Unity’s Q3 2025: Revenue Grows, Cash Flow Strengthens, and Adjusted Margins Hit Multi-Year High
Sustained Revenue Growth Led by Unity Vector AI and Subscription Gains
Unity reported its third quarter 2025 financials, revealing total revenue of $471 million—an increase of 5% year-over-year from $447 million in Q3 2024. Growth was supported by strong performance in the Unity Ad Network, powered by Vector AI, and healthy expansion in the Create Solutions business through increased subscription revenue.
The company's main revenue streams—Create and Grow—showed resilience:
| Segment | Q3 2025 Revenue ($M) | Q3 2024 Revenue ($M) | YoY Change |
|---|---|---|---|
| Create Solutions | 152 | 147 | +3% |
| Grow Solutions | 318 | 299 | +6% |
| Total Revenue | 471 | 447 | +5% |
Create Solutions benefited from growing subscriptions, though some of that was offset by reduced consumption services. Meanwhile, Grow Solutions, notably the ad network, delivered gains despite soft patches elsewhere.
Profitability Trends: Adjusted EBITDA Margin Climbs, Cost Controls in Effect
Unity continues to invest in product innovation while improving its bottom line through tighter operational controls. Adjusted EBITDA for the quarter came in at $109 million (23% margin), up from $92 million (21% margin) in the same period last year. This signals meaningful progress in underlying business health despite GAAP losses, which widened marginally year-on-year due to continued investments.
| Metric | Q3 2025 | Q3 2024 | Change |
|---|---|---|---|
| Adjusted EBITDA ($M) | 109 | 92 | +18% |
| Adjusted EBITDA Margin | 23% | 21% | +2 pts |
| Free Cash Flow ($M) | 151 | 115 | +31% |
| Net Loss ($M) | (127) | (125) | -1.6% |
| GAAP Net Loss Per Share | (0.30) | (0.31) | Improved |
| Adjusted EPS | 0.20 | 0.19 | +5% |
Improved cash generation stood out as well: free cash flow reached $151 million (up from $115 million in Q3 2024), providing further financial flexibility.
Cash Position and Balance Sheet Resilience Remain Strong
Unity’s liquidity improved notably this quarter. As of September 30, 2025, the company’s cash, cash equivalents, and restricted cash totaled $1.91 billion, an increase of $381 million since the end of last year. The increase came from robust operating cash flows and new stock issuances, slightly offset by refinancing activity.
The company's total assets now stand at $6.78 billion, while total liabilities increased marginally to $3.33 billion—demonstrating stability as Unity maintains strong reserves for continued R&D investment.
Guidance Points to Continued Growth and Margin Focus
For the fourth quarter 2025, Unity forecasts revenue between $480 million and $490 million and expects adjusted EBITDA of $110 million to $115 million. Create Solutions is projected to achieve high-single digit year-over-year growth (excluding non-strategic revenue), while Grow Solutions anticipates mid-single digit sequential revenue increases.
| Guidance | Q4 2025 Low End | Q4 2025 High End |
|---|---|---|
| Revenue ($M) | 480 | 490 |
| Adjusted EBITDA ($M) | 110 | 115 |
Management remains focused on disciplined investment in AI-driven innovation, with further operational discipline likely to continue boosting margins and cash flow over the next year.
Key Takeaway: Improving Core Business Metrics Amid Continued Losses
Unity’s Q3 report paints a picture of incremental yet meaningful improvement: revenue growth is healthy, non-GAAP profitability and margins are trending up, and liquidity is robust. Investors will want to keep an eye on Unity’s execution of its AI initiatives and whether ongoing cash generation and adjusted profitability trends can carry the company closer to sustained GAAP profitability in coming quarters. With Q4 guidance signaling more progress ahead, Unity is positioning itself for long-term growth even as it navigates sector and macro headwinds.
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