Unity Software Inc Dossier - Source-backed chat

Unity Software Inc

UNYSE

SectorInformation Technology

IndustryApplication Software

Beta (adjusted)1.67

Intrinsic Value

Insufficient data for a value estimateNot enough reliable inputs to publish a fair value for this company yet.

Market Price $40.93Price as of 30 Sep 2026

Data confidenceNot applicable

Market Cap $18B

Enterprise Value $17.3B

Shares Outstanding 442.3M diluted

Moat Rating None

Next Earnings Date4 Nov 2026

All prices and values are periodic snapshots, not live quotes. Source dates are shown for reference.

Thesis

Street consensus, scenarios, merits, risks, and invalidation triggers

AI-assisted

Thesis Summary

Unity's operating recovery accelerated in Q2 2026: total strategic revenue increased 38% year over year, adjusted EBITDA reached USD 160.191 million, and free cash flow reached USD 201.959 million. Management's Q3 guidance calls for further acceleration and GAAP profitability, while the exit from ironSource Ads and sale of Supersonic simplify the portfolio around strategic Create and Grow products. The neutral recommendation reflects strong execution offset by dependence on Vector-led advertising growth, slower reported Create growth, continuing GAAP losses through Q2.

This section is the 12-month view: analyst targets and the probability-weighted scenarios built from them. The intrinsic value at the top of this page answers a different question: what the business is worth today.

Street view · analyst 12-month targets23 analysts · as of 18 Aug 2026

Low · most bearish analyst$28.00

Mean target$47.97

High · most bullish analyst$55.00

Our research · scenarios, merits, risks, and invalidation triggersResearch as of 2 Sep 2026

Scenarios · 12-month scenario targetsAnchored at research date

Bear CaseDownside scenario

$28.0020%

Strategic revenue falls below USD 540 million, adjusted EBITDA falls below USD 185 million, or GAAP profitability is delayed. Deceleration in Vector, weak Create growth, or disruption from exiting non-strategic businesses would undermine the evidence that Unity's recovery is sustainable.

Base CaseCentral scenario

$47.9755%

Matches the consensus mean

Unity delivers Q3 strategic revenue within USD 540-550 million and adjusted EBITDA within USD 185-190 million while reaching approximately break-even or positive GAAP net income. Strategic Grow remains the principal growth engine and Create advances more gradually.

Bull CaseUpside scenario

$55.0025%

Strategic revenue exceeds the USD 550 million upper end of Q3 guidance, adjusted EBITDA exceeds USD 190 million, and Unity achieves GAAP profitability. Sustained Vector momentum and improving Create growth would demonstrate that the portfolio reset is producing durable growth and operating leverage.

Scenarios are anchored to street consensus at the research date, with our probabilities and rationale.

Key Investment Merits

Q2 2026 total strategic revenue increased 38% year over year to USD 486.411 million, including 63% growth in strategic Grow revenue.
Q2 adjusted EBITDA increased to USD 160.191 million from USD 90.497 million, with the adjusted EBITDA margin expanding to 29% from 21%.
Q2 operating cash flow was USD 205.622 million and free cash flow was USD 201.959 million, indicating substantially stronger cash generation.
The sunset of ironSource Ads and sale of Supersonic concentrate resources on strategic products; Q3 guidance implies non-strategic revenue declining to USD 20 million.

Key Investment Risks

Recent Grow performance depends materially on Unity Vector, making execution and effectiveness of the AI-driven advertising product central to the growth thesis.
Reported Q2 Create Solutions revenue increased only 2% year over year, while strategic Create revenue increased 5% before adjustment for a prior-year one-time item.
The removal of ironSource Ads and Supersonic creates portfolio-transition and comparability risk even though management expects stronger strategic growth and profitability.
Unity remained GAAP loss-making in Q2 2026, reporting a USD 22.672 million net loss and USD 75.576 million of stock-based compensation in its adjusted EBITDA reconciliation.

All scenarios are estimates and subject to change. Past performance is not indicative of future results.

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Explore this dossier

ValuationIntrinsic value, the six-method breakdown, peer medians, and your assumptions sandbox.Financial SnapshotRevenue, profitability, returns, balance sheet, dividends, and the filing-level detail.Qualitative AnalysisBusiness overview, strategic initiatives, and mergers, acquisitions & partnerships.Outlook & Key DatesForward estimates, reporting calendar, and the monitoring framework.