Companies /Technology
Unity Software Inc
NYSE: U Software - Application
$43.34
▲ $1.94 (+4.69%) today
Markets closed · 6:58pm ET

Unity (U) Q1 2026 Earnings

Reported May 7, 2026, 7:03am ET · SEC source
$0.23
Miss −4.25%
EPS · est. $0.24
$508.2M
Beat +0.64%
Revenue · est. $505.0M
+5.7%
Beating market
U vs S&P since report
1 quarter
Consecutive EPS beats

How Did U Stock React to Q1 2026 Earnings?

% change · around the report
−10%−5%0+5%May 7May 8report 7:03am ETearnings+0.3%−4.2%
−10%−5%0+5%May 7May 8earnings+0.3%−4.2%
U −4.2%S&P 500 +0.3%
−10%−5%0+5%May 7May 8report 7:03am ETearnings+2.0%−4.2%
−10%−5%0+5%May 7May 8earnings+2.0%−4.2%
U −4.2%NASDAQ +2.0%
−8%−4%0May 6May 15report 7:03am ETearnings+0.7%−6.1%
−8%−4%0May 6May 15earnings+0.7%−6.1%
U −6.1%S&P 500 +0.7%
−8%−4%0+4%May 6May 15report 7:03am ETearnings+1.7%−6.1%
−8%−4%0+4%May 6May 15earnings+1.7%−6.1%
U −6.1%NASDAQ +1.7%
−2.02%
Day of report
+5.35%
Next session
+2.06%
One week
+6.40%
30 days

S&P 500 over the same 30 days: +0.75%.

Did U Beat Earnings? Q1 2026 Results

No. Unity reported Q1 2026 earnings of $0.23 a share on May 7, 2026, missing the $0.24 consensus estimate by 4.2%. Revenue was $508.2M against a $505.0M estimate.

Unity Software posted a mixed but broadly encouraging set of Q1 2026 results, delivering a modest revenue beat while falling just short on the bottom line, as $279 million in impairment charges tied to the sunset of the ironSource Ads Network clouded an otherwise improving operational picture. Revenue climbed 16.8% year-over-year to $508.24 million, edging past the $505.01 million consensus, while adjusted EPS of $0.23 came in slightly below the $0.24 estimate, snapping a four-consecutive-quarter streak of beating EPS consensus. The impairment charges pushed the GAAP net loss to $347 million, but adjusted EBITDA expanded sharply to $138.28 million, reflecting a 27% margin versus 19% a year ago, with the company's AI-driven Unity Vector advertising platform emerging as a key growth catalyst within the Grow Solutions segment. Free cash flow surged to $66.46 million from just $7.31 million in the prior-year period, underscoring improving cash generation. Looking ahead, Unity guided Q2 revenue of $505 million to $515 million and reiterated expectations for GAAP profitability by Q4 2026, offering investors a clearer path through the ongoing portfolio transformation.

Key Takeaways
  • Unity Ad Network growth driven by Unity Vector technology
  • Subscription revenue increases in Create Solutions
  • Continued cost control driving adjusted EBITDA margin expansion from 19% to 27%
  • Strategic revenue growth of 35% year-over-year

“We are delivering exceptional revenue growth and margin expansion while executing on the most exciting product roadmap in Unity's history.”

Unity CEO, on the earnings call

What Was Unity's Outlook in Q1 2026?

For Q2 2026, Unity guides total revenue of $505 million to $515 million; strategic revenue of $455 million to $465 million (up 29-32% YoY), comprising strategic Grow revenue of $302 million to $306 million (up 50-52% YoY) and strategic Create revenue of $154 million to $158 million (up 11-14% YoY excluding a $12 million one-time item in Q2 2025); and adjusted EBITDA of $130 million to $135 million (up 44-49% YoY). The company expects to achieve GAAP profitability by Q4 2026.

U YoY Financials

Q1 2026 vs Q1 2025 · SEC filings Q1 2025 Q1 2026
$0$200.0M$400.0M$435.0M$508.2MRevenue$321.0M$156.6MGross Profit
$0$200.0M$400.0MRevenueGross Profit
U income statement, Q1 2026 versus Q1 2025
Metric Q1 2026 Q1 2025 Year over year
Revenue $508.2M $435.0M +16.8%
Gross Profit $156.6M $321.0M −51.2%

U Revenue by Segment

Grow Solutions$352.0M+24.0%
Create Solutions$157.0M+4.0%

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