Unity Software Inc. experienced a significant decline in shares during late trading on Monday following disappointing results and forecasts. The company projected a revenue range of $415 million to $420 million for the fiscal first quarter for its "strategic portfolio," excluding its non-strategic portfolio. This figure fell short of the FactSet consensus of $534 million. For the full year, Unity anticipates revenue in the range of $1.7 billion to $1.8 billion for its strategic portfolio, which was below analysts' expectations of $2.3 billion.

The company also provided forecasts for adjusted earnings before interest, taxes, depreciation, and amortization (Ebitda), with expectations of $45 million to $50 million for the fiscal first quarter and $400 million to $425 million for the full year. The projections were lower than what analysts had predicted, with estimates of $112 million for the quarter and $647 million for the year.

In the fiscal fourth quarter, Unity reported a net loss of $254 million, or 66 cents per share, compared to a loss of $288 million, or 82 cents per share, in the previous year. This was higher than analysts' forecast of a 46-cent loss per share. Unity's revenue for the quarter reached $609 million, surpassing the $551 million estimated by FactSet analysts.

Unity stated in its shareholder letter that the company is currently in the middle of a "two-phase company reset," aiming to enhance customer and shareholder value. The focus now is on reviving revenue growth following the completion of the portfolio and cost structure reset. However, shareholders reacted negatively to the news, with Unity Software Inc. shares dropping more than 17% in the extended trading session on Monday.