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Unity Software Inc.
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$17.2B
Market Cap
—
P/E
5.66
PEG
-12.1%
ROCE
-18.8%
ROE
0.70
D/E
-16.5%
OPM
-20.6%
% from 52W High
74
α RS
🔍 U is showing a multi-screen setup because it matches 4 of 39 tracked screener presets, Sector RRG has Technology in the Improving quadrant with the trail still strengthening, RS Rating is 74, and it has maintained a 35-day Stage 2 momentum persistence. The main caution: the Margin Expansion preset's Backtest win rate is only 46.6%. Net: Mixed signal stack, not a recommendation. ? Conviction RRG RS Rating Momentum Streaks Backtest
Sources
Conviction 4/39 · Technology in Improving quadrant · RS Rating 74 · Stage 2 streak: 35d · Backtest win rate 46.6%
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🌏 Global Investor Returns
Currency-adjusted total returns for U including FX impact
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📈 Price History
Ratio Health
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By Category
📊 Peer Medians
About

Unity Software Inc. operates a platform to develop, deploy, and grow games and interactive experiences for mobile phones, PCs, consoles, and extended reality devices in the United States, China, Hong Kong, Taiwan, Europe, the Middle East, Africa, the Asia Pacific, Canada, and Latin America. The company's platform offers artificial intelligence solutions that support developers through the entire development lifecycle, which includes prototyping, live service operation, user acquisition, and monetization. It also provides Create Solutions, a set of tools and services used to build, ship, and run real-time 2D and 3D content; and Grow Solutions, which allows customers to grow and engage their user base and monetize their content. In addition, the company offers enterprise support and consumption services; professional services, including consulting, platform integration, training, and custom application and workflow development services; and advertising and game publishing services. It provides its solutions directly through its online store, field sales operations, independent distributors, and resellers. The company serves enterprises, mid-market companies, government, and non-profit institutions; mid-sized, small, and independent businesses; and individuals from various industries. Unity Software Inc. was founded in 2004 and is headquartered in San Francisco, California.

Key Ratios Snapshot
📈 Growth Pattern
📊 Quick Scorecard
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⭐ Superinvestors Holding U
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Manager Shares Value % of Fund Period
Steve Cohen Point72 Asset Management 6.68M $146.5M 0.19% Mar 2026
Jim Simons Renaissance Technologies LLC 2.49M $54.5M 0.09% Mar 2026
Stan Druckenmiller Duquesne Family Office 738.8K $16.2M 0.48% Mar 2026

SEC Form 13F data. 45-day lag from quarter end.

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📊 MIXED Unity Q1 2026: Strategic rev up 35% YoY, EBITDA margin 27%, Vector drives growth
Revenue & Profitability
Strategic revenue in Q1 2026 was approximately $433 million ($279M Grow + $154M Create). Adjusted EBITDA was $138 million (27% margin), up 65% year-over-year. Free cash flow on a trailing twelve-month basis was $463 million, up 50%. Cash balance stood at $2.15 billion. The company expects GAAP net income profitability by Q4 2026.
Outlook
Management sees strong industry tailwinds from AI adoption: 90% of game developers use AI, newly released mobile apps are up 60% year-over-year, and new Unity-made games rose 12% quarter-over-quarter. AI is accelerating game creation and discovery, benefiting Unity's platform. No significant headwinds were mentioned.
Growth Drivers
Key growth levers include Vector's 15% sequential growth for four straight quarters (80% larger year-over-year), the upcoming graduation of runtime data to live production models in Q2, strong performance in Create (mid-teens growth for four quarters), and the launch of new products like Unity AI (public beta) and Unity Commerce (Q2 2026). Growth is broad-based across geographies and campaign types.
Balance Sheet & CapEx
Not discussed in detail, but management noted that AI-focused R&D spend increased 17% year-over-year and will continue to rise. Cloud costs are the largest component of cost of revenue, and adjusted gross margins are around 82-83%. The company prioritizes investment in AI and Vector over near-term cost optimization.
Margins
Adjusted EBITDA margin was 27% in Q1 2026, expanding 800 basis points year-over-year. The company guides Q2 adjusted EBITDA of $130-$135 million (up 44-49% YoY). Margin expansion in the back half of 2026 is expected from cost reductions related to sunsetting the ironSource ad network and selling Supersonic (200+ bps improvement). Stock-based compensation fell to 15% of revenue.
Key Risks
Risks discussed include the uncertainty around the timing and magnitude of runtime data benefits, potential increases in cloud costs during AI investment cycles, and the challenge of balancing margin expansion with R&D spend. No other explicit risks were flagged by management or analysts.
Generated by AI · Q1 2026 results · Not investment advice
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✓ 📞 Earnings Call Transcripts (5 quarters) submit a missing quarter
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📞 Earnings Call Transcripts (5)
Q2 2026 Q2 2026 2026-08-06
Record Q2 results featured 38% strategic revenue growth and 77% adjusted EBITDA growth, driven by Vector AI and Create Solutions. Guidance for Q3 points to further acceleration, with profitability milestones pulled forward and major platform upgrades and partnerships fueling future growth.
Q1 2026 Q1 2026 2026-05-07
Q1 2026 saw 35% year-over-year strategic revenue growth and a 27% adjusted EBITDA margin, driven by strong AI adoption, Vector's rapid expansion, and robust performance in both Create and Grow segments. GAAP profitability is expected by Q4 2026, with continued margin expansion and new product launches ahead.
Q4 2025 Q4 2025 2026-02-11
Q4 2025 results exceeded guidance, led by Vector's rapid growth and Create's global momentum. Vector is on track for a $1B+ run rate by end of 2026, while ironSource's impact wanes. Strong cash flow, margin expansion, and AI-driven product innovation set up continued growth.
Q3 2025 Q3 2025 2025-11-05
Q3 2025 saw strong revenue and margin growth, led by Vector AI and robust performance in both Grow and Create segments. Guidance for Q4 remains positive, with continued investment in AI, new commerce solutions, and strong momentum in China.
Q2 2025 Q2 2025 2025-08-06
Q2 2025 saw Unity exceed revenue and EBITDA guidance, driven by strong Unity Vector AI performance and double-digit growth in Create subscriptions. Major partnerships and robust free cash flow support continued investment in AI and global expansion.
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📊 Analysis Methodology

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Financial Model
Projections are built from each company's audited annual financials (Income Statement, Balance Sheet, Cash Flow) over the last 5 fiscal years. Forward assumptions — revenue growth %, EBITDA margin, D&A (USD millions), interest expense, tax rate, and capex — are AI-generated using historical context and refreshed twice a year: after the December results season and after the September/Q4 results season.

DCF Valuation
Fair Value = Σ(FCFt / (1+WACC)t) + Terminal Value. Terminal Value uses the Gordon Growth Model: FCF5 × (1+g) / (WACC−g). Default WACC: 10% (US risk-free ~4.5%, equity risk premium ~5.5%). Default terminal growth: 3% (long-run US nominal GDP proxy).

CAGR Tracker
Expected 5-year CAGR = (DCF Fair Value / Current Price)1/5 − 1. Assumes fair value is reached in exactly 5 years — a mechanical estimate only.

Data Sources & Limitations
Financial statements sourced from public filings. Prices updated daily. Forward assumptions are AI-generated. All monetary values in USD millions. Non-US ADR companies may have currency conversion inaccuracies. Models are point-in-time and do not update intra-quarter or account for M&A, macro shocks, or extraordinary items.

⚠️ Important Disclaimers — Please read without fail.

Investment Risk:
Investing in securities, including US equities and ETFs, involves inherent risks including the potential loss of principal. All investments are subject to market fluctuations, economic conditions, regulatory changes, and other factors that may affect their value. Past performance is not indicative of future results. This analysis is provided for informational and educational purposes only and should not be construed as investment advice under any circumstances.

No Investment Recommendation:
This analysis does not constitute, nor should it be interpreted as, an offer, solicitation, or recommendation to buy, sell, or hold any securities or financial products. Investors are strongly advised to conduct their own independent research and due diligence and to consult with a licensed financial advisor or an SEC-registered investment adviser before making any investment decisions, taking into account their individual financial situation, risk tolerance, and investment objectives.

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Conflict of Interest Disclosure:
The author and/or analyst may currently hold or have previously held positions in the securities discussed. Any such positions are not intended to influence the objectivity or independence of the analysis. This research is produced independently and is not sponsored, endorsed, or commissioned by any company or institution.

Information Sources:
The analysis is based on publicly available information including SEC filings (10-K, 10-Q), annual reports, management commentary, and publicly available financial data. Information is believed to be accurate as of the date of publication but may be subject to change without notice. Readers are encouraged to independently verify all information before acting upon it.

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