Unity, maker of the Unity game engine, reported earnings for the first quarter ended March 31, 2026, with revenues growing 17% to $508.2 million.
“We are delivering exceptional revenue growth and margin expansion while executing on the most exciting product roadmap in Unity’s history,” said Matt Bromberg, CEO of Unity, in a statement. “More games, more creators, and more game discovery are all fueling the growth in our business.” Unity’s stock price rose slightly in after-hours trading after the news.
Unity said strategic grow revenue was $278.7 million, up 49% from $186.9 million a year ago. Strategic create revenue was $153.7 million, up 15% from $133.3 million a year ago. Total strategic revenue was $432.4 million, up 35% from $320.2 million a year ago. And non-strategic revenue was $75.8 million, down 34% from $114.7 million a year ago. That category consists of revenue from the IronSource ad network, which was sunsetted on April 30, and the Supersonic publishing business which is being divested.
Q2 2026 Guidance
For the second quarter ending June 30, Unity projected total Revenue of $505 million to $515 million.
Strategic revenue is expected to be $455 million to $465 million, up 29% – 32% year-over-year. Strategic grow revenue is expected to be $302 million to $306 million, up 50% – 52% year-over-year. Strategic create revenue is expected to be $154 million to $158 million up 11% – 14% year-over-year, when excluding the impact of a $12 million one-time revenue item in the second quarter of 2025.
Adjusted EBITDA is expected to be $130 million to $135 million, up 44% – 49% year-over-year
First Quarter 2026 Results
Unity said the GAAP net loss was $347 million, with a margin of (68)%; GAAP basic and diluted net loss per share was 80 cents.
Adjusted EBITDA was $138 million, with a margin of 27%; adjusted EPS was 23 cents. Net cash provided by operating activities was $71 million; free cash flow was $66 million.
Revenue
Revenue was $508 million, up 17% year-over-year. Strategic revenue was $432 million, up 35% year-over-year.
Create Solutions revenue was $157 million, up 4% year-over-year. The increase was driven by increases in subscription revenue, partially offset by decreases in cloud and hosting services revenue, driven by our portfolio reset in 2025.
Grow Solutions revenue was $352 million, up 24% year-over-year. The change was due to growth in the Unity Ad Network, driven by “Unity Vector”, partially offset by decreases in the IronSource Ad Network.
Basic and Diluted Net Loss per share
Basic and diluted net loss per share was $0.80, as compared to $0.19 for the same period in 2025.
Net Loss and Net Cash Provided by Operating Activities
Net loss for the quarter was $347 million, which includes $279 million of impairment charges, related to the sunset of the IronSource Ads Network, and planned divestiture of our Supersonic game publishing business. This compares to a net loss of $78 million in the first quarter of 2025.
Net Loss margin was (68)%, compared to (18)% in the first quarter of 2025.
Net cash provided by operating activities for the quarter was $71 million, compared to $13 million in the first quarter of 2025.
Adjusted EBITDA, Free Cash Flow, and Adjusted EPS
Adjusted EBITDA for the quarter was $138 million, with a margin of 27%, compared to $84 million in the first quarter of 2025, with a margin of 19%. The year-over-year improvement was driven by higher revenue and continued cost control.
Free cash flow for the quarter was $66 million, compared to $7 million in the first quarter of 2025.
Adjusted EPS for the quarter was $0.23, compared to $0.24 in the first quarter of 2025.
Liquidity
As of March 31, 2026, cash and cash equivalents, and restricted cash was $2.14 billion, and increased by $82 million, as compared with $2.06 billion as of December 31, 2025. This increase was primarily driven by operations.