Unity shares rise 8% after Q3 profit tops estimates
Unity reported third-quarter adjusted EPS of 44 cents, topping the 6 cents consensus estimate, and revenue of $622.09 million topped the $578.79 million estimate.
Key takeaways
- Unity Software (U) reported third-quarter adjusted EPS of 44 cents, against the 6 cents consensus estimate, and revenue of $622.09 million, above the $578.79 million estimate. Revenue rose 32% from a year earlier. The company also guided fourth-quarter adjusted EBITDA to $290 million to $295 million.
Shares rose 8.4% at 10:09 a.m. ET, from a $42.46 close.
Unity (U) reported adjusted earnings of 44 cents per share for the quarter ended Sept. 30, topping the 6 cents consensus estimate. Revenue of $622.09 million also topped the $578.79 million estimate.
Revenue rose 32% from a year earlier. GAAP net income was $122 million, with a 20% margin, compared with a net loss of $127 million a year earlier.
President and CEO Matt Bromberg said: "more creators make more games on our platform, and more games fuel the need for more discovery through advertising."
- Revenue: $622.09 million vs. $470.62 million a year earlier
- Adjusted EPS: 44 cents vs. 20 cents a year earlier, against 6 cents expected
- GAAP diluted EPS: 25 cents per share vs. a loss of 30 cents a year earlier
- Adjusted EBITDA: $257 million, a 41% margin, vs. $109 million a year earlier
- Free cash flow: $220 million vs. $151 million a year earlier
Segment results
Grow Solutions revenue was $457 million, up 44% from a year earlier. The change was due to growth in the Unity Ads Network, driven by Unity Vector, partly offset by lower ironSource Ads Network revenue.
Create Solutions revenue was $165 million, up 8%. Higher subscription revenue was partly offset by lower cloud and hosting services revenue.
Non-strategic revenue, which includes the ironSource Ads Network and the Supersonic publishing business, was $25.52 million, down 73%. The Supersonic publishing business was sold on Aug. 4, 2026, for proceeds of $37.15 million.
2026 fourth-quarter guidance
The company expects fourth-quarter strategic revenue of $683 million to $691 million, up 65% to 67% from a year earlier.
Strategic Grow revenue is expected at $515 million to $520 million, up 105% to 107%. Strategic Create revenue is expected at $168 million to $171 million, up 4% to 6%.
Non-strategic revenue is expected at $5 million. Adjusted EBITDA is expected at $290 million to $295 million, up 132% to 136% from a year earlier.
Cash and convertible notes
Cash, cash equivalents and restricted cash was $2.65 billion at Sept. 30, an increase of $587 million from $2.06 billion at Dec. 31, 2025. Net cash provided by operating activities was $224 million in the quarter.
The company plans to pay off its convertible notes due Nov. 15, 2026.