Unity shares sink 20% on disappointing first-quarter outlook

Investing.com -- Unity Software Inc (NYSE: U) shares plunged sharply after the company issued disappointing guidance for the first quarter of fiscal 2026, overshadowing better-than-forecast fourth-quarter results.

The stock was down more than 20% in U.S. premarket trading by 07:15 ET (12:15 GMT).

The video game software maker reported fourth-quarter earnings per share (EPS) of $0.24, topping analyst estimates of $0.21. Revenue rose to $503.1 million from $457 million a year earlier and came in ahead of the $488.95 million consensus.

Segment-wise, Create Solutions revenue totaled $165 million, up from $152 million in the fourth quarter of 2024. Grow Solutions revenue increased to $338 million from $305 million a year earlier.

Adjusted EBITDA reached $125 million, representing a margin of 25%.

For the first quarter of 2026, Unity expects revenue of $480 million to $490 million, missing analyst expectations of $491.8 million. The company said it anticipates Grow revenue to be flat sequentially, while Create revenue is expected to post double-digit year-over-year growth, excluding non-strategic revenue.

Unity forecasts first-quarter adjusted EBITDA in a range of $105 million to $110 million.

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