Core Insights - Unity Software reported strong financial performance in FY25Q3, with Grow business revenue reaching $318 million, an 11% quarter-over-quarter increase and a 6% year-over-year increase. Create business revenue was $152 million, a 3% year-over-year increase, and a 13% increase when excluding non-strategic revenue impacts. Adjusted EBITDA was $109 million, with a profit margin of 23%, up 200 basis points year-over-year and quarter-over-quarter. Free cash flow reached a record high of $151 million, up $36 million year-over-year, with cash reserves of $1.9 billion and convertible debt of $2.2 billion [1][2]. Financial Performance - Grow business revenue for Q3 was $318 million, with a quarter-over-quarter growth of 11% and year-over-year growth of 6% [1]. - Create business revenue was $152 million, showing a 3% year-over-year increase, and a 13% increase when excluding non-strategic revenue impacts [1]. - Adjusted EBITDA for the quarter was $109 million, with a profit margin of 23%, reflecting a 200 basis point improvement from the previous year and quarter [1]. - Free cash flow reached a historical high of $151 million, an increase of $36 million year-over-year [1]. - Cash reserves stood at $1.9 billion, while convertible debt was $2.2 billion [1]. Future Guidance - The company expects total revenue for Q4 to be between $480 million and $490 million, with adjusted EBITDA projected to be between $110 million and $115 million [1]. - The Grow business is anticipated to achieve low single-digit quarter-over-quarter revenue growth, while Create business is expected to show stable growth, with high single-digit year-over-year growth when excluding non-strategic revenue impacts [1]. Strategic Vision - Company leadership identified Q2 2025 as a pivotal point for growth, with Q3 performance indicating readiness for sustainable long-term growth [2]. - The gaming industry has surpassed Hollywood in scale, with social media and short videos identified as the next target areas [2]. - Unity aims to democratize technology, providing tools for software developers to become game developers, with AI advancements expected to enhance this mission [2]. Vector AI Impact - The Vector AI technology has shown excellent scalability and performance, capable of processing large and complex data sets while adapting to real-time market changes [3]. - The company is optimistic about the long-term growth potential of the developer data framework and Runtime data, viewing it as a multi-year growth opportunity [4]. - The integration of Vector technology into other advertising businesses is planned, with early results showing promise for sustainable growth [6]. Market Opportunities - The global app store landscape is opening up due to regulatory changes, providing Unity with significant opportunities to enhance developer value through in-app payment solutions [6]. - The company is optimistic about the potential of programmatic advertising, which is expected to reach $700 billion by 2026, with a focus on helping advertisers reach mobile users securely [11]. China Market Performance - Unity's revenue from China increased from 15% to 20% of total revenue over the past year, driven by significant growth in both Grow and Create businesses [14][15]. - The company has established a strong presence in the Chinese gaming market, with many popular games developed using Unity technology [14].

Core Insights - Unity is experiencing a positive inflection point, indicating long-term sustainable growth, as evidenced by strong performance in the third quarter [2][3] - The advertising business has seen an 11% quarter-over-quarter increase, driven by Vector AI, while the subscription software and creation business grew by 13% year-over-year [3] Business Performance - Unity's overall business is showing strength, with both revenue and profit exceeding guidance and consensus expectations [3] - The gaming sector remains robust even in uncertain consumer environments, with free-to-play games being particularly appealing for consumers [6][7] Market Context - The company is well-positioned within the digital advertising landscape, especially as targeting becomes increasingly important for retailers [5] - The vibrancy in the mobile handset market, driven by new phone releases, is expected to positively impact mobile gaming and Unity's business [9] AI Integration - AI is a critical component for Unity, enhancing the game development process and driving advertising revenue through products like Vector [10][11] - The company is leveraging AI to improve internal efficiencies and streamline operations [10][11]

Core Insights - Unity Software Inc. shares increased over 10% in intra-day trading following the release of stronger-than-expected third-quarter results and positive guidance for the fourth quarter [1] Financial Performance - The company reported earnings per share of $0.20, significantly surpassing expectations of a loss of $0.23 [1] - Revenue for the third quarter rose to $471 million from $447 million year-over-year, exceeding consensus estimates of $453 million [1] Segment Performance - Create Solutions revenue increased to $152 million from $147 million year-over-year [2] - Grow Solutions revenue grew to $318 million from $299 million year-over-year [2] - Adjusted EBITDA was reported at $109 million, reflecting a 23% margin [2] Future Guidance - For the fourth quarter, Unity forecasts revenue between $480 million and $490 million, above Wall Street's expectation of $475 million [3] - The company anticipates mid-single-digit sequential growth in its Grow business and high-single-digit year-over-year growth in Create, excluding non-strategic revenue [3]

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 ...