Unity revenue tops $500M as ‘Vector’ AI growth drives recovery

Unity Software (NYSE:U) cleared a major hurdle in its ongoing turnaround, reporting fourth-quarter revenue of $503 million and surpassing the half-billion-dollar mark for the first time since its 2024 restructuring.

The San Francisco-based creator of the world’s most widely used game engine saw its top line grow 10% year-over-year, driven by what CEO Matt Bromberg described as "the fastest adoption of a new engine version" in the company's history.

The company’s Grow Solutions segment—the advertising and monetization arm—was the standout performer, generating $338 million in revenue.

This 11% increase was largely attributed to "Vector," Unity’s new neural network-based engine, which has delivered three consecutive quarters of mid-teen sequential growth.

Meanwhile, the Create Solutions segment, which houses the core Unity 6 game engine, rose 8% to $165 million.

Despite the revenue beat and a healthy 25% adjusted EBITDA margin, Unity’s shares plunged more than 20% in premarket trading on Wednesday.

Investors reacted sharply to a conservative first-quarter 2026 forecast, with management projecting revenue between $480 million and $490 million—missing analyst estimates of $491.8 million.

On a GAAP basis, the company reported a net loss of $89 million, or $0.21 per share, an improvement from the deeper losses seen during its mid-2024 reset.

Unity also demonstrated significant cash-generation strength, posting $119 million in free cash flow for the quarter.