HB Wealth Management LLC boosted its holdings in Unity Software Inc. (NYSE:U – Free Report) by 10.8% during the 2nd quarter, according to the company in its most recent 13F filing with the Securities & Exchange Commission. The firm owned 274,554 shares of the company’s stock after buying an additional 26,762 shares during the period. HB Wealth Management LLC owned approximately 0.06% of Unity Software worth $7,847,000 as of its most recent SEC filing.
A number of other large investors also recently modified their holdings of the business. REAP Financial Group LLC acquired a new stake in shares of Unity Software in the fourth quarter worth $28,000. Larson Financial Group LLC boosted its holdings in Unity Software by 88.1% in the 3rd quarter. Larson Financial Group LLC now owns 728 shares of the company’s stock valued at $29,000 after purchasing an additional 341 shares during the period. IFP Advisors Inc acquired a new stake in Unity Software in the 3rd quarter worth $33,000. International Assets Investment Management LLC acquired a new stake in Unity Software in the 4th quarter worth $36,000. Finally, Summit Securities Group LLC bought a new position in shares of Unity Software during the 1st quarter worth about $54,000. 73.46% of the stock is currently owned by institutional investors and hedge funds.
Unity Software Stock Performance Shares of NYSE:U opened at $41.63 on Monday. The business’s fifty day moving average price is $36.58 and its two-hundred day moving average price is $28.44. Unity Software Inc. has a fifty-two week low of $16.78 and a fifty-two week high of $52.15. The stock has a market capitalization of $18.32 billion, a price-to-earnings ratio of -30.61, a price-to-earnings-growth ratio of 1.82 and a beta of 2.06. The company has a debt-to-equity ratio of 0.55, a current ratio of 2.03 and a quick ratio of 2.03.
Unity Software (NYSE:U – Get Free Report) last issued its quarterly earnings data on Thursday, August 6th. The company reported $0.28 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of ($0.11) by $0.39. Unity Software had a positive return on equity of 4.64% and a negative net margin of 28.97%.The company had revenue of $546.47 million during the quarter, compared to analysts’ expectations of $514.72 million. During the same period last year, the business earned $0.18 earnings per share. The business’s revenue was up 24.0% on a year-over-year basis. As a group, analysts predict that Unity Software Inc. will post 0.55 EPS for the current fiscal year. Insider Activity In other news, SVP Rebecca Boyden sold 1,032 shares of the firm’s stock in a transaction that occurred on Tuesday, August 25th. The shares were sold at an average price of $45.32, for a total transaction of $46,770.24. Following the completion of the sale, the senior vice president owned 308,413 shares of the company’s stock, valued at approximately $13,977,277.16. This trade represents a 0.33% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which is accessible through this link. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, CFO Jarrod Yahes sold 26,017 shares of Unity Software stock in a transaction that occurred on Tuesday, August 25th. The shares were sold at an average price of $45.31, for a total transaction of $1,178,830.27. Following the completion of the transaction, the chief financial officer owned 678,343 shares of the company’s stock, valued at $30,735,721.33. This trade represents a 3.69% decrease in their position. The disclosure for this sale is available in the SEC filing. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Over the last 90 days, insiders have sold 109,547 shares of company stock worth $4,884,202. Company insiders own 0.77% of the company’s stock.
Wall Street Analysts Forecast Growth Several equities analysts recently issued reports on U shares. Zacks Research upgraded Unity Software from a “hold” rating to a “strong-buy” rating in a research note on Monday, July 13th. Piper Sandler lifted their price target on shares of Unity Software from $45.00 to $55.00 and gave the stock an “overweight” rating in a research note on Friday, August 7th. Weiss Ratings raised shares of Unity Software from a “sell (e+)” rating to a “sell (d-)” rating in a report on Tuesday, August 4th. Benchmark raised shares of Unity Software from a “hold” rating to a “buy” rating and set a $50.00 price objective for the company in a report on Friday, August 7th. Finally, Wedbush upped their target price on shares of Unity Software from $32.00 to $36.00 and gave the company an “outperform” rating in a research note on Wednesday, July 22nd. Two research analysts have rated the stock with a Strong Buy rating, seventeen have issued a Buy rating, three have assigned a Hold rating and one has given a Sell rating to the company. According to MarketBeat.com, the stock currently has a consensus rating of “Moderate Buy” and a consensus target price of $45.16.
Read Our Latest Analysis on Unity Software
Unity Software Profile (Free Report)
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.
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Unity Software is transforming into a high-margin AI advertising platform, leveraging its engine's data advantage for sustainable growth. Strategic revenue, led by Unity Ads Network and Vector, is compounding at 38% year-over-year, while non-strategic lines are deliberately wound down. Profitability has arrived two quarters early, with adjusted EBITDA margin reaching 29% and guided to 33%, supported by robust free cash flow and a net cash position.
Caisse de depot et placement du Quebec bought a new stake in Unity Software Inc. (NYSE:U – Free Report) during the second quarter, according to its most recent disclosure with the Securities and Exchange Commission (SEC). The firm bought 36,400 shares of the company’s stock, valued at approximately $1,040,000.
Other hedge funds have also bought and sold shares of the company. Wellington Management Group LLP grew its stake in Unity Software by 58.7% in the 3rd quarter. Wellington Management Group LLP now owns 18,213,875 shares of the company’s stock worth $729,284,000 after buying an additional 6,734,285 shares in the last quarter. Geode Capital Management LLC raised its holdings in shares of Unity Software by 5.9% during the 4th quarter. Geode Capital Management LLC now owns 5,852,047 shares of the company’s stock valued at $258,547,000 after buying an additional 328,595 shares in the last quarter. Norges Bank purchased a new position in shares of Unity Software during the 4th quarter valued at about $230,285,000. Ameriprise Financial Inc. lifted its position in Unity Software by 37.8% in the 2nd quarter. Ameriprise Financial Inc. now owns 4,628,328 shares of the company’s stock worth $112,006,000 after buying an additional 1,270,798 shares during the last quarter. Finally, T. Rowe Price Investment Management Inc. lifted its position in Unity Software by 41.5% in the 4th quarter. T. Rowe Price Investment Management Inc. now owns 4,622,445 shares of the company’s stock worth $204,174,000 after buying an additional 1,355,847 shares during the last quarter. 73.46% of the stock is currently owned by institutional investors.
Wall Street Analysts Forecast Growth U has been the subject of several research reports. Zacks Research raised Unity Software from a “hold” rating to a “strong-buy” rating in a research note on Monday, July 13th. Wedbush lifted their price target on shares of Unity Software from $32.00 to $36.00 and gave the stock an “outperform” rating in a research note on Wednesday, July 22nd. Benchmark upgraded shares of Unity Software from a “hold” rating to a “buy” rating and set a $50.00 price objective for the company in a report on Friday, August 7th. Oppenheimer upped their price objective on shares of Unity Software from $38.00 to $47.00 and gave the company an “outperform” rating in a research note on Friday, August 7th. Finally, Wall Street Zen raised shares of Unity Software from a “hold” rating to a “buy” rating in a report on Saturday, August 8th. Two investment analysts have rated the stock with a Strong Buy rating, seventeen have given a Buy rating, three have issued a Hold rating and one has assigned a Sell rating to the company. According to data from MarketBeat, the company presently has a consensus rating of “Moderate Buy” and an average price target of $45.16.
View Our Latest Report on Unity Software Unity Software Trading Up 0.2% NYSE U opened at $43.40 on Monday. Unity Software Inc. has a fifty-two week low of $16.78 and a fifty-two week high of $52.15. The company has a debt-to-equity ratio of 0.55, a quick ratio of 2.03 and a current ratio of 2.03. The stock has a 50 day simple moving average of $35.17 and a two-hundred day simple moving average of $27.74. The stock has a market cap of $19.10 billion, a P/E ratio of -31.91, a price-to-earnings-growth ratio of 1.90 and a beta of 2.04.
Unity Software (NYSE:U – Get Free Report) last issued its quarterly earnings data on Thursday, August 6th. The company reported $0.28 earnings per share for the quarter, topping analysts’ consensus estimates of ($0.11) by $0.39. Unity Software had a positive return on equity of 4.64% and a negative net margin of 28.97%.The firm had revenue of $546.47 million for the quarter, compared to analyst estimates of $514.72 million. During the same period last year, the company earned $0.18 EPS. The business’s quarterly revenue was up 24.0% compared to the same quarter last year. On average, analysts forecast that Unity Software Inc. will post 0.55 earnings per share for the current year.
Insider Activity at Unity Software In other news, COO Alexander Blum sold 20,595 shares of the stock in a transaction that occurred on Tuesday, August 25th. The stock was sold at an average price of $45.31, for a total value of $933,159.45. Following the completion of the transaction, the chief operating officer owned 707,375 shares of the company’s stock, valued at approximately $32,051,161.25. This represents a 2.83% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, SVP Rebecca Berenice Boyden sold 1,032 shares of the stock in a transaction that occurred on Tuesday, August 25th. The stock was sold at an average price of $45.32, for a total value of $46,770.24. Following the completion of the transaction, the senior vice president directly owned 308,413 shares of the company’s stock, valued at $13,977,277.16. This represents a 0.33% decrease in their position. The disclosure for this sale is available in the SEC filing. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders sold a total of 65,991 shares of company stock valued at $2,989,081 in the last 90 days. 0.77% of the stock is owned by company insiders.
About Unity Software (Free Report)
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.
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Matthew S. Bromberg, President and Chief Executive Officer of Unity Software Inc. (U -0.41%), disposed of 16,383 shares of common stock on August 25, 2026, as disclosed in a recent SEC Form 4 filing.
Transaction summaryMetricValueTransaction value~$742,314Shares sold16,383Post-transaction shares (directly held)1,541,131Post-transaction value$69.34 millionTransaction value based on SEC Form 4 weighted average sale price ($45.31); post-transaction value based on August 25, 2026 market close ($44.99).
Key questionsWhat triggered the timing of this transaction?
The sale was executed automatically to fund tax withholding obligations linked to the vesting of restricted stock units (RSUs).How has the stock performed over the past year?
Unity Software shares have achieved a 13% total return over the 12-month period ending on the August 25, 2026 transaction date.Does the CEO maintain additional equity interests?
Beyond his direct holdings, Matthew S. Bromberg holds derivative securities that contribute to his total beneficial ownership.Company OverviewMetricValueShare Price (as of market close 2026-08-25)$44.99Market Capitalization$19.6 billionRevenue (TTM)$2.0 billionNet Income (TTM)-$586.9 millionCompany SnapshotUnity Software provides a foundational platform for developing and operating interactive, real-time 3D content, enabling users to create, deploy, and monetize dynamic 2D and 3D content across mobile devices, tablets, personal computers, gaming consoles, and augmented and virtual reality hardware.The company generates revenue through licensing its development platform, subscription services, and monetization solutions that enable developers to build and distribute interactive content while capturing value from end-user engagement.Unity serves a diverse professional base including content creators, software developers, game developers, and enterprises across industries seeking to develop immersive interactive experiences and real-time 3D applications.Unity Software is a leading provider of real-time 3D development and operating platform. The company maintains a substantial developer ecosystem and continues to expand its platform capabilities to address growing demand for interactive content across gaming, entertainment, and enterprise applications.
Despite current operating losses, Unity's strategic positioning in the high-growth 3D content creation market and its comprehensive platform offering provide a competitive foundation for long-term value creation.
What this transaction means for investorsUnity CEO Matthew Bromberg's Aug. 25 sale of company stock is not a cause for investor concern. It was a non-discretionary transaction executed specifically to satisfy tax withholding obligations resulting from the vesting of RSUs, and does not reflect the insider's view on the stock.
An RSU is a form of employee compensation where a company promises to give an employee shares of stock at a future date. When that vesting date arrives, as was the case here, a "sell to cover" transaction occurs to pay for the related taxes.
Post-disposition, Bromberg retains a sizable equity stake in Unity Software. He has 1.5 million directly held shares, ensuring his continued alignment with shareholder interests.
Unity Software's stock price rose after the company reported earnings results for the second quarter on Aug. 6. Revenue reached $546.5 million, a strong 24% year-over-year increase.
The sales growth contributed to a substantial improvement in its bottom line. Unity's Q2 net loss of $22.7 million was down from a loss of $107.4 million in the prior year. This positions the company to finally achieve profitability as soon as the third quarter. It also exited Q2 with a whopping $2.4 billion in cash on its balance sheet.
Robert Izquierdo has positions in Unity Software. The Motley Fool has positions in and recommends Unity Software. The Motley Fool has a disclosure policy.
Avala Global LP acquired a new stake in shares of Unity Software Inc. (NYSE:U – Free Report) during the second quarter, according to its most recent disclosure with the Securities & Exchange Commission. The fund acquired 2,187,605 shares of the company’s stock, valued at approximately $62,522,000. Unity Software makes up about 2.3% of Avala Global LP’s investment portfolio, making the stock its 20th largest position. Avala Global LP owned about 0.50% of Unity Software at the end of the most recent reporting period.
Several other large investors have also recently added to or reduced their stakes in the stock. Renaissance Technologies LLC acquired a new stake in shares of Unity Software during the 1st quarter valued at $54,534,000. Entropy Technologies LP acquired a new position in shares of Unity Software in the first quarter worth $1,985,000. Vanguard Group Inc. increased its stake in shares of Unity Software by 2.9% in the fourth quarter. Vanguard Group Inc. now owns 35,553,296 shares of the company’s stock worth $1,570,389,000 after acquiring an additional 996,685 shares during the last quarter. Nano Cap New Millennium Growth Fund L P acquired a new position in shares of Unity Software in the fourth quarter worth $3,710,000. Finally, Norges Bank purchased a new stake in shares of Unity Software during the fourth quarter worth $230,285,000. Institutional investors and hedge funds own 73.46% of the company’s stock.
Analyst Ratings Changes A number of analysts recently issued reports on U shares. Citizens Jmp lifted their price objective on Unity Software from $37.00 to $45.00 and gave the company a “market outperform” rating in a research report on Friday, August 7th. Wells Fargo & Company upped their target price on Unity Software from $36.00 to $48.00 and gave the stock an “overweight” rating in a research report on Friday, August 7th. BTIG Research raised their price target on Unity Software from $43.00 to $51.00 and gave the stock a “buy” rating in a research note on Thursday, August 6th. Citigroup lifted their price target on Unity Software from $40.00 to $48.00 and gave the company a “buy” rating in a report on Monday, August 10th. Finally, Piper Sandler boosted their price target on Unity Software from $45.00 to $55.00 and gave the company an “overweight” rating in a research note on Friday, August 7th. Two investment analysts have rated the stock with a Strong Buy rating, seventeen have issued a Buy rating, three have given a Hold rating and one has given a Sell rating to the company. According to data from MarketBeat.com, the company currently has an average rating of “Moderate Buy” and an average price target of $45.16.
Read Our Latest Report on U Unity Software Price Performance Shares of NYSE:U opened at $44.15 on Thursday. The stock has a market capitalization of $19.43 billion, a P/E ratio of -32.46, a P/E/G ratio of 1.97 and a beta of 2.04. The business has a 50-day moving average of $34.53 and a two-hundred day moving average of $27.50. Unity Software Inc. has a fifty-two week low of $16.78 and a fifty-two week high of $52.15. The company has a debt-to-equity ratio of 0.55, a current ratio of 2.03 and a quick ratio of 2.03.
Unity Software (NYSE:U – Get Free Report) last issued its quarterly earnings data on Thursday, August 6th. The company reported $0.28 EPS for the quarter, beating analysts’ consensus estimates of ($0.11) by $0.39. Unity Software had a positive return on equity of 4.64% and a negative net margin of 28.97%.The business had revenue of $546.47 million for the quarter, compared to analyst estimates of $514.72 million. During the same quarter in the prior year, the firm posted $0.18 EPS. The firm’s revenue for the quarter was up 24.0% on a year-over-year basis. On average, equities research analysts predict that Unity Software Inc. will post 0.55 EPS for the current fiscal year.
Insiders Place Their Bets In other news, SVP Rebecca Berenice Boyden sold 1,032 shares of Unity Software stock in a transaction that occurred on Tuesday, August 25th. The shares were sold at an average price of $45.32, for a total value of $46,770.24. Following the transaction, the senior vice president owned 308,413 shares of the company’s stock, valued at $13,977,277.16. This trade represents a 0.33% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, CEO Matthew S. Bromberg sold 16,383 shares of the business’s stock in a transaction on Tuesday, August 25th. The stock was sold at an average price of $45.31, for a total transaction of $742,313.73. Following the completion of the sale, the chief executive officer owned 1,541,131 shares of the company’s stock, valued at $69,828,645.61. The trade was a 1.05% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders sold 43,432 shares of company stock valued at $1,967,914 over the last 90 days. 0.77% of the stock is currently owned by company insiders.
Unity Software Profile (Free Report)
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.
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Algert Global LLC reduced its stake in shares of Unity Software Inc. (NYSE:U – Free Report) by 42.1% in the 2nd quarter, according to its most recent Form 13F filing with the Securities and Exchange Commission (SEC). The institutional investor owned 289,936 shares of the company’s stock after selling 210,668 shares during the quarter. Algert Global LLC owned 0.07% of Unity Software worth $8,286,000 as of its most recent SEC filing.
A number of other hedge funds and other institutional investors also recently made changes to their positions in U. Renaissance Technologies LLC bought a new stake in Unity Software during the 1st quarter worth approximately $54,534,000. Entropy Technologies LP bought a new position in Unity Software in the first quarter valued at about $1,985,000. Vanguard Group Inc. raised its stake in shares of Unity Software by 2.9% during the fourth quarter. Vanguard Group Inc. now owns 35,553,296 shares of the company’s stock worth $1,570,389,000 after buying an additional 996,685 shares during the last quarter. Nano Cap New Millennium Growth Fund L P bought a new position in shares of Unity Software in the 4th quarter worth $3,710,000. Finally, Norges Bank bought a new position in Unity Software during the 4th quarter worth approximately $230,285,000. 73.46% of the stock is owned by institutional investors.
Analyst Ratings Changes Several research firms have weighed in on U. HSBC upgraded Unity Software from a “hold” rating to a “buy” rating and set a $47.10 target price on the stock in a report on Friday, August 7th. Oppenheimer boosted their price target on Unity Software from $38.00 to $47.00 and gave the stock an “outperform” rating in a research report on Friday, August 7th. Barclays upped their price objective on Unity Software from $28.00 to $33.00 and gave the stock an “equal weight” rating in a research note on Friday, May 8th. Bank of America upgraded shares of Unity Software from a “neutral” rating to a “buy” rating and boosted their price objective for the stock from $30.00 to $50.00 in a research note on Friday, August 7th. Finally, BTIG Research boosted their price target on Unity Software from $43.00 to $51.00 and gave the stock a “buy” rating in a research report on Thursday, August 6th. Two analysts have rated the stock with a Strong Buy rating, seventeen have issued a Buy rating, three have assigned a Hold rating and one has assigned a Sell rating to the company. Based on data from MarketBeat, the stock has a consensus rating of “Moderate Buy” and a consensus price target of $45.16.
Get Our Latest Stock Analysis on U Insider Activity In related news, SVP Rebecca Berenice Boyden sold 1,032 shares of the stock in a transaction that occurred on Tuesday, August 25th. The shares were sold at an average price of $45.32, for a total value of $46,770.24. Following the completion of the transaction, the senior vice president owned 308,413 shares of the company’s stock, valued at $13,977,277.16. This represents a 0.33% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, CFO Jarrod Yahes sold 26,017 shares of the stock in a transaction on Tuesday, August 25th. The shares were sold at an average price of $45.31, for a total value of $1,178,830.27. Following the completion of the transaction, the chief financial officer owned 678,343 shares of the company’s stock, valued at $30,735,721.33. The trade was a 3.69% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The sale was made to cover tax withholding obligations related to the vesting of equity awards. In the last three months, insiders have sold 43,432 shares of company stock worth $1,967,914. Corporate insiders own 0.77% of the company’s stock.
Unity Software Stock Down 1.9% Shares of NYSE U opened at $44.15 on Thursday. The company has a debt-to-equity ratio of 0.55, a quick ratio of 2.03 and a current ratio of 2.03. Unity Software Inc. has a 52 week low of $16.78 and a 52 week high of $52.15. The stock has a market capitalization of $19.43 billion, a P/E ratio of -32.46, a PEG ratio of 1.97 and a beta of 2.04. The stock’s fifty day moving average is $34.53 and its 200 day moving average is $27.50.
Unity Software (NYSE:U – Get Free Report) last posted its quarterly earnings data on Thursday, August 6th. The company reported $0.28 earnings per share for the quarter, topping the consensus estimate of ($0.11) by $0.39. The business had revenue of $546.47 million during the quarter, compared to analysts’ expectations of $514.72 million. Unity Software had a negative net margin of 28.97% and a positive return on equity of 4.64%. Unity Software’s revenue was up 24.0% compared to the same quarter last year. During the same quarter in the prior year, the business posted $0.18 earnings per share. Sell-side analysts forecast that Unity Software Inc. will post 0.55 earnings per share for the current fiscal year.
Unity Software Profile (Free Report)
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.
Read More Five stocks we like better than Unity Software Williams-Sonoma’s Quarter Gave Bulls More Than Just a Beat-and-Raise Alcoa’s Gallium Project Opens a New Door Beyond Aluminum Oura’s $16 Billion IPO Could Put a New Price on Wearable Tech Can Tesla’s Flying Roadster Distract From Its Real Risks? Want to see what other hedge funds are holding U? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Unity Software Inc. (NYSE:U – Free Report).
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Jarrod Yahes, SVP and Chief Financial Officer of Unity Software Inc. (U -0.41%), reported the sale of 26,017 shares of common stock on Aug. 25, 2026, according to a recent SEC Form 4 filing.
Transaction summaryMetricValueTransaction value$1.2 millionShares sold26,017Post-transaction shares (directly held)678,343Post-transaction value$30.52 millionTransaction value based on SEC Form 4 weighted average sale price ($45.31); post-transaction value based on Aug. 25, 2026, market close ($44.99).
Key questionsWhat was the primary driver behind this disposition of shares?
The transaction was a non-discretionary sale executed specifically to fund tax withholding requirements triggered by the vesting of equity awards. This type of automated execution is common for executives managing the fiscal impact of their compensation packages.What is the scale of the insider's remaining equity position?
Following the sale, the CFO retains direct ownership of 678,343 shares of common stock. At the Aug. 25, 2026, market close price of $44.99, this direct stake is valued at approximately $30.52 million.How does this sale relate to the company's broader market capitalization?
Unity Software maintains a market capitalization of $19.6 billion as of late August 2026. Total insider ownership across the firm stands at approximately 0.16% of outstanding shares.In what business context does Unity Software operate?
The San Francisco-based company provides a platform for creating and operating real-time 3D content. Developers and creators utilize its software to build applications for mobile devices, gaming consoles, and augmented reality hardware.Company OverviewMetricValueShare Price (as of market close 2026-08-25)$44.99Market Capitalization$19.6 billionRevenue (TTM)$2.0 billionNet Income (TTM)-$586.9 millionCompany SnapshotUnity Software provides a foundational platform for developing and operating interactive, real-time 3D content, enabling users to create, deploy, and monetize dynamic 2D and 3D content across mobile devices, tablets, personal computers, gaming consoles, and augmented and virtual reality hardware.The company generates revenue through licensing its development platform, subscription services, and monetization solutions that enable developers to build and distribute interactive content while capturing value from end-user engagement.Unity serves a diverse professional base, including content creators, software developers, game developers, and enterprises across industries seeking to develop immersive interactive experiences and real-time 3D applications.Unity Software is a leading provider of real-time 3D development and operating platform with a market capitalization of $19.6 billion and TTM revenues of $2.0 billion. The company maintains a substantial developer ecosystem and continues to expand its platform capabilities to address growing demand for interactive content across gaming, entertainment, and enterprise applications. Despite current operating losses, Unity's strategic positioning in the high-growth 3D content creation market and its comprehensive platform offering provide a competitive foundation for long-term value creation.
What this transaction means for investorsAlthough Jarrod Yahes's sale of Unity shares might spark concerns at first glance, this is probably not a move that should set off investors.
As stated in the Form 4, Yahes sold some shares to cover tax withholding obligations, a common move when an insider's equity awards vest. Moreover, the sale amounted to about 4% of his Unity holdings, implying an intent to minimize the impact of the vesting on his position in the tech stock.
A closer look at the stock could explain why Yahes wants to keep most of his shares. Unity stock has traded in a range since the 2022 bear market and has consistently reported losses.
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Nonetheless, after making only modest gains in 2025, analysts forecast a 20% increase in revenue in 2026. Its AI-powered platform Vector has renewed interest in its software development ecosystem.
Moreover, the price-to-sales (P/S) ratio, which once topped 50 at the height of the 2021 bull market, now stands at 9.5. Considering its valuation and the aforementioned revenue growth, investors could have the catalyst needed to spark a long-awaited recovery in Unity stock.
Will Healy has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Unity Software. The Motley Fool has a disclosure policy.
The recommendations of Wall Street analysts are often relied on by investors when deciding whether to buy, sell, or hold a stock. Media reports about these brokerage-firm-employed (or sell-side) analysts changing their ratings often affect a stock's price. Do they really matter, though?
Let's take a look at what these Wall Street heavyweights have to say about Unity Software Inc. (U - Free Report) before we discuss the reliability of brokerage recommendations and how to use them to your advantage.
Unity Software currently has an average brokerage recommendation (ABR) of 1.36, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 25 brokerage firms. An ABR of 1.36 approximates between Strong Buy and Buy.
Of the 25 recommendations that derive the current ABR, 20 are Strong Buy and one is Buy. Strong Buy and Buy respectively account for 80% and 4% of all recommendations.
Brokerage Recommendation Trends for U
Check price target & stock forecast for Unity Software here>>>
The ABR suggests buying Unity Software, but making an investment decision solely on the basis of this information might not be a good idea. According to several studies, brokerage recommendations have little to no success guiding investors to choose stocks with the most potential for price appreciation.
Are you wondering why? The vested interest of brokerage firms in a stock they cover often results in a strong positive bias of their analysts in rating it. Our research shows that for every "Strong Sell" recommendation, brokerage firms assign five "Strong Buy" recommendations.
In other words, their interests aren't always aligned with retail investors, rarely indicating where the price of a stock could actually be heading. Therefore, the best use of this information could be validating your own research or an indicator that has proven to be highly successful in predicting a stock's price movement.
Zacks Rank, our proprietary stock rating tool with an impressive externally audited track record, categorizes stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), and is an effective indicator of a stock's price performance in the near future. Therefore, using the ABR to validate the Zacks Rank could be an efficient way of making a profitable investment decision.
ABR Should Not Be Confused With Zacks RankIn spite of the fact that Zacks Rank and ABR both appear on a scale from 1 to 5, they are two completely different measures.
The ABR is calculated solely based on brokerage recommendations and is typically displayed with decimals (example: 1.28). In contrast, the Zacks Rank is a quantitative model allowing investors to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5.
It has been and continues to be the case that analysts employed by brokerage firms are overly optimistic with their recommendations. Because of their employers' vested interests, these analysts issue more favorable ratings than their research would support, misguiding investors far more often than helping them.
On the other hand, earnings estimate revisions are at the core of the Zacks Rank. And empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
Furthermore, the different grades of the Zacks Rank are applied proportionately across all stocks for which brokerage analysts provide earnings estimates for the current year. In other words, at all times, this tool maintains a balance among the five ranks it assigns.
There is also a key difference between the ABR and Zacks Rank when it comes to freshness. When you look at the ABR, it may not be up-to-date. Nonetheless, since brokerage analysts constantly revise their earnings estimates to reflect changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in predicting future stock prices.
Is U Worth Investing In?Looking at the earnings estimate revisions for Unity Software, the Zacks Consensus Estimate for the current year has increased 56.1% over the past month to $1.21.
Analysts' growing optimism over the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates higher, could be a legitimate reason for the stock to soar in the near term.
The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #2 (Buy) for Unity Software. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Therefore, the Buy-equivalent ABR for Unity Software may serve as a useful guide for investors.
It doesn't matter your age or experience: taking full advantage of the stock market and investing with confidence are common goals for all investors. Luckily, Zacks Premium offers several different ways to do both.
The research service features daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, all of which will help you become a smarter, more confident investor.
Zacks Premium includes access to the Zacks Style Scores as well.
What are the Zacks Style Scores? Developed alongside the Zacks Rank, the Zacks Style Scores are a group of complementary indicators that help investors pick stocks with the best chances of beating the market over the next 30 days.
Each stock is given an alphabetic rating of A, B, C, D or F based on their value, growth, and momentum qualities. With this system, an A is better than a B, a B is better than a C, and so on, meaning the better the score, the better chance the stock will outperform.
The Style Scores are broken down into four categories:
Value ScoreFor value investors, it's all about finding good stocks at good prices, and discovering which companies are trading under their true value before the broader market catches on. The Value Style Score utilizes ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to help pick out the most attractive and discounted stocks.
Growth ScoreGrowth investors are more concerned with a stock's future prospects, and the overall financial health and strength of a company. Thus, the Growth Style Score analyzes characteristics like projected and historic earnings, sales, and cash flow to find stocks that will see sustainable growth over time.
Momentum ScoreMomentum investors, who live by the saying "the trend is your friend," are most interested in taking advantage of upward or downward trends in a stock's price or earnings outlook. Utilizing one-week price change and the monthly percentage change in earnings estimates, among other factors, the Momentum Style Score can help determine favorable times to buy high-momentum stocks.
VGM ScoreIf you want a combination of all three Style Scores, then the VGM Score will be your friend. It rates each stock on their combined weighted styles, helping you find the companies with the most attractive value, best growth forecast, and most promising momentum. It's also one of the best indicators to use with the Zacks Rank.
How Style Scores Work with the Zacks Rank The Zacks Rank is a proprietary stock-rating model that harnesses the power of earnings estimate revisions, or changes to a company's earnings expectations, to help investors build a successful portfolio.
Investors can count on the Zacks Rank's success, with #1 (Strong Buy) stocks producing an unmatched +23.94% average annual return since 1988, more than double the S&P 500's performance. But the model rates a large number of stocks, and there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.
With more than 800 top-rated stocks to choose from, it can certainly feel overwhelming to pick the ones that are right for you and your investing journey.
That's where the Style Scores come in.
To maximize your returns, you want to buy stocks with the highest probability of success. This means picking stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you find yourself looking at stocks with a #3 (Hold) rank, make sure they have Scores of A or B as well to ensure as much upside potential as possible.
The direction of a stock's earnings estimate revisions should always be a key factor when choosing which stocks to buy, since the Scores were created to work together with the Zacks Rank.
For instance, a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one that boasts Scores of A and B, still has a downward-trending earnings forecast, and a much greater likelihood its share price will decline as well.
Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.
Stock to Watch: Unity Software Inc. (U - Free Report) Unity Software Inc. provides a platform to develop, deploy and grow games and interactive 3D experiences across mobile, PC, console and extended reality. Its software supports creators through the full content lifecycle, including prototyping, real-time rendering, live operations, user acquisition and monetization. San Francisco, CA-based Unity markets solutions globally through direct and indirect channels with field sales in North America, China, France, the United Kingdom, Israel, Japan and South Korea.
U is a #2 (Buy) on the Zacks Rank, with a VGM Score of B.
Momentum investors should take note of this Computer and Technology stock. U has a Momentum Style Score of A, and shares are up 60.8% over the past four weeks.
For fiscal 2026, five analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.18 to $1.21 per share. U boasts an average earnings surprise of +12.5%.
With a solid Zacks Rank and top-tier Momentum and VGM Style Scores, U should be on investors' short list.
Momentum investing revolves around the idea of following a stock's recent trend in either direction. In "long context," investors will be essentially be "buying high, but hoping to sell even higher." With this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving that way. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.
Even though momentum is a popular stock characteristic, it can be tough to define. Debate surrounding which are the best and worst metrics to focus on is lengthy, but the Zacks Momentum Style Score, part of the Zacks Style Scores, helps address this issue for us.
Below, we take a look at Unity Software Inc. (U - Free Report) , which currently has a Momentum Style Score of A. We also discuss some of the main drivers of the Momentum Style Score, like price change and earnings estimate revisions.
It's also important to note that Style Scores work as a complement to the Zacks Rank, our stock rating system that has an impressive track record of outperformance. Unity Software Inc. currently has a Zacks Rank of #2 (Buy). Our research shows that stocks rated Zacks Rank #1 (Strong Buy) and #2 (Buy) and Style Scores of "A or B" outperform the market over the following one-month period.
You can see the current list of Zacks #1 Rank Stocks here >>>
Set to Beat the Market?Let's discuss some of the components of the Momentum Style Score for U that show why this company shows promise as a solid momentum pick.
Looking at a stock's short-term price activity is a great way to gauge if it has momentum, since this can reflect both the current interest in a stock and if buyers or sellers have the upper hand at the moment. It's also helpful to compare a security to its industry; this can show investors the best companies in a particular area.
For U, shares are up 7.56% over the past week while the Zacks Internet - Software industry is up 1.04% over the same time period. Shares are looking quite well from a longer time frame too, as the monthly price change of 56.48% compares favorably with the industry's 4.38% performance as well.
Considering longer term price metrics, like performance over the last three months or year, can be advantageous as well. Over the past quarter, shares of Unity Software Inc. have risen 74.6%, and are up 25.54% in the last year. In comparison, the S&P 500 has only moved 4.19% and 20.55%, respectively.
Investors should also take note of U's average 20-day trading volume. Volume is a useful item in many ways, and the 20-day average establishes a good price-to-volume baseline; a rising stock with above average volume is generally a bullish sign, whereas a declining stock on above average volume is typically bearish. Right now U is averaging 12,448,661 shares for the last 20 days..
Earnings OutlookThe Zacks Momentum Style Score also takes into account trends in estimate revisions, in addition to price changes. Please note that estimate revision trends remain at the core of Zacks Rank as well. A nice path here can help show promise, and we have recently been seeing that with U.
Over the past two months, 5 earnings estimates moved higher compared to none lower for the full year. These revisions helped boost U's consensus estimate, increasing from $1.03 to $1.21 in the past 60 days. Looking at the next fiscal year, 6 estimates have moved upwards while there have been no downward revisions in the same time period.
Bottom LineGiven these factors, it shouldn't be surprising that U is a #2 (Buy) stock and boasts a Momentum Score of A. If you're looking for a fresh pick that's set to soar in the near-term, make sure to keep Unity Software Inc. on your short list.
Unity Software Inc. (U - Free Report) could be a solid addition to your portfolio given a notable revision in the company's earnings estimates. While the stock has been gaining lately, the trend might continue since its earnings outlook is still improving.
The rising trend in estimate revisions, which is a result of growing analyst optimism on the earnings prospects of this company, should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Our stock rating tool -- the Zacks Rank -- has this insight at its core.
The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.
Consensus earnings estimates for the next quarter and full year have moved considerably higher for Unity Software Inc., as there has been strong agreement among the covering analysts in raising estimates.
The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate:
12 Month EPS
Current-Quarter Estimate RevisionsThe company is expected to earn $0.29 per share for the current quarter, which represents a year-over-year change of +45.0%.
Over the last 30 days, the Zacks Consensus Estimate for Unity Software has increased 11.48% because one estimate has moved higher compared to no negative revisions.
Current-Year Estimate RevisionsFor the full year, the earnings estimate of $1.09 per share represents a change of +26.7% from the year-ago number.
The revisions trend for the current year also appears quite promising for Unity Software, with two estimates moving higher over the past month compared to no negative revisions. The consensus estimate has also received a boost over this time frame, increasing 10.4%.
Favorable Zacks RankThanks to promising estimate revisions, Unity Software currently carries a Zacks Rank #2 (Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision.
You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.
Bottom LineWhile strong estimate revisions for Unity Software have attracted decent investments and pushed the stock 52.5% higher over the past four weeks, further upside may still be left in the stock. So, you may consider adding it to your portfolio right away.
Analyst’s Disclosure: I/we have a beneficial long position in the shares of APP either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
Unity Software Inc. (U - Free Report) reached a significant support level, and could be a good pick for investors from a technical perspective. Recently, U's 50-day simple moving average broke out above its 200-day moving average; this is known as a "golden cross."
A golden cross is a technical chart pattern that can signify a potential bullish breakout. It's formed from a crossover involving a security's short-term moving average breaking above a longer-term moving average, with the most common moving averages being the 50-day and the 200-day, since bigger time periods tend to form stronger breakouts.
Golden crosses have three key stages that investors look out for. It starts with a downtrend in a stock's price that eventually bottoms out, followed by the stock's shorter moving average crossing over its longer moving average and triggering a trend reversal. The final stage is when a stock continues the upward climb to higher prices.
A golden cross contrasts with a death cross, another widely-followed chart pattern that suggests bearish momentum could be on the horizon.
U could be on the verge of a breakout after moving 59.5% higher over the last four weeks. Plus, the company is currently a #2 (Buy) on the Zacks Rank.
The bullish case solidifies once investors consider U's positive earnings outlook. For the current quarter, no earnings estimate has been cut compared to 2 revisions higher in the past 60 days. The Zacks Consensus Estimate has increased too.
With a winning combination of earnings estimate revisions and hitting a key technical level, investors should keep their eye on U for more gains in the near future.
Handelsbanken Fonder AB raised its position in shares of Unity Software Inc. (NYSE: U) by 12.2% during the undefined quarter, according to its most recent disclosure with the Securities and Exchange Commission. The institutional investor owned 104,100 shares of the company's stock after buying an additional 11,300 shares during the quarter. Handelsbanken Fonder
Bank of America Corp DE lowered its stake in shares of Unity Software Inc. (NYSE:U – Free Report) by 58.5% in the first quarter, according to its most recent 13F filing with the SEC. The fund owned 1,359,999 shares of the company’s stock after selling 1,917,401 shares during the period. Bank of America Corp DE owned approximately 0.31% of Unity Software worth $29,838,000 as of its most recent SEC filing.
A number of other hedge funds and other institutional investors have also recently added to or reduced their stakes in the stock. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC lifted its stake in Unity Software by 5.9% during the 1st quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 813,176 shares of the company’s stock valued at $15,930,000 after acquiring an additional 45,481 shares in the last quarter. Focus Partners Wealth purchased a new position in Unity Software during the 1st quarter worth $260,000. Northwestern Mutual Wealth Management Co. grew its stake in shares of Unity Software by 28.9% in the 2nd quarter. Northwestern Mutual Wealth Management Co. now owns 5,542 shares of the company’s stock worth $134,000 after acquiring an additional 1,241 shares in the last quarter. California Public Employees Retirement System raised its holdings in shares of Unity Software by 11.3% in the second quarter. California Public Employees Retirement System now owns 520,774 shares of the company’s stock valued at $12,603,000 after purchasing an additional 53,015 shares during the last quarter. Finally, Sei Investments Co. raised its holdings in shares of Unity Software by 1,135.6% in the second quarter. Sei Investments Co. now owns 224,715 shares of the company’s stock valued at $5,438,000 after purchasing an additional 206,529 shares during the last quarter. 73.46% of the stock is owned by institutional investors.
Insider Transactions at Unity Software In other news, COO Alexander Blum sold 19,009 shares of the business’s stock in a transaction on Tuesday, May 26th. The shares were sold at an average price of $27.18, for a total transaction of $516,664.62. Following the completion of the transaction, the chief operating officer directly owned 730,069 shares in the company, valued at $19,843,275.42. The trade was a 2.54% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, CFO Jarrod Yahes sold 24,021 shares of the company’s stock in a transaction on Tuesday, May 26th. The stock was sold at an average price of $27.18, for a total transaction of $652,890.78. Following the completion of the transaction, the chief financial officer directly owned 704,360 shares in the company, valued at approximately $19,144,504.80. The trade was a 3.30% decrease in their position. The SEC filing for this sale provides additional information. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Over the last 90 days, insiders sold 198,321 shares of company stock worth $5,390,783. 0.77% of the stock is owned by corporate insiders.
Wall Street Analyst Weigh In Several equities research analysts have commented on the stock. Needham & Company LLC increased their price objective on shares of Unity Software from $40.00 to $54.00 and gave the company a “buy” rating in a research note on Friday, August 7th. BTIG Research boosted their target price on Unity Software from $43.00 to $51.00 and gave the stock a “buy” rating in a research note on Thursday, August 6th. Weiss Ratings raised Unity Software from a “sell (e+)” rating to a “sell (d-)” rating in a report on Tuesday, August 4th. UBS Group reaffirmed an “outperform” rating on shares of Unity Software in a research report on Friday, August 7th. Finally, HSBC upgraded Unity Software from a “hold” rating to a “buy” rating and set a $47.10 price target on the stock in a report on Friday, August 7th. Two research analysts have rated the stock with a Strong Buy rating, seventeen have given a Buy rating, three have given a Hold rating and one has given a Sell rating to the stock. According to MarketBeat, the company currently has a consensus rating of “Moderate Buy” and an average price target of $45.16.
Read Our Latest Research Report on Unity Software
Unity Software Stock Performance Unity Software stock opened at $46.33 on Friday. Unity Software Inc. has a 1-year low of $16.78 and a 1-year high of $52.15. The company has a current ratio of 2.03, a quick ratio of 1.95 and a debt-to-equity ratio of 0.55. The firm has a market capitalization of $20.39 billion, a PE ratio of -34.07, a price-to-earnings-growth ratio of 3.16 and a beta of 2.04. The firm’s 50 day simple moving average is $31.58 and its 200 day simple moving average is $26.79.
About Unity Software (Free Report)
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.
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TINTON FALLS, N.J.--(BUSINESS WIRE)--Jersey Mike's Subs Inc. ("Jersey Mike's" or the "Company") (NYSE: JMKE) today announced the appointment of Matthew Bromberg to its Board of Directors, effective July 29, 2026. Mr. Bromberg currently serves as President and Chief Executive Officer of Unity Software, Inc. (NYSE: U), where he leads the company's global strategy and operations, and brings extensive experience across technology, consumer businesses, and organizational growth. “Matt is an accompli.
Uber Stock Lags in 2026, But Cash Flow and AV Bets Fuel UpsideUnity Software NYSE: U reported what Chief Executive Officer Matt Bromberg described as “arguably the best quarter in Unity’s history as a public company,” driven by accelerating growth in its Vector advertising platform, expanding profitability and continued product development centered on artificial intelligence.
For the second quarter of 2026, Unity reported strategic revenue growth of 38% and adjusted EBITDA growth of 77%, according to Chief Financial Officer Jarrod Yahes. Adjusted EBITDA totaled $160 million, while adjusted EBITDA margin reached 29%, an increase of 800 basis points from a year earlier.
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GLP-1 Demand Is Creating a New Dividend Angle in These 4 Logistics StocksUnity also generated $202 million of free cash flow in the quarter, up 59% year over year, bringing its cash balance to $2.36 billion. Yahes said the company moved from a net-debt position to a net-cash position during the period and plans to repay its 2026 convertible note in November.
Vector exceeds growth expectations The company’s performance-marketing product, Unity Vector, was the primary driver of quarterly momentum. Bromberg said Vector grew 23% sequentially in the second quarter, nearly double Unity’s prior expectation for 12% to 13% quarter-over-quarter growth. He said the platform reached an annual run rate of “substantially over $1 billion,” two quarters ahead of the company’s expectations.
MarketBeat Week in Review – 07/27- 07/31Yahes said strategic Grow revenue was $329 million, up 63% from the prior year. The wind-down of the ironSource ad network had only a negligible impact on Vector’s expansion, contributing roughly $3 million of Vector revenue growth from former ironSource customers during the quarter, he said.
Unity attributed the advertising business’s performance to product updates, improved data and ongoing model enhancements. The company said it deployed more than 20 major Vector updates in the second quarter, including expanded day-28 return-on-ad-spend capabilities for in-app advertising and hybrid campaigns.
Day-28 ROAS campaigns measure advertiser returns over a longer period than Unity’s standard seven-day product. Bromberg said spending on day-28 campaigns increased nearly threefold from the first quarter, with more than 25% of Unity’s advertiser base adopting the approach.
Unity also began incorporating signals from its runtime into Vector’s AI models near the end of the second quarter. Bromberg said Unity’s runtime reaches approximately 3 billion people each month who play games built with Unity. While he characterized the initiative as early, he said the initial results were encouraging and could represent a durable competitive advantage for the company.
Create business and Unity 7 roadmap Unity’s Create business also returned to growth. Yahes said Create strategic revenue was $157 million, up 14% year over year excluding a one-time revenue item in the prior-year period. He cited higher average revenue per user, price increases, minimum annual customer commitments and growth in China as contributing factors.
At its Unite conference in Seoul, Unity announced Unity 7, a new version of its game-development software scheduled to enter beta in the fourth quarter of 2026 and launch fully in the first quarter of 2027.
Bromberg said Unity 7 is intended to enable developers, artists, producers and coding agents to collaborate across the game-development process. Unity has made its model context protocol free and opened its application programming interface, allowing developers to use command-line tools and coding agents within their own workflows.
“This isn’t just another engine upgrade for us,” Bromberg said during the question-and-answer session. He said the product was re-architected to support collaboration among creators and coding agents, while retaining compatibility with Unity 6 projects.
The company expects the broader authoring platform to connect game creators with downstream services including Vector, commerce offerings and live-game operations. Bromberg said these services will be configured automatically under the Unity 7 framework, with no additional software development kits or engineering time required.
Commerce, Netflix partnership and portfolio changes Unity said its Commerce product became generally available June 30. Bromberg said the offering enables game publishers to support direct-to-consumer purchases without managing separate software development kits or storefronts. He said the company sees three main benefits: helping publishers avoid high fees, gaining visibility into purchase-behavior data that can improve advertising models, and generating a smaller economic benefit for Unity over time.
The company also announced a multiyear partnership with Netflix to support Netflix’s multiplatform games ecosystem using the Unity engine. Bromberg said Unity will invest in supporting Netflix’s gaming initiatives and helping developers build games for the platform.
Separately, Yahes said Unity completed the sale of its Supersonic business to Tripledot Studios on Aug. 4. Unity substantially completed the closure of the ironSource ad network, effective April 30. Yahes said the actions should benefit margins in the second half of 2026 and further focus the company on faster-growing and more profitable businesses.
Third-quarter outlook For the third quarter, Unity forecast strategic revenue of $540 million to $550 million, representing year-over-year growth of 44% to 47%. The company expects Grow Solutions revenue growth of 68% to 70%, supported by continued Vector performance, and Create Solutions growth of 7% to 10%.
Unity expects Vector to grow 19% to 21% sequentially in the third quarter. It also forecast approximately $20 million in non-strategic revenue, primarily from Supersonic’s contribution in July before the sale closed.
The company projected adjusted EBITDA of $185 million to $190 million, implying a 33% margin and year-over-year adjusted EBITDA growth of 69% to 74%. Yahes said Unity now expects to achieve GAAP net-income profitability in the third quarter of 2026, one quarter earlier than its prior expectation for the fourth quarter.
About Unity Software (NYSE:U)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.
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Should You Invest $1,000 in Unity Software Right Now?Before you consider Unity Software, you'll want to hear this.
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Unity Software Inc (NYSE:U) shares moved higher on Friday after analysts at Wedbush and Bank of America raised their outlooks for the company, citing stronger-than-expected growth in its Vector advertising platform and the potential for further gains from the integration of runtime data.
Shares were up about 4% at $43 in Friday trading.
Wedbush raised its price target on Unity to $50 from $36 while reiterating its ‘Outperform’ rating. The firm wrote that the company’s “flywheel is beginning to turn,” pointing to accelerating growth in Vector and a business mix increasingly focused on the platform and Unity’s core game engine following the sunset of the ironSource Ad Network and the sale of Supersonic.
Unity reported second quarter revenue of $546 million, up 24% year over year and 8% sequentially. The result exceeded the firm’s $510 million estimate, the $515 million consensus estimate and Unity’s guidance range of $505 million to $515 million.
Strategic revenue, which excludes ironSource and Supersonic, increased 38% year over year to $486 million. Strategic Grow revenue rose 63% to $329 million, while Strategic Create revenue increased 5% to $157 million.
Adjusted EBITDA increased 77% year over year to $160 million, above Wedbush’s $132 million estimate, while non-GAAP earnings of $0.28 per share exceeded consensus of $0.25. Free cash flow increased to $202 million from $127 million a year earlier, and Unity ended the quarter with $2.4 billion in cash.
Wedbush highlighted 20 major Vector updates released during the quarter, including the incorporation of runtime data and a shift to Day-28 return on ad spend, or ROAS, from seven days previously. The firm wrote that the change drove a threefold sequential increase in user-acquisition spending.
For the third quarter, Unity guided to strategic revenue of $540 million to $550 million, including Strategic Grow revenue of $380 million to $385 million. Adjusted EBITDA is expected at $185 million to $190 million.
Wedbush wrote that the contribution from runtime data should become more significant in the second half of the year and beyond, prompting the firm to raise its longer-term estimates. It now expects fiscal 2028 adjusted EBITDA of $1.35 billion, compared with its previous estimate of $915 million.
Bank of America also upgraded Unity to ‘Buy’ from ‘Neutral’ and raised its price objective to $50 from $30. The firm wrote that the latest results provide an early indication that runtime data is improving the effectiveness of Vector’s targeting model and could support sustained growth through the end of 2027.
Bank of America noted that Vector revenue increased 23% sequentially in the second quarter, with growth benefiting from the rollout of the Day-28 ROAS product and the integration of runtime data.
The firm expects Vector to maintain sequential growth of more than 20% in both the third and fourth quarters, compared with its previous expectations for a more gradual slowdown. Bank of America wrote that Unity’s third-quarter guidance could prove conservative because it does not reflect an acceleration despite a full quarter of runtime data contribution.
Bank of America raised its 2027 adjusted EBITDA estimate to $1.29 billion from $789 million, based on continued growth in Vector and further expansion of the runtime data set. The firm wrote that additional success with runtime data could provide further upside to its estimates.
On August 07, 2026, Unity Software Inc (U) shares rose 5.4%, bringing the current price to $43.00. This stock has experienced significant volatility over the pa
4:15pm: Winning week Wall Street wrapped up the week on a strong note Friday, with all three major averages climbing as investors cheered a softer-than-expected US jobs report and scaled back expectations for further Federal Reserve rate hikes.
The Dow gained 152 points, or 0.3%, to close at 54,037. The S&P 500 advanced 48 points, or 0.6%, to finish at 7,758, while the Nasdaq jumped 342 points, or 1.3%, ending the session at 26,691.
The gains capped off a winning week for the major indexes. The Nasdaq led the charge with a roughly 5% weekly gain, while the S&P 500 climbed nearly 3.5% and the Dow also finished higher.
Stocks rallied after the July nonfarm payrolls report showed the US economy unexpectedly lost 23,000 jobs, sharply missing economist expectations for an 83,000 increase. Investors viewed the weaker labor market data as a sign that the Federal Reserve may have less urgency to raise interest rates at its September meeting.
Treasury yields moved sharply lower following the report, adding further support to equities, particularly growth and technology stocks that tend to benefit from lower borrowing costs.
Looking ahead, investors will turn their attention to next week’s inflation data, with expectations that July consumer price pressures remained relatively contained, although some inflationary pressures could remain concentrated in specific sectors. Retail sales are also expected to show modest growth, while the housing market continues to face pressure from elevated mortgage rates.
The earnings calendar will remain active, with results expected from companies including Applied Materials, Cisco, Barrick Mining Corporation and Rocket Lab.
3:45pm: Proactive news headlines American Resources Corp (NASDAQ:AREC) said its ReElement Technologies affiliate successfully commissioned its first commercial-scale germanium production column, marking a key milestone in scaling its chromatography-based refining process. RBC Capital Markets initiated coverage of Pan African Resources PLC (LSE:PAF, OTCQX:PAFRY, JSE:PAN) with an Outperform rating and a 155p price target, citing expected production growth and rising EBITDA through the end of the decade. Standard Uranium Ltd (TSX-V:STND, OTCQB:STTDF, FRA:9SU0) secured a C$3 million strategic investment through a non-brokered private placement with a Southeast Asian conglomerate, which will acquire a nearly 20% stake in the company. 2:40pm: Market movers Unity Software Inc (NYSE:U) shares rose after Wedbush and Bank of America lifted their outlooks, citing strong growth in its Vector advertising platform and further upside from runtime data integration. Atlassian (NASDAQ:TEAM) shares surged more than 30% after the software company reported better-than-expected fourth-quarter revenue and cloud growth and issued a stronger fiscal 2027 cloud revenue outlook. Lyft Inc (NASDAQ:LYFT) shares gained after the ride-hailing company reported second-quarter revenue and gross bookings that beat expectations alongside continued growth in riders and trips. Canopy Growth Corporation (TSX:WEED, NYSE:CGC) shares climbed after the cannabis company posted stronger-than-expected first-quarter revenue growth and narrowed its adjusted EBITDA loss. Under Armour Inc (NYSE:UA) shares fell after the apparel maker reported an earnings beat but slightly missed revenue expectations and issued a more cautious full-year outlook. Oklo shares jumped despite reporting a wider-than-expected quarterly loss as revenue significantly exceeded analyst estimates. Twilio shares soared after the communications software company delivered second-quarter earnings and revenue that topped Wall Street expectations. Trade Desk Inc (NASDAQ:TTD) shares plunged after the digital advertising company missed second-quarter revenue and earnings estimates and issued weaker-than-expected third-quarter guidance. Cloudflare shares were set to rally after the cloud connectivity company reported second-quarter results that exceeded expectations and provided stronger-than-expected guidance for the current quarter. 1:30pm: 'Impossible to justify' rate hike deVere Group CEO Nigel Green says the scale of the jobs miss removes almost any realistic path to a September rate increase.
"A jobs report this weak, layered on top of two months of substantial downward revisions, makes a hike next month almost impossible to justify.
"Three consecutive months of softening data is not noise. It’s a labour market losing momentum in a way policymakers cannot responsibly ignore."
The deVere CEO added that markets are already repricing accordingly.
"Gold was rallying into this release, and reports of weak hiring will likely extend that move further.
“When a currency loses support at the same time a safe-haven asset gains it, that combination tells you plainly which way sentiment has shifted."
12:05pm: Atlassian (NASDAQ:TEAM) surges Atlassian (NASDAQ:TEAM) (Atlassian (NASDAQ:TEAM)) shares jumped more than 30% on Friday after the software maker posted fourth-quarter revenue and cloud growth that topped analyst estimates and issued a stronger-than-expected cloud revenue outlook for fiscal 2027.
Revenue for the quarter came in at $1.8 billion, up 28% from a year earlier and above the $1.66 billion analysts had expected.
Cloud revenue rose 31% to $1.2 billion, while subscription annual recurring revenue climbed 23% to $6.6 billion. Remaining performance obligations, a measure of contracted future revenue, grew 44% to $4.8 billion.
Jefferies raised its price target on the stock to $200, citing accelerating backlog growth and what it called a cheap valuation relative to peers. The brokerage pointed to cross-selling from Atlassian (NASDAQ:TEAM)'s Service Collection and Teamwork Collection products, along with seat expansion within Jira and Confluence, as drivers of the beat.
11:00am: Mixed signals Analysts largely viewed the weaker-than-expected July jobs report as reinforcing expectations that the Federal Reserve will keep interest rates unchanged, despite a surprise decline in nonfarm payrolls.
Jamie Cox, managing partner at Harris Financial Group, said the loss of 23,000 jobs validated the Fed's decision not to raise rates in July. “While I expect this weakness to be temporary, the softening labor market remains one of my biggest concerns for the economy,” Cox said.
Jeffrey Roach, chief economist at LPL Financial, described the labor market slowdown as "orderly," noting that labor stress indicators remain historically low.
“Today’s jobs report is likely to support risk appetite,” Roach said. “However, the decline in the unemployment rate will complicate the Fed’s decision process because the economy appears to be at full employment.”
Bill Adams, chief US economist at Fifth Third Commercial Bank, said the report reflects slower job growth but a labor market that continues to tighten because of a shrinking labor force.
“The Fed will see the unemployment rate’s further decline in July as a reason to look past the month’s weak payrolls print and continue to focus on controlling inflation,” Adams said.
“The July CPI release will influence the Fed’s September decision more than the month’s jobs report.”
10:00am: Jobs surprise lifts markets Wall Street opened higher on Friday after a surprisingly weak July jobs report reinforced expectations that the Federal Reserve may be nearing the end of its tightening cycle. The Nasdaq climbed 0.7%, while the S&P 500 gained 0.3% and the Dow Jones Industrial Average added 0.2%.
The July employment report showed the US economy lost 23,000 jobs, far below expectations for an increase of 80,000, signaling that the labor market may be losing momentum. Investors viewed the data as reducing the likelihood of additional interest rate hikes this year, lifting equities at the open.
Charlie Ripley, Senior Investment Strategist at Allianz Investment Management, said the sharp payroll miss shifts the market's focus back to the employment side of the Federal Reserve's mandate. "This report squarely puts the spotlight back on the employment side of the Fed's mandate," Ripley said. "The Fed is unlikely to ignore this signal, and, if anything, it raises the bar for any Fed rate increases heading into the fall."
Among individual stocks, Trade Desk plunged after the digital advertising company reported weaker-than-expected earnings and revenue and issued disappointing guidance. Meta Platforms was also in focus after being ordered to pay nearly $1 billion over claims related to harm caused to children through social media.
Looking ahead, markets will also keep an eye on June consumer credit data for additional clues on the strength of consumer spending.
9:00am: Payrolls unexpectedly contract in July The US labor market unexpectedly weakened in July as nonfarm payrolls fell by 23,000, marking the first monthly decline in employment in years and missing expectations for an 80,000-job gain. Private payrolls increased by just 30,000, well below forecasts of 82,000, while May and June payrolls were revised down by a combined 103,000 jobs.
The unemployment rate edged down to 4.1% from an expected 4.2%, although average hourly earnings rose just 0.1% month-over-month and 3.2% year-over-year, both below forecasts. The labor force participation rate slipped to 61.4% from an expected 61.6%, while the average workweek held steady at 34.3 hours.
The weaker-than-expected employment report prompted investors to sharply scale back expectations for a Federal Reserve interest rate hike in September, with market-implied odds falling significantly following the release.
Payrolls day Good morning, and welcome to payrolls day, the Friday each month when Wall Street stops talking over itself to stare at one spreadsheet.
US stock futures nudged higher ahead of the July jobs report, due at 8.30 am eastern time.
Dow futures were essentially flat, the S&P 500 added 0.2% and the Nasdaq-100 rose 0.5%, which counts as enthusiasm after Thursday's muddle.
Economists surveyed by Bloomberg expect 80,000 positions were added last month, with unemployment parked at 4.2%.
Not thrilling, but the labour market has been quietly stable while everyone shouted about inflation and artificial intelligence spending.
The Federal Reserve will be reading closely as it weighs its next move on interest rates.
Oil, meanwhile, kept climbing because the US and Iran still have not shaken hands.
An Iranian semi-official news agency reported explosions in the Strait of Hormuz on Thursday night, blamed on the interception of "hostile targets".
Iran and Oman are still working towards reopening the waterway, though the latest word is US and Israeli ships need not apply.
What all that does to inflation expectations is Friday's other question, with the New York Fed's one-year survey also landing.
Earnings are thin: Vistra, Oklo, Under Armour and Wendy's.
Key Takeaways Unity's Vector grew 23% sequentially in Q2 and topped a $1 billion annual run rate ahead of schedule.Unity expects Q3 adjusted EBITDA of $185M-$190M, implying a 33% margin and a sixth straight expansion.Unity 7 beta is due in Q4 2026, linking coding agents with Vector, commerce and live operations. Unity Software Inc. (U - Free Report) centered its second-quarter 2026 earnings call on accelerating Vector artificial intelligence (AI) performance, tighter links between Create and Grow, and a more profitable operating model. Management also raised near-term profitability expectations while simplifying the portfolio.
Revenues of $546.5 million topped the Zacks Consensus Estimate of $511.8 million, while adjusted earnings of $0.28 per share exceeded the $0.24 consensus estimate. Strategic revenues increased 38% year over year.
U Sees Vector AI Growth AcceleratePresident and chief executive officer Matt Bromberg said Vector grew 23% sequentially in the second quarter, nearly twice management’s prior expectation of 12% to 13%. The product also moved above a $1 billion annual run rate, two quarters earlier than expected.
Strategic Grow revenues reached $329 million, up 63% year over year. Bromberg attributed the acceleration to product enhancements, better data and model improvements that are raising advertising returns for customers.
For the third quarter, chief financial officer Jarrod Yahes said Unity expects Vector to grow 19% to 21% sequentially. Strategic Grow revenues are projected at $380 million to $385 million, representing 68% to 70% year-over-year growth.
Unity Links Create and Grow More TightlyBromberg said Unity increasingly views Create and Grow as parts of one platform rather than separate businesses. More game creation drives platform usage, while more games increase the need for discovery and advertising.
Unity 7 is central to that strategy. Bromberg said the release will let developers and coding agents work together across development while automatically configuring services including Vector, commerce and live operations.
The Unity 7 beta is scheduled for the fourth quarter of 2026, with a full release planned for the first quarter of 2027. Bromberg also highlighted a multiyear partnership supporting Netflix’s multiplatform games ecosystem.
U Raises the Margin BarYahes said adjusted EBITDA was $160 million in the second quarter, with a 29% margin, as revenue growth and cost discipline produced operating leverage. Adjusted EBITDA increased 77% year over year.
Third-quarter adjusted EBITDA is expected at $185 million to $190 million, implying a 33% margin. Yahes said that would mark a sixth consecutive quarter of adjusted EBITDA margin expansion.
Unity also pulled forward its target for GAAP net income profitability to the third quarter of 2026 from the fourth quarter. Yahes tied the improvement to operating leverage and lower costs following portfolio actions.
Unity Sharpens Its Portfolio and Balance SheetYahes said Unity completed the ironSource Ads Network shutdown and sold Supersonic to Tripledot Studios on Aug. 4. Management expects those actions to support margins in the second half.
Free cash flow reached $202 million, up 59% year over year. Cash increased to $2.36 billion, and Yahes said Unity moved from a net debt position to a net cash position.
Near-term capital priorities are focused on deleveraging. Yahes said Unity expects to repay its 2026 convertible notes in November, while stronger cash generation should expand capital allocation flexibility.
U Q&A Highlights Runtime and Unity 7A Morgan Stanley analyst asked how much runtime data contributed to Vector’s improvement. Bromberg said runtime signals were introduced near quarter-end and remain too early to isolate, but management views the data as a long-term advantage.
A Cannonball Research analyst asked how Unity 7 differs from prior releases. Bromberg described a broader change than an engine upgrade, emphasizing coding-agent collaboration, faster workflows and compatibility with Unity 6 projects.
A Goldman Sachs analyst pressed management on long-term margins. Yahes pointed to adjusted gross margins around 82% to 83% and said Unity sees further margin expansion while funding high-return product investments.
Unity Enters the Second Half More FocusedManagement’s message centered on sustaining Vector’s growth while using Unity 7 and AI tools to deepen engagement across the platform. Bromberg emphasized product velocity, runtime data and tighter integration between creation, monetization and live services.
Yahes stressed cost control, portfolio simplification and balance-sheet improvement. Third-quarter strategic revenue guidance of $540 million to $550 million calls for 44% to 47% year-over-year growth.
Zacks Signals Favor GrowthU carries a Zacks Rank #2 (Buy). Its Growth Score of A and VGM Score of B align favorably with Zacks methodology, which emphasizes A or B Style Scores alongside a top Zacks Rank.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Value Score of F is comparatively weak, while the Momentum Score of C is middle of the range. The current Zacks Rank can change as earnings estimates are revised following the just-reported results.
Key Takeaways Unity Software topped Q2 EPS and revenue estimates as revenue rose 24% year over year.U's Strategic Revenue grew 38%, led by Unity Vector and strong Strategic Grow performance.Unity expects GAAP profitability in Q3 2026 and guided for strong Strategic Revenue growth. Unity Software (U - Free Report) reported second-quarter 2026 adjusted earnings per share (EPS) of 28 cents, marking a 55.6% increase year over year. The figure beat the Zacks Consensus Estimate by 16.67%.
On a GAAP basis, the company posted a net loss of $23 million, or 5 cents per share, narrower than a net loss of $107 million, or 26 cents per share, in the year-ago quarter. GAAP net loss margin improved to (4)% from (24)% a year earlier.
Net revenues of $546.47 million rose 24% year over year. The figure beat the consensus mark by 6.77%.
Total Strategic Revenue, which excludes the ironSource Ads Network and Supersonic, grew 38% year over year to $486.41 million and accounted for 89% of total revenues, up from roughly 80% a year earlier. Non-Strategic Revenue fell 33% year over year to $60.06 million as the company continued to wind down its non-core ad and publishing businesses.
Q2 Details of Unity SoftwareUnity Software reported Create Solutions revenues of $158 million, up 2% year over year. The increase was driven by higher subscription revenues, partially offset by declines in cloud and hosting services revenues tied to the company's 2025 portfolio reset. Strategic Create Revenue, which excludes non-strategic items, was $157.46 million, up 5% year over year, or up 14% year over year excluding the impact of a $12 million one-time revenue item recorded in the second quarter of 2025.
Grow Solutions revenues were $389 million, up 35% year over year. The growth was driven by the Unity Ads Network, propelled by Unity Vector, partially offset by declines in the ironSource Ads Network. Strategic Grow Revenue was $328.96 million, up 63% year over year, again outpacing total Grow growth and reflecting Vector's continued momentum.
Operating Details of UnityIn the second quarter, adjusted gross profit increased 24% year over year to $453.25 million. Adjusted gross margin was 83%, flat year over year.
Research & development expenses on an adjusted basis grew 17.2% year over year to $161.1 million. Adjusted R&D, as a percentage of revenues, contracted 100 basis points to 30%.
Sales and marketing expenses on an adjusted basis declined 2.2% year over year to $94.06 million. Adjusted S&M, as a percentage of revenues, contracted 500 basis points to 17%.
General & administrative expenses on an adjusted basis decreased 8.6% year over year to $37.9 million. Adjusted G&A, as a percentage of revenues, contracted 200 basis points to 7%.
Unity Software reported adjusted EBITDA of $160.19 million, up 77% year over year. The company's adjusted EBITDA margin of 29% improved 800 basis points compared with the prior year, driven by higher revenues and continued cost control.
Net loss for the quarter (before noncontrolling interest allocation) was $22.67 million, narrowing 78.9% year over year from a net loss of $107.37 million in the year-ago quarter.
Unity Software's Balance Sheet & Cash FlowAs of June 30, 2026, Unity had cash, cash equivalents and restricted cash of $2.357 billion compared with $2.15 billion as of March 31, 2026.
Operating cash flow was $205.62 million in the reported quarter, up 54.5% year over year from $133.1 million in the year-ago quarter. Free cash flow during the quarter was $201.96 million, up 59.5% year over year from $126.65 million in the prior-year quarter.
The current portion of convertible notes was $557.17 million as of June 30, 2026.
Significant Q2 DevelopmentsUnity Software completed the sunset of the ironSource Ads Network, effective April 30, 2026, as previously announced. Subsequent to quarter-end, on Aug. 4, 2026, the company completed the sale of its Supersonic mobile game publishing business; second-quarter Non-Strategic Revenue and third-quarter guidance each incorporate roughly one month of residual Supersonic contribution.
Management noted that Unity Vector, the company's AI-powered advertising platform, continues to be a primary growth driver behind the sharp acceleration in Strategic Grow Revenue, and that the company has begun incorporating behavioral data from the Unity runtime — which reaches billions of monthly players across games built on the platform — into Vector's models as a further competitive differentiator.
The company now expects to reach GAAP profitability in the third quarter of 2026, moved up from its prior target of the fourth quarter of 2026. Management also reiterated plans to repay its 2021 convertible notes in November 2026 as part of continued balance-sheet deleveraging, and indicated that the completed Supersonic divestiture and ironSource Ads Network wind-down are expected to support faster revenue growth and materially higher profitability in the second half of 2026.
Unity Software's Guidance for Q3 2026For the third quarter of 2026, Unity Software anticipates Strategic Revenue between $540 million and $550 million, implying a rise of 44-47% year over year. Within that, Strategic Grow Revenue is expected between $380 million and $385 million, suggesting an increase of 68-70% year over year, and Strategic Create Revenue is guided in the range of $159-$163 million, indicating a rise of 7-10% year over year.
Non-Strategic Revenue is expected to be approximately $20 million, reflecting roughly one month of residual revenues from the divested Supersonic business.
Adjusted EBITDA is expected in the range of $185-$190 million, indicating year-over-year growth of 69-74%.
Zacks Rank & Other Stocks to ConsiderUnity Software currently carries a Zacks Rank #2 (Buy).
Kimball Electronics (KE - Free Report) , Quantum (QMCO - Free Report) and Lumentum (LITE - Free Report) are among the top-ranked stocks that investors can consider in the broader Zacks Computer and Technology sector. Currently, Kimball Electronics sports a Zacks Rank #1 (Strong Buy), while Quantum and Lumentum carry a Zacks Rank #2 each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Kimball Electronics shares have inched up 1.8% in the past six months. KE is scheduled to report its fiscal fourth-quarter 2026 results on Aug. 13.
Quantum's shares have surged 96% in the past six months. QMCO is scheduled to report its fiscal first-quarter 2027 results on Aug. 10, 2026.
Lumentum shares have gained 48.9% in the past six months. LITE is slated to report its fiscal fourth-quarter 2026 results on Aug. 11.
Unity Software Inc (NYSE:U) shares moved higher on Friday after analysts at Wedbush and Bank of America raised their outlooks for the company, citing stronger-than-expected growth in its Vector advertising platform and the potential for further gains from the integration of runtime data.
Shares were up about 4% at $43 in Friday trading.
Wedbush raised its price target on Unity to $50 from $36 while reiterating its ‘Outperform’ rating. The firm wrote that the company’s “flywheel is beginning to turn,” pointing to accelerating growth in Vector and a business mix increasingly focused on the platform and Unity’s core game engine following the sunset of the ironSource Ad Network and the sale of Supersonic.
Unity reported second quarter revenue of $546 million, up 24% year over year and 8% sequentially. The result exceeded the firm’s $510 million estimate, the $515 million consensus estimate and Unity’s guidance range of $505 million to $515 million.
Strategic revenue, which excludes ironSource and Supersonic, increased 38% year over year to $486 million. Strategic Grow revenue rose 63% to $329 million, while Strategic Create revenue increased 5% to $157 million.
Adjusted EBITDA increased 77% year over year to $160 million, above Wedbush’s $132 million estimate, while non-GAAP earnings of $0.28 per share exceeded consensus of $0.25. Free cash flow increased to $202 million from $127 million a year earlier, and Unity ended the quarter with $2.4 billion in cash.
Wedbush highlighted 20 major Vector updates released during the quarter, including the incorporation of runtime data and a shift to Day-28 return on ad spend, or ROAS, from seven days previously. The firm wrote that the change drove a threefold sequential increase in user-acquisition spending.
For the third quarter, Unity guided to strategic revenue of $540 million to $550 million, including Strategic Grow revenue of $380 million to $385 million. Adjusted EBITDA is expected at $185 million to $190 million.
Wedbush wrote that the contribution from runtime data should become more significant in the second half of the year and beyond, prompting the firm to raise its longer-term estimates. It now expects fiscal 2028 adjusted EBITDA of $1.35 billion, compared with its previous estimate of $915 million.
Bank of America also upgraded Unity to ‘Buy’ from ‘Neutral’ and raised its price objective to $50 from $30. The firm wrote that the latest results provide an early indication that runtime data is improving the effectiveness of Vector’s targeting model and could support sustained growth through the end of 2027.
Bank of America noted that Vector revenue increased 23% sequentially in the second quarter, with growth benefiting from the rollout of the Day-28 ROAS product and the integration of runtime data.
The firm expects Vector to maintain sequential growth of more than 20% in both the third and fourth quarters, compared with its previous expectations for a more gradual slowdown. Bank of America wrote that Unity’s third-quarter guidance could prove conservative because it does not reflect an acceleration despite a full quarter of runtime data contribution.
Bank of America raised its 2027 adjusted EBITDA estimate to $1.29 billion from $789 million, based on continued growth in Vector and further expansion of the runtime data set. The firm wrote that additional success with runtime data could provide further upside to its estimates.
Investors often turn to recommendations made by Wall Street analysts before making a Buy, Sell, or Hold decision about a stock. While media reports about rating changes by these brokerage-firm employed (or sell-side) analysts often affect a stock's price, do they really matter?
Before we discuss the reliability of brokerage recommendations and how to use them to your advantage, let's see what these Wall Street heavyweights think about Unity Software Inc. (U - Free Report) .
Unity Software currently has an average brokerage recommendation (ABR) of 1.73, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 26 brokerage firms. An ABR of 1.73 approximates between Strong Buy and Buy.
Of the 26 recommendations that derive the current ABR, 16 are Strong Buy and one is Buy. Strong Buy and Buy respectively account for 61.5% and 3.9% of all recommendations.
Brokerage Recommendation Trends for U
Check price target & stock forecast for Unity Software here>>>
While the ABR calls for buying Unity Software, it may not be wise to make an investment decision solely based on this information. Several studies have shown limited to no success of brokerage recommendations in guiding investors to pick stocks with the best price increase potential.
Do you wonder why? As a result of the vested interest of brokerage firms in a stock they cover, their analysts tend to rate it with a strong positive bias. According to our research, brokerage firms assign five "Strong Buy" recommendations for every "Strong Sell" recommendation.
In other words, their interests aren't always aligned with retail investors, rarely indicating where the price of a stock could actually be heading. Therefore, the best use of this information could be validating your own research or an indicator that has proven to be highly successful in predicting a stock's price movement.
Zacks Rank, our proprietary stock rating tool with an impressive externally audited track record, categorizes stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), and is an effective indicator of a stock's price performance in the near future. Therefore, using the ABR to validate the Zacks Rank could be an efficient way of making a profitable investment decision.
ABR Should Not Be Confused With Zacks RankIn spite of the fact that Zacks Rank and ABR both appear on a scale from 1 to 5, they are two completely different measures.
Broker recommendations are the sole basis for calculating the ABR, which is typically displayed in decimals (such as 1.28). The Zacks Rank, on the other hand, is a quantitative model designed to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5.
It has been and continues to be the case that analysts employed by brokerage firms are overly optimistic with their recommendations. Because of their employers' vested interests, these analysts issue more favorable ratings than their research would support, misguiding investors far more often than helping them.
In contrast, the Zacks Rank is driven by earnings estimate revisions. And near-term stock price movements are strongly correlated with trends in earnings estimate revisions, according to empirical research.
Furthermore, the different grades of the Zacks Rank are applied proportionately across all stocks for which brokerage analysts provide earnings estimates for the current year. In other words, at all times, this tool maintains a balance among the five ranks it assigns.
Another key difference between the ABR and Zacks Rank is freshness. The ABR is not necessarily up-to-date when you look at it. But, since brokerage analysts keep revising their earnings estimates to account for a company's changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in indicating future price movements.
Is U a Good Investment?In terms of earnings estimate revisions for Unity Software, the Zacks Consensus Estimate for the current year has increased 2.3% over the past month to $1.04.
Analysts' growing optimism over the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates higher, could be a legitimate reason for the stock to soar in the near term.
The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #2 (Buy) for Unity Software. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Therefore, the Buy-equivalent ABR for Unity Software may serve as a useful guide for investors.
Unity Software Inc (NYSE:U) on Thursday posted upbeat second-quarter 2026 financial results and issued strong third-quarter guidance.
For the second quarter, Unity reported revenue of $546.47 million, reflecting a 24% year-over-year increase. This easily topped analyst consensus estimates of $514.61 million. Adjusted EPS arrived at 28 cents per share, beating the consensus estimate for a loss of 9 cents per share.
Looking ahead, Unity projected third-quarter strategic revenue between $540 million and $550 million, ahead of Wall Street consensus estimates of $538.79 million. Third-quarter adjusted EBITDA is expected to reach $185 million to $190 million, up 69% to 74% year-over-year.
“This was arguably the best quarter in Unity’s history as a public company,” said Matt Bromberg, President & CEO of Unity. “The ongoing success of Unity Vector AI, combined with the most exciting product roadmap in Unity’s history, is helping drive substantial value for creators, players, and shareholders.”
Unity Software shares rose 4.9% to $42.80 in pre-market trading.
These analysts made changes to their price targets on Unity Software following earnings announcement.
B of A Securities analyst Omar Dessouky upgraded the stock from Neutral to Buy and raised the price target from $30 to $50. Deutsche Bank analyst Benjamin Black upgraded the stock from Hold to Buy and boosted the price target from $31 to $50. Considering buying U stock? Here’s what analysts think:
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SAN FRANCISCO--(BUSINESS WIRE)--Unity (NYSE: U), the world’s leading game engine, today announced financial results for the second quarter ended June 30, 2026.
“This was arguably the best quarter in Unity’s history as a public company”
Share “This was arguably the best quarter in Unity’s history as a public company,” said Matt Bromberg, President & CEO of Unity. “The ongoing success of Unity Vector AI, combined with the most exciting product roadmap in Unity’s history, is helping drive substantial value for creators, players, and shareholders.”
Select revenue highlights for Q2 2026 are as follows (in thousands):
Three Months Ended June 30,
2026
2025
YoY Change
Strategic Grow Revenue
$328,955
$201,334
63%
Strategic Create Revenue
$157,456
$150,605
5%1
Total Strategic Revenue
$486,411
$351,939
38%
Non-Strategic Revenue2
$60,057
$89,005
(33)%
Total Revenue
$546,468
$440,944
24%
Q3 2026 Guidance3
Strategic Revenue of $540 million to $550 million, up 44% - 47% year-over-year Strategic Grow Revenue of $380 million to $385 million, up 68% - 70% year-over-year Strategic Create Revenue of $159 million to $163 million up 7% - 10% year-over-year Non-Strategic Revenue of $20 million Incorporates approximately one month of revenue from the Supersonic business, which was sold on August 4, 2026 Adjusted EBITDA of $185 million to $190 million, up 69% - 74% year-over-year Earnings Webcast
Unity will hold a public webcast at 8:30 a.m. ET today to discuss the results for its second quarter 2026. The live public webcast can be accessed on Unity’s Investor Relations website at https://investors.unity.com. The webcast replay will also be available on the site.
Second Quarter 2026 Results:
Total Revenue Highlights:
Revenue was $546 million, compared to $441 million in the second quarter 2025. Create Solutions revenue was $158 million, compared to $154 million in the second quarter 2025. Grow Solutions revenue was $389 million, compared to $287 million in the second quarter 2025. Profitability Highlights:
GAAP net loss was $23 million, with a margin of (4)%; GAAP basic and diluted net loss per share was $0.05. Adjusted EBITDA was $160 million, with a margin of 29%; adjusted EPS was $0.28. Net cash provided by operating activities was $206 million; free cash flow was $202 million. Revenue
Revenue was $546 million, up 24% year-over-year. Strategic revenue was $486 million, up 38% year-over-year.
Create Solutions revenue was $158 million, up 2% year-over-year. The increase was driven by increases in subscription revenue, partially offset by decreases in cloud and hosting services revenue, driven by our portfolio reset in 2025.
Grow Solutions revenue was $389 million, up 35% year-over-year. The change was due to growth in the Unity Ads Network, driven by “Unity Vector”, partially offset by decreases in the ironSource Ads Network.
Basic and Diluted Net Loss per share
Basic and diluted net loss per share was $0.05, as compared to $0.26 for the same period in 2025.
Net Loss and Net Cash Provided by Operating Activities
Net Loss for the quarter was $23 million, compared to a net loss of $107 million in the second quarter of 2025.
Net Loss margin was (4)%, compared to (24)% in the second quarter of 2025.
Net cash provided by operating activities for the quarter was $206 million, compared to $133 million in the second quarter of 2025.
Adjusted EBITDA, Free Cash Flow, and Adjusted EPS
Adjusted EBITDA for the quarter was $160 million, with a margin of 29%, compared to $90 million in the second quarter of 2025, with a margin of 21%. The year-over-year improvement was driven by higher revenue and continued cost control.
Free cash flow for the quarter was $202 million, compared to $127 million in the second quarter of 2025.
Adjusted EPS for the quarter was $0.28, compared to $0.18 in the second quarter of 2025.
Liquidity
As of June 30, 2026, our cash and cash equivalents, and restricted cash was $2,357 million, and increased by $293 million, as compared with $2,064 million as of December 31, 2025. This increase was primarily driven by our operations.
About Unity
Unity [NYSE: U] offers a suite of tools to develop, deploy, and grow games and interactive experiences across all major platforms from mobile, PC, and console, to extended reality. For more information, visit Unity.com.
UNITY SOFTWARE INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
(Unaudited)
As of
June 30, 2026
December 31, 2025
Assets
Current assets:
Cash and cash equivalents
$
2,351,987
$
2,055,840
Accounts receivable, net
688,739
643,611
Prepaid expenses and other
83,590
113,012
Assets held-for-sale
56,030
—
Total current assets
3,180,346
2,812,463
Property and equipment, net
49,814
68,289
Goodwill
3,155,607
3,166,304
Intangible assets, net
163,141
650,544
Other assets
112,354
140,006
Total assets
$
6,661,262
$
6,837,606
Liabilities and stockholders' equity
Current liabilities:
Accounts payable
$
10,429
$
13,981
Accrued expenses and other
304,134
299,541
Publisher payables
440,665
431,494
Deferred revenue
237,348
224,405
Current portion of convertible notes
557,173
556,451
Liabilities held-for-sale
19,946
—
Total current liabilities
1,569,695
1,525,872
Convertible notes
1,680,229
1,678,899
Long-term deferred revenue
20,278
14,038
Other long-term liabilities
84,167
122,660
Total liabilities
3,354,369
3,341,469
Commitments and contingencies
Redeemable noncontrolling interests
266,727
252,637
Stockholders' equity:
Common stock, $0.000005 par value:
Authorized shares - 1,000,000 and 1,000,000
Issued and outstanding shares - 439,987 and 432,860
2
2
Additional paid-in capital
7,540,533
7,378,295
Accumulated other comprehensive income (loss)
3,280
(2,156
)
Accumulated deficit
(4,509,925
)
(4,138,709
)
Total Unity Software Inc. stockholders' equity
3,033,890
3,237,432
Noncontrolling interest
6,276
6,068
Total stockholders' equity
3,040,166
3,243,500
Total liabilities and stockholders' equity
$
6,661,262
$
6,837,606
UNITY SOFTWARE INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2026
2025
2026
2025
Revenue
$
546,468
$
440,944
$
1,054,706
$
875,944
Cost of revenue
111,709
114,211
463,346
228,168
Gross profit
434,759
326,733
591,360
647,776
Operating expenses
Research and development
278,275
214,807
532,700
435,432
Sales and marketing
132,368
161,513
327,745
323,526
General and administrative
56,335
69,165
114,547
135,505
Total operating expenses
466,978
445,485
974,992
894,463
Loss from operations
(32,219
)
(118,752
)
(383,632
)
(246,687
)
Interest expense
(6,032
)
(6,030
)
(12,052
)
(11,921
)
Interest income and other income (expense), net
17,941
19,837
21,405
77,948
Loss before income taxes
(20,310
)
(104,945
)
(374,279
)
(180,660
)
Provision for (benefit from) Income taxes
2,362
2,420
(4,680
)
4,612
Net loss
(22,672
)
(107,365
)
(369,599
)
(185,272
)
Net income attributable to noncontrolling interest and redeemable noncontrolling interests
934
1,433
1,617
1,168
Net loss attributable to Unity Software Inc.
(23,606
)
(108,798
)
(371,216
)
(186,440
)
Basic and diluted net loss per share attributable to Unity Software Inc.
$
(0.05
)
$
(0.26
)
$
(0.85
)
$
(0.45
)
Weighted-average shares used in computation of basic and diluted net loss per share
437,898
417,566
436,069
414,696
Net loss
(22,672
)
(107,365
)
(369,599
)
(185,272
)
Change in foreign currency translation adjustment
3,823
2,716
6,871
3,894
Comprehensive loss
$
(18,849
)
$
(104,649
)
$
(362,728
)
$
(181,378
)
Net income attributable to noncontrolling interest and redeemable noncontrolling interests
934
1,433
1,617
1,168
Foreign currency translation attributable to noncontrolling interest and redeemable noncontrolling interests
800
564
1,435
818
Comprehensive income attributable to noncontrolling interest and redeemable noncontrolling interests
1,734
1,997
3,052
1,986
Comprehensive loss attributable to Unity Software Inc.
$
(20,583
)
$
(106,646
)
$
(365,780
)
$
(183,364
)
UNITY SOFTWARE INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2026
2025
2026
2025
Operating activities
Net loss
$
(22,672
)
$
(107,365
)
$
(369,599
)
$
(185,272
)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization
85,475
96,928
212,730
193,145
Stock-based compensation expense
79,948
101,604
157,113
200,394
Gain on repayment of convertible note
—
—
—
(42,744
)
Impairment of intangible assets
—
—
270,506
—
Impairment of property and equipment
25
579
8,447
4,049
Impairment of investments
—
—
15,000
—
Other
1,097
(7,754
)
2,566
(7,972
)
Changes in assets and liabilities, net of effects of acquisitions:
Accounts receivable, net
(57,170
)
(43,083
)
(67,366
)
(22,061
)
Prepaid expenses and other
44,553
24,373
26,155
13,771
Other assets
2,933
1,866
12,267
11,889
Accounts payable
2,027
(4,297
)
(3,211
)
(2,099
)
Accrued expenses and other
(6,428
)
7,417
7,532
(13,612
)
Publisher payables
63,112
33,590
24,634
(21,565
)
Other long-term liabilities
2,184
(1,942
)
(37,763
)
(12,861
)
Deferred revenue
10,538
31,180
17,897
31,060
Net cash provided by operating activities
205,622
133,096
276,908
146,122
Investing activities
Purchases of non-marketable investments
—
(2,000
)
—
(2,000
)
Purchases of property and equipment
(3,663
)
(6,446
)
(8,492
)
(12,164
)
Net cash used in investing activities
(3,663
)
(8,446
)
(8,492
)
(14,164
)
Financing activities
Proceeds from issuance of convertible notes
—
—
—
690,000
Purchase of capped calls
—
—
—
(44,436
)
Payment of debt issuance costs
—
—
—
(13,236
)
Repayments of convertible note
—
—
—
(641,691
)
Proceeds from issuance of common stock upon exercise of stock options and purchase of ESPP shares
4,551
9,783
16,194
31,394
Net cash provided by financing activities
4,551
9,783
16,194
22,031
Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash
4,522
15,440
8,210
19,637
Increase in cash, cash equivalents, and restricted cash
211,032
149,873
292,820
173,626
Cash, cash equivalents, and restricted cash, beginning of period
2,146,089
1,551,634
2,064,301
1,527,881
Cash, cash equivalents, and restricted cash, end of period
$
2,357,121
$
1,701,507
$
2,357,121
$
1,701,507
About Non-GAAP Financial Measures
To supplement our consolidated financial statements prepared and presented in accordance with generally accepted accounting principles in the United States (GAAP) we use certain non-GAAP financial measures, as described below, to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe the following non-GAAP measures are useful in evaluating our operating performance. We are presenting these non-GAAP financial measures because we believe, when taken collectively, they may be helpful to investors because they provide consistency and comparability with past financial performance.
However, non-GAAP financial measures have limitations in their usefulness to investors because they have no standardized meaning prescribed by GAAP and are not prepared under any comprehensive set of accounting rules or principles. In addition, other companies, including companies in our industry, may calculate similarly-titled non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. As a result, our non-GAAP financial measures are presented for supplemental informational purposes only and should not be considered in isolation or as a substitute for our consolidated financial statements presented in accordance with GAAP.
We define adjusted EBITDA as GAAP net income or loss excluding benefits or expenses associated with stock-based compensation, amortization and impairment of acquired intangible assets, depreciation, restructurings and reorganizations, interest, income tax, and other non-operating activities, which primarily consist of foreign exchange rate gains or losses. We define adjusted EBITDA margin as adjusted EBITDA as a percentage of revenue. We define adjusted gross profit as GAAP gross profit excluding expenses associated with stock-based compensation, amortization and impairment of acquired intangible assets, depreciation, and restructurings and reorganizations. We define adjusted gross margin as adjusted gross profit as a percentage of revenue.
We define adjusted cost of revenue as GAAP cost of revenue, excluding expenses associated with stock-based compensation, amortization and impairment of acquired intangible assets, depreciation, and restructurings and reorganizations. We define adjusted research and development expense as GAAP research and development expense, excluding expenses associated with stock-based compensation, amortization and impairment of acquired intangible assets, depreciation, and restructurings and reorganizations. We define adjusted sales and marketing expense as GAAP sales and marketing expense, excluding expenses associated with stock-based compensation, amortization and impairment of acquired intangible assets, depreciation, and restructurings and reorganizations. We define adjusted general and administrative expense as GAAP general and administrative expense excluding expenses associated with stock-based compensation, depreciation, impairment of acquired intangible assets, and restructurings and reorganizations. We define free cash flow as net cash provided by operating activities less cash used for purchases of property and equipment.
We define adjusted EPS as GAAP net income or loss excluding benefits or expenses associated with stock-based compensation, amortization and impairment of acquired intangible assets, depreciation, restructurings and reorganizations, and the income tax impact of the preceding adjustments (cumulatively "adjusted net income"), increased by the tax effected impacts from any relevant dilutive securities, divided by the diluted weighted-average outstanding shares. The effective tax rate used in calculating adjusted EPS is estimated for each period, based on the net income or loss adjusted for the items noted above, and may differ from the effective rate used in our financial statements. Shares of common stock that are excluded in our calculation of GAAP diluted net loss per share due to their antidilutive impact on such calculations, are included in the diluted weighted average outstanding shares used in our calculation of adjusted EPS, to the extent they have a dilutive impact on adjusted EPS given the adjusted net income in each period.
UNITY SOFTWARE, INC.
Non-GAAP Reconciliation
(In thousands)
Three Months Ended
Six Months Ended
June 30,
June 30,
2026
2025
2026
2025
Adjusted EBITDA reconciliation
Revenue
$
546,468
$
440,944
$
1,054,706
$
875,944
GAAP net loss
$
(22,672
)
$
(107,365
)
$
(369,599
)
$
(185,272
)
Add:
Stock-based compensation expense
$
75,576
$
101,435
$
152,445
$
196,751
Amortization of intangible assets expense
$
77,490
$
86,218
$
194,904
$
171,868
Depreciation expense
$
7,985
$
10,710
$
17,826
$
21,277
Impairment of intangible assets
$
—
$
—
$
278,666
$
—
Restructuring and reorganization costs
$
31,359
$
10,886
$
38,262
$
31,231
Interest expense
$
6,032
$
6,030
$
12,052
$
11,921
Interest income and other income (expense), net
$
(17,941
)
$
(19,837
)
$
(21,405
)
$
(77,948
)
Provision for (benefit from) income taxes
$
2,362
$
2,420
$
(4,680
)
$
4,612
Adjusted EBITDA
$
160,191
$
90,497
$
298,471
$
174,440
GAAP net loss margin
(4
)%
(24
)%
(35
)%
(21
)%
Adjusted EBITDA margin
29
%
21
%
28
%
20
%
Adjusted gross profit reconciliation
GAAP gross profit
$
434,759
$
326,733
$
591,360
$
647,776
Add:
Stock-based compensation expense
6,712
9,861
14,094
18,973
Amortization of intangible assets expense
6,550
26,997
33,619
53,697
Depreciation expense
1,309
1,766
2,940
3,480
Impairment of intangible assets
—
—
226,516
—
Restructuring and reorganization costs
3,915
275
3,862
809
Adjusted gross profit
$
453,245
$
365,632
$
872,391
$
724,735
GAAP gross margin
80
%
74
%
56
%
74
%
Adjusted gross margin
83
%
83
%
83
%
83
%
Operating expenses reconciliation
Cost of revenue
GAAP cost of revenue
$
111,709
$
114,211
$
463,346
$
228,168
Stock-based compensation expense
(6,712
)
(9,861
)
(14,094
)
(18,973
)
Amortization of intangible assets expense
(6,550
)
(26,997
)
(33,619
)
(53,697
)
Depreciation expense
(1,309
)
(1,766
)
(2,940
)
(3,480
)
Impairment of intangible assets
—
—
(226,516
)
—
Restructuring and reorganization costs
(3,915
)
(275
)
(3,862
)
(809
)
Adjusted cost of revenue
$
93,223
$
75,312
$
182,315
$
151,209
GAAP cost of revenue as a percentage of revenue
20
%
26
%
44
%
26
%
Adjusted cost of revenue as a percentage of revenue
17
%
17
%
17
%
17
%
Research and development
GAAP research and development expense
$
278,275
$
214,807
$
532,700
$
435,432
Stock-based compensation expense
(39,469
)
(51,050
)
(78,097
)
(101,645
)
Amortization of intangible assets expense
(51,393
)
(16,332
)
(102,771
)
(32,862
)
Depreciation expense
(3,934
)
(5,340
)
(8,726
)
(10,606
)
Impairment of intangible assets
—
—
(3,998
)
—
Restructuring and reorganization costs
(22,379
)
(4,581
)
(25,955
)
(12,927
)
Adjusted research and development expense
$
161,100
$
137,504
$
313,153
$
277,392
GAAP research and development expense as a percentage of revenue
51
%
49
%
50
%
50
%
Adjusted research and development expense as a percentage of revenue
30
%
31
%
30
%
31
%
Sales and marketing
GAAP sales and marketing expense
$
132,368
$
161,513
$
327,745
$
323,526
Stock-based compensation expense
(12,940
)
(19,041
)
(27,112
)
(35,527
)
Amortization of intangible assets expense
(19,547
)
(42,889
)
(58,514
)
(85,309
)
Depreciation expense
(1,588
)
(2,156
)
(3,601
)
(4,310
)
Impairment of intangible assets
—
—
(46,969
)
—
Restructuring and reorganization costs
(4,237
)
(1,253
)
(6,551
)
(9,153
)
Adjusted sales and marketing expense
$
94,056
$
96,174
$
184,998
$
189,227
GAAP sales and marketing expense as a percentage of revenue
24
%
37
%
31
%
37
%
Adjusted sales and marketing expense as a percentage of revenue
17
%
22
%
18
%
22
%
General and administrative
GAAP general and administrative expense
$
56,335
$
69,165
$
114,547
$
135,505
Stock-based compensation expense
(16,455
)
(21,483
)
(33,142
)
(40,606
)
Depreciation expense
(1,154
)
(1,448
)
(2,559
)
(2,881
)
Impairment of intangible assets
—
—
(1,183
)
—
Restructuring and reorganization costs
(828
)
(4,777
)
(1,894
)
(8,342
)
Adjusted general and administrative expense
$
37,898
$
41,457
$
75,769
$
83,676
GAAP general and administrative expense as a percentage of revenue
11
%
16
%
11
%
15
%
Adjusted general and administrative expense as a percentage of revenue
7
%
9
%
7
%
10
%
Adjusted EPS reconciliation
GAAP net loss
$
(22,672
)
$
(107,365
)
$
(369,599
)
$
(185,272
)
Stock-based compensation expense
75,576
101,435
152,445
196,751
Amortization of intangible assets expense
77,490
86,218
194,904
171,868
Depreciation expense
7,985
10,710
17,826
21,277
Impairment of intangible assets
—
—
278,666
—
Restructuring and reorganization costs
31,359
10,886
38,262
31,231
Income tax impact of adjusting items
(36,302
)
(20,527
)
(73,836
)
(48,291
)
Adjusted net income used for calculation of adjusted EPS, before impact of dilutive instruments
$
133,436
$
81,357
$
238,668
$
187,564
Increase from forgone financing costs on dilutive convertible notes, net of tax
4,676
789
9,344
9,299
Adjusted net income used for calculation of adjusted EPS, including impact of dilutive instruments
$
138,112
$
82,146
$
248,012
$
196,863
Weighted-average common shares used in GAAP diluted net loss per share attributable to Unity Software Inc.
437,898
417,566
436,069
414,696
Convertible notes
41,348
20,896
41,348
35,951
Stock options and PVOs
2,660
5,385
2,801
6,124
Unvested RSUs, PVUs, and PSUs
7,585
4,572
7,195
4,869
ESPP
—
4
63
327
Non-GAAP weighted-average common shares used in adjusted EPS
489,491
448,423
487,476
461,967
GAAP diluted net loss per share attributable to Unity Software Inc.
(0.05
)
(0.26
)
(0.85
)
(0.45
)
Total impact on diluted net loss per share attributable to Unity Software Inc. from non-GAAP adjustments
0.36
0.45
1.40
0.90
Total impact on diluted net loss per share attributable to Unity Software Inc. from antidilutive common stock now included
This press release and the earnings call referencing this press release contain “forward-looking statements,” as that term is defined under federal securities laws, including statements regarding Unity’s outlook and future financial performance, including, but not limited to: (i) Unity’s ability to further enhance its platform, accelerate product innovation and enhance financial performance; (ii) expectations regarding Vector, including expectations regarding Vector’s improvements, performance, growth and impact on Unity’s overall future growth prospects; (iii) Unity’s strategic initiatives, including its continued investment and focus on artificial intelligence tools and redeployment of investments to core strategic priorities; (iv) expectations regarding Vector leveraging behavioral data available through Unity runtime; (v) expectations regarding Unity 7; (vi) statements regarding Unity’s product roadmap, products, projects, technology, ongoing product development and improvements, and customer demand for Unity products; (vii) statements regarding industry trends and business model evolution; (viii) statements regarding Unity’s market opportunity; (ix) expectations regarding Unity’s competitive position, core value proposition, and growth prospects; (x) expectations regarding improvements in operating margins; (xi) expectations regarding Unity’s operating discipline and cost management; (xii) expectations regarding future profitability, including Unity’s expectation to become GAAP profitable by the third quarter of 2026; (xiii) plans to pay off future obligations, including Unity’s plan to pay off its convertible notes issued in 2021 in November 2026 and to de-lever its balance sheet; and (xiv) Unity’s financial guidance for future periods. The words “aim,” “believe,” “may,” “will,” “estimate,” “continue,” “intend,” “expect,” “plan,” “project,” and similar expressions are intended to identify forward-looking statements. These forward-looking statements are subject to risks, uncertainties, and assumptions. If the risks materialize or assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. Risks include, but are not limited to, those related to: (i) the impact of macroeconomic conditions, such as inflation, high interest rates, tariffs, sanctions and trade barriers, and limited credit availability which could further cause economic uncertainty and volatility; (ii) Unity’s ability to compete effectively; (iii) adverse changes in the geopolitical relationship between the U.S. and China; (iv) Unity’s ability to develop, deploy, maintain, manage, or commercialize artificial intelligence-enabled products; (v) Unity’s ability to address issues raised by the development or use of artificial intelligence in its offerings, or the use of artificial intelligence by its customers, personnel, vendors and competitors; (vi) Unity’s ability to execute its plans to realign its business and to right-size its investments, including the sunset of the ironSource Ads Network and the sale of its Supersonic game publishing business; (vii) the impact of any decisions to change how Unity prices its products and services; (viii) Unity’s ability to achieve and sustain profitability; (ix) Unity’s ability to retain existing customers and expand the use of its platform, or attract new customers; (x) Unity’s ability to further expand into adjacent business areas or new industries; (xi) the impact of any changes of terms of service, policies or technical requirements from operating system platform providers or application stores which may result in changes to Unity or its customers’ business practices; (xii) Unity’s ability to maintain favorable relationships with hardware, operating system, device, game console and other technology providers; (xiii) breaches in its security measures, unauthorized access to its platform, data, or its customers’ or other users’ personal data; (xiv) Unity’s ability to manage growth effectively and manage costs effectively; (xv) the rapidly changing and increasingly stringent laws, regulations, contractual obligations and industry standards that relate to privacy, data security and the protection of children; (xvi) Unity’s ability to attract, manage and retain its talent; (xvii) Unity’s ability to adapt effectively to rapidly changing technology, evolving industry standards, changing regulations, or changing customer needs, requirements, or preferences; and (xviii) the effectiveness of Vector. Further information on these and additional risks that could affect our results is included in our filings with the Securities and Exchange Commission (SEC), including our Annual Report on Form 10-K filed with the SEC on February 11, 2026, our Quarterly Report on Form 10-Q filed with the SEC on May 7, 2026, and our future reports that we may file with the SEC from time to time, which could cause actual results to vary from expectations. Copies of reports filed with the SEC are available on the Unity Investor Relations website. Statements herein speak only as of the date of this release, and Unity assumes no obligation to, and does not currently intend to, update any such forward-looking statements after the date of this release except as required by law.
Unity Software Inc. (U) Q2 2026 Earnings Call August 6, 2026 8:30 AM EDT
Company Participants
Alex Giaimo - Head of Investor Relations
Matthew Bromberg - CEO, President & Director
Jarrod Yahes - CFO & Senior VP
Conference Call Participants
Matthew Cost - Morgan Stanley, Research Division
Alec Brondolo - Wells Fargo Securities, LLC, Research Division
William Lampen - BTIG, LLC, Research Division
Vasily Karasyov - Cannonball Research, LLC
Eric Sheridan - Goldman Sachs Group, Inc., Research Division
Andrew Boone - Citizens JMP Securities, LLC, Research Division
Dylan Becker - William Blair & Company L.L.C., Research Division
Omar Dessouky - BofA Securities, Research Division
Presentation
Operator
Ladies and gentlemen, thank you for joining us, and welcome to the Unity Technologies Q2 Earnings Call. [Operator Instructions]
I will now hand the conference over to Alex Giaimo, Head of Investor Relations. Alex, please go ahead.
Alex Giaimo
Head of Investor Relations
Thank you. Good morning, everyone. Welcome to Unity's Second Quarter 2026 Earnings Call. Today, I'm joined by our CEO, Matt Bromberg; and our CFO, Jarrod Yahes.
Before we begin, I want to note that today's discussion contains forward-looking statements, including statements about goals, business outlook, industry trends and expectations for future financial performance, all of which are subject to risks, uncertainties and assumptions. You can find more information in the Risk Factors section of our filings at sec.gov. Actual results may differ, and we take no obligation to revise or update any forward-looking statements.
Finally, during today's meeting, we will discuss non-GAAP financial measures. These non-GAAP financial measures are in addition to and not a substitute for or superior to measures of financial performance prepared in accordance with GAAP. A full reconciliation of GAAP to non-GAAP is available in our press release and on the sec.gov website.
Unity Software Inc. (U - Free Report) came out with quarterly earnings of $0.28 per share, beating the Zacks Consensus Estimate of $0.24 per share. This compares to a loss of $0.26 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of +16.67%. A quarter ago, it was expected that this company would post earnings of $0.24 per share when it actually produced earnings of $0.23, delivering a surprise of -4.17%.
Over the last four quarters, the company has surpassed consensus EPS estimates three times.
Unity Software, which belongs to the Zacks Internet - Software industry, posted revenues of $546.47 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 6.77%. This compares to year-ago revenues of $440.94 million. The company has topped consensus revenue estimates four times over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.
Unity Software shares have lost about 19.7% since the beginning of the year versus the S&P 500's gain of 12.8%.
What's Next for Unity Software?While Unity Software has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.
Ahead of this earnings release, the estimate revisions trend for Unity Software was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.28 on $528.98 million in revenues for the coming quarter and $1.04 on $2.12 billion in revenues for the current fiscal year.
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Internet - Software is currently in the top 44% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
One other stock from the same industry, Zoom Communications (ZM - Free Report) , is yet to report results for the quarter ended July 2026. The results are expected to be released on August 25.
This video-conferencing company is expected to post quarterly earnings of $1.50 per share in its upcoming report, which represents a year-over-year change of -2%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.
Zoom Communications' revenues are expected to be $1.27 billion, up 4.2% from the year-ago quarter.
On August 04, 2026, Unity Software Inc (U) shares rose 5.5% to $35.22, continuing a positive trend over the past week and month, despite a year-to-date decline.
Key Takeaways Unity Software expects Q2 revenues of $505-$515 million and adjusted EBITDA of $130-$135 million.U likely benefited from Vector AI ad platform momentum, pricing gains and Unity 6 product stability.Unity Software expects steady growth from AI tools, non-gaming traction and disciplined cost management. Unity Software (U - Free Report) is scheduled to report its second-quarter 2026 results on Aug. 06, 2026.
For the second quarter, Unity expects total net revenues between $505-$515 million. Strategic revenue is expected in the range of $455-$465 million, implying a rise of 29-32% year over year. Within that, Strategic Growth revenue is expected between $302 million and $306 million, suggesting an increase of 50-52% year over year and Strategic Create revenue is guided in the range of $154-$158 million, indicating a rise of 11-14% year over year.
Adjusted EBITDA is expected in the range of $130-$135 million, indicating year-over-year growth of 44-49%.
The Zacks Consensus Estimate for second-quarter 2026 revenues is pegged at $511.84 million, suggesting 16.08% year-over-year growth.
The consensus mark for earnings is pegged at 24 cents per share, unchanged over the past 30 days. This projection indicates a year-over-year increase of 16.08%.
Unity surpassed the Zacks Consensus Estimate for earnings in two of the trailing four quarters, while missing it twice with an average positive surprise of 7.37%.
Let us see how things are shaping up for the upcoming announcement.
Key Factors to ConsiderUnity's second-quarter performance is expected to have benefited from continued momentum in Vector, its AI-powered advertising platform. Improved targeting and product enhancements have likely driven higher advertiser spending. Strong sequential growth has been supported by richer data signals and ongoing machine learning improvements. The integration of runtime data into Vector is expected to strengthen ad personalization and targeting over time, though this contribution likely remained modest and gradual rather than an immediate step change.
The Strategic Create segment is likely to have benefited from higher pricing and improving product stability. Unity has reduced user-reported issues following the Unity 6 rollout, helping it maintain a leading position in mobile game creation. The public beta launch of Unity AI and rising adoption of AI-assisted development tools likely supported customer engagement. Early retention data has been encouraging, with a majority of beta users still active five days after adoption. Healthy traction in non-gaming verticals, particularly automotive HMI, likely provided an additional growth driver. The planned launch of Unity's commerce platform may have added an early, modest revenue contribution.
Disciplined cost management likely continued to support profitability despite ongoing investment in AI research and development. Operating leverage from lower sales, marketing and G&A spending probably offset elevated cloud costs tied to AI testing. The combination of steady revenue growth and improving margins is expected to have supported second quarter results, alongside continued progress toward the company's longer-term profitability targets.
What Our Model Says About UnityOur proven model does not conclusively predict an earnings beat for Unity this time around. Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, this is not the case here, as you can see below.
Unity currently has an Earnings ESP of 0.00% and a Zacks Rank #2. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Stocks to ConsiderHere are some companies worth considering, as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases:
Sandisk Corporation (SNDK - Free Report) is scheduled to report fourth-quarter fiscal 2026 results on Aug. 5. Currently, Sandisk has an Earnings ESP of +4.13% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Sandisk’s fourth-quarter earnings is pegged at $34.24 per share, indicating a year-over-year surge of 11,707%. Earnings estimates for the quarter have been revised upward by 5.7% over the past 60 days.
Western Digital Corporation (WDC - Free Report) is scheduled to report fourth-quarter fiscal 2026 results on Aug. 5. Currently, Western Digital has an Earnings ESP of +3.22% and flaunts a Zacks Rank #1.
The Zacks Consensus Estimate for Western Digital’s fourth-quarter earnings is pegged at $3.35 per share, calling for a year-over-year increase of 101.8%. Earnings estimates for the quarter have been revised upward by 3 cents in the past 30 days.
MKS Inc. (MKSI - Free Report) is scheduled to report second-quarter 2026 results on Aug. 5. Currently, MKS has an Earnings ESP of +2.64% and carries a Zacks Rank #2.
The Zacks Consensus Estimate for MKS’ second-quarter earnings is pegged at $2.93 per share, calling for a year-over-year jump of 65.5%. Earnings estimates for the quarter have been revised northward by a penny in the past 30 days.
On August 03, 2026, Unity Software Inc (U) shares rose 5.3% to $33.38, amidst a 52-week range of $16.78 to $52.15. This price movement reflects a notable shift
In the latest close session, Unity Software Inc. (U - Free Report) was down 4.89% at $31.71. This change lagged the S&P 500's daily gain of 0.7%. Meanwhile, the Dow experienced a rise of 0.53%, and the technology-dominated Nasdaq saw an increase of 1%.
Shares of the company witnessed a gain of 13.71% over the previous month, beating the performance of the Computer and Technology sector with its loss of 6.59%, and the S&P 500's loss of 0.49%.
The upcoming earnings release of Unity Software Inc. will be of great interest to investors. The company's earnings report is expected on August 6, 2026. In that report, analysts expect Unity Software Inc. to post earnings of $0.24 per share. This would mark year-over-year growth of 192.31%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $511.84 million, up 16.08% from the year-ago period.
In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $1.04 per share and a revenue of $2.12 billion, indicating changes of +20.93% and +14.5%, respectively, from the former year.
Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Unity Software Inc. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.
The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 2.31% higher. Unity Software Inc. presently features a Zacks Rank of #1 (Strong Buy).
In the context of valuation, Unity Software Inc. is at present trading with a Forward P/E ratio of 32.06. This expresses a premium compared to the average Forward P/E of 20.16 of its industry.
Also, we should mention that U has a PEG ratio of 1.34. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. Internet - Software stocks are, on average, holding a PEG ratio of 1.18 based on yesterday's closing prices.
The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 88, which puts it in the top 36% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.
Here are three stocks with buy ranks and strong growth characteristics for investors to consider today July 31st:
Sanmina (SANM - Free Report) : This company, which is a global provider of electronics contract manufacturing services, carries a Zacks Rank #1(Strong Buy), and has witnessed the Zacks Consensus Estimate for its current year earnings increasing 6% over the last 60 days.
Sanmina has a PEG ratio of 0.56 compared with 0.92 for the industry. The company possesses a Growth Score of A.
Unity Software (U - Free Report) : This company, which provides a platform to develop, deploy and grow games and interactive 3D experiences across mobile, PC, console and extended reality, carries a Zacks Rank #1, and has witnessed the Zacks Consensus Estimate for its current year earnings increasing 1% over the last 60 days.
Unity Software has a PEG ratio of 1.34 compared with 6.75 for the industry. The company possesses a Growth Score of A.
NVIDIA (NVDA - Free Report) : This company, which is the worldwide leader in visual computing technologies and the inventor of the graphics processing unit, or GPU, carries a Zacks Rank #1, and has witnessed the Zacks Consensus Estimate for its current year earnings increasing 4.1% over the last 60 days.
NVIDIA has a PEG ratio of 0.37 compared with 0.69 for the industry. The company possesses a Growth Score of B.
See the full list of top ranked stocks here.
Learn more about the Growth score and how it is calculated here.
On July 30, 2026, Unity Software Inc (U) shares rose 4.1% to a current price of $33.34. Over the past year, the stock has fluctuated between a 52-week high of $
Wall Street expects a year-over-year increase in earnings on higher revenues when Unity Software Inc. (U - Free Report) reports results for the quarter ended June 2026. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates.
The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on August 6. On the other hand, if they miss, the stock may move lower.
While the sustainability of the immediate price change and future earnings expectations will mostly depend on management's discussion of business conditions on the earnings call, it's worth handicapping the probability of a positive EPS surprise.
Zacks Consensus EstimateThis company is expected to post quarterly earnings of $0.24 per share in its upcoming report, which represents a year-over-year change of +192.3%.
Revenues are expected to be $510.89 million, up 15.9% from the year-ago quarter.
Estimate Revisions TrendThe consensus EPS estimate for the quarter has been revised 3.28% higher over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.
Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change.
Price, Consensus and EPS Surprise
Earnings WhisperEstimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. This insight is at the core of our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction).
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.
Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only.
A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP.
Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell).
How Have the Numbers Shaped Up for Unity Software?For Unity Software, the Most Accurate Estimate is higher than the Zacks Consensus Estimate, suggesting that analysts have recently become bullish on the company's earnings prospects. This has resulted in an Earnings ESP of +2.74%.
On the other hand, the stock currently carries a Zacks Rank of #1.
So, this combination indicates that Unity Software will most likely beat the consensus EPS estimate.
Does Earnings Surprise History Hold Any Clue?While calculating estimates for a company's future earnings, analysts often consider to what extent it has been able to match past consensus estimates. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number.
For the last reported quarter, it was expected that Unity Software would post earnings of $0.24 per share when it actually produced earnings of $0.23, delivering a surprise of -4.17%.
Over the last four quarters, the company has beaten consensus EPS estimates two times.
Bottom LineAn earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss.
That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
Unity Software appears a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.
An Industry Player's Expected ResultsAnother stock from the Zacks Internet - Software industry, Unity Software Inc. (U - Free Report) , is soon expected to post earnings of $0.24 per share for the quarter ended June 2026. This estimate indicates a year-over-year change of +192.3%. Revenues for the quarter are expected to be $510.89 million, up 15.9% from the year-ago quarter.
Over the last 30 days, the consensus EPS estimate for Unity Software has been revised 3.3% up to the current level. Nevertheless, the company now has an Earnings ESP of +2.74%, reflecting a higher Most Accurate Estimate.
When combined with a Zacks Rank of #1 (Strong Buy), this Earnings ESP indicates that Unity Software will most likely beat the consensus EPS estimate. Over the last four quarters, the company surpassed consensus EPS estimates two times.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
Unity Software Inc. (U - Free Report) has been one of the most searched-for stocks on Zacks.com lately. So, you might want to look at some of the facts that could shape the stock's performance in the near term.
Over the past month, shares of this company have returned +6.1%, compared to the Zacks S&P 500 composite's -1.5% change. During this period, the Zacks Internet - Software industry, which Unity Software falls in, has gained 4.6%. The key question now is: What could be the stock's future direction?
While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.
Earnings Estimate RevisionsHere at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.
We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
Unity Software is expected to post earnings of $0.24 per share for the current quarter, representing a year-over-year change of +192.3%. Over the last 30 days, the Zacks Consensus Estimate has changed +3.3%.
The consensus earnings estimate of $1.04 for the current fiscal year indicates a year-over-year change of +20.9%. This estimate has changed +2.3% over the last 30 days.
For the next fiscal year, the consensus earnings estimate of $1.28 indicates a change of +22.8% from what Unity Software is expected to report a year ago. Over the past month, the estimate has changed +1%.
Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Unity Software is rated Zacks Rank #1 (Strong Buy).
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Projected Revenue GrowthEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.
For Unity Software, the consensus sales estimate for the current quarter of $510.89 million indicates a year-over-year change of +15.9%. For the current and next fiscal years, $2.11 billion and $2.42 billion estimates indicate +14.3% and +14.4% changes, respectively.
Last Reported Results and Surprise HistoryUnity Software reported revenues of $508.24 million in the last reported quarter, representing a year-over-year change of +16.8%. EPS of $0.23 for the same period compares with -$0.19 a year ago.
Compared to the Zacks Consensus Estimate of $500.57 million, the reported revenues represent a surprise of +1.53%. The EPS surprise was -4.17%.
Over the last four quarters, Unity Software surpassed consensus EPS estimates two times. The company topped consensus revenue estimates each time over this period.
ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.
While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.
The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an A is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Unity Software is graded F on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
ConclusionThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Unity Software. However, its Zacks Rank #1 does suggest that it may outperform the broader market in the near term.
After reaching an important support level, Unity Software Inc. (U - Free Report) could be a good stock pick from a technical perspective. U surpassed resistance at the 200-day moving average, suggesting a long-term bullish trend.
The 200-day simple moving average helps traders and analysts determine overall long-term market trends for stocks, commodities, indexes, and other financial instruments. The indicator moves higher or lower along with longer-term price moves, serving as a support or resistance level.
Shares of U have been moving higher over the past four weeks, up 11.4%. Plus, the company is currently a Zacks Rank #1 (Strong Buy) stock, suggesting that U could be poised for a continued surge.
Looking at U's earnings estimate revisions, investors will be even more convinced of the bullish uptrend. There have been 1 higher compared to none lower for the current fiscal year, and the consensus estimate has moved up as well.
Given this move in earnings estimate revisions and the positive technical factor, investors may want to keep their eye on U for more gains in the near future.
From a technical perspective, Unity Software Inc. (U - Free Report) is looking like an interesting pick, as it just reached a key level of support. U recently overtook the 50-day moving average, and this suggests a short-term bullish trend.
The 50-day simple moving average, which is one of three major moving averages, is widely used by traders and analysts to establish support and resistance levels for a range of securities. Because it's the first sign of an up or down trend, the 50-day is considered to be more important.
Shares of U have been moving higher over the past four weeks, up 7.5%. Plus, the company is currently a Zacks Rank #1 (Strong Buy) stock, suggesting that U could be poised for a continued surge.
The bullish case only gets stronger once investors take into account U's positive earnings estimate revisions. There have been 1 higher compared to none lower for the current fiscal year, and the consensus estimate has moved up as well.
With a winning combination of earnings estimate revisions and hitting a key technical level, investors should keep their eye on U for more gains in the near future.
Unity Software Inc. (U - Free Report) reached a significant support level, and could be a good pick for investors from a technical perspective. Recently, U broke through the 20-day moving average, which suggests a short-term bullish trend.
The 20-day simple moving average is a popular trading tool. It provides a look back at a stock's price over a 20-day period, and is beneficial to short-term traders since it smooths out price fluctuations and provides more trend reversal signals than longer-term moving averages.
Like other SMAs, if a stock's price is moving above the 20-day, the trend is considered positive. When the price falls below the moving average, it can signal a downward trend.
U could be on the verge of another rally after moving 7.5% higher over the last four weeks. Plus, the company is currently a Zacks Rank #1 (Strong Buy) stock.
The bullish case solidifies once investors consider U's positive earnings estimate revisions. No estimate has gone lower in the past two months for the current fiscal year, compared to 1 higher, while the consensus estimate has increased too.
Investors may want to watch U for more gains in the near future given the company's key technical level and positive earnings estimate revisions.
Bank of Nova Scotia acquired a new position in Unity Software Inc. (NYSE:U – Free Report) in the 1st quarter, according to its most recent Form 13F filing with the Securities and Exchange Commission. The firm acquired 256,694 shares of the company’s stock, valued at approximately $5,632,000. Bank of Nova Scotia owned approximately 0.06% of Unity Software at the end of the most recent quarter.
A number of other hedge funds and other institutional investors also recently made changes to their positions in the business. Wellington Management Group LLP lifted its position in shares of Unity Software by 58.7% during the 3rd quarter. Wellington Management Group LLP now owns 18,213,875 shares of the company’s stock valued at $729,284,000 after acquiring an additional 6,734,285 shares during the period. Norges Bank acquired a new position in shares of Unity Software during the fourth quarter valued at about $230,285,000. Duquesne Family Office LLC bought a new position in shares of Unity Software during the 2nd quarter worth about $42,932,000. Dimensional Fund Advisors LP boosted its position in shares of Unity Software by 52.8% during the 1st quarter. Dimensional Fund Advisors LP now owns 4,245,014 shares of the company’s stock worth $93,089,000 after purchasing an additional 1,465,962 shares in the last quarter. Finally, T. Rowe Price Investment Management Inc. grew its stake in shares of Unity Software by 41.5% in the 4th quarter. T. Rowe Price Investment Management Inc. now owns 4,622,445 shares of the company’s stock valued at $204,174,000 after buying an additional 1,355,847 shares during the period. 73.46% of the stock is owned by institutional investors and hedge funds.
Insider Buying and Selling In related news, COO Alexander Blum sold 19,009 shares of Unity Software stock in a transaction on Tuesday, May 26th. The stock was sold at an average price of $27.18, for a total transaction of $516,664.62. Following the completion of the sale, the chief operating officer owned 730,069 shares of the company’s stock, valued at approximately $19,843,275.42. This trade represents a 2.54% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is accessible through the SEC website. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, CFO Jarrod Yahes sold 24,021 shares of the business’s stock in a transaction that occurred on Tuesday, May 26th. The stock was sold at an average price of $27.18, for a total transaction of $652,890.78. Following the completion of the transaction, the chief financial officer directly owned 704,360 shares of the company’s stock, valued at approximately $19,144,504.80. This represents a 3.30% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders sold 198,321 shares of company stock valued at $5,390,783 in the last three months. Insiders own 0.77% of the company’s stock.
Wall Street Analysts Forecast Growth Several research analysts have issued reports on U shares. Piper Sandler started coverage on Unity Software in a report on Tuesday, June 2nd. They issued an “overweight” rating and a $40.00 price target on the stock. Barclays upped their target price on Unity Software from $28.00 to $33.00 and gave the stock an “equal weight” rating in a research report on Friday, May 8th. Wells Fargo & Company lifted their price target on shares of Unity Software from $35.00 to $36.00 and gave the company an “overweight” rating in a research report on Tuesday, July 7th. UBS Group boosted their price target on shares of Unity Software from $26.00 to $28.00 and gave the company a “neutral” rating in a research note on Tuesday, May 5th. Finally, BTIG Research upped their price objective on shares of Unity Software from $39.00 to $43.00 and gave the stock a “buy” rating in a report on Thursday, May 7th. Two equities research analysts have rated the stock with a Strong Buy rating, twelve have issued a Buy rating, eight have assigned a Hold rating and one has assigned a Sell rating to the company. According to MarketBeat.com, the company currently has a consensus rating of “Moderate Buy” and a consensus price target of $37.99.
Check Out Our Latest Report on Unity Software
Unity Software Price Performance U opened at $30.40 on Tuesday. The company has a market capitalization of $13.27 billion, a price-to-earnings ratio of -19.36, a PEG ratio of 3.39 and a beta of 2.05. The company has a quick ratio of 1.95, a current ratio of 1.95 and a debt-to-equity ratio of 0.56. The firm has a 50-day moving average price of $28.68 and a 200-day moving average price of $27.14. Unity Software Inc. has a twelve month low of $16.78 and a twelve month high of $52.15.
Unity Software Company Profile (Free Report)
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.
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Entropy Technologies LP bought a new position in shares of Unity Software Inc. (NYSE:U – Free Report) in the 1st quarter, according to its most recent disclosure with the SEC. The institutional investor bought 90,464 shares of the company’s stock, valued at approximately $1,985,000.
A number of other hedge funds and other institutional investors have also recently made changes to their positions in the business. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC lifted its holdings in Unity Software by 5.9% in the 1st quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 813,176 shares of the company’s stock valued at $15,930,000 after purchasing an additional 45,481 shares in the last quarter. Focus Partners Wealth purchased a new position in shares of Unity Software in the first quarter worth about $260,000. Northwestern Mutual Wealth Management Co. boosted its position in Unity Software by 28.9% during the second quarter. Northwestern Mutual Wealth Management Co. now owns 5,542 shares of the company’s stock worth $134,000 after acquiring an additional 1,241 shares during the last quarter. California Public Employees Retirement System boosted its position in Unity Software by 11.3% during the second quarter. California Public Employees Retirement System now owns 520,774 shares of the company’s stock worth $12,603,000 after acquiring an additional 53,015 shares during the last quarter. Finally, Sei Investments Co. grew its stake in Unity Software by 1,135.6% during the 2nd quarter. Sei Investments Co. now owns 224,715 shares of the company’s stock valued at $5,438,000 after acquiring an additional 206,529 shares in the last quarter. Hedge funds and other institutional investors own 73.46% of the company’s stock.
Unity Software Trading Up 0.1% Shares of Unity Software stock opened at $28.64 on Monday. The firm has a market capitalization of $12.50 billion, a price-to-earnings ratio of -18.24, a PEG ratio of 3.39 and a beta of 2.05. Unity Software Inc. has a fifty-two week low of $16.78 and a fifty-two week high of $52.15. The company has a debt-to-equity ratio of 0.56, a quick ratio of 1.95 and a current ratio of 1.95. The stock has a 50 day moving average of $28.61 and a 200 day moving average of $27.25.
Wall Street Analysts Forecast Growth A number of equities research analysts have recently issued reports on U shares. Citigroup dropped their price target on Unity Software from $43.00 to $40.00 and set a “buy” rating for the company in a research report on Thursday, April 30th. UBS Group boosted their price objective on Unity Software from $26.00 to $28.00 and gave the stock a “neutral” rating in a research note on Tuesday, May 5th. Wedbush upped their target price on Unity Software from $32.00 to $36.00 and gave the company an “outperform” rating in a report on Wednesday, July 22nd. Weiss Ratings restated a “sell (e+)” rating on shares of Unity Software in a report on Friday, July 17th. Finally, Wells Fargo & Company raised their target price on Unity Software from $35.00 to $36.00 and gave the stock an “overweight” rating in a research note on Tuesday, July 7th. Two investment analysts have rated the stock with a Strong Buy rating, twelve have given a Buy rating, eight have given a Hold rating and one has assigned a Sell rating to the stock. Based on data from MarketBeat, the stock has a consensus rating of “Moderate Buy” and an average target price of $37.99.
Get Our Latest Stock Analysis on Unity Software
Insider Buying and Selling at Unity Software In other news, COO Alexander Blum sold 2,099 shares of the business’s stock in a transaction that occurred on Thursday, May 28th. The shares were sold at an average price of $27.37, for a total value of $57,449.63. Following the sale, the chief operating officer directly owned 727,970 shares of the company’s stock, valued at approximately $19,924,538.90. The trade was a 0.29% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at this hyperlink. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, CAO Mark Barrysmith sold 13,247 shares of the business’s stock in a transaction that occurred on Tuesday, May 26th. The shares were sold at an average price of $27.18, for a total transaction of $360,053.46. Following the completion of the sale, the chief accounting officer directly owned 370,654 shares in the company, valued at $10,074,375.72. This trade represents a 3.45% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Over the last quarter, insiders sold 198,321 shares of company stock valued at $5,390,783. 0.77% of the stock is currently owned by company insiders.
Trending Headlines about Unity Software Here are the key news stories impacting Unity Software this week:
Positive Sentiment: Several reports highlighted Unity as one of the software names positioned to benefit from expanding AI adoption, with potential upside from stronger platform usage, enterprise demand, and new monetization opportunities. The Zacks Analyst Blog Highlights Arista Networks, Unity Software, HubSpot and Samsara Positive Sentiment: Another industry outlook piece said Unity and peers are benefiting from AI-infused software demand and cybersecurity-related tailwinds, which supports the bullish case for the stock. 3 Internet Software Stocks to Buy From a Challenging Industry Positive Sentiment: Wall Street price-target commentary suggested roughly 27% upside for Unity, with analysts’ earnings estimate increases reinforcing expectations for better performance ahead. Wall Street Analysts See a 27.16% Upside in Unity Software (U): Can the Stock Really Move This High? Neutral Sentiment: Additional coverage repeated the same AI-adoption theme, saying Unity is among software names likely to benefit as companies expand intelligent software and cloud capabilities. 4 Software Stocks Poised to Benefit From Expanding AI Adoption Negative Sentiment: Recent trading had shown Unity moving lower, reflecting some near-term pressure despite the more constructive analyst and industry backdrop. Unity Software Inc. (U) Registers a Bigger Fall Than the Market: Important Facts to Note Unity Software Profile (Free Report)
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.
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Unity Software Inc. (U - Free Report) closed the most recent trading day at $28.62, moving -1.11% from the previous trading session. The stock's change was less than the S&P 500's daily gain of 0.05%. Meanwhile, the Dow experienced a rise of 0.46%, and the technology-dominated Nasdaq saw a decrease of 0.64%.
The company's shares have seen an increase of 8.35% over the last month, surpassing the Computer and Technology sector's loss of 3.62% and the S&P 500's gain of 0.61%.
The upcoming earnings release of Unity Software Inc. will be of great interest to investors. The company's earnings report is expected on August 6, 2026. The company is predicted to post an EPS of $0.24, indicating a 192.31% growth compared to the equivalent quarter last year. Meanwhile, the latest consensus estimate predicts the revenue to be $510.89 million, indicating a 15.86% increase compared to the same quarter of the previous year.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $1.04 per share and revenue of $2.11 billion. These totals would mark changes of +20.93% and +14.29%, respectively, from last year.
Investors should also take note of any recent adjustments to analyst estimates for Unity Software Inc. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 8.09% higher. As of now, Unity Software Inc. holds a Zacks Rank of #1 (Strong Buy).
In the context of valuation, Unity Software Inc. is at present trading with a Forward P/E ratio of 27.83. This signifies a premium in comparison to the average Forward P/E of 18.34 for its industry.
We can additionally observe that U currently boasts a PEG ratio of 1.17. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. As of the close of trade yesterday, the Internet - Software industry held an average PEG ratio of 1.02.
The Internet - Software industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 154, finds itself in the bottom 38% echelons of all 250+ industries.
The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
The Zacks Internet Software industry is facing meaningful execution challenges as AI adoption accelerates. One of the biggest concerns is balancing rapid software development with governance and security. Monetizing AI also presents challenges. Macroeconomic conditions continue to weigh on software spending. The industry participants are facing the challenge of continuously investing in AI infrastructure while maintaining profitability. These players are committing substantial resources toward AI models, cloud infrastructure, engineering talent and platform modernization to remain competitive. However, industry players like Unity Software (U - Free Report) , HubSpot (HUBS - Free Report) and GitLab (GTLB - Free Report) are benefiting from rapid adoption of AI, which is expanding software usage. AI is driving higher platform engagement, broader enterprise adoption and new monetization opportunities.
Industry Description The Zacks Internet Software industry comprises companies offering application performance monitoring, infrastructure and application software, DevOps deployment and Security software. Industry participants offer online payment solutions, asset optimization software, multi-cloud application security and delivery, social networking, 3D printing applications, and cloud content management solutions. They use the SaaS-based cloud computing model to deliver solutions to end-users, as well as enterprises. Hence, subscription is the primary revenue source. Advertising is also a major revenue source. Industry participants target a variety of end markets, including banking and financial services, construction, consumer packaged goods, education, energy, legal, various service providers, federal governments, and animal health technology and services.
3 Trends Shaping the Future of the Internet Software Industry Enterprise Software Infrastructure Growing Rapidly: The industry is benefiting from rapid AI adoption, which is driving demand for enterprise software infrastructure. AI-generated code is driving sharp increases in code pushes and platform usage, creating structural demand for DevSecOps platforms that can manage security, governance and deployment at machine scale. Growing requirement of integrated platforms capable of orchestrating both human developers and AI agents while maintaining compliance and operational control is benefiting the industry’s prospects. Platform consolidation is becoming increasingly attractive as enterprises seek unified data and AI infrastructure.
Consumption-Based Pricing Gains Traction: The emergence of AI-native pricing models is a key catalyst. The industry players are moving beyond traditional seat-based licensing by introducing consumption-based credits and outcome-driven pricing. The companies are allowing customers to scale usage as AI adoption expands, opening new monetization channels that extend beyond conventional software subscriptions. AI-powered agents, automation and consumption-based pricing are creating incremental revenue streams while increasing customer productivity.
AI Agents & AI-Workloads Create Opportunities: The growing need to secure cloud platforms amid the increasing incidences of cyberattacks and hacking drives the demand for web-based cybersecurity software. As enterprises continue to move their on-premises workloads to cloud environments, application and infrastructure monitoring are gaining importance. This is increasing the demand for web-based performance management monitoring tools. AI applications, AI agents and cloud-based AI workloads are expanding the attack surface for businesses, which bodes well for industry participants.
Zacks Industry Rank Indicates Dim Prospects The Zacks Internet Software industry, placed within the broader Zacks Computer and Technology sector, carries a Zacks Industry Rank #152, which places it in the bottom 38% of more than 247 Zacks industries.
The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates dull near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.
The industry’s position in the bottom 50% of the Zacks-ranked industries is a result of a negative earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are pessimistic about this group’s earnings growth potential. The industry’s earnings estimates for 2026 have moved south by 1.7% since Aug. 31, 2025.
Given the bearish outlook of the industry, there are only a few stocks worth picking for healthy portfolio returns. However, before we present the top industry picks, it is worth looking at the industry’s shareholder returns and current valuation first.
Industry Lags S&P 500 and Sector The Zacks Internet Software industry has underperformed the broader Zacks Computer and Technology sector and the S&P 500 Index in the past year.
The industry has dropped 14.8% over this period compared with the S&P 500’s jump of 20.8% and the broader sector’s appreciation of 29.9%.
One-Year Price Performance
Industry's Current Valuation On the basis of forward 12-month price-to-sales (P/S), which is a commonly used multiple for valuing Internet Software stocks, we see that the industry is currently trading at 3.96X compared with the S&P 500’s 4.97X and the sector’s forward 12-month P/S of 6.71X.
Over the last five years, the industry has traded as high as 6.12X and as low as 3.69X, with a median of 4.73X, as the charts below show.
Forward 12-Month Price-to-Sales (P/S) Ratio
3 Internet Software Stocks to Buy Right Now Unity Software: This Zacks Rank #1 (Strong Buy) stock is benefiting from the rapid adoption of AI across game development and interactive content creation. You can see the complete list of today’s Zacks #1 Rank stocks here.
AI is accelerating game production, increasing new developer sign-ups and expanding demand for game discovery and monetization tools. The company is leveraging these trends through Vector, its AI-powered personalization platform, Unity AI for content creation and the upcoming commerce platform, while AI-native pricing models tied to agent usage are expected to create additional long-term revenue opportunities.
Unity shares have dropped 33.7% year to date (YTD). The Zacks Consensus Estimate for 2026 earnings has inched up by a penny to $1.04 per share over the past 30 days.
Price and Consensus: U
HubSpot: Another Zacks Rank #1 company, HubSpot's growth outlook is supported by rising enterprise adoption, platform consolidation and increasing AI monetization. The company continues to benefit from upmarket customer wins, multi-hub adoption and pricing initiatives, while AI-enabled offerings such as Customer Agent, Prospecting Agent and Data Agent are driving higher credit consumption and expanding recurring revenue opportunities.
The company believes that combining unified customer data with AI agents positions HubSpot as a comprehensive growth platform, enabling customers to automate marketing, sales and service workflows while increasing platform adoption over time.
HUBS shares have dropped 48.9% YTD. The Zacks Consensus Estimate for its 2026 earnings is pegged at $13.11 per share, down by a penny in the past 30 days.
Price and Consensus: HUBS
GitLab: This Zacks Rank #1 company is well positioned to benefit from the structural shift toward AI-powered software engineering. GitLab is winning larger enterprise deals as customers consolidate DevSecOps workflows on a single platform with integrated security, compliance, and AI. GitLab Ultimate anchors the upsell motion, while Dedicated and the Duo Agent Platform broaden deployment and monetization choices.
GitLab’s fiscal 2027 guidance points to continued revenue growth with non-GAAP operating profitability, supported by high cash generation and ongoing share repurchases. Remaining performance obligations of near $1.1 billion support revenue visibility as renewals and expansions flow through. Rising SaaS activity and early credit consumption indicate AI-assisted development is increasing usage across GitLab’s lifecycle.
GitLab shares have dropped 16.4% YTD. The Zacks Consensus Estimate for GTLB’s fiscal 2027 earnings is pegged at 81 cents per share, unchanged over the past 30 days.
Key Takeaways ANET is benefiting from AI networking demand and raised its 2026 AI revenue target to $3.5 billion. HUBS is seeing rapid AI agent adoption, with AI feature credit consumption up 67% quarter over quarter. U and IOT are expanding AI-powered platforms to improve automation, customer growth and efficiency. Artificial intelligence (AI) is rapidly reshaping the global technology landscape, driving a new wave of enterprise software spending. Businesses across industries ranging from manufacturing and healthcare to retail and financial services are accelerating investments in generative AI, large language models (LLMs), AI agents, intelligent automation, cloud platforms, and data analytics to improve productivity, enhance customer experiences, and streamline operations.
The AI boom is benefiting a broad range of software companies, including Arista Networks (ANET - Free Report) , Unity Software (U - Free Report) , HubSpot (HUBS - Free Report) and Samsara (IOT - Free Report) , which are integrating AI into their platforms to enhance product capabilities, improve customer outcomes and strengthen competitive positioning.
Before discussing the stocks in detail, let’s dig deeper into the trends.
Software Companies Gain From Rising Enterprise AI SpendingSoftware companies are benefiting from strong AI adoption by embedding intelligent copilots and automated agents into existing platforms, shifting from basic subscription models to consumption-based pricing. They are also using AI to dramatically accelerate their software development life cycles while expanding their data infrastructure capabilities to meet rising enterprise demands.
Continued strength of AI-driven software spending has been a key catalyst. Businesses are increasingly adopting solutions such as voice recognition, telehealth platforms, learning management systems, infrastructure monitoring software and spend management tools. Collaboration platforms, communication software and online education services are also seeing steady demand as workplaces and learning environments continue to evolve.
The pace of AI investment continues to accelerate. Gartner forecasts worldwide AI spending to reach $2.59 trillion in 2026, up 47% year over year, driven by higher investments in AI infrastructure, cloud services and enterprise software. It also expects end-user spending on AI models and platforms to reach $64 billion in 2026, up 63.4% from $39 billion in 2025. Spending on generative AI models is expected to surge 117%, while AI platform spending is projected to increase 36.9% in 2026. The growing adoption of AI-powered applications is creating significant opportunities for software companies that offer AI-enabled platforms and solutions.
Another major trend is the rise of Agentic AI. Software vendors are adopting usage-based AI pricing models, accelerating software development with AI coding tools and strengthening AI governance and compliance capabilities. The demand for multi-cloud interoperability is increasing, allowing enterprises to connect AI models and business systems seamlessly. These trends are positioning leading software companies to benefit from expanding AI adoption over the long term.
Our PicksUnity Software is benefiting significantly from the expanding adoption of AI across the interactive content industry. Unity’s AI-driven products, such as Vector and Unity AI, are accelerating game development, enhancing personalization and driving both user and creator growth. With 90% of game developers already using AI in their workflows and new Unity sign-ups up 20% quarter-over-quarter, Unity is positioned at the center of this transformation. In the first quarter of 2026, Strategic revenues grew 35% year over year, and AI-powered tools are driving both user and creator growth.
This Zacks Rank #1 (Strong Buy) company’s Zacks Consensus Estimate for fiscal 2026 earnings is pegged at $1.03 per share, which has been unchanged over the past 30 days. This represents 19.77% year-over-year growth. You can see the complete list of today’s Zacks #1 Rank stocks here.
HubSpot is benefiting significantly from expanding AI adoption, positioning the company for further upside. In the first quarter of 2026, the company highlighted that HubSpot’s AI-first strategy is translating into measurable growth, with AI-driven products like Customer Agent, Prospecting Agent and Data Agent seeing rapid adoption and usage. Active core seat users grew 90% year over year, and credit consumption for AI features surged 67% quarter over quarter. Customers are integrating AI into daily workflows, driving real outcomes such as improved CRM accuracy and higher support resolution rates.
This Zacks Rank #1 company’s Zacks Consensus Estimate for fiscal 2026 earnings is pegged at $13.11 per share, which has been unchanged over the past 30 days. This represents 35.15% year-over-year growth.
Arista Networks is benefiting from the accelerating adoption of AI, which is driving unprecedented demand for high-speed networking solutions. In the first quarter of 2026, Arista Networks achieved the #1 market share in high-speed switching above 10-gigabit Ethernet, largely due to its robust cloud and AI networking strategy. With more than 100 customers deploying 800-gigabit Ethernet and a raised AI revenue target to $3.5 billion for 2026, Arista’s innovative products like the Etherlink portfolio and XPO optics are driving growth.
This Zacks Rank #2 (Buy) company’s Zacks Consensus Estimate for fiscal 2026 earnings is pegged at $3.64 per share, which has increased by a penny over the past 30 days. This represents 22.15% year-over-year growth.
Samsara is benefiting from the expanding adoption of AI across the physical economy, positioning itself for further upside. As AI transitions from digital to physical applications, Samsara’s Connected Operations Platform leverages IoT hardware and AI to deliver real-time insights and automate workflows for asset-heavy industries. Customers are increasingly adopting AI-driven solutions like video-based safety, Waste Intelligence and Ground Intelligence, which help reduce costs, improve safety and boost operational efficiency. With more than $2 billion in ARR and strong growth in large customer segments, Samsara’s focus on operational AI and emerging products is driving durable, scalable growth.
This Zacks Rank #2 company’s Zacks Consensus Estimate for fiscal 2026 earnings is pegged at 75 cents per share, which has been unchanged over the past 30 days. This represents 33.93% year-over-year growth.
Shares of Unity Software Inc. (U - Free Report) have gained 7.8% over the past four weeks to close the last trading session at $29.27, but there could still be a solid upside left in the stock if short-term price targets of Wall Street analysts are any indication. Going by the price targets, the mean estimate of $37.22 indicates a potential upside of 27.2%.
The average comprises 22 short-term price targets ranging from a low of $28.00 to a high of $54.00, with a standard deviation of $6.03. While the lowest estimate indicates a decline of 4.3% from the current price level, the most optimistic estimate points to a 84.5% upside. More than the range, one should note the standard deviation here, as it helps understand the variability of the estimates. The smaller the standard deviation, the greater the agreement among analysts.
While the consensus price target is highly sought after by investors, the ability and unbiasedness of analysts in setting price targets have long been questionable. And investors making investment decisions solely based on this tool would arguably do themselves a disservice.
But, for U, an impressive average price target is not the only indicator of a potential upside. Strong agreement among analysts about the company's ability to report better earnings than they predicted earlier strengthens this view. While a positive trend in earnings estimate revisions doesn't gauge how much a stock could gain, it has proven to be powerful in predicting an upside.
Price, Consensus and EPS Surprise
Here's What You Should Know About Analysts' Price TargetsAccording to researchers at several universities across the globe, a price target is one of many pieces of information about a stock that misleads investors far more often than it guides. In fact, empirical research shows that price targets set by several analysts, irrespective of the extent of agreement, rarely indicate where the price of a stock could actually be heading.
While Wall Street analysts have deep knowledge of a company's fundamentals and the sensitivity of its business to economic and industry issues, many of them tend to set overly optimistic price targets. Are you wondering why?
They usually do that to drum up interest in shares of companies that their firms either have existing business relationships with or are looking to be associated with. In other words, business incentives of firms covering a stock often result in inflated price targets set by analysts.
However, a tight clustering of price targets, which is represented by a low standard deviation, indicates that analysts have a high degree of agreement about the direction and magnitude of a stock's price movement. While that doesn't necessarily mean the stock will hit the average price target, it could be a good starting point for further research aimed at identifying the potential fundamental driving forces.
That said, while investors should not entirely ignore price targets, making an investment decision solely based on them could lead to disappointing ROI. So, price targets should always be treated with a high degree of skepticism.
Why U Could Witness a Solid UpsideThere has been increasing optimism among analysts lately about the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates higher. And that could be a legitimate reason to expect an upside in the stock. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
Over the last 30 days, the Zacks Consensus Estimate for the current year has increased 8.1%, as one estimate has moved higher compared to no negative revision.
Moreover, U currently has a Zacks Rank #1 (Strong Buy), which means it is in the top 5% of more than 4,000 stocks that we rank based on four factors related to earnings estimates. Given an impressive externally-audited track record, this is a more conclusive indication of the stock's potential upside in the near term. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> .
Therefore, while the consensus price target may not be a reliable indicator of how much U could gain, the direction of price movement it implies does appear to be a good guide.
Unity Software Inc (NYSE:U) is drawing renewed optimism from Wall Street ahead of its second-quarter earnings.
Wedbush is raising its price target on the stock to $36 as Unity works through a significant business transition. The company's ironSource Ad Network is being sunset effective April 30, and its Supersonic unit is slated for divestiture, leaving Unity's business increasingly concentrated on its Vector advertising platform and core game engine.
Wedbush analysts said they had confidence in Unity's ability to recapture ad spend that had been flowing through the winding down ironSource network. According to the analysts, roughly 60% of ironSource spend has already migrated to Vector, and one advisor's firm now allocates about 20% of its budget to Vector, up sharply from around 5% before Unity overhauled its algorithm last year.
That data point is driving Wedbush to lift its longer term estimates, with the firm now projecting Unity's adjusted EBITDA will reach $915 million by fiscal 2028.
Unity is scheduled to report second quarter results before the market opens on August 6.
In the latest close session, Unity Software Inc. (U - Free Report) was down 2.01% at $29.27. The stock fell short of the S&P 500, which registered a loss of 0.14% for the day. Meanwhile, the Dow lost 0.01%, and the Nasdaq, a tech-heavy index, lost 0.57%.
Coming into today, shares of the company had gained 8.19% in the past month. In that same time, the Computer and Technology sector lost 4.82%, while the S&P 500 gained 0.25%.
Analysts and investors alike will be keeping a close eye on the performance of Unity Software Inc. in its upcoming earnings disclosure. The company's earnings report is set to go public on August 6, 2026. On that day, Unity Software Inc. is projected to report earnings of $0.24 per share, which would represent year-over-year growth of 192.31%. At the same time, our most recent consensus estimate is projecting a revenue of $510.89 million, reflecting a 15.86% rise from the equivalent quarter last year.
For the full year, the Zacks Consensus Estimates are projecting earnings of $1.03 per share and revenue of $2.11 billion, which would represent changes of +19.77% and +14.14%, respectively, from the prior year.
It's also important for investors to be aware of any recent modifications to analyst estimates for Unity Software Inc. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.
The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 5.65% higher. Unity Software Inc. is currently a Zacks Rank #1 (Strong Buy).
In the context of valuation, Unity Software Inc. is at present trading with a Forward P/E ratio of 28.91. This expresses a premium compared to the average Forward P/E of 19.55 of its industry.
Also, we should mention that U has a PEG ratio of 1.21. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. By the end of yesterday's trading, the Internet - Software industry had an average PEG ratio of 1.06.
The Internet - Software industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 104, finds itself in the top 43% echelons of all 250+ industries.
The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.
Unity Software Inc (NYSE:U) is drawing renewed optimism from Wall Street ahead of its second-quarter earnings.
Wedbush is raising its price target on the stock to $36 as Unity works through a significant business transition. The company's ironSource Ad Network is being sunset effective April 30, and its Supersonic unit is slated for divestiture, leaving Unity's business increasingly concentrated on its Vector advertising platform and core game engine.
Wedbush analysts said they had confidence in Unity's ability to recapture ad spend that had been flowing through the winding down ironSource network. According to the analysts, roughly 60% of ironSource spend has already migrated to Vector, and one advisor's firm now allocates about 20% of its budget to Vector, up sharply from around 5% before Unity overhauled its algorithm last year.
That data point is driving Wedbush to lift its longer term estimates, with the firm now projecting Unity's adjusted EBITDA will reach $915 million by fiscal 2028.
Unity is scheduled to report second quarter results before the market opens on August 6.
The recommendations of Wall Street analysts are often relied on by investors when deciding whether to buy, sell, or hold a stock. Media reports about these brokerage-firm-employed (or sell-side) analysts changing their ratings often affect a stock's price. Do they really matter, though?
Let's take a look at what these Wall Street heavyweights have to say about Unity Software Inc. (U - Free Report) before we discuss the reliability of brokerage recommendations and how to use them to your advantage.
Unity Software currently has an average brokerage recommendation (ABR) of 1.73, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 26 brokerage firms. An ABR of 1.73 approximates between Strong Buy and Buy.
Of the 26 recommendations that derive the current ABR, 16 are Strong Buy and one is Buy. Strong Buy and Buy respectively account for 61.5% and 3.9% of all recommendations.
Brokerage Recommendation Trends for U
Check price target & stock forecast for Unity Software here>>>
While the ABR calls for buying Unity Software, it may not be wise to make an investment decision solely based on this information. Several studies have shown limited to no success of brokerage recommendations in guiding investors to pick stocks with the best price increase potential.
Do you wonder why? As a result of the vested interest of brokerage firms in a stock they cover, their analysts tend to rate it with a strong positive bias. According to our research, brokerage firms assign five "Strong Buy" recommendations for every "Strong Sell" recommendation.
This means that the interests of these institutions are not always aligned with those of retail investors, giving little insight into the direction of a stock's future price movement. It would therefore be best to use this information to validate your own analysis or a tool that has proven to be highly effective at predicting stock price movements.
With an impressive externally audited track record, our proprietary stock rating tool, the Zacks Rank, which classifies stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), is a reliable indicator of a stock's near-term price performance. So, validating the Zacks Rank with ABR could go a long way in making a profitable investment decision.
ABR Should Not Be Confused With Zacks RankAlthough both Zacks Rank and ABR are displayed in a range of 1--5, they are different measures altogether.
The ABR is calculated solely based on brokerage recommendations and is typically displayed with decimals (example: 1.28). In contrast, the Zacks Rank is a quantitative model allowing investors to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5.
It has been and continues to be the case that analysts employed by brokerage firms are overly optimistic with their recommendations. Because of their employers' vested interests, these analysts issue more favorable ratings than their research would support, misguiding investors far more often than helping them.
On the other hand, earnings estimate revisions are at the core of the Zacks Rank. And empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
Furthermore, the different grades of the Zacks Rank are applied proportionately across all stocks for which brokerage analysts provide earnings estimates for the current year. In other words, at all times, this tool maintains a balance among the five ranks it assigns.
There is also a key difference between the ABR and Zacks Rank when it comes to freshness. When you look at the ABR, it may not be up-to-date. Nonetheless, since brokerage analysts constantly revise their earnings estimates to reflect changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in predicting future stock prices.
Is U Worth Investing In?In terms of earnings estimate revisions for Unity Software, the Zacks Consensus Estimate for the current year has increased 5.6% over the past month to $1.03.
Analysts' growing optimism over the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates higher, could be a legitimate reason for the stock to soar in the near term.
The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #1 (Strong Buy) for Unity Software. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Therefore, the Buy-equivalent ABR for Unity Software may serve as a useful guide for investors.
