Unity Software announced financial results for the second quarter of 2026, which Chief Executive Officer Matt Bromberg characterized as a historic period for the company. Strategic revenue increased 38% year-over-year while adjusted EBITDA grew 77% to $160 million, according to Chief Financial Officer Jarrod Yahes. The company’s adjusted EBITDA margin expanded to 29%, representing an 800 basis point increase from the prior year. Free cash flow reached $202 million, up 59% year-over-year, bringing the company’s cash balance to $2.36 billion. During the quarter, Unity transitioned from a net-debt position to a net-cash position and plans to repay its convertible note in November.
The Vector performance-marketing platform served as the primary growth driver during the period. Vector expanded 23% sequentially, nearly double the company’s initial projection of 12% to 13%, and achieved an annual run rate substantially exceeding $1 billion, two quarters ahead of schedule. Strategic Grow revenue totaled $329 million, increasing 63% year-over-year. The company attributed this performance to product updates, enhanced data capabilities and improvements to its artificial intelligence models. During the quarter, Unity deployed more than 20 major Vector updates, including expanded measurement capabilities for in-app advertising. Additionally, Unity began incorporating signals from its runtime into Vector’s AI models, with the company noting its runtime reaches approximately 3 billion monthly users. The Create Solutions business also returned to growth, with strategic revenue of $157 million, up 14% year-over-year excluding a one-time prior-year item.
Looking ahead, Unity outlined several strategic initiatives for the coming quarters. The company unveiled Unity 7, a new version of its game-development software scheduled to enter beta in the fourth quarter and launch fully in the first quarter of 2027. The company also announced that its Commerce product became generally available on June 30, enabling game publishers to facilitate direct-to-consumer purchases. Additionally, Unity announced a multiyear partnership with Netflix to support the streaming company’s multiplatform games ecosystem. The company completed the sale of its Supersonic business on August 4 and substantially completed the closure of the ironSource ad network.
For the third quarter, Unity projected strategic revenue of $540 million to $550 million, representing year-over-year growth of 44% to 47%. The company forecast adjusted EBITDA of $185 million to $190 million, implying a 33% margin. Unity accelerated its timeline for achieving GAAP net-income profitability to the third quarter of 2026, one quarter ahead of its prior expectation.
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