Unity Q2 Preview: Can Create and Ads Fuel a Turnaround?

Unity Software U reports Q2 2025 earnings before market open on August 6. Analysts expect adjusted EPS $0.14 per share on revenue of $427 million, representing around a 5% decline year-over-year and a 48% EPS decline from Q2 2024's $0.27 per share. Shares are up roughly 26% YTD but still trade 20% below its 52 week highs made on July 17 2025.

Investor focus will be on segment performance and cost leverage. The Create business, particularly game development workflows, saw softening demand in Q1. Renewed strength there would matter. On the monetization side, Unity Ads and Vector, its AI-powered advertising solution, will be in focus as investors gauge whether Unity can maintain ad traction amid broader skepticism over profitability. Analysts will watch margin execution and progress toward sustainable contribution from Grow-related revenue.

Execution risks remain elevated. Unity trades at 43 FCF, but continues to face pressure from high cash burn. Investors need to see tangible cost reductions and liquidity runway if the company is going to justify that valuation while scaling toward profitability. With execution stakes high, Q2 commentary must balance early signs of growth recovery with concrete visibility on cost discipline and cash flow management.