Unity shares plunge 30% after the video game software provider issued disappointing first-quarter guidance, despite beating fourth-quarter estimates. The stock fell sharply Wednesday as investors reacted to the company's forecast that fell short of Wall Street expectations.

Unity reported fourth-quarter earnings per share of $0.24, exceeding analyst estimates of $0.21. Revenue reached $503.1 million, above the $488.95 million consensus. However, the company expects first-quarter revenue of $480 million to $490 million, missing the $491.8 million projection. Grow revenue is expected to remain flat sequentially, while Create revenue should see double-digit year-over-year growth.

Stifel analyst Bernie McTernan noted the guidance for adjusted EBITDA is 9% below consensus, driven by lower margins and Create revenue falling 5% short. The analyst considered the flat Grow revenue guidance reasonable given seasonal trends and conservative forecasting from companies using neural network technology. Unity's Vector product trajectory remains on track despite the disappointing outlook.