U NYSE Russell 1000 Earnings call
Unity Technologies (U) · Q2 2026 results and valuation
Share price: $49.65 · 2026-11-11
Results Q2 2026 vs Q1 2026 · previous quarter · published 6 Aug 2026 and 7 May 2026
Net loss narrowed on the previous quarter. Management sounded upbeat, in its script and in answers to analysts.
Only a basic analysis is available for this company at the moment.
1 · Numbers
Loss narrowed
Net income vs Q1 2026
Outlook given
Net income -23.6M vs -347.6M
Revenue +7.5%
Net income -23.6M vs -108.8M in Q2 2025 and -347.6M last quarter.
2 · How management spoke
Upbeat
More upbeat than 84% of company calls
Answers to analysts: upbeat, in line with the script.
Similar to last call.
3 · What stood out
Figure
The company achieved 23% quarter-over-quarter growth, establishing an accelerated momentum that has carried into the current period.
Valuation
Is Unity Technologies undervalued?
Reverse DCF. Free cash flow from the last full fiscal year (2025-12-31), grown for 10 years, discounted back, plus a terminal value. “Implied growth” is the rate the current price assumes.
At 10.0% growth a year (3-year revenue growth), the model's fair value is $27.24 a share — the stock trades 82% above it. Today's price assumes 19.6% growth a year.
Current price
$49.65
close of 2026-11-11
Market implies growth of iThe yearly free-cash-flow growth, for the next 10 years, that today’s share price already assumes. If you believe the company grows faster than this, the stock is cheap under this model; slower, and it is expensive.
+19.6% for 10 yrs
Fair value / share
$27.24
Buy below
$20.43
Price vs fair value
Overvalued 82%
Price vs buy-below price
Overvalued 143%
Management expects
Revenue +69% · from the Q2 2026 report: “The company expects year-over-year revenue growth of 68% to 70% in Strategic Grow, driven by continued performance in Unity Vector.”
A guidance figure for revenue, usually one year ahead, not a 10-year free-cash-flow rate.
Read between the lines
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Key theme
Adjusted EBITDA margins reached 29% in Q2, expanding 800 basis points year-over-year due to revenue growth, high gross margins, and disciplined cost management.
Source quote
“Adjusted EBITDA margins were 29% with margins expanding 800 basis points year-over-year. Adjusted EBITDA in Q2 was $160 million. Rapid revenue growth, high gross margins and disciplined cost management resulted in significant operating leverage.”
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Key theme
The company is focusing on moving users into its integrated authoring platform to provide creators with Vector, commerce, and live service solutions.
Source quote
“What's really important is we drive as many people as possible into our full integrated authoring platform, which helps creators... The application layer is just the surface piece. As more games enter this platform, we benefit because we're able to deliver Vector, our commerce solutions and our live service solutions.”
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Guidance
The company expects year-over-year revenue growth of 68% to 70% in Strategic Grow, driven by continued performance in Unity Vector.
Source quote
“In Strategic Grow, we expect year-over-year revenue growth of 68% to 70%, driven by continued exceptional performance in Unity Vector.”
Tone
How upbeat the language was, compared with other companiesiTone counts positive minus negative finance words, adjusted for length. Executives mostly speak positively, so the labels compare each call with every company's latest call: “typical” is the middle third, “very upbeat” the top tenth, “cautious” the bottom tenth.. Dot: Q2 2026. Ring: Q1 2026.
Script and answers carried a similar tone, so the script's message held up under questioning.
Sentences that drove the tone
“Create momentum continues to be driven by ARPU growth, supported by price increases and minimum annual customer commitments as well as strong growth in China.”
“Our astounding performance is fueling a 63% year-over-year increase in our Strategic Grow business with our third quarter outlook pointing to an even stronger 70% growth rate.”
“Unity delivered a truly exceptional second quarter with strategic revenue growth of 38% and adjusted EBITDA growth of 77%, along with record margins.”
Full figures
USD · SEC EDGAR XBRL (10-Q, period end 2026-06-30)
| Metric | Q2 2026period end 2026-06-30 | Q1 2026period end 2026-03-31 | Change | Q2 2025 | YoY |
|---|---|---|---|---|---|
| Revenue | 546.5M | 508.2M | +7.5% | 440.9M | +23.9% |
| Gross profit | 434.8M | 156.6M | +177.6% | 326.7M | +33.1% |
| Operating income | -32.2M | -351.4M | Loss narrowed | -118.8M | Loss narrowed |
| Net income | -23.6M | -347.6M | Loss narrowed | -108.8M | Loss narrowed |
| EPS | -0.05 | -0.80 | Loss narrowed | -0.26 | Loss narrowed |
| P/E | 12-mo loss | 12-mo loss | — | 12-mo loss | — |
Topics
Most discussed now
- Unity has now entered a new chapter of structurally faster revenue growth, combined with enhanced profitability, powered by a flywheel...
- Unity delivered a truly exceptional second quarter with strategic revenue growth of 38% and adjusted EBITDA growth of 77%, along...
- Of note, the sunsetting of the ironSource Ad Network had a negligible positive impact on Vector growth in the quarter...
- The product really helps Unity Technologies' developers leverage the full power of Unity.
- Unity Technologies' Unity AI product went into open beta in May, just so everyone is on the same page.
Faded since Q1 2026
- Dropped As you recall, the first stop on that journey was ensuring that Unity Technologies' software for its core professional audience was...
- Fading Other than that, in terms of uses of cash, Unity Technologies is really focused on its product road map, organic...
- Fading Unity had an exceptional first quarter of 2026 with strategic revenue growth accelerating and adjusted EBITDA margins expanding rapidly.
- Fading The reason Vector is continuing to grow as Unity Technologies is doing a better job predicting which customers are going to like...
Latest announcements
Official filings, newest first.
- Director or officer change; Regulation FD disclosure · SEC 8-K
- Results of operations · SEC 8-K
- Director or officer change · SEC 8-K
- Director or officer change · SEC 8-K
- Shareholder vote results · SEC 8-K
- Results of operations · SEC 8-K
- Regulation FD disclosure · SEC 8-K
- Results of operations · SEC 8-K