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Investing.com - Oppenheimer maintained its Perform rating on Unity Software (NYSE:U) on Thursday, citing mixed results from the company’s Vector platform. The company, which has seen its stock surge over 129% in the past year according to InvestingPro data, maintains strong liquidity with a current ratio of 2.74.
Unity’s Ad Network, which fully migrated to the Vector platform in early May, delivered 15% quarter-over-quarter growth in revenue and represented 49% of the company’s Grow Segment, according to Oppenheimer analyst Martin Yang. This growth comes as Unity generates annual revenue of $1.79 billion with an impressive gross margin of 74.83%.
The Vector platform’s growth in the second quarter more than offset a 10% quarter-over-quarter decline in non-Vector business, with management expecting the non-Vector segment to stabilize as early as the third quarter.
Unity plans to enhance Vector’s performance by incorporating data from Unity Editor starting in August with the release of Unity 6.2, potentially improving the platform’s capabilities.
The Create segment experienced significant growth during the second quarter from several large strategic partnership deals, particularly in China, while third-quarter guidance suggests stable quarter-over-quarter revenue and margin trends across all segments.
In other recent news, Unity Software reported impressive financial results for the second quarter of 2025, with earnings per share reaching $0.18, surpassing the forecasted $0.13 by 38.46%. The company also reported revenue of $441 million, exceeding expectations by $14.2 million. These results led JMP Securities to raise its price target for Unity Software from $30 to $35, maintaining a Market Outperform rating. Needham also increased its price target from $30 to $40, citing Unity’s better-than-expected performance and its strategic position in the mobile gaming ecosystem. Jefferies followed suit, raising its price target to $40 from $35, highlighting Unity Ads’ 15% quarter-over-quarter growth and its significant contribution to the company’s Grow segment. Unity’s third-quarter revenue and EBITDA guidance met consensus expectations, which JMP considers conservative. These developments reflect positive momentum and investor confidence in Unity Software’s strategic direction and financial health.
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