Unity Stock Earnings Reports

Unity delivered a strong Q1 2026 with strategic revenue up 35% YoY, adjusted EBITDA of $138M (best in over two years) and adjusted EBITDA margin of 27% (up 800 bps YoY). Grow (ads/Vector) was the primary driver, with strategic Grow revenue of $279M (49% YoY) and Vector revenue up ~80% YoY with four consecutive quarters of ~15% sequential growth. Create revenue was steady at $154M (15% YoY), aided by product stability, price increases and strength in China and non‑game verticals. Unity launched the public beta of Unity AI (a Vector‑driven, project‑aware agent) and reports strong early engagement (70% of adopters still using it after 5 days). Runtime (in‑game sequential) data testing will graduate to live production models in Q2 and is expected to be a durable long‑term signal/catalyst rather than an immediate spike. Management guided Q2 strategic revenue $455M–$465M (total growth 29%–32%), Grow to grow ~50% YoY, and adjusted EBITDA $130M–$135M. Cash is strong ($2.15B), free cash flow improving, and management plans to pay down a $558M convertible due in November. Unity expects GAAP net income profitability by Q4 2026, driven by margin expansion, lower stock comp, and a rapid decline in M&A amortization. Management is prioritizing AI R&D (R&D up 9% YoY, AI R&D up 17% YoY), product launches (Unity commerce and other AI‑native products through 2026), and prudent capital allocation while exiting nonstrategic assets (sunsetting ironSource Ad Network; selling Supersonic). They acknowledge short‑term cloud cost variability tied to AI experiments but expect long‑term leverage as scale increases.