A platform for building and running real-time 2D and 3D games and interactive experiences across mobile, PC, console, and XR. Its Create Solutions tools serve game makers and non-gaming industries like automotive, retail, and healthcare, while its Grow Solutions handle ads and user acquisition through products like the Unity Ad Network and Supersonic. Founded in 2004 in Copenhagen by three developers, Unity grew into one of the world's largest platforms for real-time 3D creation.
Unity's revenue rose 24% to $546M and GAAP net loss narrowed to $24M as its AI ad platform drove growth.
The ironSource ad network sunset is largely complete, and the cost is now visible in the numbers. rose 24% to $546.5 million and rebounded to 79.6% from 30.8% last quarter as a $227 million charge did not repeat, while more than doubled to $202 million. The company has the cash to retire its remaining 2026 notes, but the core business is barely growing.
Key takeaways
rose 24% to $546.5 million, driven by the Unity Ads Network as it migrated to the AI-powered platform, which more than offset declines in the sunsetting .
rebounded to 79.6% from 30.8% in Q1 2026 because the prior quarter included a $227 million of in cost of tied to the sunset; the charge did not repeat.
grew only slightly to $158 million, as subscription gains were offset by lower cloud and hosting services and the absence of a $12 million term license sale recorded in the prior-year quarter.
Section summaries
Management's Discussion and Analysis
Q2 revenue rose 24% to $546M driven by Unity Ads Network growth, while GAAP net loss narrowed to $23M.
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Total increased 24% to $546M, primarily from growth in the Unity Ads Network driven by '', partially offset by declines in the sunsetting .
rose 60% to $202 million, and the company ended the quarter with $2.35 billion in cash and equivalents, which management stated is sufficient to repay the remaining 2026 at maturity in November 2026.
Operating expenses rose 5% to $467 million, with R&D up 30% on higher and hosting costs, while sales and marketing fell 18% on lower intangible amortization following the Q1 .
The sunset was substantially completed in Q2 2026, and the company disclosed it caused higher-than-expected customer and attrition; the sale of closed on August 4, 2026.
What changed
The dollar-based net expansion rate was not disclosed again this quarter, leaving unanswered the question flagged since Q3 2024 of whether the customer base contraction has stabilized below 93%.
The sunset and divestiture flagged in Q1 2026 have progressed: the ad network sunset was substantially completed this quarter with higher-than-expected attrition, and the Supersonic sale closed after quarter-end.
The collapse to 30.8% in Q1 2026 was a one-quarter event caused by the charge; the margin rebounded to 79.6% this quarter, confirming the underlying unit economics remain intact.
remains nearly flat , failing to show the sustained growth without one-time license sales that earlier filings flagged as the key test of whether the core engine business had stabilized after the portfolio reset.
The remaining 2026 come due in November 2026, and the company's $2.35 billion cash position suggests it can settle them without straining liquidity, addressing a concern flagged in the FY 2025 and Q1 2026 filings.
What to watch
Whether the higher-than-expected customer and attrition from the sunset continues into Q3 2026 or proves to be a one-time disruption now that the sunset is substantially complete.
Whether can grow without one-time license sales, and whether AI-driven automation begins to pressure seat-based subscription demand.
The company's ability to settle the remaining 2026 in cash at the November 2026 maturity without drawing down cash reserves to a level that constrains operations.
Whether the dollar-based net expansion rate is disclosed again and, if so, whether it has stabilized or begun to recover from the 93% reported in FY 2025.
grew slightly to $158M, with subscription gains offsetting lower cloud and hosting services after a 2025 portfolio reset and a $12M term license in the prior-year quarter.
expanded to 80% from 74% as cost of was flat, benefiting from lower intangible after a $227M charge in Q1 2026.
Operating expenses rose 5% to $467M, with R&D up 30% on higher and hosting costs, while sales and marketing fell 18% on lower intangible amortization.
Six-month doubled to $268M, and the company held $2.4B in cash, sufficient to repay the remaining at maturity in November 2026.
more than doubled to $160M, and rose to $0.28 from $0.18, excluding , , and restructuring costs.
Quantitative and Qualitative Disclosures About Market Risk
Our assessment of our exposures to market risk has not changed materially since the presentation set forth in Part II, Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 11, 2026. 29 Table of Contents Unity Software Inc.
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Our assessment of our exposures to market risk has not changed materially since the presentation set forth in Part II, Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 11, 2026.
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Table of Contents Unity Software Inc.
We are not party to any material legal proceedings at this time. From time to time, we may be subject to other legal proceedings and claims arising in the ordinary course of business.
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We are not party to any material legal proceedings at this time. From time to time, we may be subject to other legal proceedings and claims arising in the ordinary course of business.
Unity's restructuring, including sunsetting the ironSource Ads Network and exiting Supersonic, creates execution risk and customer attrition.
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Failure to execute the realignment around the and monetization solutions may prevent achieving profitability.
Workforce reductions risk loss of accumulated knowledge, legacy product support gaps, and operational inefficiency.
The sunset was substantially completed in Q2 2026 and has caused higher-than-expected customer and attrition.
The sale of completed on August 4, 2026, and together with the ad network exit, has disrupted relationships with customers, publishers, and advertisers.
Customers and partners have delayed, reduced, or terminated use of Unity's offerings and may continue to do so.