Unity Software Q4 Revenue $503M Beats, Q1 Forecast $480M–$490M Misses
Piper Sandler adjusted Unity Software's price target to $29, down from $59, after Q4 revenue of $503.1 million beat estimates. The company's Q1 forecast of $480 million–$490 million fell short of the $491.8 million consensus, sending shares down over 28%.
1. Piper Sandler Adjusts Price Target
Piper Sandler lowered its price target for Unity Software to $29, down from $59, signaling a more cautious stance despite recent earnings strength. The adjustment reflects tempered expectations for near-term growth.
2. Q4 2025 Earnings Exceed Expectations
Unity reported Q4 2025 revenue of $503.1 million, a 10% year-over-year increase that topped the $492.8 million consensus. The Create Solutions segment grew 8% to $165 million, while Grow Solutions climbed 11% to $338 million.
3. Q1 2026 Guidance Misses Consensus
The company forecast Q1 revenue between $480 million and $490 million and adjusted EBITDA of $105 million to $110 million, below the $491.8 million revenue consensus. The cautious outlook raises concerns about upcoming demand for Unity’s development tools.
4. Share Price Reaction and Market Impact
Shares plunged over 26%, trading between $18.80 and $22.09 on volume of 102.4 million shares following the guidance announcement. The sharp drop highlights investor sensitivity to near-term forecasts despite a solid quarterly performance.