Unity Software Q3 2025 Earnings: Ad Business Growth Powers Revenue Gains
Unity's Q3 2025 revenue rose to $470.6M on stronger ad-business growth from its Vector AI targeting tool, with free cash flow and adjusted profitability improving, though the company remains unprofitable on a trailing-twelve-month basis.
| Q3 2025 | Reported |
|---|---|
| EPS | -$0.30 |
| Revenue | $470.6M |
Figures as reported by the company to the SEC for the quarter ended September 30, 2025. Analyst estimates are not part of a filing, so no comparison to expectations is shown.
Key takeaways
- Revenue for the quarter was $470.6 million, up from the year-ago period, with growth led by Unity’s advertising business rather than its game-development tools.
- The advertising and monetization business (“Grow Solutions”) brought in $318 million, up 6% from a year earlier and 11% from the prior quarter; Unity credited this to Vector AI, a newer ad-targeting system that adjusts to real-time data.
- The game-development tools business (“Create Solutions”) brought in $152 million, up 3% year over year, which the company attributed to growth in subscription customers.
- Unity’s reported net loss under standard accounting rules (GAAP) was $0.30 per share. Separately, on an adjusted basis that strips out items like stock-based compensation, the company reported a per-share profit of $0.20 — a non-GAAP figure management uses to describe underlying operating performance, which is not directly comparable to the GAAP loss.
- Free cash flow — cash generated after running the business and covering equipment/software investment — was $151 million, up $36 million from the same quarter last year, and the company ended the quarter with about $1.9 billion in cash and investments.
- Looking at the trailing twelve months, Unity’s overall operating and net margins are still negative (around -34% each), meaning the company has not yet turned an annual profit, even as individual quarterly metrics like adjusted EBITDA margin (23%, up from 21% a year earlier) have been improving.
- For the fourth quarter of 2025, Unity guided to revenue of $480 million to $490 million, which would represent continued sequential growth from Q3.
- CEO Matt Bromberg pointed to Vector AI’s ability to process large amounts of data and adapt to market changes, combined with a pickup in mobile-game advertising spend, as key reasons for the growth acceleration.
- Unity shares moved sharply higher in the session following the release, reflecting how investors reacted to the reported results and outlook.
Q3 2025 in context
| Metric | Sep 2025 | Sep 2024 | Change |
|---|---|---|---|
| Revenue | $471M | $447M | +5.4% |
| Net income | -$126M | -$125M | -1.3% |
| Free cash flow | $151M | $115M | +31.3% |
| Diluted EPS | -$0.30 | -$0.31 | +3.2% |
| Gross margin | 74.4% | 74.9% | -0.5 pts |
| Operating margin | -26.7% | -28.5% | +1.7 pts |
| Net margin | -26.9% | -27.9% | +1.1 pts |
Figures for the quarter ended Sep 2025 and the quarter ended Sep 2024, as reported to the SEC.
How the stock took it
Unity Software Inc closed at $35.87 on Nov 4, 2025, the last session before the report, and at $39.93 on Nov 6, 2025, the first session after it — +11.3% across the report.
Closes from the market's daily record. Each figure spans the report date — from the last session that closed before it to the first that closed after — because a company may report before the open or after the close.
Sources: company report · earnings call · Investing.com