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Unity Software to Post Q3 Earnings: What's in the Cards for the Stock?
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Key Takeaways
Unity Software to report Q3 earnings on Nov. 5, with revenues expected to rise 20.16% and EPS to grow 70%.
Unity Vector revenues may rise 19-21% sequentially, supporting expected Strategic Grow growth of 68-70%.
U projects $185-$190 million in adjusted EBITDA, but nonstrategic revenues may fall to $20 million.
Unity Software (U - Free Report) is scheduled to report its third-quarter 2026 results on Nov. 5, before the opening bell.
For the to-be-reported quarter, Unity Software expects strategic revenues of $540-$550 million and nonstrategic revenues of approximately $20 million, implying total revenues of $560-$570 million.
The Zacks Consensus Estimate for third-quarter revenues is pegged at $565.49 million, indicating 20.16% year-over-year growth.
The consensus mark for earnings is pegged at 34 cents per share, unchanged over the past 30 days. This projection suggests 70% year-over-year growth.
Unity Software surpassed the Zacks Consensus Estimate for earnings in three of the trailing four quarters, missing once, with an average earnings surprise of 12.54%.
Let us see how things have shaped up for the upcoming announcement.
Factors Shaping U’s Q3 Results
Unity Software's third-quarter performance is likely to have benefited from sustained momentum in Unity Vector, its AI-powered advertising platform. Vector revenues surged 23% sequentially in the second quarter, and the company expects another 19-21% sequential increase in the third quarter. Enhancements to AI prediction models, the Day 28 return-on-ad-spend offering and the integration of Unity runtime signals are likely to have improved advertising effectiveness and encouraged higher advertiser spending. These developments are expected to have supported the projected 68-70% year-over-year growth in Strategic Grow revenues in the quarter under review.
The Strategic Create business is likely to have gained from higher subscription pricing, minimum annual customer commitments and sustained demand in China. These factors supported 14% year-over-year revenue growth in the second quarter, excluding a prior-year one-time revenue item. Unity Software expects Strategic Create revenues to increase 7-10% year over year in the third quarter. The Unity AI open beta is likely to have supported developer engagement, while the multiyear Netflix gaming partnership strengthened the company's platform ecosystem. These factors are expected to have boosted customer spending in the to-be-reported quarter.
U's third-quarter profitability is likely to have benefited from improving operating leverage and disciplined cost management. In the second quarter, adjusted EBITDA surged 77% year over year to $160 million, while adjusted EBITDA margin expanded 800 basis points to 29%. The closure of the ironSource Ads Network and the divestiture of Supersonic are expected to have generated additional cost savings. Supported by stronger strategic revenues and improved operating efficiency, adjusted EBITDA is projected at $185-$190 million, representing 69-74% year-over-year growth. These improvements are expected to have supported Unity Software's anticipated achievement of GAAP net income profitability in the quarter under review.
However, declining nonstrategic revenues are likely to have weighed on U's overall third-quarter performance. The closure of the ironSource Ads Network and the Aug. 4 sale of Supersonic have reduced contributions from businesses previously included in reported revenues. Unity Software expects nonstrategic revenues of approximately $20 million in the third quarter, compared with $60 million in the preceding quarter. The restructuring also carries risks of customer attrition and disruption to publisher and advertiser relationships. These factors are likely to have partially offset strong growth in strategic operations during the to-be-reported quarter.
What Our Model Says About U Stock
Our proven model does not conclusively predict an earnings beat for Unity Software this time around. Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, this is not the case here, as you can see below.
Unity Software currently has an Earnings ESP of 0.00% and a Zacks Rank #2. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Stocks to Consider
Here are some companies worth considering, as our model shows that these have the right combination of elements to beat earnings in their upcoming releases:
Analog Devices, Inc. (ADI - Free Report) presently has an Earnings ESP of +2.23% and a Zacks Rank #2. ADI’s shares have surged 52.2% year to date. ADI is set to report its third-quarter 2026 results on Nov. 24. You can see the complete list of today’s Zacks #1 Rank stocks here.
Microchip Technology (MCHP - Free Report) has an Earnings ESP of +3.31% and a Zacks Rank #2 at present. MCHP’s shares have gained 19.5% year to date. MCHP is set to report its second-quarter fiscal 2027 results on Nov. 5, 2026.
NVIDIA Corporation (NVDA - Free Report) currently has an Earnings ESP of +3.46% and carries a Zacks Rank #2. NVDA’s shares have returned 8.4% year to date. NVDA is set to report its third-quarter fiscal 2027 results on Nov. 17, 2026.
View the Zacks #1 Rank List
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Unity Software to Post Q3 Earnings: What's in the Cards for the Stock?
Key Takeaways
Unity Software (U - Free Report) is scheduled to report its third-quarter 2026 results on Nov. 5, before the opening bell.
For the to-be-reported quarter, Unity Software expects strategic revenues of $540-$550 million and nonstrategic revenues of approximately $20 million, implying total revenues of $560-$570 million.
The Zacks Consensus Estimate for third-quarter revenues is pegged at $565.49 million, indicating 20.16% year-over-year growth.
The consensus mark for earnings is pegged at 34 cents per share, unchanged over the past 30 days. This projection suggests 70% year-over-year growth.
Unity Software Inc. Price and EPS Surprise
Unity Software Inc. price-eps-surprise | Unity Software Inc. Quote
Unity Software surpassed the Zacks Consensus Estimate for earnings in three of the trailing four quarters, missing once, with an average earnings surprise of 12.54%.
Let us see how things have shaped up for the upcoming announcement.
Factors Shaping U’s Q3 Results
Unity Software's third-quarter performance is likely to have benefited from sustained momentum in Unity Vector, its AI-powered advertising platform. Vector revenues surged 23% sequentially in the second quarter, and the company expects another 19-21% sequential increase in the third quarter. Enhancements to AI prediction models, the Day 28 return-on-ad-spend offering and the integration of Unity runtime signals are likely to have improved advertising effectiveness and encouraged higher advertiser spending. These developments are expected to have supported the projected 68-70% year-over-year growth in Strategic Grow revenues in the quarter under review.
The Strategic Create business is likely to have gained from higher subscription pricing, minimum annual customer commitments and sustained demand in China. These factors supported 14% year-over-year revenue growth in the second quarter, excluding a prior-year one-time revenue item. Unity Software expects Strategic Create revenues to increase 7-10% year over year in the third quarter. The Unity AI open beta is likely to have supported developer engagement, while the multiyear Netflix gaming partnership strengthened the company's platform ecosystem. These factors are expected to have boosted customer spending in the to-be-reported quarter.
U's third-quarter profitability is likely to have benefited from improving operating leverage and disciplined cost management. In the second quarter, adjusted EBITDA surged 77% year over year to $160 million, while adjusted EBITDA margin expanded 800 basis points to 29%. The closure of the ironSource Ads Network and the divestiture of Supersonic are expected to have generated additional cost savings. Supported by stronger strategic revenues and improved operating efficiency, adjusted EBITDA is projected at $185-$190 million, representing 69-74% year-over-year growth. These improvements are expected to have supported Unity Software's anticipated achievement of GAAP net income profitability in the quarter under review.
However, declining nonstrategic revenues are likely to have weighed on U's overall third-quarter performance. The closure of the ironSource Ads Network and the Aug. 4 sale of Supersonic have reduced contributions from businesses previously included in reported revenues. Unity Software expects nonstrategic revenues of approximately $20 million in the third quarter, compared with $60 million in the preceding quarter. The restructuring also carries risks of customer attrition and disruption to publisher and advertiser relationships. These factors are likely to have partially offset strong growth in strategic operations during the to-be-reported quarter.
What Our Model Says About U Stock
Our proven model does not conclusively predict an earnings beat for Unity Software this time around. Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, this is not the case here, as you can see below.
Unity Software currently has an Earnings ESP of 0.00% and a Zacks Rank #2. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Stocks to Consider
Here are some companies worth considering, as our model shows that these have the right combination of elements to beat earnings in their upcoming releases:
Analog Devices, Inc. (ADI - Free Report) presently has an Earnings ESP of +2.23% and a Zacks Rank #2. ADI’s shares have surged 52.2% year to date. ADI is set to report its third-quarter 2026 results on Nov. 24. You can see the complete list of today’s Zacks #1 Rank stocks here.
Microchip Technology (MCHP - Free Report) has an Earnings ESP of +3.31% and a Zacks Rank #2 at present. MCHP’s shares have gained 19.5% year to date. MCHP is set to report its second-quarter fiscal 2027 results on Nov. 5, 2026.
NVIDIA Corporation (NVDA - Free Report) currently has an Earnings ESP of +3.46% and carries a Zacks Rank #2. NVDA’s shares have returned 8.4% year to date. NVDA is set to report its third-quarter fiscal 2027 results on Nov. 17, 2026.