Companies /Technology

Unity Software Inc

NYSE: U Software - Application
$42.10
▼ $1.21 (−2.79%) today
Markets closed · 6:35am ET

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

Market Reaction

% 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%0+4%May 6May 15report 7:03am ETearnings+0.7%−6.1%
−8%−4%0+4%May 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

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

Forward Guidance & Outlook

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 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.