Unity Software Shares Hit 52-Week High After Strong Q3

Unity Software shares rose approximately 14% to a 52-week high on November 5 after the company reported its first GAAP profit since going public. Third-quarter revenue grew 32% year-over-year to $622.1 million, surpassing analyst expectations of $567.3 million. The company reported a GAAP profit of $121.6 million, reversing a $126.8 million loss from the previous year, and generated $220 million in free cash flow.

Growth was primarily driven by Vector, an AI-powered advertising platform that saw revenue increase 126% year-over-year. CEO Matt Bromberg described the quarter as the company's strongest ever. For the fourth quarter, Unity provided strategic revenue guidance between $683 million and $691 million and adjusted EBITDA between $290 million and $295 million, figures roughly 40% higher than analyst projections.

Following the results, Wedbush raised its price target for Unity to $63 and increased its fiscal 2028 adjusted EBITDA estimate to $1.55 billion. Other firms, including Goldman Sachs, UBS, Raymond James, and BTIG, also raised their price targets. To expand its ecosystem, Unity has integrated coding agents and established partnerships with Google for the Spark no-code tool and Meta for VR game engine support.