IS - Unity Software sees revenue growing; stands by IronSource acquisition plans

Unity Software ( NYSE: U ) shares dipped into the red in after-hours trading Tuesday even as the developer of gaming software platforms forecast third-quarter revenue growing from a year ago, and said it was committed to its $4.4B acquisition of IronSource ( IS ).

Unity ( U ) shares gave up 4% after the company said that it expects to lose between $35M and $50M, on revenue in a range of $315M to $335M for its third quarter. With the forecast, Unity ( U ) expects revenue for the quarter to rise by as much as 22% from the $273.6M it reported in the third quarter of 2021.

Unity ( U ) garnered some attention early Tuesday when marketing services company AppLovin ( APP ) made an unsolicited "non-binding proposal" to acquire Unity ( U ) for $20B in stock. Analyst Michael Pachter, of Wedbush Securities, said he doubts that Unity ( U ) will accept AppLovin's ( APP ) offer as it is "well below" the company's intrinsic value .

Along with its third-quarter outlook, Unity ( U ) reported a second-quarter loss, excluding one time items, of 18 cents a share, on revenue of $297M. Wall Street analysts had forecast Unity ( U ) to lose 21 cents a share, on $299M in revenue.

The company didn't immediately address AppLovin's ( APP ) acquisition offer along with its results and forecast. AppLovin ( APP ) said that under terms of its proposal, Unity ( U ) Chief Executive John Riccitiello would be CEO of the combined company, which AppLovin ( APP ) CEO Adam Foroughi would become the company's chief operating officer .

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