Unity Software Inc. (NYSE: U) shares plummeted 5.07% in Wednesday's trading session, following the release of its second-quarter 2025 financial results. Despite beating analyst estimates, the company's year-over-year revenue decline and lower-than-expected third-quarter guidance appear to have rattled investors.
The game engine maker reported Q2 revenue of $440.94 million, surpassing analyst expectations of $426.77 million. However, this figure represented a 1.9% decrease from the same quarter last year. Unity's adjusted earnings per share came in at $0.18, beating the consensus estimate of $0.15. The company's adjusted EBITDA of $90.5 million also exceeded analyst projections of $77.49 million.
While Unity's Q2 performance beat expectations, its outlook for the third quarter fell short of market hopes. The company guided for Q3 revenue between $440 million and $450 million, with the midpoint slightly below analyst estimates of $447.6 million. This conservative guidance, coupled with the year-over-year revenue decline, likely contributed to the stock's significant drop as investors reassessed the company's growth prospects in the competitive tech landscape.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.