Design Software Stocks Q3 Highlights: Unity (NYSE:U)
As the craze of earnings season draws to a close, here's a look back at some of the most exciting (and some less so) results from Q3. Today we are looking at the design software stocks, starting with Unity (NYSE:U).
The demand for rich, interactive 2D, 3D, VR and AR experiences is growing, and while the ubiquitous metaverse might still be more of a buzzword than a real thing, what is real is the demand for the tools to create these experiences, whether they are games, 3D tours or interactive movies.
The 8 design software stocks we track reported a weak Q3; on average, revenues beat analyst consensus estimates by 1.2% while next quarter's revenue guidance was 1.5% below consensus. Inflation (despite slowing) has investors prioritizing near-term cash flows, but design software stocks held their ground better than others, with the share prices up 16.9% on average since the previous earnings results.
Unity (NYSE:U)
Started as a game studio by three friends in a Copenhagen apartment, Unity (NYSE:U) is a software as a service platform that makes it easier to develop and monetize new games and other visual digital experiences.
Unity reported revenues of $544.2 million, up 68.5% year on year, falling short of analyst expectations by 0.9%. It was a weak quarter for the company, with a miss of analysts' revenue estimates. The major negative, however, was that the company stopped providing financial guidance.
Unity achieved the fastest revenue growth of the whole group. The stock is up 31.4% since the results and currently trades at $33.16.
Read our full report on Unity here, it's free.
Best Q3: Adobe (NASDAQ:ADBE)
One of the most well-known Silicon Valley software companies around, Adobe (NASDAQ:ADBE) is a leading provider of software as service in the digital design and document management space.
Adobe reported revenues of $5.05 billion, up 11.6% year on year, in line with analyst expectations. It was a weak quarter for the company, with full-year revenue guidance missing analysts' expectations.
The stock is down 1.8% since the results and currently trades at $612.7.
Is now the time to buy Adobe? Access our full analysis of the earnings results here, it's free.
Weakest Q3: ANSYS (NASDAQ:ANSS)
Used to help design the Mars Rover, Ansys (NASDAQ:ANSS) offers a software-as-a-service platform that enables simulation for engineering and design.
ANSYS reported revenues of $458.8 million, down 2.9% year on year, falling short of analyst expectations by 1.7%. It was a weak quarter for the company, with full-year revenue guidance missing analysts' expectations and underwhelming revenue guidance for the next quarter.
The company announced that it has agreed to be acquired by Synopsys, with Ansys shareholders set to receive $197 in cash and 0.345 shares of Synopsys common stock per Ansys share. This equates to a $390 per share offer price. The resulting enterprise value is approximately $35 billion, making for a large deal in semis.
ANSYS had the slowest revenue growth in the group. The stock is up 21% since the results and currently trades at $337.
Read our full analysis of ANSYS's results here.
PTC (NASDAQ:PTC)
Used to design the Airbus A380 and Boeing 787 Dreamliner commercial airplanes, PTC’s (NASDAQ:PTC) software-as-service platform helps engineers and designers create and test products before manufacturing.
PTC reported revenues of $546.6 million, up 7.6% year on year, falling short of analyst expectations by 2.3%. It was a weak quarter for the company, with full-year revenue guidance missing analysts' expectations and underwhelming revenue guidance for the next quarter.
PTC had the weakest performance against analyst estimates and weakest full-year guidance update among its peers. The stock is up 25.8% since the results and currently trades at $174.7.
Read our full, actionable report on PTC here, it's free.
Autodesk (NASDAQ:ADSK)
Founded in 1982 by John Walker and growing into one of the industry's behemoths, Autodesk (NASDAQ:ADSK) makes computer-aided design (CAD) software for engineering, construction, and architecture companies.
Autodesk reported revenues of $1.41 billion, up 10.5% year on year, surpassing analyst expectations by 1.9%. It was a mixed quarter for the company, with a decent beat of analysts' revenue estimates but underwhelming revenue guidance for the next quarter.
The stock is up 14.6% since the results and currently trades at $249.14.
Read our full, actionable report on Autodesk here, it's free.
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The author has no position in any of the stocks mentioned
