Unity Technology's promising first-quarter earnings for fiscal year 2022 are being dampened by prospects of choppier waters ahead.
If you just stick to the spreadsheets, things are looking good for the 3D engine maker. Revenue increased 36 percent year-over-year to $320.1 million. The company is still operating at a loss however, and it lost $177.5 million, 65 percent more than it did last year.
Those losses are in line with previous guidance, but if you glance at the company's stock price, it's tumbled downward by 38 percent, currently trading at $35.30 per share in after-hours trading. Investors seem to be spooked by its guidance for the rest of 2022, starting in the second quarter.
The company is lowering its guidance for the rest of the year because of "challenges with monetization products." It's only anticipating about $290 million in revenue in the next quarter of 2022, and about $1.3 billion in revenue for the full year of 2022. Those numbers are weaker than what analysts predicted, and investors are headed for the hills.
Fun fact, as Video Game Insights pointed out on Twitter: Unity's share price dipped so far from its peak that to climb back to its highest heights, it would need to jump 666 percent in value. Quite a number!
Unity didn't specify what its "challenges with monetization products were, and it appears that the slipping numbers were enough to make some pessimistic about the business.
There is still time for those numbers to turn around, of course. It's worth remembering that Unity beat analyst expectations in its fourth-quarter 2021 results. Anything's possible in the world of video games.