Unity (NYSE: U) narrows 2025 loss as cash flow strengthens
Filing Impact
Filing Sentiment
Form Type
8-K
Rhea-AI Filing Summary
Unity Software Inc. reported improving growth and profitability trends for Q4 and full-year 2025. Fourth quarter revenue was $503 million, up 10% year-over-year, with Create Solutions at $165 million and Grow Solutions at $338 million. Vector drove mid-teen sequential revenue growth and accounted for 56% of Grow revenue.
GAAP net loss for Q4 narrowed to $89 million, with margin improving to (18)% from (27)% a year earlier. Adjusted EBITDA was $125 million with a 25% margin, and free cash flow was $119 million. For 2025, revenue reached $1.85 billion and net loss declined to $401 million. Unity ended the year with $2.06 billion in cash and guided Q1 2026 revenue to $480–$490 million and adjusted EBITDA to $105–$110 million.
Positive
- None.
Negative
- None.
Insights
Unity is showing healthier growth, better margins, and strong cash generation, but still runs sizeable GAAP losses.
Unity delivered Q4 2025 revenue of $503 million, up 10% year-over-year, with Create up 8% and Grow up 11%. Management highlighted Vector as a key driver, representing 56% of Grow revenue, while IronSource Ad Network declines were a headwind.
Profitability metrics improved meaningfully. GAAP net loss shrank to $89 million with margin improving to (18)% from (27)%, and adjusted EBITDA rose to $125 million with a 25% margin. Full-year net loss fell to $401 million from $664 million, while operating cash flow increased to $422.9 million.
Liquidity is solid, with cash, cash equivalents and restricted cash of $2.064 billion as of December 31, 2025. Guidance for Q1 2026 calls for revenue of $480–$490 million and adjusted EBITDA of $105–$110 million, implying continued profitability on a non-GAAP basis even as revenue steps down seasonally from Q4 levels.
8-K Event Classification
2 items: 2.02, 9.01
2 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 11, 2026
| (Exact name of registrant as specified in its charter) | ||||||||
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( | ||||||||
(Registrant's telephone number, including area code) | ||||||||
| Not applicable | ||||||||
| (Former name or former address, if changed since last report) | ||||||||
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
| Securities registered pursuant to Section 12(b) of the Act: | ||||||||||||||
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On February 11, 2026, Unity Software Inc. (“Unity” or the “Company”) issued a press release announcing its financial results for the quarter and year ended December 31, 2025. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference. The Company also posted supplemental material dated February 11, 2026, on the Investor Relations page of its website at investors.unity.com.
The information in this Item 2.02 of this Current Report on Form 8-K and the exhibit attached hereto as 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit Number | Description of Exhibit | |||||||
| 99.1 | Press Release dated February 11, 2026 of Unity Software Inc. | |||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |||||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| UNITY SOFTWARE INC. | |||||||||||
| Date: February 11, 2026 | By: | /s/ Jarrod Yahes | |||||||||
| Jarrod Yahes | |||||||||||
| Senior Vice President, Chief Financial Officer | |||||||||||
| (Principal Financial Officer) | |||||||||||
Exhibit 99.1
Unity Reports Fourth Quarter and Fiscal Year 2025 Financial Results
SAN FRANCISCO, February 11, 2026 -- Unity (NYSE: U), the world’s leading game engine, today announced financial results for the fourth quarter and fiscal year ended December 31, 2025.
“Fourth quarter results once again comfortably exceeded the high-end of our guidance, led by exceptional performance from Vector, which experienced its third consecutive quarter of mid-teen sequential revenue growth, and the best growth we’ve seen in Create in over two years,” said Matt Bromberg, President and CEO of Unity.
“With Vector demonstrating rapid growth and Unity 6 adoption at the fastest rate we’ve ever experienced, our goal of becoming the essential infrastructure for the next generation of interactive entertainment is coming into clear focus.”
Earnings Webcast
Unity will hold a public webcast at 8:30 a.m. ET today to discuss the results for its fourth quarter and fiscal year 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.
Fourth Quarter 2025 Results:
•Revenue was $503 million, compared to $457 million in the fourth quarter 2024.
•Create Solutions revenue was $165 million, compared to $152 million in the fourth quarter 2024.
•Grow Solutions revenue was $338 million, compared to $305 million in the fourth quarter 2024.
•GAAP net loss was $89 million, with a margin of (18)%.
•GAAP basic and diluted net loss per share was $0.21.
•Adjusted EBITDA was $125 million, with a margin of 25%.
•Adjusted earnings per share was $0.24.
•Net cash provided by operating activities was $121 million.
•Free cash flow was $119 million.
Revenue
Revenue was $503 million, up 10% year-over-year.
Create Solutions revenue was $165 million, up 8% year-over-year. The increase was driven by strong growth in subscription revenue.
Grow Solutions revenue was $338 million, up 11% year-over-year. The change was driven by mid-teen sequential quarterly revenue growth from Unity Vector, which represented 56% of total Grow Solutions revenue in the fourth quarter. The growth was partially offset by declines in the IronSource Ad Network, which represented 11% of total Grow Solutions revenue in the fourth quarter.
© 2026 Unity Technologies | U N I T Y . C O M | | | 1 | |||||||||||
Basic and Diluted Net Loss per share
Basic and diluted net loss per share was $0.21, as compared to $0.30 for the same period in 2024.
Net Loss and Net Cash Provided by Operating Activities
Net loss for the quarter was $89 million, compared to $123 million in the fourth quarter of 2024.
Net loss margin was (18)%, compared to (27)% in the fourth quarter of 2024.
Net cash provided by operating activities for the quarter was $121 million, compared to $112 million in the fourth quarter of 2024.
Adjusted EBITDA, Free Cash Flow, and Adjusted EPS
Adjusted EBITDA for the quarter was $125 million, with a margin of 25%, compared to $106 million in the fourth quarter of 2024, with a margin of 23%. The year-over-year improvement was driven by better cost control and higher revenue.
Free cash flow for the quarter was $119 million, compared to $106 million in the fourth quarter of 2024.
Adjusted EPS for the quarter was $0.24, compared to $0.20 in the fourth quarter of 2024.
Liquidity
As of December 31, 2025, our cash and cash equivalents, and restricted cash was $2,064 million, and increased by $536 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 upon exercise of stock options and purchase of ESPP shares, offset by the net cash outflows from our debt refinancing.
Q1 2026 Guidance1
We expect First Quarter Revenue of $480 million to $490 million.
•In Grow, we expect revenue to be flat on a sequential basis.
•In Create, we expect double digit year-over-year revenue growth (excluding the impact of non-strategic revenue).
We expect First Quarter Adjusted EBITDA of $105 million to $110 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.
1 These statements are forward-looking and actual results may differ materially. Refer to the “Forward-Looking Statements” safe harbor section below for information on the factors that could cause our actual results to differ materially from these forward-looking statements.
We have not reconciled our estimates for non-GAAP financial measures in this press release and in the earnings call referencing this press release to GAAP due to the uncertainty and potential variability of expenses that may be incurred in the future. As a result, a reconciliation is not available without unreasonable effort and we are unable to address the probable significance of the unavailable information. We have provided a reconciliation of other GAAP to non-GAAP financial measures in the financial statement tables for our fourth quarter and fiscal year 2025 non-GAAP results included in this press release.
© 2026 Unity Technologies | U N I T Y . C O M | | | 2 | |||||||||||
| UNITY SOFTWARE INC. | ||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
| (In thousands, except par share data) | ||||||||
| (Unaudited) | ||||||||
| As of | ||||||||
| December 31, 2025 | December 31, 2024 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 2,055,840 | $ | 1,517,672 | ||||
| Accounts receivable, net | 643,611 | 573,884 | ||||||
| Prepaid expenses and other | 113,012 | 133,795 | ||||||
| Total current assets | 2,812,463 | 2,225,351 | ||||||
| Property and equipment, net | 68,289 | 98,819 | ||||||
| Goodwill | 3,166,304 | 3,166,304 | ||||||
| Intangible assets, net | 650,544 | 1,066,235 | ||||||
| Other assets | 140,006 | 180,698 | ||||||
| Total assets | $ | 6,837,606 | $ | 6,737,407 | ||||
| Liabilities and stockholders' equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 13,981 | $ | 13,948 | ||||
| Accrued expenses and other | 299,541 | 294,951 | ||||||
| Publisher payables | 431,494 | 394,284 | ||||||
| Deferred revenue | 224,405 | 186,304 | ||||||
| Current portion of convertible notes | 556,451 | — | ||||||
| Total current liabilities | 1,525,872 | 889,487 | ||||||
| Convertible notes | 1,678,899 | 2,238,922 | ||||||
| Long-term deferred revenue | 14,038 | 16,846 | ||||||
| Other long-term liabilities | 122,660 | 165,004 | ||||||
| Total liabilities | 3,341,469 | 3,310,259 | ||||||
| Commitments and contingencies | ||||||||
| Redeemable noncontrolling interests | 252,637 | 230,627 | ||||||
| Stockholders' equity: | ||||||||
Common stock, $0.000005 par value: | ||||||||
Authorized shares - 1,000,000 and 1,000,000 | ||||||||
Issued and outstanding shares - 432,860 and 409,393 | 2 | 2 | ||||||
| Additional paid-in capital | 7,378,295 | 6,936,038 | ||||||
| Accumulated other comprehensive loss | (2,156) | (9,425) | ||||||
| Accumulated deficit | (4,138,709) | (3,735,944) | ||||||
| Total Unity Software Inc. stockholders' equity | 3,237,432 | 3,190,671 | ||||||
| Noncontrolling interest | 6,068 | 5,850 | ||||||
| Total stockholders' equity | 3,243,500 | 3,196,521 | ||||||
| Total liabilities and stockholders' equity | $ | 6,837,606 | $ | 6,737,407 | ||||
© 2026 Unity Technologies | U N I T Y . C O M | | | 3 | |||||||||||
| UNITY SOFTWARE INC. | ||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS | ||||||||||||||
| (In thousands, except per share amounts) | ||||||||||||||
| (Unaudited) | ||||||||||||||
| Three Months Ended | Year Ended | |||||||||||||
| December 31, | December 31, | |||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||
| Revenue | $ | 503,089 | $ | 457,099 | $ | 1,849,648 | $ | 1,813,255 | ||||||
| Cost of revenue | 129,239 | 115,537 | 477,739 | 480,853 | ||||||||||
| Gross profit | 373,850 | 341,562 | 1,371,909 | 1,332,402 | ||||||||||
| Operating expenses | ||||||||||||||
| Research and development | 249,727 | 217,970 | 929,516 | 924,830 | ||||||||||
| Sales and marketing | 163,512 | 175,747 | 652,907 | 752,649 | ||||||||||
| General and administrative | 67,121 | 71,499 | 268,539 | 410,072 | ||||||||||
| Total operating expenses | 480,360 | 465,216 | 1,850,962 | 2,087,551 | ||||||||||
| Loss from operations | (106,510) | (123,654) | (479,053) | (755,149) | ||||||||||
| Interest expense | (6,043) | (5,839) | (24,007) | (23,542) | ||||||||||
| Interest income and other income (expense), net | 15,466 | 9,108 | 107,862 | 111,558 | ||||||||||
| Loss before income taxes | (97,087) | (120,385) | (395,198) | (667,133) | ||||||||||
| Provision for (benefit from) Income taxes | (7,694) | 2,138 | 6,295 | (2,846) | ||||||||||
| Net loss | (89,393) | (122,523) | (401,493) | (664,287) | ||||||||||
| Net income (loss) attributable to noncontrolling interest and redeemable noncontrolling interests | 570 | 204 | 1,272 | (173) | ||||||||||
| Net loss attributable to Unity Software Inc. | (89,963) | (122,727) | (402,765) | (664,114) | ||||||||||
| Basic and diluted net loss per share attributable to Unity Software Inc. | $ | (0.21) | $ | (0.30) | $ | (0.96) | $ | (1.68) | ||||||
| Weighted-average shares used in computation of basic and diluted net loss per share | 429,833 | 405,172 | 420,914 | 395,951 | ||||||||||
| Net loss | (89,393) | (122,523) | (401,493) | (664,287) | ||||||||||
| Change in foreign currency translation adjustment | 3,954 | (8,102) | 9,201 | (5,544) | ||||||||||
| Comprehensive loss | $ | (85,439) | $ | (130,625) | $ | (392,292) | $ | (669,831) | ||||||
| Net income (loss) attributable to noncontrolling interest and redeemable noncontrolling interests | 570 | 204 | 1,272 | (173) | ||||||||||
| Foreign currency translation attributable to noncontrolling interest and redeemable noncontrolling interests | 832 | (1,664) | 1,932 | (1,128) | ||||||||||
| Comprehensive loss attributable to noncontrolling interest and redeemable noncontrolling interests | 1,402 | (1,460) | 3,204 | (1,301) | ||||||||||
| Comprehensive loss attributable to Unity Software Inc. | $ | (86,841) | $ | (129,165) | $ | (395,496) | $ | (668,530) | ||||||
© 2026 Unity Technologies | U N I T Y . C O M | | | 4 | |||||||||||
| UNITY SOFTWARE INC. | ||||||||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||
| (In thousands) | ||||||||||||||
| (Unaudited) | ||||||||||||||
| Three Months Ended | Year Ended | |||||||||||||
| December 31, | December 31, | |||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||
| Operating activities | ||||||||||||||
| Net loss | $ | (89,393) | $ | (122,523) | $ | (401,493) | $ | (664,287) | ||||||
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||||||||
| Depreciation and amortization | 131,906 | 103,161 | 460,944 | 408,980 | ||||||||||
| Stock-based compensation expense | 92,852 | 110,356 | 385,214 | 596,249 | ||||||||||
| Gain on repayment of convertible note | — | — | (42,744) | (61,371) | ||||||||||
| Impairment of property and equipment | 971 | (83) | 5,882 | 22,791 | ||||||||||
| Other | 837 | 8,574 | (3,683) | 23,309 | ||||||||||
| Changes in assets and liabilities, net of effects of acquisitions: | ||||||||||||||
| Accounts receivable, net | (43,244) | 1,896 | (69,078) | 37,359 | ||||||||||
| Prepaid expenses and other | 13,984 | 746 | 24,071 | (11,203) | ||||||||||
| Other assets | 3,261 | (7,113) | 33,819 | (2,746) | ||||||||||
| Accounts payable | (6,444) | 652 | (545) | 742 | ||||||||||
| Accrued expenses and other | 72 | 8,696 | 4,361 | (6,671) | ||||||||||
| Publisher payables | 34,304 | 11,731 | 37,210 | 9,170 | ||||||||||
| Other long-term liabilities | (13,169) | (1,181) | (44,825) | (47,963) | ||||||||||
| Deferred revenue | (4,502) | (2,720) | 33,822 | 11,194 | ||||||||||
| Net cash provided by operating activities | 121,435 | 112,192 | 422,955 | 315,553 | ||||||||||
| Investing activities | ||||||||||||||
| Purchases of non-marketable investments | — | — | (2,000) | — | ||||||||||
| Purchases of intangible assets | (3,000) | — | (3,000) | (12,860) | ||||||||||
| Purchases of property and equipment | (2,753) | (6,442) | (19,024) | (29,549) | ||||||||||
| Net cash used in investing activities | (5,753) | (6,442) | (24,024) | (42,409) | ||||||||||
| 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) | (414,999) | ||||||||||
| Proceeds from issuance of common stock upon exercise of stock options and purchase of ESPP shares | 33,978 | 19,390 | 119,454 | 76,692 | ||||||||||
| Net cash provided by (used in) financing activities | 33,978 | 19,390 | 110,091 | (338,307) | ||||||||||
| Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash | 5,553 | (13,227) | 27,398 | (11,223) | ||||||||||
| Increase (decrease) in cash, cash equivalents, and restricted cash | 155,213 | 111,913 | 536,420 | (76,386) | ||||||||||
| Cash, cash equivalents, and restricted cash, beginning of period | 1,909,088 | 1,415,968 | 1,527,881 | 1,604,267 | ||||||||||
| Cash, cash equivalents, and restricted cash, end of period | $ | 2,064,301 | $ | 1,527,881 | $ | 2,064,301 | $ | 1,527,881 | ||||||
© 2026 Unity Technologies | U N I T Y . C O M | | | 5 | |||||||||||
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.
© 2026 Unity Technologies | U N I T Y . C O M | | | 6 | |||||||||||
| UNITY SOFTWARE, INC. | ||||||||||||||
| Non-GAAP Reconciliation | ||||||||||||||
| (In thousands) | ||||||||||||||
| Three Months Ended | Year Ended | |||||||||||||
| December 31, | December 31, | |||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||
| Adjusted EBITDA reconciliation | ||||||||||||||
| Revenue | $ | 503,089 | $ | 457,099 | $ | 1,849,648 | $ | 1,813,255 | ||||||
| GAAP net loss | $ | (89,393) | $ | (122,523) | $ | (401,493) | $ | (664,287) | ||||||
| Add: | ||||||||||||||
| Stock-based compensation expense | $ | 91,847 | $ | 110,203 | $ | 380,159 | $ | 469,128 | ||||||
| Amortization of intangible assets expense | $ | 121,478 | $ | 88,465 | $ | 418,691 | $ | 353,371 | ||||||
| Depreciation expense | $ | 10,428 | $ | 14,696 | $ | 42,253 | $ | 55,609 | ||||||
| Restructuring and reorganization costs | $ | 7,651 | $ | 16,398 | $ | 46,781 | $ | 266,855 | ||||||
| Interest expense | $ | 6,043 | $ | 5,839 | $ | 24,007 | $ | 23,542 | ||||||
| Interest income and other income (expense), net | $ | (15,466) | $ | (9,108) | $ | (107,862) | $ | (111,558) | ||||||
| Provision for (benefit from) income taxes | $ | (7,694) | $ | 2,138 | $ | 6,295 | $ | (2,846) | ||||||
| Adjusted EBITDA | $ | 124,894 | $ | 106,108 | $ | 408,831 | $ | 389,814 | ||||||
| GAAP net loss margin | (18) | % | (27) | % | (22) | % | (37) | % | ||||||
| Adjusted EBITDA margin | 25 | % | 23 | % | 22 | % | 21 | % | ||||||
| Adjusted gross profit reconciliation | ||||||||||||||
| GAAP gross profit | $ | 373,850 | $ | 341,562 | $ | 1,371,909 | $ | 1,332,402 | ||||||
| Add: | ||||||||||||||
| Stock-based compensation expense | 11,019 | 9,685 | 39,103 | 43,566 | ||||||||||
| Amortization of intangible assets expense | 27,409 | 27,293 | 108,399 | 108,580 | ||||||||||
| Depreciation expense | 1,727 | 2,372 | 6,941 | 9,613 | ||||||||||
| Restructuring and reorganization costs | 1,001 | 117 | 1,787 | 15,154 | ||||||||||
| Adjusted gross profit | $ | 415,006 | $ | 381,029 | $ | 1,528,139 | $ | 1,509,315 | ||||||
| GAAP gross margin | 74 | % | 75 | % | 74 | % | 73 | % | ||||||
| Adjusted gross margin | 82 | % | 83 | % | 83 | % | 83 | % | ||||||
| Operating expenses reconciliation | ||||||||||||||
| Cost of revenue | ||||||||||||||
| GAAP cost of revenue | $ | 129,239 | $ | 115,537 | $ | 477,739 | $ | 480,853 | ||||||
| Stock-based compensation expense | (11,019) | (9,685) | (39,103) | (43,566) | ||||||||||
| Amortization of intangible assets expense | (27,409) | (27,293) | (108,399) | (108,580) | ||||||||||
| Depreciation expense | (1,727) | (2,372) | (6,941) | (9,613) | ||||||||||
| Restructuring and reorganization costs | (1,001) | (117) | (1,787) | (15,154) | ||||||||||
| Adjusted cost of revenue | $ | 88,083 | $ | 76,070 | $ | 321,509 | $ | 303,940 | ||||||
| GAAP cost of revenue as a percentage of revenue | 26 | % | 25 | % | 26 | % | 27 | % | ||||||
| Adjusted cost of revenue as a percentage of revenue | 18 | % | 17 | % | 17 | % | 17 | % | ||||||
© 2026 Unity Technologies | U N I T Y . C O M | | | 7 | |||||||||||
| UNITY SOFTWARE, INC. | ||||||||||||||
| Non-GAAP Reconciliation | ||||||||||||||
| (In thousands) | ||||||||||||||
| Three Months Ended | Year Ended | |||||||||||||
| December 31, | December 31, | |||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||
| Research and development | ||||||||||||||
| GAAP research and development expense | $ | 249,727 | $ | 217,970 | $ | 929,516 | $ | 924,830 | ||||||
| Stock-based compensation expense | (40,965) | (58,077) | (188,264) | (240,556) | ||||||||||
| Amortization of intangible assets expense | (52,548) | (17,737) | (138,714) | (69,345) | ||||||||||
| Depreciation expense | (5,095) | (7,025) | (20,867) | (26,686) | ||||||||||
| Restructuring and reorganization costs | (7,322) | (1,892) | (21,752) | (54,460) | ||||||||||
| Adjusted research and development expense | $ | 143,797 | $ | 133,239 | $ | 559,919 | $ | 533,783 | ||||||
| GAAP research and development expense as a percentage of revenue | 50 | % | 48 | % | 50 | % | 51 | % | ||||||
| Adjusted research and development expense as a percentage of revenue | 28 | % | 29 | % | 30 | % | 29 | % | ||||||
| Sales and marketing | ||||||||||||||
| GAAP sales and marketing expense | $ | 163,512 | $ | 175,747 | $ | 652,907 | $ | 752,649 | ||||||
| Stock-based compensation expense | (14,576) | (20,898) | (67,996) | (95,171) | ||||||||||
| Amortization of intangible assets expense | (41,521) | (43,435) | (171,578) | (175,446) | ||||||||||
| Depreciation expense | (2,173) | (3,199) | (8,667) | (11,567) | ||||||||||
| Restructuring and reorganization costs | (1,478) | (5,135) | (10,992) | (56,888) | ||||||||||
| Adjusted sales and marketing expense | $ | 103,764 | $ | 103,080 | $ | 393,674 | $ | 413,577 | ||||||
| GAAP sales and marketing expense as a percentage of revenue | 32 | % | 38 | % | 35 | % | 42 | % | ||||||
| Adjusted sales and marketing expense as a percentage of revenue | 21 | % | 23 | % | 22 | % | 23 | % | ||||||
| General and administrative | ||||||||||||||
| GAAP general and administrative expense | $ | 67,121 | $ | 71,499 | $ | 268,539 | $ | 410,072 | ||||||
| Stock-based compensation expense | (25,287) | (21,543) | (84,796) | (89,835) | ||||||||||
| Depreciation expense | (1,433) | (2,100) | (5,778) | (7,743) | ||||||||||
| Restructuring and reorganization costs | 2,150 | (9,254) | (12,250) | (140,353) | ||||||||||
| Adjusted general and administrative expense | $ | 42,551 | $ | 38,602 | $ | 165,715 | $ | 172,141 | ||||||
| GAAP general and administrative expense as a percentage of revenue | 13 | % | 16 | % | 15 | % | 23 | % | ||||||
| Adjusted general and administrative expense as a percentage of revenue | 8 | % | 8 | % | 9 | % | 10 | % | ||||||
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| UNITY SOFTWARE, INC. | ||||||||||||||
| Non-GAAP Reconciliation | ||||||||||||||
| (In thousands) | ||||||||||||||
| Three Months Ended | Year Ended | |||||||||||||
| December 31, | December 31, | |||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||
| Adjusted EPS reconciliation | ||||||||||||||
| GAAP net loss | $ | (89,393) | $ | (122,523) | $ | (401,493) | $ | (664,287) | ||||||
| Stock-based compensation expense | 91,847 | 110,203 | 380,159 | 469,128 | ||||||||||
| Amortization of intangible assets expense | 121,478 | 88,465 | 418,691 | 353,371 | ||||||||||
| Depreciation expense | 10,428 | 14,696 | 42,253 | 55,609 | ||||||||||
| Restructuring and reorganization costs | 7,651 | 16,398 | 46,781 | 266,855 | ||||||||||
| Income tax impact of adjusting items | (30,055) | (22,688) | (94,907) | (111,073) | ||||||||||
| Adjusted net income used for calculation of adjusted EPS, before impact of dilutive instruments | $ | 111,956 | $ | 84,551 | $ | 391,484 | $ | 369,603 | ||||||
| Increase from forgone financing costs on dilutive convertible notes, net of tax | 4,714 | 4,516 | 18,729 | 18,226 | ||||||||||
| Adjusted net income used for calculation of adjusted EPS, including impact of dilutive instruments | $ | 116,670 | $ | 89,067 | $ | 410,213 | $ | 387,829 | ||||||
| Weighted-average common shares used in GAAP diluted net loss per share attributable to Unity Software Inc. | 429,833 | 405,172 | 420,914 | 395,951 | ||||||||||
| Convertible notes | 41,349 | 24,486 | 38,672 | 24,766 | ||||||||||
| Stock options and PVOs | 5,788 | 8,912 | 6,136 | 11,197 | ||||||||||
| Unvested RSUs, PVUs, and PSUs | 12,987 | 5,901 | 8,945 | 4,820 | ||||||||||
| ESPP | 8 | 258 | 138 | 214 | ||||||||||
| Non-GAAP weighted-average common shares used in adjusted EPS | 489,965 | 444,729 | 474,805 | 436,948 | ||||||||||
| GAAP diluted net loss per share attributable to Unity Software Inc. | (0.21) | (0.30) | (0.96) | (1.68) | ||||||||||
| Total impact on diluted net loss per share attributable to Unity Software Inc. from non-GAAP adjustments | 0.47 | 0.51 | 1.89 | 2.61 | ||||||||||
| Total impact on diluted net loss per share attributable to Unity Software Inc. from antidilutive common stock now included | (0.02) | (0.01) | (0.07) | (0.04) | ||||||||||
| Adjusted EPS | 0.24 | 0.20 | 0.86 | 0.89 | ||||||||||
| Free cash flow reconciliation | ||||||||||||||
| Net cash provided by operating activities | $ | 121,435 | $ | 112,192 | $ | 422,955 | $ | 315,553 | ||||||
| Less: | ||||||||||||||
| Purchases of property and equipment | (2,753) | (6,442) | (19,024) | (29,549) | ||||||||||
| Free cash flow | 118,682 | 105,750 | 403,931 | 286,004 | ||||||||||
| Net cash used in investing activities | (5,753) | (6,442) | (24,024) | (42,409) | ||||||||||
| Net cash provided by (used in) financing activities | 33,978 | 19,390 | 110,091 | (338,307) | ||||||||||
© 2026 Unity Technologies | U N I T Y . C O M | | | 9 | |||||||||||
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 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 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) statements regarding our products, projects, technology and ongoing product development, including expectations regarding Unity AI and the accessibility of Unity authoring workflows by web browser; (vi) expectations regarding growth of Vector and its impact on Unity’s overall growth prospects, as well as revenue mix; (vii) statements regarding our market opportunity; (viii) expectations regarding our competitive position and growth prospects; (ix) expectations regarding improvements in operating margins; (x) expectations regarding stock-based compensation expense; (xi) plans to pay off future obligations; and (xii) 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 address issues raised by the use of, or failure to successfully use, artificial intelligence in its offerings, or the use of artificial intelligence by its customers and competitors; (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, or attract new customers; (viii) Unity’s ability to further expand into adjacent business areas or new industries; (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 attract, manage and retain its talent; (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, August 6, 2025 and November 5, 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.
© 2026 Unity Technologies | U N I T Y . C O M | | | 10 | |||||||||||
Contacts:
Investor Relations:
Alex Giaimo, Head of Investor Relations
alex.giaimo@unity3d.com
Media Relations:
UnityComms@unity3d.com
Source: Unity Software Inc.
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