Unity reported its third quarter on November 5 and posted its first GAAP profit since going public in 2020. Net income was $122 million, a 20% margin, against a $127 million loss a year earlier. Revenue rose 32% to $622 million, well above the roughly $567 million analysts expected, and diluted EPS of $0.25 crushed a five-cent consensus. The stock jumped about 22% in premarket trading.
Look at where the money came from. Grow Solutions, the advertising business, made $457 million, up 44%. Create Solutions, the engine and the tools most people think of when they hear Unity, made $165 million, up 8%. Inside Grow, Vector, Unity’s machine-learning ad targeting platform launched last year, grew 126% year over year and 40% from the second quarter. The older ironSource ad network kept shrinking. Unity is now an ad company that also sells a game engine.
The other figures follow from that. Adjusted EBITDA reached $257 million, a 41% margin, up from 23%. Free cash flow was $220 million. Cash stands at $2.65 billion. Fourth-quarter guidance calls for strategic revenue of $683 million to $691 million, up 65% to 67%, and adjusted EBITDA of $290 million to $295 million, which assumes Vector grows another 21% to 23% sequentially. Non-strategic revenue, the businesses Unity is winding down, falls to about $5 million.
The engine is the funnel, the ads are the business
CEO Matt Bromberg described a flywheel: more creators make more games on Unity, and more games mean more ad inventory and more data for Vector to learn from. That’s the logic of the pivot. The runtime fee fight of 2023 showed Unity couldn’t squeeze developers for more money per install without losing them. So it stopped trying to charge creators more and started earning on the players they bring in. Create’s 8% growth is enough as long as the engine keeps games, and their ad slots, on Unity.
The risk is the one every ad network carries. Vector’s growth depends on mobile game marketers spending more and on Unity’s targeting beating AppLovin’s, which set the standard for this kind of machine-learning ad platform. One quarter of 126% growth is a strong signal. Two more at that rate would make Unity a genuine number two in mobile game ads.
Xsolla works the other side of the same money
The same day, Xsolla announced a run of developer events: Xsolla Connect Berlin alongside its sponsorship of Games Ground Berlin, a Latin American push at Game Conference MX in Mexico, and appearances at the Montreal International Game Summit and Pocket Gamer Connects in Montreal. Xsolla sells payments, web shops and direct-to-consumer commerce to game studios, and its pitch is the mirror image of Unity’s. Unity makes money by helping studios buy players through ads. Xsolla makes money by helping studios sell to players directly, outside the app store fees that court rulings and the EU’s Digital Markets Act have started to loosen.
Put them side by side and the shape of game-tech money in 2026 is clear. The engine is a commodity that wins on habit. The margin sits at the two ends of the player’s journey: acquiring them and charging them. Unity just proved it can profit from the first. The second is still wide open, and Xsolla is spending November on the road trying to own it.