Why Is Unity Stock Rising Today?

Unity Software’s Q3 revenue rose 5% year-on-year (YoY) to $471 million.

• Unity’s AI-powered ad platform, Unity Vector, provided a boost to Q3 revenue.
• The company’s Q3 revenue and EPS surpassed analysts’ consensus estimate. 
• Unity’s Q3 EBITDA rose 18% YoY to $109 million.

Unity (U) stock surged over 17% in Wednesday’s premarket after the company’s third-quarter (Q3) earnings beat street estimates, with a boost from its artificial intelligence-powered ad platform, Unity Vector.

The company offers a range of tools that help creators build, launch, and expand games and interactive experiences across various platforms, including mobile devices, PCs, and consoles.

Q3 Highlights

Unity Software’s Q3 revenue rose 5% year-on-year (YoY) to $471 million. Adjusted earnings per share (EPS) were $0.20. Both revenue and EPS exceeded the analysts’ consensus estimate of $453.06 million and $0.17, respectively, according to Fiscal AI data.

Create Solutions revenue increased 3% YoY to $152 million. Grow Solutions' revenue rose 6% YoY $318 million, propelled by the strong performance of the Unity Ad Network. 

On Stocktwits, Unity Software stock became the top trending equity ticker on Wednesday morning. Retail sentiment around the stock improved to ‘extremely bullish’ from ‘bullish’ territory the previous day, while message volume jumped to ‘high’ from ‘low’ levels in 24 hours. 

Unity Vector AI Boosts Earnings

Unity’s Q3 adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) rose 18% YoY to $109 million, reflecting a 23% margin. 

Vector uses data from the entire Unity network to help grow games. It relies on self-learning algorithms to improve ad campaigns by identifying valuable users, adjusting in real-time to player activity and game updates.

Unity stock has gained over 59% year-to-date and over 65% in the last 12 months. 

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