Companies /Technology

Unity Software Inc

NYSE: U Software - Application
$42.10
▼ $1.21 (−2.79%) today
Markets closed · 12:56am ET

Q1 2025 Earnings

Reported May 7, 2025, 7:54am ET · SEC source
$0.24
Beat +165.48%
EPS · est. $-0.37
$435.0M
Beat +4.41%
Revenue · est. $416.6M
+12.6%
Beating market
U vs S&P since report
1 quarter
Consecutive EPS beats

Market Reaction

% change · around the report
−12%−8%−4%0May 7May 8report 7:54am ETearnings+1.0%−7.4%
−12%−8%−4%0May 7May 8earnings+1.0%−7.4%
U −7.4%S&P 500 +1.0%
−10%−5%0May 7May 8report 7:54am ETearnings+1.3%−7.4%
−10%−5%0May 7May 8earnings+1.3%−7.4%
U −7.4%NASDAQ +1.3%
−10%−5%0+5%May 6May 15report 7:54am ETearnings+4.1%−5.6%
−10%−5%0+5%May 6May 15earnings+4.1%−5.6%
U −5.6%S&P 500 +4.1%
−12%−6%0+6%May 6May 15report 7:54am ETearnings+6.6%−5.6%
−12%−6%0+6%May 6May 15earnings+6.6%−5.6%
U −5.6%NASDAQ +6.6%
−3.10%
Day of report
−0.05%
Next session
+4.26%
One week
+19.51%
30 days

S&P 500 over the same 30 days: +6.87%.

Did U Beat Earnings? Q1 2025 Results

Unity Software delivered a decisive earnings beat in Q1 2025, with aggressive cost discipline and the early rollout of its Unity Vector ad mediation product driving results well ahead of Wall Street expectations. The game engine and monetization platform posted adjusted EPS of $0.24, clearing the consensus estimate of negative $0.37 by 165.48%, while revenue of $435.00 million topped forecasts by 4.41%, though it still slipped 5.5% year-over-year as the company deliberately wound down non-strategic product lines. The narrowing of the GAAP net loss to $77.91 million from $291.48 million a year earlier underscored how sharply total operating expenses have been cut, falling more than 35% to $448.98 million. Adjusted EBITDA reached $83.94 million at a 19% margin, improving from 17% a year prior. Looking ahead, Unity guided Q2 2025 revenue of $415.00 million to $425.00 million and Adjusted EBITDA of $70.00 million to $75.00 million, with management pointing to Unity Vector's momentum and strong demand for Unity 6 as key growth levers.

Key Takeaways
  • Better cost control driving improved Adjusted EBITDA margin to 19%
  • Strong subscription revenue growth in Create Solutions
  • Earlier than expected Unity Vector rollout partially offsetting Grow Solutions declines
  • Significant reduction in operating expenses including restructuring costs
  • Stock-based compensation expense reduced significantly year-over-year

“The Company's first quarter results once again meaningfully exceeded expectations on both revenue and Adjusted EBITDA, highlighting our progress as we continue to build a culture of execution and discipline.”

Unity CEO, on the earnings call

Forward Guidance & Outlook

For Q2 2025, Unity guided revenue of $415 million to $425 million and Adjusted EBITDA of $70 million to $75 million. The company expects continued progress from its portfolio reset, with the early success of Unity Vector and strong demand for Unity 6 underpinning growth expectations. Management highlighted opportunities in the AR and VR gaming and entertainment market.

U YoY Financials

Q1 2025 vs Q1 2024 · SEC filings Q1 2024 Q1 2025
$0$200.0M$400.0M$460.4M$435.0MRevenue$316.0M$321.0MGross Profit$-77,125,030$-127,935,000Operating Income$-44,973,157$-77,907,000Net Income
$0$200.0M$400.0MRevenueGross ProfitOperating IncomeNet Income

U Revenue by Segment

Grow Solutions$285.0M−4.0%
Create Solutions$150.0M−8.0%

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