Companies /Technology

Unity Software Inc

NYSE: U Software - Application
$42.10
▼ $1.21 (−2.79%) today
Markets closed · 6:34am ET

Q2 2025 Earnings

Reported Aug 6, 2025, 7:05am ET · SEC source
$0.18
Beat +163.85%
EPS · est. $-0.28
$440.9M
Beat +3.34%
Revenue · est. $426.7M
+40.0%
Beating market
U vs S&P since report
1 quarter
Consecutive EPS beats

Market Reaction

% change · around the report
−7%0+7%+14%Aug 6Aug 7report 7:05am ETearnings+0.2%+0.4%
−7%0+7%+14%Aug 6Aug 7earnings+0.2%+0.4%
U +0.4%S&P 500 +0.2%
−7%0+7%+14%Aug 6Aug 7report 7:05am ETearnings+1.2%+0.4%
−7%0+7%+14%Aug 6Aug 7earnings+1.2%+0.4%
U +0.4%NASDAQ +1.2%
0+7%+14%Aug 5Aug 14report 7:05am ETearnings+2.1%+16.2%
0+7%+14%Aug 5Aug 14earnings+2.1%+16.2%
U +16.2%S&P 500 +2.1%
0+7%+14%Aug 5Aug 14report 7:05am ETearnings+3.0%+16.2%
0+7%+14%Aug 5Aug 14earnings+3.0%+16.2%
U +16.2%NASDAQ +3.0%
−5.95%
Day of report
+5.17%
Next session
+18.86%
One week
+42.54%
30 days

S&P 500 over the same 30 days: +2.54%.

Did U Beat Earnings? Q2 2025 Results

Unity Software delivered a standout second quarter, posting adjusted EPS of $0.18 against a consensus estimate of negative $0.28, a beat of 163.85%, while revenue of $440.94 million cleared expectations by 3.34% despite slipping 1.9% year-over-year. The key driver behind the outperformance was Unity Vector, the company's new AI platform, which fueled 15% sequential growth in the Unity Ad Network and pushed that product to represent 49% of total Grow Solutions revenue, helping offset broader softness in select advertising products. CEO Matt Bromberg characterized the quarter as an inflection point, a view reinforced by free cash flow surging to $126.65 million from $79.61 million a year ago and cash on hand reaching $1.70 billion. Shares rose notably following the report, reflecting investor enthusiasm for the platform's growth trajectory. Looking ahead, Unity guided Q3 revenue of $440 million to $450 million and Adjusted EBITDA of $90 million to $95 million, projecting mid-single digit sequential Grow revenue growth as Vector continues gaining traction.

Key Takeaways
  • Unity Ad Network grew 15% sequentially in Q2 and now represents 49% of total Grow Solutions revenue
  • Create Solutions benefited from approximately $12 million term license sale and subscription revenue increases
  • Continued cost discipline contributed to better-than-expected Adjusted EBITDA margin
  • Free cash flow surged to $127 million from $80 million in Q2 2024

“We believe the second quarter of 2025 will be remembered as an inflection point in the Unity story, where our commitment to accelerating product innovation and delivering for our customers translated to markedly better performance.”

Unity CEO, on the earnings call

Forward Guidance & Outlook

For Q3 2025, Unity expects revenue of $440 million to $450 million and Adjusted EBITDA of $90 million to $95 million. In Grow, the company expects mid-single digit sequential revenue growth from Q2 to Q3. In Create, a slight sequential decline from Q2 to Q3 is expected due to the impact of a large customer win in Q2. The company believes it is at an inflection point, with Unity Vector transforming growth prospects and continued cost discipline supporting margin improvement over time.

U YoY Financials

Q2 2025 vs Q2 2024 · SEC filings Q2 2024 Q2 2025
$0$200.0M$400.0M$449.3M$440.9MRevenue$340.6M$326.7MGross Profit$-109,711,752$-118,752,000Operating Income$-93,768,559$-107,365,000Net Income
$0$200.0M$400.0MRevenueGross ProfitOperating IncomeNet Income

U Revenue by Segment

Grow Solutions$287.0M−4.0%
Create Solutions$154.0M+2.0%

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