New York, Feb 11, 2026, 17:46 (ET) — Trading after hours
- Unity shares dropped roughly 26% in after-hours trading following a weak revenue forecast for the first quarter
- The company exceeded fourth-quarter targets but signaled a slowdown in its near-term pace
- Traders are closely tracking demand indicators, the pace of ad-tech growth, and the overall mood in the software sector
Shares of Unity Software Inc (NYSE: U) dropped 26% to $21.41 in after-hours trading Wednesday, following an intraday range from $18.81 up to $30.34. Roughly 105 million shares traded hands during the session.
The game-engine company projected first-quarter revenue between $480 million and $490 million, falling short of analysts’ $492.1 million estimate, according to LSEG data. Investors are also concerned that Alphabet’s Google might leverage new AI tools to automate aspects of world-building traditionally handled by game engines.
Software stocks dropped once more, despite chip shares gaining ground during the session. The S&P 500 software index slipped 2.6%. Investors now await Friday’s U.S. January consumer price index report, looking for clues on rate-cut expectations that could move growth stocks.
Unity’s revenue for the fourth quarter climbed 10% to $503 million, driven by $165 million from Create Solutions and $338 million from Grow Solutions, the company announced. Adjusted earnings came in at $0.24 per share, while adjusted EBITDA hit $125 million—a profit metric excluding interest, taxes, and depreciation. Free cash flow stood at $119 million, representing cash remaining after capital expenditures. CEO Matt Bromberg said the “fourth quarter results once again comfortably exceeded the high-end of our guidance,” highlighting strength in Vector and a rebound in Create. Unity Technologies
During the earnings call, Bromberg told analysts that “this January was Vector’s best revenue month ever,” highlighting how the company relies on its newer ad product to stabilize the Grow business. Investing.com Nigeria
Earlier this week, the mood was quite different. On Tuesday, Oppenheimer analyst Martin Yang upgraded the stock, arguing that “world models” like Google’s Project Genie aren’t designed to replace engines such as Unity. He called the concerns “fundamentally misplaced.” Investing
Unity revealed changes to its board just a day before releasing its earnings report. Bernard Kim, a seasoned gaming and tech executive, joined as an independent director starting May 1. At the same time, co-founder David Helgason and Tomer Bar-Zeev stepped down from the board as of Feb. 5. Board chair Jim Whitehurst highlighted Kim’s “deep experience building and scaling global, public companies.” Unity Technologies
On Wednesday, Unity filed a Form 8-K that included its earnings press release as an exhibit and added extra materials to its investor relations page.
The forecast offers little margin for slip-ups. Should ad demand weaken or the Grow segment miss a bounce back, this quarter might end up as another reset for a stock already jittery over shifts in software sentiment and mounting AI-powered competition.
Traders will be keeping an eye on whether Unity steadies after the recent guidance-driven sell-off, and if management’s remarks on Vector and Create demand shift the mood. Friday’s U.S. inflation report is the next key date for rate-sensitive tech stocks.
