Unity Software (U) reports Q2 2026 earnings and revenue beats as Strategic Grow and Vector AI drive growth.
Stock Earnings Results
August 6, 2026
Table of Contents
August 6, 2026
Unity Software Inc. (NYSE: U) reported second-quarter 2026 results above expectations, supported by higher revenue, stronger adjusted EPS, sharp Strategic Grow revenue growth, improved adjusted EBITDA, strong free cash flow, and continued momentum from Unity Vector AI.
Unity is a software platform for creating, deploying, and growing games and interactive experiences across mobile, PC, console, extended reality, and other digital platforms.
The company reported adjusted EPS of $0.28, above estimates of $0.24, representing a 16.7% earnings surprise. Revenue came in at $546.47 million, above estimates of $511.84 million, with revenue growth of 23.9%.
Revenue increased 24% year-over-year to $546 million.
GAAP net loss was $23 million.
GAAP basic and diluted net loss per share was $0.05.
Adjusted EBITDA was $160 million.
Adjusted EBITDA margin was 29%.
Adjusted EPS was $0.28, compared with $0.18 in the prior-year quarter.
Net cash provided by operating activities was $206 million.
Free cash flow was $202 million.
Strategic revenue increased 38% year-over-year to $486 million.
Strategic Grow revenue increased 63% to $329 million.
Strategic Create revenue increased 5% to $157 million.
Non-Strategic revenue declined 33% to $60 million.
Unity said Non-Strategic revenue mainly included revenue from the ironSource Ads network, which was sunset on April 30, and the Supersonic publishing business, which was sold on August 4.
Grow Solutions revenue increased 35% year-over-year to $389 million.
Unity said the growth was driven by the Unity Ads Network and Unity Vector.
That growth was partly offset by declines in the ironSource Ads Network.
The result shows that Unity’s ad business is becoming more focused around its newer strategic products after the company moved away from older non-strategic revenue streams.
Create Solutions revenue increased 2% year-over-year to $158 million.
Unity said the increase was driven by higher subscription revenue.
That was partly offset by lower cloud and hosting services revenue following the company’s 2025 portfolio reset.
Strategic Create revenue increased 5%, or 14% when excluding a $12 million one-time revenue item in the prior-year quarter.
Adjusted EBITDA increased to $160 million from $90 million in the prior-year quarter.
Adjusted EBITDA margin improved to 29% from 21%.
Unity said the improvement was driven by higher revenue and continued cost control.
Free cash flow increased to $202 million from $127 million.
The combination of revenue growth, higher adjusted EBITDA, and stronger free cash flow was the main strength in the quarter.
Unity ended the quarter with $2.36 billion in cash, cash equivalents, and restricted cash.
That was up from $2.06 billion at the end of 2025.
The increase was primarily driven by operations.
The balance sheet gives Unity flexibility as it continues investing in AI tools, product development, and its strategic platform reset.
For the third quarter of 2026, Unity expects Strategic Revenue of $540 million to $550 million.
That would represent year-over-year growth of 44% to 47%.
Strategic Grow Revenue is expected to be $380 million to $385 million, up 68% to 70%.
Strategic Create Revenue is expected to be $159 million to $163 million, up 7% to 10%.
Non-Strategic Revenue is expected to be $20 million.
Adjusted EBITDA is expected to be $185 million to $190 million, up 69% to 74% year-over-year.
The guidance reflects stronger growth in the strategic business and the continued wind-down of non-strategic revenue.
Unity delivered one of its stronger quarters as a public company.
Revenue beat expectations, adjusted EPS topped estimates, Strategic Revenue increased 38%, adjusted EBITDA margin reached 29%, and free cash flow improved sharply. Unity Vector AI continued to support growth in the ads business, while management continued moving away from non-strategic assets.
The key question is whether Unity can keep growing its strategic platform while improving profitability and proving that Vector AI can drive durable revenue growth.
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