Unity Reports Third Quarter 2025 Financial Results

Unity (NYSE:U), the leading platform to create and grow games and interactive experiences, today announced financial results for the third quarter ended September 30, 2025.

"Third-quarter results once again meaningfully exceeded expectations on both revenue and Adjusted EBITDA, powered by Unity Vector AI, as well as continued strength in Create. As consumer enthusiasm for interactive entertainment continues to grow, Unity is poised to grow with it."

Earnings Webcast

Unity will hold a public webcast at 8:30 a.m. ET today to discuss the results for its third quarter of 2025. 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.

Third Quarter 2025 Results:

• Revenue was $471 million, compared to $447 million in the third quarter 2024.
• Create Solutions revenue was $152 million, compared to $147 million in the third quarter 2024.
• Grow Solutions revenue was $318 million, compared to $299 million in the third quarter 2024.
• GAAP net loss was $127 million, with a margin of (27)%.
• GAAP basic and diluted net loss per share was $0.30.
• Adjusted EBITDA was $109 million, with a margin of 23%.
• Adjusted earnings per share was $0.20.
• Net cash provided by operating activities was $155 million.
• Free cash flow was $151 million.

Revenue

Revenue was $471 million, up 5% year-over-year.

Create Solutions revenue was $152 million, up 3% year-over-year. The increase was driven by strong growth in subscription revenue, offset by decreases in consumption services revenue, driven by our portfolio reset.

Grow Solutions revenue was $318 million, up 6% year-over-year. The increase was driven by strong performance of the Unity Ad Network, powered by Unity Vector. The growth was slightly offset by year-over-year declines in our other Grow businesses.

Basic and Diluted Net Loss per share

Basic and diluted net loss per share was $0.30, as compared to $0.31 for the same period in 2024.

Net Loss and Net Cash Provided by Operating Activities

Net loss for the quarter was $127 million, compared to $125 million in the third quarter of 2024.

Net loss margin was (27)%, compared to (28)% in the third quarter of 2024.

Net cash provided by operating activities for the quarter was $155 million, compared to $122 million in the third quarter of 2024.

Adjusted EBITDA, Free Cash Flow, and Adjusted EPS

Adjusted EBITDA for the quarter was $109 million, with a margin of 23%, compared to $92 million in the third quarter of 2024, with a margin of 21%. The year-over-year improvement was driven by better cost control and higher revenue.

Free cash flow for the quarter was $151 million, compared to $115 million in the third quarter of 2024.

Adjusted EPS for the quarter was $0.20, compared to $0.19 in the third quarter of 2024.

Liquidity

As of September 30, 2025, our cash and cash equivalents, and restricted cash was $1,909 million, and increased by $381 million, as compared with $1,528 million as of December 31, 2024. This increase was primarily driven by our operations, and proceeds from issuance of common stock from employee equity plans, offset by the net cash outflows from our debt refinancing.

Q4 2025 Guidance¹

We expect Fourth Quarter Revenue of $480 million to $490 million.

• In Grow, we expect mid-single digit sequential revenue growth from Q3 to Q4.
• In Create, we expect high-single digit year-over-year revenue growth (excluding the impact of non-strategic revenue).

We expect Fourth Quarter Adjusted EBITDA of $110 million to $115 million.

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.

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 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 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 of acquired intangible assets, depreciation, and restructurings and reorganizations. We define adjusted research and development expense as research and development expense, excluding expenses associated with stock-based compensation, amortization 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 of acquired intangible assets, depreciation, and restructurings and reorganizations. We define adjusted general and administrative expense as general and administrative expense excluding expenses associated with stock-based compensation, depreciation, 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 net income or loss excluding benefits or expenses associated with stock-based compensation, amortization 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.

Cautionary Statement Regarding Forward-Looking Statements

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, but not limited to, statements regarding Unity's outlook and future financial performance, including: (i) Unity's position at an inflection point and its ability to further enhance its platform, accelerate product innovation and enhance financial performance; (ii) expectations regarding Vector, including expectations regarding Vector's improvements and performance and the expansion of Vector across our Grow solutions; (iii) our strategic initiatives, including our continued investment and focus on artificial intelligence tools; (iv) expectations regarding Vector leveraging behavioral data available through Unity Runtime, including expectations of multi-year growth of the product portfolio and its impact on financial results; (v) expectations regarding the launch of Unity 6.3, including the timing of the release and market acceptance; (vi) expectations regarding our competitive position and growth prospects; (vii) our controls around spend and our operating structure having the potential to drive meaningful improvements in operating margins over time; and (viii) Unity's financial guidance for the fourth quarter 2025. 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) competition in the advertising market and Unity's ability to compete effectively; (iii) ongoing geopolitical instability, particularly in Israel, where a significant portion of the Grow operations is located; (iv) Unity's ability to recover or reengage its customers, or attract new customers; (v) the impact of any decisions to change how Unity prices its products and services; (vi) Unity's ability to achieve and sustain profitability; (vii) Unity's ability to retain existing customers and expand the use of its platform; (viii) Unity's ability to further expand into new industries and attract new customers; (ix) 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; (x) Unity's ability to maintain favorable relationships with hardware, operating system, device, game console and other technology providers; (xi) breaches in its security measures, unauthorized access to its platform, data, or its customers' or other users' personal data; (xii) Unity's ability to manage growth effectively and manage costs effectively; (xiii) the rapidly changing and increasingly stringent laws, regulations, contractual obligations and industry standards that relate to privacy, data security and the protection of children; (xiv) Unity's ability to successfully transition executive leadership; (xv) Unity's ability to adapt effectively to rapidly changing technology, evolving industry standards, changing regulations, or changing customer needs, requirements, or preferences; and (xvi) 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 20, 2025 and Quarterly Reports on Form 10-Q filed with the SEC on May 7, 2025 and August 6, 2025 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.

Source: Unity Software Inc.

View source version on businesswire.com: https://www.businesswire.com/news/home/20251105177294/en/

Investor Relations:

Alex Giaimo, Head of Investor Relations

[email protected]

Media Relations:

Julianne Whitelaw, Head of Corporate Communications

[email protected]