Unity and Palantir shares are leaping after their first earnings reviews since going public

The New York Stock Exchange welcomes Unity Software Inc. (NYSE: U) on Friday, September 18, 2020 as they officially start trading today.

NYSE

Unity and Palantir posted revenue growth of over 50% in their first earnings announcements since going public in September on Thursday. Investors rewarded her and sent her shares up on Friday.

Unity, whose software is used by video game developers, rose 13% to $ 114.77 according to its third-quarter earnings report. The share has more than doubled compared to the IPO.

Palantir, a developer of software and analytics tools for government agencies and large corporations, rose 8.2% to $ 15.80. Shares are up nearly 60% since the company was directly listed.

Both companies beat analysts’ estimates, which was helped by the increasing use of the coronavirus. Hardcore gamers got stuck at home during the pandemic, leading to increased engagement with Unity’s customers and demand for new titles. Palantir has won business from companies that need their software to monitor employee health, manage supply chains, and track clinical work.

Unity and Palantir stocks

CNBC

Unity posted revenue growth of 53% to $ 200.8 million in the third quarter, beating the average analyst estimate of $ 186.9 million, according to Refinitiv. Palantir revenue rose 52% to $ 289.4 million for the quarter, beating the average estimate of $ 279.4 million.

Companies are also saving money by dramatically reducing travel and eliminating live events. Unity’s operating loss decreased during the period, reducing the negative margin from 21% in the previous year to 4%.

“We are seeing significant material savings in travel, marketing and events,” Kim Jabal, CFO of Unity, told CNBC in an interview. “That helps our operating margins.”

However, Jabal said that from a revenue perspective, some of the growth the company sees a lot in the fourth quarter may have been more recent because people who would normally head home for the holidays are already there. Unity projected revenue of 27% to 29% for the fourth quarter, a significant slowdown from the third period.

“This seasonal increase in exposure has already occurred,” said Jabal. “They are already busy at a level that is pretty high.”

Palantir raised its full-year revenue forecast from approximately $ 1.06 billion to $ 1.07 billion to $ 1.072 billion, up 44% year over year. Palantir’s revenue continues to come from a small group of customers who spend an average of millions of dollars a year on the technology.

The company found that “customer concentration is decreasing”. Palantir said 61% of its sales in the first nine months of the year came from its top 20 customers, compared to 68% in the same period in 2019.

CLOCK: Palantir reports Q3 results with sales of $ 289.37 million

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