Unity Software Posts First GAAP Profit Since 2020 IPO on 32% Revenue Surge, Stock Jumps 20%+

Unity Software delivered its strongest quarter on record in Q3 2026, reporting its first GAAP-profitable period since going public in 2020. Revenue rose 32% year-over-year to $622 million, well above the $567 million analyst consensus, while diluted EPS of $0.25 crushed the $0.05 estimate. Net income reached $122 million, representing a 20% GAAP net income margin, and adjusted EBITDA came in at $257 million, equating to a 41% margin.

The standout driver was Vector, Unity's AI-powered advertising product, which grew 126% year-over-year and 40% sequentially. Grow Solutions, the segment housing advertising revenue, jumped 44% year-over-year to $457 million, while Create Solutions, which covers developer tools, rose 8% to $165 million. Strategic revenue, the company's core business metric, reached $597 million, up 59% year-over-year. Free cash flow hit $220 million, up 46% year-over-year, and Unity added $587 million in cash over the course of the year, achieving those gains while simultaneously cutting sales and marketing spending by 38%.

For Q4, Unity guided strategic revenue of $683 million to $691 million, with the Grow segment alone projected at $515 million to $520 million, implying the ad business is set to more than double sequentially. Adjusted EBITDA guidance of $290 million to $295 million points to continued margin expansion. BTIG raised its price target on the stock following the results.

Shares surged roughly 20% to 23% in premarket and early trading, with the stock trading around $47, as investors responded to both the milestone profitability and the aggressive forward guidance. The results placed Unity among the biggest premarket movers of the session alongside AppLovin, which also rallied sharply on its own strong ad-tech results.