Headline really feels like it’s trying to imply unity is currently making a profit. They haven’t been out of the red in a while. Businesses tend to die when they’re bleeding money and there’s no VC.
It’s a bit more complicated than that. There are a lot of accounting tricks to be constantly making losses but end up cash flow positive.
I don’t work or invest in Unity so I don’t have a great understanding of their metrics but companies I worked at would constantly capitalize new projects to add expenses in the future. You can structure sales deals so a new feature is added late in the contract. That pushes revenue out, but you can collect more cash early.
If unity didn’t do share buy backs this quarter, they would have a positive cash flow. Which points to they should be a profitable company but instead are using accounting tricks to post losses to lower tax bills.
Headline really feels like it’s trying to imply unity is currently making a profit. They haven’t been out of the red in a while. Businesses tend to die when they’re bleeding money and there’s no VC.
It’s a bit more complicated than that. There are a lot of accounting tricks to be constantly making losses but end up cash flow positive.
I don’t work or invest in Unity so I don’t have a great understanding of their metrics but companies I worked at would constantly capitalize new projects to add expenses in the future. You can structure sales deals so a new feature is added late in the contract. That pushes revenue out, but you can collect more cash early.
If unity didn’t do share buy backs this quarter, they would have a positive cash flow. Which points to they should be a profitable company but instead are using accounting tricks to post losses to lower tax bills.