Core Insights - Unity Software is experiencing significant valuation gains following its recent third-quarter report, with stock prices increasing by 14.1% and reaching a peak of 17.7% shortly after market opening [1] - Over the past year, Unity's stock has appreciated approximately 101%, raising questions about whether investors should pursue this rally amid a strong bullish trend in AI stocks [2] Financial Performance - Unity's revenue from its grow segment reached $318 million, reflecting an 11% increase on a sequential quarterly basis and a 6% year-over-year growth, driven by its digital-marketing unit and AI-powered Vector platform [4] - The create segment generated $152 million, marking a 3% year-over-year increase [4] - The company's non-GAAP earnings per share were reported at $0.17 on sales of $471 million, surpassing Wall Street's expectations of $0.17 per share on sales of $453.06 million, with overall revenue up 5% compared to the same quarter last year [5] Future Guidance - For the fourth quarter, Unity projects revenue between $480 million and $490 million, indicating an expected annual sales growth of approximately 6% over last year's $457 million [6] - The growth of Unity's ad network, particularly through its Vector platform, is anticipated to continue driving significant improvements in overall business performance [6] Valuation Considerations - Unity's stock is currently valued at about 9.6 times this year's expected sales, which may appear richly valued given the relatively modest sales growth [7] - However, there is potential for significant acceleration in sales growth over the next year and beyond, suggesting a strong long-term setup for the company [7] Market Reaction - Following the release of its third-quarter earnings, Unity's stock has seen double-digit gains, with sales and profits exceeding Wall Street's expectations [8] - The new AI-powered advertising platform is playing a crucial role in the company's turnaround strategy [8]

About this content About Emily Jarvie Emily began her career as a political journalist for Australian Community Media in Hobart, Tasmania. After she relocated to Toronto, Canada, she reported on business, legal, and scientific developments in the emerging psychedelics sector before joining Proactive in 2022. She brings a strong journalism background with her work featured in newspapers, magazines, and digital publications across Australia, Europe, and North America, including The Examiner, The Advocate, ...

Investors are cheering Unity Software Inc (NYSE: U) this morning after the video game software development firm posted a better-than-expected Q3 and raised its guidance for the full year. The company'... ...

Unity Software Inc (NYSE:U) is one of the best names on the New York Stock Exchange (NYSE) today, last seen up 9.6% to trade at $39.36, brushing off recent tech sector weakness. The video game software company reported adjusted third-quarter revenue of 20 cents per share on $470.60 million in revenue, both of which topped analyst estimates. Unity stock is heading for its best single-session gain since Aug. 12. Despite taking a roughly 16% haircut off of its Sept. 16 annual highs of $46.93, support stepped u ...

Core Viewpoint - Unity Software's stock price increased over 11% following the release of its third-quarter earnings report, which significantly exceeded market expectations [1] Financial Performance - Adjusted earnings per share for Q3 were $0.20, surpassing Wall Street's expectation of $0.17 [1] - Quarterly revenue grew by 5% year-over-year, reaching $471 million, also above the market estimate of $450 million [1] - Create Solutions segment revenue was $152 million, up from $147 million year-over-year, while Grow Solutions revenue increased from $299 million to $318 million, indicating steady expansion in core product lines [1] Cash Flow and Profitability - Adjusted EBITDA for Q3 was $109 million, with operating cash flow at $155 million and free cash flow at $151 million, reflecting improved profitability and healthy cash flow [1] Management Commentary - CEO Matthew Bromberg attributed the strong performance to the growth driven by Unity Vector AI and the continued expansion of the Create business, indicating a new growth cycle due to rising consumer demand for interactive entertainment content [1] Outlook - For Q4, the company expects revenue between $480 million and $490 million, exceeding analysts' prior estimate of $473 million; adjusted EBITDA is projected to be between $110 million and $115 million, demonstrating management's confidence in ongoing profitability [1]

Core Insights - Unity Software's stock price increased over 11% to $39.94 following a strong Q3 earnings report that exceeded market expectations [1] - The adjusted earnings per share for Q3 were $0.20, surpassing Wall Street's forecast of $0.17 [1] - Quarterly revenue grew by 5% year-over-year to $471 million, also exceeding market estimates of $450 million [1] Revenue Breakdown - The Create Solutions segment generated $152 million, up from $147 million in the same period last year [1] - The Grow Solutions revenue increased from $299 million to $318 million, indicating steady expansion in core product lines [1] Financial Health - Adjusted EBITDA for Q3 was $109 million, with operating cash flow reaching $155 million and free cash flow at $151 million, reflecting improved profitability and healthy cash flow [1] - CEO Matthew Bromberg highlighted growth driven by Unity Vector AI and the ongoing expansion of the Create business, indicating a new growth cycle due to rising consumer demand for interactive entertainment content [1] Q4 Outlook - For Q4, the company expects revenue between $480 million and $490 million, above analysts' previous estimate of $473 million [1] - The adjusted EBITDA forecast for Q4 is between $110 million and $115 million, demonstrating management's confidence in continued strong performance [1]

Unity Software Inc. (U) came out with quarterly earnings of $0.2 per share, beating the Zacks Consensus Estimate of $0.17 per share. This compares to a loss of $0.31 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of +17.65%. A quarter ago, it was expected that this company would post a loss of $0.25 per share when it actually produced a loss of $0.26, delivering a surprise of -4%.Over the last four quarters, the company has surp ...

Financial Data and Key Metrics Changes - In Q3 2025, Unity reported a sequential revenue increase of 11% in the Grow segment, reaching $318 million, and a year-over-year increase of 6% [18] - The Create segment generated $152 million in revenue, up 3% year over year, with a 13% increase when excluding non-strategic revenue [19] - Adjusted EBITDA for the quarter was $109 million, representing a 23% margin, an improvement of 200 basis points year over year [20] - Free cash flow reached a record $151 million, an increase of $36 million year over year [20] - The company has a strong balance sheet with cash of $1.9 billion and convertible debt of $2.2 billion [21] Business Line Data and Key Metrics Changes - The Grow segment's revenue growth was driven by the performance of Vector AI, which enhanced the Unity ad network [18] - The Create segment's growth was attributed to improvements in subscription revenue and ARPU, particularly in China [19] Market Data and Key Metrics Changes - China has become a significant market for Unity, with revenue from the region increasing from 15% to 20% of total revenue over the past year [99] - The gaming market in China is the largest globally, and Unity's technology is compatible with all major Chinese platforms [97] Company Strategy and Development Direction - Unity aims to democratize game development, enabling not just software developers but also regular content creators to build interactive experiences [60] - The company is focusing on advancements in AI to enhance content creation efficiency and engagement [9][60] - Unity is expanding into cross-platform commerce with Unity IAP, allowing developers to manage global commerce from a single dashboard [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the sustainable growth trajectory of the business, particularly with the ongoing improvements in Vector AI and the overall mobile gaming advertising spend [27] - The company anticipates continued strong performance in both the Grow and Create segments, with guidance for Q4 revenues between $480 million and $490 million [21] Other Important Information - Unity has rolled out the Developer Data Framework, which has seen over 90% adoption in new projects built with Unity 6.2 [12] - The company is actively pursuing partnerships with payment providers to enhance its commerce capabilities [13] Q&A Session Summary Question: Drivers of faster revenue growth in the Grow segment - Management highlighted that Vector AI's scalability and performance improvements were key drivers, allowing for better ad targeting and broader customer reach [27] Question: Impact of the Developer Data Framework in 2026 - Management indicated that the runtime data would provide a long-term growth opportunity, enhancing the capabilities of Vector AI over time [29][30] Question: Guidance for Grow segment and expected sequential slowdown - Management explained that the guidance reflects seasonality and the current run rate, but they remain optimistic about continued growth [34][36] Question: Improvements in non-Vector Grow business - Management noted plans to leverage learnings from Vector to enhance other ad businesses, with early positive results observed [40][41] Question: Unity In-App Payments initiative - Management emphasized the opportunity for developers to manage cross-platform commerce, which could lead to increased profitability and growth [45][46] Question: Performance of Vector and strategy for e-commerce - Management expressed optimism about the potential for Vector in non-gaming advertising and the launch of the Audience Hub to help brands reach new audiences [79][81] Question: Momentum in China and unique aspects of the ecosystem - Management highlighted Unity's strong position in China, with significant revenue growth and compatibility with local platforms [97][99]

Core Insights - Unity Software reported a strong third quarter, exceeding both revenue and earnings expectations, marking a significant recovery from its poor performance in Q1 of the same year [1] Financial Performance - The company demonstrated a dramatic turnaround in its financial results compared to Q1, which was characterized by disappointing outcomes [1]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______ Commission File Number: 001-39497 UNITY SOFTWARE INC. (Exact name of registrant as specified in its charter) Delaware 27-0334803 (State ...