MeritValue

Unity Software Inc.

Udata completeness 88%8 fiscal years on file

Data notes: no data for concept 'totalDebt'

The thesis, from the filings

Unity Software Inc. earns about -32% on invested capital, below its ~9% cost of capital, but has diluted owners by 49% over 5 years — no moat visible in the numbers. The estimate methods put fair value between $16.94 and $17.96 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$1.11B1$1.39B2$2.19B3$1.81B3$1.85B3
Net income−$532.6M4−$921.1M5−$822M6−$664.1M6−$402.8M6
Operating cash flow−$111.4M7−$59.4M8$234.7M9$315.6M9$423M9
Capital expenditure$41.9M10$57.1M11$55.9M12$29.5M12$19M12
Free cash flow (derived)−$153.4M7−$116.6M8$178.8M9$286M9$403.9M9
Total debt—————
Cash & equivalents$1.06B13$1.49B14$1.59B15$1.52B16$2.06B16
Diluted shares282.2M310.5M380.5M396.0M420.9M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$76.91
your share of equity
Profit it earned you last year
−$9.57
Free cash flow it threw off
$9.6
Debt you’d be carrying
—

10 shares is a claim on $76.91 of net worth that earned you −$9.57 and generated $9.6 of cash last year.

iii. Is this a good business?
Moat signal · return on invested capital
-32% avg · 5y
FY21 -31%FY22 -34%FY23 -38%FY24 -32%FY25 -26%

It earned about -32% on invested capital against a ~9% cost of capital — below the cost of funding. The numbers show no moat.

seeing a moat in the numbers →
Management signal · capital allocation
+49% shares · 5y

Share count is up 49% over 5 years — owners have been diluted. Worth asking what they got for it.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0

The 2 estimate methods that apply put fair value between $16.94 and $17.96 a share. They rest on different assumptions, so where they diverge is the story.

DCF · Growth Exit 10Y
$17.96
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth5.0%
  • fcfBase$286M
DCF · Growth Exit 5Y
$16.94
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth5.0%
  • fcfBase$286M
Earnings Power Value
not applicable
normalized (5y-median) earnings non-positive — EPV undefined
Graham Number
not applicable
diluted EPS missing or non-positive — Graham Number undefined

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years5.0%
Discount rate (WACC)8.93%
Terminal growth2.5%
At your growth, a share is worth $16.94
The three cases
Bear0.0%$14.59
Base5.0%$16.94
Bull10.0%$19.75

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 5.0%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0001810806-24-000053 (RevenueFromContractWithCustomerExcludingAssessedTax)
  2. 10-K · period ending 2022-12-31 · accession 0001810806-25-000026 (RevenueFromContractWithCustomerExcludingAssessedTax)
  3. 10-K · period ending 2023-12-31 · accession 0001810806-26-000011 (RevenueFromContractWithCustomerExcludingAssessedTax)
  4. 10-K · period ending 2021-12-31 · accession 0001810806-24-000053 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-31 · accession 0001810806-25-000026 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0001810806-26-000011 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0001810806-24-000053 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0001810806-25-000026 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0001810806-26-000011 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0001810806-24-000053 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2022-12-31 · accession 0001810806-25-000026 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-12-31 · accession 0001810806-26-000011 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2021-12-31 · accession 0001810806-23-000016 (CashAndCashEquivalentsAtCarryingValue)
  14. 10-K · period ending 2022-12-31 · accession 0001810806-24-000053 (CashAndCashEquivalentsAtCarryingValue)
  15. 10-K · period ending 2023-12-31 · accession 0001810806-25-000026 (CashAndCashEquivalentsAtCarryingValue)
  16. 10-K · period ending 2024-12-31 · accession 0001810806-26-000011 (CashAndCashEquivalentsAtCarryingValue)