Unity Software Stock Down 58% After Q1 Revenue Outlook Miss Despite Q4 Beats
Unity Software’s share price has slumped 58% year-to-date after its first-quarter revenue outlook of $480 million–$490 million fell short of the $494 million consensus. The company posted a 10% year-over-year revenue increase to $503 million and a 25% adjusted EBITDA margin in Q4, yet Benchmark maintained its Hold rating.
1. Year-to-Date Stock Decline
Unity Software’s shares have fallen 58% in 2026, reflecting investor concerns over AI competition and slower user acquisition growth despite the company’s approximately $8 billion market capitalization.
2. Q4 Financial Results
In the fourth quarter, Unity generated $503 million in revenue (up 10% year-over-year) and $125 million in adjusted EBITDA (25% margin), beating revenue estimates by $10 million and EBITDA forecasts by $7.2 million.
3. Q1 Revenue Outlook
Management projected first-quarter revenue between $480 million and $490 million, below the $494 million consensus, indicating a notable reset in growth expectations for the upcoming quarter.
4. Analyst Perspectives
Oppenheimer rates Unity as Outperform with a $32 price target implying 72.5% upside, while Benchmark maintains a Hold rating over AI headwind concerns; the 20-analyst consensus average target of $37.53 suggests a 102% potential gain.