SAN FRANCISCO, May 7, 2026, 12:03 PDT
Unity Software Inc. reported first-quarter revenue up 17% on Thursday, crediting growth in its ad and creation tools. Still, a $279 million impairment related to winding down legacy operations dragged net loss to $347 million.
This quarter puts CEO Matt Bromberg’s turnaround strategy on the spot. Unity is out to show it can accelerate growth in its core engine, ad network, and AI products now that it’s shuttering the ironSource Ads Network and looking to offload its Supersonic game publishing unit.
Clarity was elusive. Unity traded as high as $31.20 after starting at $29.57, but by midday, shares had slipped 1.8% to $26.80.
Revenue climbed to $508.2 million, up from $435 million in the same period a year ago. Create Solutions—the segment handling subscriptions and services for building interactive games and apps—delivered $156.6 million. Grow Solutions, which covers app ad and monetization tools, pulled in $351.6 million.
Adjusted EBITDA jumped to $138 million, good for a 27% margin, up from $84 million the year before. Free cash flow also climbed, reaching $66 million versus just $7 million a year ago.
Bromberg pointed to “more games, more creators, and more game discovery” as key growth engines for Unity. Strategic revenue—excluding assets the company is discontinuing or offloading—climbed 35% to $432.4 million. Unity Technologies
During the earnings call, Chief Financial Officer Jarrod Yahes told analysts Unity is targeting “GAAP profitable by the fourth quarter of 2026,” referring to the official U.S. accounting standard that captures expenses stripped from adjusted results. For Q2, Unity put its strategic revenue outlook at $455 million to $465 million, with adjusted EBITDA expected in a $130 million to $135 million range. Investing.com Canada
Driving that optimism is Unity Vector, the company’s AI-powered ad platform. Bromberg described Vector as “an AI prediction engine” that connects players to games. He said revenue from Vector in the first quarter jumped 80% year-over-year, marking the fourth consecutive quarter with 15% sequential growth. Investing.com Canada
Unity finds itself squeezed on both sides. Its most recent annual filing singles out Epic Games’ Unreal Engine as a main competitor on the creation tools front, while AppLovin is flagged as a key rival in Grow—the segment where ad tech and data models keep gaining in importance with each passing quarter.
Still, the plan isn’t without significant risks. Unity flagged the uncertainty around AI investments delivering returns, and pointed to its reliance on outside AI models as a possible source of higher costs or restricted access. There’s also a risk that AI progress could enable rivals or users to automate tasks Unity currently monetizes. The company noted shutting down ironSource might trigger bigger customer or revenue losses than anticipated, and said the Supersonic sale hinges on securing a willing buyer.
Unity’s narrative is clearer these days: strategic growth is picking up speed, cash flow looks healthier, and the AI message is more focused. Still, GAAP losses have widened, and every fresh update keeps the stock bouncing sharply.
