New York, Feb 12, 2026, 14:01 (ET) — Regular session
- Unity shares slid even more as the company issued a bleak outlook for the first quarter.
- Analysts describe a landscape rattled by uncertainty, with AI-driven disruption and changing ad mixes throwing established patterns into question.
- Unity’s next product rollouts and the developer showcase set for March are now in focus.
Unity Software Inc shares tumbled nearly 10% Thursday, extending a two-day losing streak after Wall Street digested a soft revenue outlook and fresh skepticism from analysts over its ad strategy overhaul. The stock hovered around $19.28 by the afternoon, off about 10%.
The stock dropped further, piling onto Wednesday’s nearly 30% slump after Unity’s Q1 revenue projection fell short of analysts’ expectations — a hit that shifts attention back to execution. Ongoing anxiety this year surrounding emerging AI tools, including Alphabet’s Google models that build interactive worlds, has dragged on the shares and stirred fears about the company’s role in a market shifting away from traditional game engines. 1
Unity turned in fourth-quarter revenue of $503 million, with adjusted earnings at $0.24 per share. Free cash flow came in at $119 million. For the current quarter, the company is targeting revenue between $480 million and $490 million, putting adjusted EBITDA guidance at $105 million to $110 million. Adjusted EBITDA strips out interest, taxes, depreciation and amortisation—still the company’s headline number. CEO Matt Bromberg flagged what he described as the “fastest rate” ever for Unity 6 adoption. Unity also noted continued traction for Vector, its AI-driven ad platform. 2
Analysts moved quickly on the new guidance. Wedbush hacked its price target to $30 from $37, with BTIG following suit—down to $41 from $60. They kept their bullish ratings, though. Wedbush’s Alicia Reese pointed to a “looming perceived AI threat,” saying Unity’s shift “undermines the structure of its business model.” 3
Executives tried to steer attention back toward their business mix. “January was a record for Vector,” CFO Jarrod Yahes said on the call. Management noted the legacy ironSource ad network’s share of revenue should fall below 6% in Q1 as Vector picks up steam. Bromberg said Unity plans to roll out a beta version of its revamped Unity AI at the Game Developer Conference in March. 4
The broader tape took a hit. SPDR S&P 500 ETF lost around 1%. Invesco QQQ, which tracks the Nasdaq 100, slid further—down about 1.5%. Tough backdrop for high-growth software names.
Unity released its annual Form 10-K on Wednesday, adding fresh details on its financials and painting a clearer picture of risks as the company pushes further into advertising and AI-powered tools. 5
It’s a tricky road ahead. Unity is betting that a bigger Vector and fatter margins can make up for slumping legacy ad network revenues, banking too on AI creation tools bringing in fresh demand for its engine—not cannibalizing it. But if advertisers cut back or developers tighten their belts again, that optimistic outlook could prove ambitious.
The Game Developers Conference in San Francisco kicks off March 9–13. Investors want clearer signals from Unity about its AI roadmap—and they’re especially watching for hints on how soon new products could hit the market. 6
