Companies /Technology

Unity Software Inc

NYSE: U Software - Application
$42.10
▼ $1.21 (−2.79%) today
Markets closed · 6:47pm ET

Q2 2026 Earnings

Reported Aug 6, 2026, 7:03am ET · SEC source
$0.28
Beat +12.40%
EPS · est. $0.25 Adjusted

GAAP net loss includes $77.5 million amortization of intangible assets, $75.6 million stock-based compensation, $31.4 million restructuring and reorganization costs, and $8.0 million depreciation expense

$546.5M
Beat +6.17%
Revenue · est. $514.7M
1 quarter
Consecutive EPS beats

Market Reaction

% change · around the report
−12%−6%0Aug 6Aug 7report 7:03am ETearnings+0.2%−1.2%
−12%−6%0Aug 6Aug 7earnings+0.2%−1.2%
U −1.2%S&P 500 +0.2%
−12%−6%0Aug 6Aug 7report 7:03am ETearnings+1.3%−1.2%
−12%−6%0Aug 6Aug 7earnings+1.3%−1.2%
U −1.2%NASDAQ +1.3%
−9%0+9%Aug 5Aug 14report 7:03am ETearnings+1.0%+11.6%
−9%0+9%Aug 5Aug 14earnings+1.0%+11.6%
U +11.6%S&P 500 +1.0%
−9%0+9%Aug 5Aug 14report 7:03am ETearnings+2.8%+11.6%
−9%0+9%Aug 5Aug 14earnings+2.8%+11.6%
U +11.6%NASDAQ +2.8%
+15.05%
Day of report
+5.37%
Next session
+12.20%
One week

Did U Beat Earnings? Q2 2026 Results

Unity Software delivered a standout second quarter for fiscal 2026, with revenue of $546.47 million rising 23.9% year-over-year and adjusted EPS of $0.28 clearing the $0.25 consensus estimate by 12.40%, as the company's <a href="https://247wallst.com/investing/2026/07/03/can-unity-software-turn-its-platform-into-an-ai-winner/">AI-driven advertising platform</a> proved to be the central growth engine. The Grow Solutions segment surged 35% year-over-year to $389 million, powered by the Unity Vector product embedded in the Unity Ads Network, while adjusted EBITDA expanded to $160.19 million at a 29% margin, up from $90.50 million and 21% a year ago. GAAP net loss narrowed sharply to $22.67 million from $107.36 million in the prior-year period, with management now targeting GAAP profitability as soon as Q3 2026. Free cash flow of $201.96 million and a cash position of $2.36 billion give Unity the runway to retire its 2021 convertible notes in November. Looking ahead, the company guided Q3 strategic revenue to $540 million to $550 million, up 44% to 47% year-over-year, with adjusted EBITDA of $185 million to $190 million.

Key Takeaways
  • Unity Vector AI driving growth in Unity Ads Network
  • Subscription revenue increases in Create Solutions
  • Higher revenue and continued cost control improving adjusted EBITDA margin to 29%
  • GAAP gross margin expansion to 80% from 74% YoY

“This was arguably the best quarter in Unity's history as a public company. The ongoing success of Unity Vector AI, combined with the most exciting product roadmap in Unity's history, is helping drive substantial value for creators, players, and shareholders.”

Unity CEO, on the earnings call

Forward Guidance & Outlook

For Q3 2026, Unity guides Strategic Revenue of $540 million to $550 million, up 44%-47% year-over-year, with Strategic Grow Revenue of $380 million to $385 million (up 68%-70% YoY) and Strategic Create Revenue of $159 million to $163 million (up 7%-10% YoY). Non-Strategic Revenue is expected at approximately $20 million, incorporating roughly one month of Supersonic revenue following its August 4 sale. Adjusted EBITDA is guided to $185 million to $190 million, up 69%-74% year-over-year. The company expects to achieve GAAP profitability by Q3 2026 and plans to pay off its 2021 convertible notes in November 2026 to de-lever the balance sheet.

U YoY Financials

Q2 2026 vs Q2 2025 · SEC filings Q2 2025 Q2 2026
$0$200.0M$400.0M$600.0M$440.9M$546.5MRevenue$327.0M$434.8MGross Profit$-18,637,705$-32,219,000Operating Income$-12,654,610$-22,672,000Net Income
$0$200.0M$400.0M$600.0MRevenueGross ProfitOperating IncomeNet Income

U Revenue by Segment

Grow Solutions$389.0M+35.0%
Create Solutions$158.0M+2.0%

Figures from SEC filings and company reports. Not investment advice.