-GAAP loss from operations of $27.8 million, or 21.2% of revenue, in the third quarter of 2019.
• Basic and diluted net loss per share was $0.97, compared to basic and diluted net loss per share of $0.76 in the third quarter of 2019.
• Basic and diluted non-GAAP net loss per share was $0.09, compared to basic and diluted non-GAAP net loss per share of $0.67 in the third quarter of 2019.
• Customers that generated more than $100,000 of revenue in the trailing twelve months as of September 30, 2020 was 739 compared to 553 as of September 30, 2019.
• Dollar-based net expansion rate as of September 30, 2020 was 144% compared to 132% as of September 30, 2019.
• Net cash provided by operating activities was $20.6 million for the third quarter of 2020, compared to net cash used in operating activities of $49.1 million for the same period last year. Free cash flow provided for the third quarter of 2020 was $10.9 million, compared to $55.7 million used for the same period last year. Cash and restricted cash was $1.8 billion as of September 30, 2020 compared to $0.5 billion as of June 30, 2020.

“Companies in the gaming industry have been using real-time 3D technology to create immersive, interactive content for over two decades, and we are proud to be able to support more than 90% of the top game companies globally,” said John Riccitiello, President and Chief Executive Officer, Unity. “Now, developers in other industries are taking note and engaging with Unity in transforming their content to be real-time 3D. Creators - from game developers to artists, architects, automotive designers, filmmakers, and more - are turning to Unity to bring their imaginations to life.”

“We are very pleased to start our public company journey with such a strong quarter,” said Kim Jabal, Chief Financial Officer, Unity. “Revenue of $200.8 million in the third quarter, up 53.3% year-over-year, reflects the resilience of our business model and strong execution across our operational teams and geographies. Our robust growth has reinforced our confidence in the fundamental strength of our business model, and in the long-term opportunity that we see ahead.”

“Our fiscal year 2020 revenue outlook is a range of $752 million to $756 million. We expect fourth quarter revenue of $200 million to $204 million. We also anticipate an improvement in our full year 2020 non-GAAP operating margin to (9)%.”

GUIDANCE:

Unity Software Inc. sees Q4 2020 revenue of $200-204 million, versus the consensus of $186.87 million.

Unity Software Inc. sees FY2020 revenue of $752-756 million, versus the consensus of $738.34 million.

For earnings history and earnings-related data on Unity Software Inc. (U) click here.