Financial Data and Key Metrics Changes - Unity exceeded the top end of guidance for revenue by $16 million and adjusted EBITDA by $15 million in Q2 2025 [18][20] - Total revenue for Q2 was $441 million, with adjusted EBITDA at $90 million, representing a 21% margin [19][20] - Free cash flow reached a record $127 million, up $47 million year-over-year [20] Business Line Data and Key Metrics Changes - In the Grow segment, revenue was $287 million, down 4% year-over-year but up 1% sequentially, driven by strong performance from the Unity ad network [18][19] - The Create segment reported revenue of $154 million, up 2% year-over-year and sequentially, with strategic revenue growth at 16% when adjusted for non-strategic revenue [19][20] Market Data and Key Metrics Changes - The Unity ad network now comprises approximately half of total Grow revenue, with expectations for this percentage to continue increasing [6][22] - The company reported significant growth in China, with a $20 million sequential increase in revenue, driven by improvements in both Create and Grow segments [56][57] Company Strategy and Development Direction - Unity is focusing on the full emergence of Unity Vector, which has exceeded expectations and is expected to drive sustainable growth [4][5] - The company is investing in AI capabilities to enhance both the advertising and content creation experiences, with a long-term vision for growth in these areas [10][13] - Partnerships with major companies like Tencent and Scopely are aimed at leveraging Unity's platform for mutual growth [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the future, citing the unique consumer insights gained from Unity's position as the leading game development platform [10][11] - The company anticipates continued improvements in performance and growth driven by AI advancements and the integration of new data capabilities [10][12] Other Important Information - Unity's adjusted gross margins are at 83%, with expectations for further margin expansion as the company scales its operations [23][80] - The Developer Data Framework is set to enhance transparency and control for developers regarding data usage [11][45] Q&A Session Summary Question: Potential to expand Unity ad strength to other products - Management confirmed that Unity Vector is modular and can be applied to improve other ad products [28] Question: Rate of improvement with Vector - Management indicated that Vector is a significant upgrade and will continue to provide performance lifts over time [32] Question: Next steps in the evolution of the product - Management emphasized ongoing improvements and investments in AI to enhance existing capabilities [35] Question: Guidance on Grow revenue - Management clarified that mid-single-digit growth implies strong performance in the Unity ad network, with stabilization in non-Vector parts [46] Question: Growth in China - Management noted that the increase in China revenue is primarily due to improvements in the Create business [56][57] Question: Strategic importance of mediation in ad pricing - Management highlighted the unique position of Unity in the marketplace and the importance of mediation in optimizing ad performance [111]

The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Unity Software Inc. (U) came out with a quarterly loss of $0.26 per share versus the Zacks Consensus Estimate of a loss of $0.25. This compares to a loss of $0.32 per share a year ago. These figures are adjusted for non- recurring items. This quarterly report represents an earnings surprise of -4.00%. A quarter ...

[Unity Q2 2025 Earnings Release](index=1&type=section&id=Unity%20Q2%202025%20Earnings%20Release) [Financial Highlights](index=1&type=section&id=Financial%20Highlights) Unity reported Q2 2025 revenue of $441 million, a 2% decrease year-over-year, exceeding guidance, with a GAAP net loss of $107 million and strong Adjusted EBITDA of $90 million and free cash flow of $127 million, driven by the new AI platform Unity Vector - The CEO, Matt Bromberg, described **Q2 2025** as an "inflection point" for Unity, with results substantially beating guidance for both **revenue** and **Adjusted EBITDA**[2](index=2&type=chunk)[3](index=3&type=chunk) Financial Metric Comparison | Financial Metric | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | $441 million | $449 million | -2% | | GAAP Net Loss | ($107 million) | ($126 million) | Improved | | GAAP Net Loss per Share | ($0.26) | ($0.32) | Improved | | Adjusted EBITDA | $90 million | $113 million | -20% | | Adjusted EPS | $0.18 | $0.22 | -18% | | Net Cash from Operations | $133 million | $88 million | +51% | | Free Cash Flow | $127 million | $80 million | +59% | - The new AI platform, Unity Vector, drove **15% sequential growth** in the Unity Ad Network during the second quarter[3](index=3&type=chunk) [Business Segment Performance](index=1&type=section&id=Business%20Segment%20Performance) Create Solutions revenue grew 2% to $154 million, while Grow Solutions declined 4% to $287 million, with strong Unity Ad Network growth offsetting other ad product declines Segment Revenue and Key Drivers | Segment | Q2 2025 Revenue | YoY Change | Key Drivers | | :--- | :--- | :--- | :--- | | Create Solutions | $154 million | +2% | A ~$12 million term license sale and increased subscription revenue | | Grow Solutions | $287 million | -4% | Strong Unity Ad Network performance (15% QoQ growth) offset by declines in other Ads products | [Profitability and Cash Flow](index=2&type=section&id=Profitability%20and%20Cash%20Flow) GAAP net loss narrowed to $107 million, Adjusted EBITDA reached $90 million (21% margin), and free cash flow significantly increased to $127 million - **GAAP net loss improved to $107 million** (a -24% margin) **from $126 million** (a -28% margin) in Q2 2024[9](index=9&type=chunk) - **Adjusted EBITDA was $90 million (21% margin)**, **down from $113 million (25% margin)** in Q2 2024. The better-than-guided margin was attributed to higher revenue and continued cost discipline[10](index=10&type=chunk) - **Net cash provided by operating activities increased to $133 million**, and **free cash flow grew to $127 million**, **up from $88 million and $80 million** respectively in Q2 2024[9](index=9&type=chunk)[10](index=10&type=chunk) [Financial Position](index=2&type=section&id=Financial%20Position) Unity maintained a strong liquidity position with cash, cash equivalents, and restricted cash totaling **$1.702 billion** as of June 30, 2025 - Cash, cash equivalents, and restricted cash stood at **$1.702 billion** as of June 30, 2025, an increase of **$174 million** from the end of 2024[12](index=12&type=chunk) Balance Sheet Summary | Balance Sheet Item | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | Total Assets | $6,716,424 | $6,737,407 | | Total Liabilities | $3,282,349 | $3,310,259 | | Total Stockholders' Equity | $3,193,378 | $3,196,521 | [Q3 2025 Business Outlook](index=2&type=section&id=Q3%202025%20Business%20Outlook) Unity projects Q3 2025 revenue between $440 million and $450 million and Adjusted EBITDA between $90 million and $95 million Q3 2025 Guidance | Guidance Metric | Q3 2025 Outlook | | :--- | :--- | | Revenue | $440 million - $450 million | | Adjusted EBITDA | $90 million - $95 million | - The Grow segment is expected to see **mid-single digit sequential revenue growth** from Q2 to Q3[16](index=16&type=chunk) - The Create segment is expected to experience a **slight sequential decline** from Q2 to Q3, attributed to the impact of a large customer win in Q2[16](index=16&type=chunk) [Consolidated Financial Statements](index=3&type=section&id=Consolidated%20Financial%20Statements) Presents unaudited condensed consolidated financial statements, including Balance Sheets, Statements of Operations, and Cash Flows for Q2 2025 [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) - Presents the company's **assets, liabilities, and stockholders' equity** as of June 30, 2025, compared to December 31, 2024[17](index=17&type=chunk)[18](index=18&type=chunk) [Consolidated Statements of Operations and Comprehensive Loss](index=4&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) - Details **revenues, costs, and expenses** to arrive at **net loss** for the three and six months ended June 30, 2025, and 2024[20](index=20&type=chunk)[21](index=21&type=chunk) [Consolidated Statements of Cash Flows](index=5&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) - Outlines the **cash inflows and outflows** from **operating, investing, and financing activities** for the three and six months ended June 30, 2025, and 2024[22](index=22&type=chunk)[23](index=23&type=chunk) [Reconciliation of GAAP to Non-GAAP Financial Measures](index=6&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Financial%20Measures) Provides detailed reconciliations of GAAP to non-GAAP financial measures, including Adjusted EBITDA, Adjusted Gross Profit, and Adjusted EPS - The company uses **non-GAAP measures** like **Adjusted EBITDA, Adjusted Gross Profit, Free Cash Flow, and Adjusted EPS** to evaluate ongoing operations and for internal planning[24](index=24&type=chunk) - **Adjusted EBITDA** is defined as **GAAP net loss excluding stock-based compensation, amortization, depreciation, restructuring, interest, taxes, and other non-operating items**[26](index=26&type=chunk) Adjusted EBITDA Reconciliation | Reconciliation Item | Q2 2025 (in thousands) | Q2 2024 (in thousands) | | :--- | :--- | :--- | | GAAP Net Loss | $(107,365) | $(125,738) | | Stock-based compensation | $101,435 | $113,766 | | Amortization of intangibles | $86,218 | $88,432 | | Depreciation | $10,710 | $12,977 | | Restructuring costs | $10,886 | $27,714 | | Other adjustments | $(11,367) | $(3,682) | | **Adjusted EBITDA** | **$90,497** | **$113,469** | [Forward-Looking Statements](index=10&type=section&id=Forward-Looking%20Statements) Contains forward-looking statements regarding future financial performance and strategic initiatives, with cautions on various risks and uncertainties - The press release includes **forward-looking statements** concerning **Unity's outlook**, the performance of its **AI platform Vector**, **strategic initiatives**, and **financial guidance for Q3 2025**[35](index=35&type=chunk) - **Key risks** that could cause actual results to differ include **macroeconomic conditions, competition, geopolitical instability** (particularly in Israel), and the ability to successfully **transition executive leadership** and **adapt to new technologies**[35](index=35&type=chunk)

Key Takeaways U is expected to post a 5.2% year-over-year revenue decline to $425.8 million in Q2.Shifts away from ironSource and Tapjoy ads are likely to have weighed on short-term revenues.Elevated R&D and cloud costs from dual-platform ops may pressure Q2 profitability for U.Unity Software Inc. (U) is scheduled to release second-quarter 2025 results on Wednesday. In the last reported quarter, the company’s earnings beat the Zacks Consensus Estimate by 50%.U’s Q2 Estimate RevisionsThe Zacks Consensus Esti ...

此外，本周五，还有十字路口开放麦在上海举办的 「 AI + 北美出海 」 专场活动。 我们还整理了近期值得参与的一些活动，对更多活动感兴趣的小伙伴，可以点击 「阅读原文」 查看。 8 月来啦，来给大家推荐一些近期的优质 AI 活动！知乎联合 Wework 将在上海举办「AI GEO 进化论」论坛活动，分享 AI 时代的营销及消费变化。 由上海市徐汇区文化和旅游局主办的 Unity 中国开发挑战赛也将于本周三开启报 名，活动准备了丰厚的奖金，最高 50 万专项奖。 连接未来 AI GEO 进化论 主办方： 知乎 X Wework 活动时间： 2025.8.8 14:00-16:30 活动地点： 上海 WeWork 中国 (星荟中心社区店）天潼路 328 号星荟中心 3 层 活动亮点： AI 时代营销进化论 Agentic 搜索:当 Al 开始决策 Ta 会如何选择可信信源 报名方式： 扫描下图二维码，扫码报名。 AI 时代的消费及营销 实操分享：GEO 的消费进行时 独立游戏 XR 应用 HMI 设计 百万奖金：最高 50 万专项奖 资源赋能：作品曝光、技术诊断、发行支持 学生专享：面试直通、实习内推 政策扶持 ...

Core Viewpoint - US AI application software stocks experienced an initial rise on Monday, indicating positive market sentiment towards this sector [1] Company Summaries - Palantir (PLTR.US) saw an increase of over 3% ahead of its latest earnings report scheduled for after market close today [1] - Unity Software (U.US) rose by more than 7%, reflecting strong investor interest [1] - Shopify (SHOP.US) increased by over 4.5%, suggesting positive market dynamics for e-commerce platforms [1] - Cloudflare (NET.US) experienced a rise of over 3.7%, indicating continued growth in the cloud services sector [1]

Core Viewpoint - The AI application software stocks in the US market experienced an upward trend on Monday, with notable gains in several companies ahead of their earnings reports [1] Company Summaries - Palantir (PLTR.US) saw an increase of over 3% and is set to release its latest earnings report after the market closes today [1] - Unity Software (U.US) rose by more than 7% [1] - Shopify (SHOP.US) increased by over 4.5% [1] - Cloudflare (NET.US) gained more than 3.7% [1]

Company Performance - Unity Software Inc. closed at $31.86, down 4.51% from the previous trading session, underperforming the S&P 500's daily loss of 1.6% [1] - Over the past month, Unity's shares have gained 27.67%, while the Computer and Technology sector gained 4.45% and the S&P 500 gained 2.25% [1] Upcoming Financial Results - Unity Software Inc. is set to announce its earnings on August 6, 2025, with an expected EPS of -$0.25, indicating a growth of 21.88% compared to the same quarter last year [2] - The consensus estimate for revenue is $425.83 million, reflecting a decrease of 5.21% from the prior-year quarter [2] Fiscal Year Projections - For the entire fiscal year, the Zacks Consensus Estimates project an EPS of -$0.8 and revenue of $1.79 billion, representing changes of +52.38% and -1.02% respectively from the prior year [3] - Recent changes to analyst estimates for Unity should be noted, as positive revisions are seen as a good sign for business outlook [3] Estimate Revisions and Stock Performance - Research indicates that estimate revisions correlate with near-term share price momentum, which is utilized in the Zacks Rank system [4] - The Zacks Rank system ranges from 1 (Strong Buy) to 5 (Strong Sell), with 1 stocks returning an average of +25% annually since 1988 [5] - Unity Software Inc. currently holds a Zacks Rank of 2 (Buy), with a 1.85% rise in the Zacks Consensus EPS estimate over the past month [5] Industry Context - The Internet - Software industry is part of the Computer and Technology sector, holding a Zacks Industry Rank of 75, placing it in the top 31% of over 250 industries [6] - The strength of individual industry groups is measured by the Zacks Industry Rank, with top-rated industries outperforming the bottom half by a factor of 2 to 1 [6]

The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on August 6. On the other hand, if they miss, the stock may move lower. While management's discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations, it's worth having a handicapping insight into the odds of a positive EPS surprise. Zacks Consensus Estimate This company is expec ...

Company Performance - Unity Software Inc. closed at $35.92, reflecting a -2.26% change from the previous day, underperforming the S&P 500's gain of 0.14% [1] - Over the past month, Unity's shares have appreciated by 59.3%, significantly outperforming the Computer and Technology sector's gain of 7.37% and the S&P 500's gain of 5.35% [1] Upcoming Earnings Report - Unity is scheduled to release its earnings on August 6, 2025, with a forecasted EPS of -$0.25, representing a 21.88% increase from the same quarter last year [2] - The consensus estimate anticipates revenue of $425.83 million, indicating a 5.21% decrease from the same quarter last year [2] Annual Forecast - For the entire year, the Zacks Consensus Estimates predict an EPS of -$0.8 and revenue of $1.79 billion, reflecting changes of +52.38% and -1.02% respectively compared to the previous year [3] - Recent adjustments to analyst estimates for Unity are noted, with positive revisions indicating a favorable business outlook [3] Analyst Ratings and Industry Rank - The Zacks Rank system, which assesses estimate revisions, currently ranks Unity Software Inc. as 2 (Buy), with a 1.85% increase in the consensus EPS estimate over the last 30 days [5] - The Internet - Software industry, part of the Computer and Technology sector, holds a Zacks Industry Rank of 79, placing it in the top 32% of over 250 industries [6]