Unity Software (U) Q4 2025 earnings summary

Executive summary

• Fourth quarter 2025 revenue reached $503 million, up 10% year-over-year, surpassing guidance high-end, driven by exceptional Vector and Create Solutions performance, with Vector achieving three consecutive quarters of mid-teen sequential revenue growth and January 2026 marking its best month ever.

• Vector revenue grew 53% in its first three quarters since launch and is expected to surpass a $1 billion annual run rate by end of 2026.

• Net loss narrowed to $89 million from $123 million year-over-year, with net loss margin improving to (18)% from (27)%.

• Unity 6 adoption is the fastest in company history, with 90% of active creators using it for free.

• The decline of the ironSource ad network is nearly complete, now representing less than 6% of total revenue, enhancing growth rates and profitability in advertising.

Financial highlights

• Q4 Grow Solutions revenue: $338 million, up 11% year-over-year, led by Vector, which represented 56% of segment revenue and saw mid-teen sequential growth.

• Q4 Create Solutions revenue: $165 million, up 8% year-over-year, led by subscription growth; excluding non-strategic revenue, Create grew 16%.

• Adjusted EBITDA for Q4: $125 million (25% margin), up from $106 million (23% margin) year-over-year.

• Free cash flow for Q4: $119 million, with free cash flow margin expanding by 600 basis points.

• Cash and cash equivalents rose to $2,064 million, up $536 million from prior year-end.

Outlook and guidance

• Q1 2026 revenue guidance: $480–$490 million; Adjusted EBITDA: $105–$110 million.

• Vector expected to grow 10% sequentially in Q1 2026; Grow Solutions revenue flat sequentially due to seasonality.

• Create Solutions forecasted for double-digit year-over-year growth in Q1 2026, excluding non-strategic revenue.

• Adjusted EBITDA margins expected to expand 300 basis points year-over-year in Q1 2026 and improve throughout the year.