News about Unity Software

Unity Software (U) posted its first GAAP profit since going public, at $122 million, as revenue rose 32% to $622 million. Shares rose about 17% in pre-market trading. The Vector AI ad system made advertising the company's main growth engine, with Strategic Grow (ads) revenue up 90% to $432 million. Part of the profit reflects accounting: lower amortization after an earlier write-down cut costs by about $49 million, while free cash flow rose to $220 million from $151 million. Strategic Create revenue, at $165 million and up 11%, is cooling, and Unity guides for just 4% to 6% growth in the fourth quarter.

Unity Software stock surged after the video game development platform forecast robust business growth. The article's information is limited to the stock's reaction and this forecast.

Unity Software (U) is scheduled to report third-quarter 2026 results on Nov. 5, before the market opens. The company guides to strategic revenues of $540-$550 million and nonstrategic revenues of about $20 million, for total revenues of $560-$570 million. The Zacks Consensus Estimate stands at $565.49 million, up 20.16% year over year, with an EPS consensus of 34 cents, implying 70% growth. Unity Vector revenue is expected to rise another 19-21% sequentially, while adjusted EBITDA is projected at $185-$190 million, up 69-74%. Nonstrategic revenues are set to fall from $60 million in the prior quarter to about $20 million, due to the closure of ironSource Ads Network and the Aug. 4 sale of Supersonic.

Morgan Stanley raised its price target on Unity Software from $50.00 to $55.00 in a research report released Tuesday and kept its overweight rating. Raymond James previously upgraded the stock to outperform with a $54.00 target, while according to MarketBeat the consensus rating is 'Moderate Buy' with an average target of $48.01. The stock opened at $43.44 on Tuesday after rising 4.9%, with a market cap of $19.12 billion and a one-year range of $16.78 to $52.15. The latest quarterly results showed EPS of $0.28 against a consensus loss of ($0.11), with revenue of $546.47 million, up 24.0% year-over-year. Over the last ninety days, insiders sold a total of 109,547 shares worth $4,884,202, including CEO Matthew S. Bromberg and COO Alexander Blum.

Unity Software shares fell 10% to $42.13 in the afternoon session, even though Wedbush raised its price target and described the Vector ad platform as gaining traction. AppLovin dropped 3% to $263.65 and The Trade Desk slipped 2% to $11.94, while the Fidelity MSCI Communication Services Index ETF fell 2% and the SPDR S&P 500 ETF fell 1%. Unity's Q2 2026 revenue rose 23.9% year over year to $546.47 million and adjusted EPS of $0.28 beat estimates, with the Grow Solutions segment that houses Vector up 35% to $389 million. Management guided Q3 2026 strategic revenue to $540 million to $550 million and targets GAAP profitability as soon as that quarter. The article attributes the sell-off mainly to worries about cyclical ad spending rather than execution, while AppLovin is down 61% year to date.