Unity Software Inc (NYSE:U) shares added more than 8% after the company’s third quarter earnings outperformed Wall Street expectations on both revenue and earnings per share (EPS).
The video game development platform posted revenue of $471 million, up 5% year-over-year and exceeding the forecast of approximately $453 million.
EPS came in at $0.20, significantly beating the consensus estimate of a loss of $0.23 per share.
Adjusted EBITDA was $109 million with a 23% margin and Unity posted free cash flow of $151 million for the quarter.
Unity’s Q3 report marked a notable turnaround from earlier in the year when the company missed earnings estimates significantly in Q1.
"Third-quarter results once again meaningfully exceeded expectations on both revenue and adjusted EBITDA, powered by Unity Vector AI, as well as continued strength in Create,” Unity said in a statement. “As consumer enthusiasm for interactive entertainment continues to grow, Unity is poised to grow with it."
Looking ahead, Unity provided revenue guidance for Q4 2025 between $480 million and $490 million, above the consensus estimate of $475 million, with expected adjusted EBITDA of $110 million to $115 million.