EX-99.1 2 a2025q3ex-991.htm EX-99.1 Document

Exhibit 99.1
unitylogo.jpg
Unity Reports Third Quarter 2025 Financial Results
SAN FRANCISCO, November 5, 2025 -- Unity (NYSE: U), the leading platform to create and grow games and interactive experiences, today announced financial results for the third quarter ended September 30, 2025.
"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. As consumer enthusiasm for interactive entertainment continues to grow, Unity is poised to grow with it."
Earnings Webcast
Unity will hold a public webcast at 8:30 a.m. ET today to discuss the results for its third quarter of 2025. The live public webcast can be accessed on Unity's Investor Relations website at https://investors.unity.com. The webcast replay will also be available on the site.
Third Quarter 2025 Results:
•Revenue was $471 million, compared to $447 million in the third quarter 2024.
•Create Solutions revenue was $152 million, compared to $147 million in the third quarter 2024.
•Grow Solutions revenue was $318 million, compared to $299 million in the third quarter 2024.
•GAAP net loss was $127 million, with a margin of (27)%.
•GAAP basic and diluted net loss per share was $0.30.
•Adjusted EBITDA was $109 million, with a margin of 23%.
•Adjusted earnings per share was $0.20.
•Net cash provided by operating activities was $155 million.
•Free cash flow was $151 million.
Revenue
Revenue was $471 million, up 5% year-over-year.
Create Solutions revenue was $152 million, up 3% year-over-year. The increase was driven by strong growth in subscription revenue, offset by decreases in consumption services revenue, driven by our portfolio reset.
Grow Solutions revenue was $318 million, up 6% year-over-year. The increase was driven by strong performance of the Unity Ad Network, powered by Unity Vector. The growth was slightly offset by year-over-year declines in our other Grow businesses.
Basic and Diluted Net Loss per share
Basic and diluted net loss per share was $0.30, as compared to $0.31 for the same period in 2024.
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Net Loss and Net Cash Provided by Operating Activities
Net loss for the quarter was $127 million, compared to $125 million in the third quarter of 2024.
Net loss margin was (27)%, compared to (28)% in the third quarter of 2024.
Net cash provided by operating activities for the quarter was $155 million, compared to $122 million in the third quarter of 2024.
Adjusted EBITDA, Free Cash Flow, and Adjusted EPS
Adjusted EBITDA for the quarter was $109 million, with a margin of 23%, compared to $92 million in the third quarter of 2024, with a margin of 21%. The year-over-year improvement was driven by better cost control and higher revenue.
Free cash flow for the quarter was $151 million, compared to $115 million in the third quarter of 2024.
Adjusted EPS for the quarter was $0.20, compared to $0.19 in the third quarter of 2024.
Liquidity
As of September 30, 2025, our cash and cash equivalents, and restricted cash was $1,909 million, and increased by $381 million, as compared with $1,528 million as of December 31, 2024. This increase was primarily driven by our operations, and proceeds from issuance of common stock from employee equity plans, offset by the net cash outflows from our debt refinancing.
Q4 2025 Guidance1
We expect Fourth Quarter Revenue of $480 million to $490 million.
•In Grow, we expect mid-single digit sequential revenue growth from Q3 to Q4.
•In Create, we expect high-single digit year-over-year revenue growth (excluding the impact of non-strategic revenue).
We expect Fourth Quarter Adjusted EBITDA of $110 million to $115 million.
About Unity
Unity [NYSE: U] offers a suite of tools to develop, deploy, and grow games and interactive experiences across all major platforms from mobile, PC, and console, to extended reality. For more information, visit Unity.com.
1 These statements are forward-looking and actual results may differ materially. Refer to the “Forward-Looking Statements” safe harbor section below for information on the factors that could cause our actual results to differ materially from these forward-looking statements.
We have not reconciled our estimates for non-GAAP financial measures in this press release and in the earnings call referencing this press release to GAAP due to the uncertainty and potential variability of expenses that may be incurred in the future. As a result, a reconciliation is not available without unreasonable effort and we are unable to address the probable significance of the unavailable information. We have provided a reconciliation of other GAAP to non-GAAP financial measures in the financial statement tables for our third quarter non-GAAP results included in this press release.
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UNITY SOFTWARE INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except par share data)
(Unaudited)
As of
September 30, 2025December 31, 2024
Assets
Current assets:
Cash and cash equivalents$1,898,558 $1,517,672 
Accounts receivable, net600,117 573,884 
Prepaid expenses and other123,885 133,795 
Total current assets2,622,560 2,225,351 
Property and equipment, net76,626 98,819 
Goodwill3,166,304 3,166,304 
Intangible assets, net769,022 1,066,235 
Other assets148,785 180,698 
Total assets$6,783,297 $6,737,407 
Liabilities and stockholders' equity
Current liabilities:
Accounts payable$20,006 $13,948 
Accrued expenses and other299,394 294,951 
Publisher payables397,190 394,284 
Deferred revenue225,645 186,304 
Total current liabilities942,235 889,487 
Convertible notes2,234,307 2,238,922 
Long-term deferred revenue16,749 16,846 
Other long-term liabilities135,376 165,004 
Total liabilities3,328,667 3,310,259 
Commitments and contingencies
Redeemable noncontrolling interests245,160 230,627 
Stockholders' equity:
Common stock, $0.000005 par value:
Authorized shares - 1,000,000 and 1,000,000
Issued and outstanding shares - 427,778 and 409,393
2 2 
Additional paid-in capital7,257,519 6,936,038 
Accumulated other comprehensive loss(5,278)(9,425)
Accumulated deficit(4,048,746)(3,735,944)
Total Unity Software Inc. stockholders' equity3,203,497 3,190,671 
Noncontrolling interest5,973 5,850 
Total stockholders' equity3,209,470 3,196,521 
Total liabilities and stockholders' equity$6,783,297 $6,737,407 
© 2025 Unity TechnologiesU N I T Y . C O M|
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UNITY SOFTWARE INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(In thousands, except per share amounts)
(Unaudited)
Three Months EndedNine Months Ended
September 30,September 30,
2025202420252024
Revenue$470,615 $446,517 $1,346,559 $1,356,156 
Cost of revenue120,332 112,054 348,500 365,316 
Gross profit350,283 334,463 998,059 990,840 
Operating expenses
Research and development244,357 215,197 679,789 706,860 
Sales and marketing165,869 176,423 489,395 576,902 
General and administrative65,913 69,989 201,418 338,573 
Total operating expenses476,139 461,609 1,370,602 1,622,335 
Loss from operations(125,856)(127,146)(372,543)(631,495)
Interest expense(6,043)(5,839)(17,964)(17,703)
Interest income and other income (expense), net14,448 15,350 92,396 102,450 
Loss before income taxes(117,451)(117,635)(298,111)(546,748)
Provision for (benefit from) Income taxes9,377 6,913 13,989 (4,984)
Net loss(126,828)(124,548)(312,100)(541,764)
Net income (loss) attributable to noncontrolling interest and redeemable noncontrolling interests(466)191 702 (377)
Net loss attributable to Unity Software Inc.(126,362)(124,739)(312,802)(541,387)
Basic and diluted net loss per share attributable to Unity Software Inc.$(0.30)$(0.31)$(0.75)$(1.38)
Weighted-average shares used in computation of basic and diluted net loss per share424,296 398,810 417,919 392,855 
Net loss(126,828)(124,548)(312,100)(541,764)
Change in foreign currency translation adjustment1,353 7,412 5,247 2,558 
Comprehensive loss$(125,475)$(117,136)$(306,853)$(539,206)
Net income (loss) attributable to noncontrolling interest and redeemable noncontrolling interests(466)191 702 (377)
Foreign currency translation attributable to noncontrolling interest and redeemable noncontrolling interests282 1,501 1,100 536 
Comprehensive loss attributable to noncontrolling interest and redeemable noncontrolling interests(184)1,692 1,802 159 
Comprehensive loss attributable to Unity Software Inc.$(125,291)$(118,828)$(308,655)$(539,365)
© 2025 Unity TechnologiesU N I T Y . C O M|
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UNITY SOFTWARE INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months EndedNine Months Ended
September 30,September 30,
2025202420252024
Operating activities
Net loss$(126,828)$(124,548)$(312,100)$(541,764)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization135,893 102,600 329,038 305,819 
Stock-based compensation expense91,968 104,617 292,362 485,893 
Gain on repayment of convertible note— — (42,744)(61,371)
Impairment of property and equipment862 956 4,911 22,874 
Other3,452 (648)(4,520)14,735 
Changes in assets and liabilities, net of effects of acquisitions:
Accounts receivable, net(3,773)(2,603)(25,834)35,463 
Prepaid expenses and other(3,684)7,866 10,087 (11,949)
Other assets18,669 6,753 30,558 4,367 
Accounts payable7,998 550 5,899 90 
Accrued expenses and other17,901 24,934 4,289 (15,367)
Publisher payables24,471 (5,701)2,906 (2,561)
Other long-term liabilities(18,795)(12,146)(31,656)(46,782)
Deferred revenue7,264 19,728 38,324 13,914 
Net cash provided by operating activities155,398 122,358 301,520 203,361 
Investing activities
Purchases of non-marketable investments— — (2,000)— 
Purchases of intangible assets— (12,500)— (12,860)
Purchases of property and equipment(4,107)(7,151)(16,271)(23,107)
Net cash used in investing activities(4,107)(19,651)(18,271)(35,967)
Financing activities
Proceeds from issuance of convertible notes— — 690,000 — 
Purchase of capped calls— — (44,436)— 
Payment of debt issuance costs— — (13,236)— 
Repayments of convertible note— — (641,691)(414,999)
Proceeds from issuance of common stock from employee equity plans54,082 20,000 85,476 57,302 
Net cash provided by (used in) financing activities54,082 20,000 76,113 (357,697)
Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash2,208 11,464 21,845 2,004 
Increase (decrease) in cash, cash equivalents, and restricted cash207,581 134,171 381,207 (188,299)
Cash, cash equivalents, and restricted cash, beginning of period1,701,507 1,281,797 1,527,881 1,604,267 
Cash, cash equivalents, and restricted cash, end of period$1,909,088 $1,415,968 $1,909,088 $1,415,968 
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About Non-GAAP Financial Measures
To supplement our consolidated financial statements prepared and presented in accordance with generally accepted accounting principles in the United States (GAAP) we use certain non-GAAP financial measures, as described below, to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe the following non-GAAP measures are useful in evaluating our operating performance. We are presenting these non-GAAP financial measures because we believe, when taken collectively, they may be helpful to investors because they provide consistency and comparability with past financial performance.
However, non-GAAP financial measures have limitations in their usefulness to investors because they have no standardized meaning prescribed by GAAP and are not prepared under any comprehensive set of accounting rules or principles. In addition, other companies, including companies in our industry, may calculate similarly-titled non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. As a result, our non-GAAP financial measures are presented for supplemental informational purposes only and should not be considered in isolation or as a substitute for our consolidated financial statements presented in accordance with GAAP.
We define adjusted EBITDA as GAAP net income or loss excluding benefits or expenses associated with stock-based compensation, amortization of acquired intangible assets, depreciation, restructurings and reorganizations, interest, income tax, and other non-operating activities, which primarily consist of foreign exchange rate gains or losses. We define adjusted EBITDA margin as adjusted EBITDA as a percentage of revenue. We define adjusted gross profit as GAAP gross profit excluding expenses associated with stock-based compensation, amortization of acquired intangible assets, depreciation, and restructurings and reorganizations. We define adjusted gross margin as adjusted gross profit as a percentage of revenue.
We define adjusted cost of revenue as GAAP cost of revenue, excluding expenses associated with stock-based compensation, amortization of acquired intangible assets, depreciation, and restructurings and reorganizations. We define adjusted research and development expense as research and development expense, excluding expenses associated with stock-based compensation, amortization of acquired intangible assets, depreciation, and restructurings and reorganizations. We define adjusted sales and marketing expense as GAAP sales and marketing expense, excluding expenses associated with stock-based compensation, amortization of acquired intangible assets, depreciation, and restructurings and reorganizations. We define adjusted general and administrative expense as general and administrative expense excluding expenses associated with stock-based compensation, depreciation, and restructurings and reorganizations. We define free cash flow as net cash provided by operating activities less cash used for purchases of property and equipment.
We define adjusted EPS as net income or loss excluding benefits or expenses associated with stock-based compensation, amortization of acquired intangible assets, depreciation, restructurings and reorganizations, and the income tax impact of the preceding adjustments (cumulatively "adjusted net income"), increased by the tax effected impacts from any relevant dilutive securities, divided by the diluted weighted-average outstanding shares. The effective tax rate used in calculating adjusted EPS is estimated for each period, based on the net income or loss adjusted for the items noted above, and may differ from the effective rate used in our financial statements. Shares of common stock that are excluded in our calculation of GAAP diluted net loss per share due to their antidilutive impact on such calculations, are included in the diluted weighted average outstanding shares used in our calculation of adjusted EPS, to the extent they have a dilutive impact on adjusted EPS given the adjusted net income in each period.
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UNITY SOFTWARE, INC.
Non-GAAP Reconciliation
(In thousands)
Three Months EndedNine Months Ended
September 30,September 30,
2025202420252024
Adjusted EBITDA reconciliation
Revenue$470,615 $446,517 $1,346,559 $1,356,156 
GAAP net loss$(126,828)$(124,548)$(312,100)$(541,764)
Add:
Stock-based compensation expense$91,561 $105,271 $288,312 $358,925 
Amortization of intangible assets expense$125,345 $88,517 $297,213 $264,906 
Depreciation expense$10,548 $14,083 $31,825 $40,913 
Restructuring and reorganization costs$7,899 $10,997 $39,130 $250,457 
Interest expense$6,043 $5,839 $17,964 $17,703 
Interest income and other income (expense), net$(14,448)$(15,350)$(92,396)$(102,450)
Provision for (benefit from) income taxes$9,377 $6,913 $13,989 $(4,984)
Adjusted EBITDA$109,497 $91,722 $283,937 $283,706 
GAAP net loss margin(27)%(28)%(23)%(40)%
Adjusted EBITDA margin23 %21 %21 %21 %
Adjusted gross profit reconciliation
GAAP gross profit$350,283 $334,463 $998,059 $990,840 
Add:
Stock-based compensation expense9,111 10,334 28,084 33,881 
Amortization of intangible assets expense27,293 27,293 80,990 81,287 
Depreciation expense1,734 2,265 5,214 7,241 
Restructuring and reorganization costs(23)77 786 15,037 
Adjusted gross profit$388,398 $374,432 $1,113,133 $1,128,286 
GAAP gross margin74%75%74%73%
Adjusted gross margin82%84%83%83%
Operating expenses reconciliation
Cost of revenue
GAAP cost of revenue$120,332 $112,054 $348,500 $365,316 
Stock-based compensation expense(9,111)(10,334)(28,084)(33,881)
Amortization of intangible assets expense(27,293)(27,293)(80,990)(81,287)
Depreciation expense(1,734)(2,265)(5,214)(7,241)
Restructuring and reorganization costs23 (77)(786)(15,037)
Adjusted cost of revenue$82,217 $72,085 $233,426 $227,870 
GAAP cost of revenue as a percentage of revenue26%25%26%27%
Adjusted cost of revenue as a percentage of revenue18%16%17%17%
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UNITY SOFTWARE, INC.
Non-GAAP Reconciliation
(In thousands)
Three Months EndedNine Months Ended
September 30,September 30,
2025202420252024
Research and development
GAAP research and development expense$244,357 $215,197 $679,789 $706,860 
Stock-based compensation expense(45,654)(57,971)(147,299)(182,479)
Amortization of intangible assets expense(53,304)(17,592)(86,166)(51,608)
Depreciation expense(5,166)(6,912)(15,772)(19,661)
Restructuring and reorganization costs(1,503)(2,553)(14,430)(52,568)
Adjusted research and development expense$138,730 $130,169 $416,122 $400,544 
GAAP research and development expense as a percentage of revenue52%48%51%52%
Adjusted research and development expense as a percentage of revenue30%29%31%30%
Sales and marketing
GAAP sales and marketing expense$165,869 $176,423 $489,395 $576,902 
Stock-based compensation expense(17,893)(23,168)(53,420)(74,273)
Amortization of intangible assets expense(44,748)(43,632)(130,057)(132,011)
Depreciation expense(2,184)(2,956)(6,494)(8,368)
Restructuring and reorganization costs(361)869 (9,514)(51,753)
Adjusted sales and marketing expense$100,683 $107,536 $289,910 $310,497 
GAAP sales and marketing expense as a percentage of revenue35%40%36%43%
Adjusted sales and marketing expense as a percentage of revenue21%24%22%23%
General and administrative
GAAP general and administrative expense$65,913 $69,989 $201,418 $338,573 
Stock-based compensation expense(18,903)(13,798)(59,509)(68,292)
Depreciation expense(1,464)(1,950)(4,345)(5,643)
Restructuring and reorganization costs(6,058)(9,236)(14,400)(131,099)
Adjusted general and administrative expense$39,488 $45,005 $123,164 $133,539 
GAAP general and administrative expense as a percentage of revenue14%16%15%25%
Adjusted general and administrative expense as a percentage of revenue8%10%9%10%
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UNITY SOFTWARE, INC.
Non-GAAP Reconciliation
(In thousands)
Three Months EndedNine Months Ended
September 30,September 30,
2025202420252024
Adjusted EPS reconciliation
GAAP net loss$(126,828)$(124,548)$(312,100)$(541,764)
Stock-based compensation expense91,561 105,271 288,312 358,925 
Amortization of intangible assets expense125,345 88,517 297,213 264,906 
Depreciation expense10,548 14,083 31,825 40,913 
Restructuring and reorganization costs7,899 10,997 39,130 250,457 
Income tax impact of adjusting items(16,561)(15,963)(64,852)(88,385)
Adjusted net income used for calculation of adjusted EPS, before impact of dilutive instruments$91,964 $78,357 $279,528 $285,052 
Increase from forgone financing costs on dilutive convertible notes, net of tax4,714 4,516 14,014 13,709 
Adjusted net income used for calculation of adjusted EPS, including impact of dilutive instruments$96,678 $82,873 $293,542 $298,761 
Weighted-average common shares used in GAAP diluted net loss per share attributable to Unity Software Inc.424,296 398,810 417,919 392,855 
Convertible notes41,348 24,486 37,770 24,860 
Stock options and PVOs6,510 8,461 6,253 11,959 
Unvested RSUs, PVUs, and PSUs13,055 3,423 7,598 4,460 
ESPP130 112 261 199 
Non-GAAP weighted-average common shares used in adjusted EPS485,339 435,292 469,801 434,333 
GAAP diluted net loss per share attributable to Unity Software Inc.(0.30)(0.31)(0.75)(1.38)
Total impact on diluted net loss per share attributable to Unity Software Inc. from non-GAAP adjustments0.52 0.51 1.42 2.11 
Total impact on diluted net loss per share attributable to Unity Software Inc. from antidilutive common stock now included(0.02)(0.01)(0.05)(0.04)
Adjusted EPS0.20 0.19 0.62 0.69 
Free cash flow reconciliation
Net cash provided by operating activities$155,398 $122,358 $301,520 $203,361 
Less:
Purchases of property and equipment(4,107)(7,151)(16,271)(23,107)
Free cash flow151,291 115,207 285,249 180,254 
Net cash used in investing activities(4,107)(19,651)(18,271)(35,967)
Net cash provided by (used in) financing activities54,082 20,000 76,113 (357,697)
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Cautionary Statement Regarding Forward-Looking Statements
This press release and the earnings call referencing this press release contain “forward-looking statements,” as that term is defined under federal securities laws, including, but not limited to, statements regarding Unity’s outlook and future financial performance, including: (i) Unity’s position at an inflection point and its ability to further enhance its platform, accelerate product innovation and enhance financial performance; (ii) expectations regarding Vector, including expectations regarding Vector’s improvements and performance and the expansion of Vector across our Grow solutions; (iii) our strategic initiatives, including our continued investment and focus on artificial intelligence tools; (iv) expectations regarding Vector leveraging behavioral data available through Unity Runtime, including expectations of multi-year growth of the product portfolio and its impact on financial results; (v) expectations regarding the launch of Unity 6.3, including the timing of the release and market acceptance; (vi) expectations regarding our competitive position and growth prospects; (vii) our controls around spend and our operating structure having the potential to drive meaningful improvements in operating margins over time; and (viii) Unity’s financial guidance for the fourth quarter 2025. The words “aim,” “believe,” “may,” “will,” “estimate,” “continue,” “intend,” “expect,” “plan,” “project,” and similar expressions are intended to identify forward-looking statements. These forward-looking statements are subject to risks, uncertainties, and assumptions. If the risks materialize or assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. Risks include, but are not limited to, those related to: (i) the impact of macroeconomic conditions, such as inflation, high interest rates, tariffs, sanctions and trade barriers, and limited credit availability which could further cause economic uncertainty and volatility; (ii) competition in the advertising market and Unity’s ability to compete effectively; (iii) ongoing geopolitical instability, particularly in Israel, where a significant portion of the Grow operations is located; (iv) Unity’s ability to recover or reengage its customers, or attract new customers; (v) the impact of any decisions to change how Unity prices its products and services; (vi) Unity’s ability to achieve and sustain profitability; (vii) Unity’s ability to retain existing customers and expand the use of its platform; (viii) Unity’s ability to further expand into new industries and attract new customers; (ix) the impact of any changes of terms of service, policies or technical requirements from operating system platform providers or application stores which may result in changes to Unity or its customers’ business practices; (x) Unity’s ability to maintain favorable relationships with hardware, operating system, device, game console and other technology providers; (xi) breaches in its security measures, unauthorized access to its platform, data, or its customers’ or other users’ personal data; (xii) Unity’s ability to manage growth effectively and manage costs effectively; (xiii) the rapidly changing and increasingly stringent laws, regulations, contractual obligations and industry standards that relate to privacy, data security and the protection of children; (xiv) Unity’s ability to successfully transition executive leadership; (xv) Unity’s ability to adapt effectively to rapidly changing technology, evolving industry standards, changing regulations, or changing customer needs, requirements, or preferences; and (xvi) the effectiveness of Vector. Further information on these and additional risks that could affect our results is included in our filings with the Securities and Exchange Commission (SEC), including our Annual Report on Form 10-K filed with the SEC on February 20, 2025 and Quarterly Reports on Form 10-Q filed with the SEC on May 7, 2025 and August 6, 2025 and our future reports that we may file with the SEC from time to time, which could cause actual results to vary from expectations. Copies of reports filed with the SEC are available on the Unity Investor Relations website. Statements herein speak only as of the date of this release, and Unity assumes no obligation to, and does not currently intend to, update any such forward looking statements after the date of this release except as required by law.
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Contacts:
Investor Relations:
Alex Giaimo, Head of Investor Relations
alex.giaimo@unity3d.com

Media Relations:
Julianne Whitelaw, Head of Corporate Communications
UnityComms@unity3d.com

Source: Unity Software Inc.
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