Unity (U) Stock Pops 17% on Best Quarter in Company History

TLDR

• Unity stock jumped 17% after Q2 revenue hit $546 million, up 24% year over year, beating estimates of $514.62 million
• Adjusted loss was $0.05 per share, better than the expected loss of $0.11 per share
• Unity Vector AI has surpassed a $1 billion annual revenue run rate two quarters ahead of schedule
• Q3 revenue guidance of $540M to $550M came in above the Wall Street consensus of $539.3M
• CFO says Unity now expects GAAP net income profitability in Q3 2026, one quarter earlier than previously forecast

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Unity Software posted its strongest quarter yet as a public company on Wednesday, sending the stock up as much as 17% in early trading. The stock was trading around $39.34, up over 10% at the time of writing.

Unity Software Inc., U

Q2 revenue came in at $546 million, up 24% year over year from $441 million. That topped Wall Street’s estimate of $514.62 million by a comfortable margin.

The company reported an adjusted loss of $0.05 per share. Analysts had expected a loss of $0.11 per share, so the beat was meaningful.

UNITY $U Q2’26 EARNINGS HIGHLIGHTS

🔹 Revenue: $546M (Est. $515M) 🟢; +24% YoY
🔹 Adj. EPS: $0.28 (Est. -$0.09) 🟢; +56% YoY
🔹 Adjusted EBITDA: $160M; +78% YoY
🔹 Free Cash Flow: $202M (Est. $149M) 🟢; +59% YoY

Q3 Guide:
🔹 Strategic Revenue: $540M-$550M
🔹 Strategic Grow… pic.twitter.com/ObgNFCwsFE

— Wall St Engine (@wallstengine) August 6, 2026

Strategic revenue, which strips out the ironSource Ads network and Supersonic publishing business, grew 38% year over year to $486 million.

Grow Solutions revenue rose 35% year over year to $389 million, driven by growth in the Unity Ads Network and Unity Vector AI. Create Solutions revenue edged up 2% year over year to $158 million.

Adjusted EBITDA for the quarter reached $160 million with a margin of 29%. That compares to $90 million and a 21% margin in Q2 2025. Free cash flow was $202 million, up from $127 million in the prior year period.

Unity Vector AI Passes $1 Billion Run Rate

CEO Matt Bromberg called it “arguably the best quarter in Unity’s history as a public company.” He pointed to the Unity Vector AI platform as the main driver.

Unity Vector has crossed a $1 billion annual revenue run rate, two quarters ahead of schedule. Bromberg said the company recently started feeding data from roughly three billion monthly players on the Unity runtime into Vector’s AI models, which he sees as a long-term competitive advantage.

“The flywheel we’ve constructed is spinning up,” Bromberg said.

Profitability Timeline Moves Up

For Q3, Unity guided for revenue of $540 million to $550 million, above the analyst consensus of $539.3 million. Adjusted EBITDA guidance came in at $185 million to $190 million, representing 69% to 74% growth year over year.

Management expects a sixth consecutive quarter of adjusted EBITDA margin expansion, with margins projected to improve another 400 basis points sequentially from Q2.

CFO Jarrod Yahes said Unity now expects to reach GAAP net income profitability in Q3 2026, one quarter earlier than previously anticipated.

Yahes added that the sale of the Supersonic business and the shutdown of the ironSource Ads network will improve margins in the second half of the year.

He described the moves as leaving Unity “a more focused company positioned for faster revenue growth and dramatically higher levels of profitability.”

Unity stock was one of the top trending tickers on Stocktwits following the earnings release.