Unity Software (U) Q2 2026 earnings summary

Executive summary

• Achieved record Q2 2026 performance with total revenue of $546.5 million, up 24% year-over-year, driven by strong growth in Grow and Create Solutions, and strategic revenue up 38% year-over-year.

• Net loss narrowed significantly to $22.7 million from $107.4 million in Q2 2025, with net loss margin improving to (4)% from (24)%.

• Adjusted EBITDA rose to $160 million (29% margin), up 77% year-over-year, driven by Vector AI-powered ad platform and Create Solutions.

• Unity Vector delivered 23% quarter-over-quarter growth, surpassing $1 billion annual run rate two quarters ahead of plan.

• Launched Unity 7 platform upgrade, enabling collaborative workflows, with beta in Q4 2026 and full release in Q1 2027.

Financial highlights

• Strategic Grow revenue reached $329 million, up 63% year-over-year; Create revenue was $157 million, up 14% year-over-year excluding a prior-year one-time item.

• Total Strategic Revenue rose 38% to $486 million; Non-Strategic Revenue declined 33% to $60 million due to divestitures.

• Adjusted EPS for Q2 2026 was $0.28, compared to $0.18 in Q2 2025.

• Free cash flow was $202 million, up 59% year-over-year; cash and cash equivalents at $2.36 billion as of June 30, 2026.

• Stock-based compensation expense down 25% year-over-year, now 14% of revenues, the lowest level ever.

Outlook and guidance

• Q3 2026 strategic revenue guidance: $540–$550 million, implying 44%–47% year-over-year growth.

• Grow Solutions expected to grow 68%–70% year-over-year; Create Solutions expected to grow 7%–10% year-over-year.

• Q3 adjusted EBITDA guidance: $185–$190 million, with margins of 33% and 69%–74% growth.

• GAAP net income profitability pulled forward to Q3 2026 from Q4 2026; plans to pay off convertible notes in November 2026.

• Guidance incorporates one month of revenue from the Supersonic business, which was sold in August 2026.