Unity Software (NYSE:U) Releases Earnings Results, Beats Estimates By $0.04 EPS

Unity Software (NYSE:U) released its quarterly earnings data on Wednesday. The company reported $0.24 earnings per share for the quarter, topping the consensus estimate of $0.20 by $0.04, FiscalAI reports. Unity Software had a negative net margin of 21.77% and a negative return on equity of 4.78%. The company had revenue of $503.09 million for the quarter, compared to analyst estimates of $490.64 million. During the same period in the previous year, the business earned ($0.30) EPS. Unity Software’s revenue for the quarter was up 10.1% compared to the same quarter last year.

Here are the key takeaways from Unity Software’s conference call:

• Vector ad product delivered mid‑teen sequential growth for a third straight quarter, was Unity’s largest Grow contributor (56% of Grow revenue), posted a January revenue record (≈+70% YoY) and is expected to exceed a $1 billion annual run rate by end of 2026.
• Unity plans to integrate its runtime/Developer Data Framework behavioral signal into Vector in Q2, which management says will compound model improvements and improve install volumes and ROAS over time.
• The legacy ironSource ad network is rapidly shrinking (forecasted to be <6% of total revenue in Q1), and Unity is displacing lower‑margin network revenue with higher‑quality AI platform revenue to boost long‑term growth and profitability.
• Create returned to growth (≈16% YoY ex‑nonstrategic revenue) with rapid Unity 6 adoption, strong China traction, a move to browser‑based collaborative authoring (Unity Studio) and an AI authoring beta at GDC aimed at expanding the addressable market and monetization paths.
• Financial momentum accelerated — Q4 Adjusted EBITDA of $125M (25% margin), 2025 free cash flow >$400M (+41%), reduced stock comp and a stronger balance sheet (> $2B cash, converted notes extended to 2030); Q1 guidance: $480–$490M revenue and continued margin expansion.

Unity Software Price Performance

NYSE:U traded down $0.43 during mid-day trading on Friday, hitting $19.22. 11,789,946 shares of the stock traded hands, compared to its average volume of 19,454,506. The business’s 50-day moving average price is $40.73 and its 200 day moving average price is $39.69. The company has a quick ratio of 2.78, a current ratio of 2.78 and a debt-to-equity ratio of 0.70. The company has a market cap of $8.22 billion, a PE ratio of -19.97, a price-to-earnings-growth ratio of 19.50 and a beta of 2.04. Unity Software has a 12-month low of $15.33 and a 12-month high of $52.15.

Insiders Place Their Bets

In other Unity Software news, Director Tomer Bar-Zeev sold 50,000 shares of the firm’s stock in a transaction on Friday, December 12th. The shares were sold at an average price of $47.00, for a total value of $2,350,000.00. Following the completion of the transaction, the director directly owned 873,146 shares of the company’s stock, valued at $41,037,862. This trade represents a 5.42% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. Also, COO Alexander Blum sold 1,988 shares of the stock in a transaction on Friday, November 28th. The stock was sold at an average price of $42.47, for a total value of $84,430.36. Following the completion of the sale, the chief operating officer owned 561,130 shares in the company, valued at $23,831,191.10. This trade represents a 0.35% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Over the last ninety days, insiders sold 1,338,021 shares of company stock worth $63,138,575. Company insiders own 3.61% of the company’s stock.

Hedge Funds Weigh In On Unity Software

Several institutional investors and hedge funds have recently bought and sold shares of the stock. Charles Schwab Investment Management Inc. lifted its position in Unity Software by 5.4% in the fourth quarter. Charles Schwab Investment Management Inc. now owns 2,488,103 shares of the company’s stock valued at $109,900,000 after purchasing an additional 128,147 shares during the last quarter. Vontobel Holding Ltd. boosted its position in Unity Software by 85.8% during the 4th quarter. Vontobel Holding Ltd. now owns 40,637 shares of the company’s stock valued at $1,795,000 after buying an additional 18,765 shares during the period. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC grew its holdings in Unity Software by 0.9% in the 4th quarter. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC now owns 734,371 shares of the company’s stock worth $32,437,000 after acquiring an additional 6,739 shares during the last quarter. Y Intercept Hong Kong Ltd increased its position in shares of Unity Software by 120.3% in the fourth quarter. Y Intercept Hong Kong Ltd now owns 97,874 shares of the company’s stock valued at $4,323,000 after acquiring an additional 53,450 shares during the period. Finally, Lord Abbett & CO. LLC raised its stake in shares of Unity Software by 76.1% during the fourth quarter. Lord Abbett & CO. LLC now owns 1,158,668 shares of the company’s stock valued at $51,178,000 after acquiring an additional 500,872 shares during the last quarter. 73.46% of the stock is currently owned by institutional investors.

Analysts Set New Price Targets

A number of equities analysts have commented on U shares. Wedbush reduced their price objective on shares of Unity Software from $37.00 to $30.00 and set an “outperform” rating for the company in a research report on Thursday. Freedom Capital upgraded Unity Software to a “strong-buy” rating in a report on Thursday, January 15th. Piper Sandler upgraded Unity Software from a “neutral” rating to an “overweight” rating and increased their target price for the stock from $43.00 to $59.00 in a research note on Thursday, December 11th. The Goldman Sachs Group decreased their price objective on Unity Software from $47.00 to $27.00 and set a “neutral” rating on the stock in a report on Thursday. Finally, Jefferies Financial Group raised their price target on shares of Unity Software from $49.00 to $55.00 and gave the stock a “buy” rating in a research report on Monday, January 5th. One equities research analyst has rated the stock with a Strong Buy rating, fourteen have issued a Buy rating, seven have given a Hold rating and two have issued a Sell rating to the company’s stock. Based on data from MarketBeat.com, the company currently has an average rating of “Moderate Buy” and an average target price of $39.29.

Unity Software News Summary

Here are the key news stories impacting Unity Software this week:

• Positive Sentiment: Q4 beat and improving profitability — Unity beat Q4 revenue and EPS expectations, delivered materially positive free cash flow and healthy adjusted EBITDA, signaling the business is becoming cash‑generative. Article Title
• Positive Sentiment: Vector (ad/AI platform) showing strong acceleration — management highlighted rapid ad‑revenue growth from Vector (January ad revenue cited as up ~72% YoY in commentary) and expects Vector to be a major growth driver. This supports upside potential if migration ramps as planned. Article Title
• Neutral Sentiment: Some analysts maintain upside despite cuts — several firms trimmed price targets but kept “buy/outperform” stances (Citigroup, BTIG, Wells Fargo among them), reflecting differing views on long‑term recovery vs. short‑term pain. Article Title
• Neutral Sentiment: Technical/valuation commentary — some commentators point to heavy selling and oversold technical conditions, framing the move as a potential buying opportunity for long‑term investors. Article Title
• Negative Sentiment: Weak near‑term guidance drove the sell‑off — Unity’s Q1 revenue guide missed consensus, triggering a large intraday drop as investors worried about demand and the pace of the platform transition. Article Title
• Negative Sentiment: Strategic product wind‑down creates a near‑term revenue hole — management is decommissioning lower‑margin legacy ad assets (IronSource), intentionally creating a temporary revenue gap while migrating customers to Vector, which increases short‑term execution risk. Article Title
• Negative Sentiment: Analyst downgrades/price‑target cuts — several firms (Goldman Sachs, Barclays, UBS and others) lowered price targets and/or moved to neutral, reflecting increased near‑term uncertainty and prompting further selling pressure. Article Title

About Unity Software

Unity Software is a leading provider of a real-time 3D development platform that enables creators across industries to design, build and operate interactive, real-time experiences. Originally focused on the game development market, Unity’s technology now extends into sectors such as film, automotive, architecture, engineering and construction, delivering immersive content for mobile, desktop, console, augmented reality and virtual reality devices. The company’s core offering comprises a suite of authoring tools, runtime engines and cloud services that streamline the creation and deployment of interactive 3D applications.

The Unity Editor serves as the central hub where developers design scenes, script behavior and iterate on assets.