New York, Feb 11, 2026, 17:46 (ET) — After-hours
- Unity shares slid about 26% in late trading after a soft first-quarter revenue forecast
- The company beat fourth-quarter targets but pointed to a slower near-term run-rate
- Traders are watching demand signals, ad-tech momentum and broader software sentiment
Unity Software Inc (NYSE: U) shares were down 26% at $21.41 in after-hours trading on Wednesday, after swinging between $18.81 and $30.34 earlier in the day. About 105 million shares had changed hands.
The game-engine maker forecast first-quarter revenue of $480 million to $490 million, below analysts’ estimate of $492.1 million, according to LSEG data. Investors have also been weighing fears that Alphabet’s Google could use new artificial-intelligence tools to automate parts of world-building that have long been done in game engines. (Reuters)
The drop landed as software stocks slipped again, even as chip shares firmed on the day. The S&P 500 software index fell 2.6%, and investors are set to turn to the U.S. January consumer price index report due on Friday for the next read on rate-cut expectations that can sway growth stocks. (Reuters)
Unity’s fourth-quarter revenue rose 10% to $503 million, with Create Solutions revenue of $165 million and Grow Solutions revenue of $338 million, the company reported. Unity posted adjusted earnings of $0.24 a share and adjusted EBITDA of $125 million, a profit measure that strips out items such as interest, taxes and depreciation; it also reported free cash flow of $119 million, or cash left after capital spending. Chief executive Matt Bromberg said “fourth quarter results once again comfortably exceeded the high-end of our guidance,” pointing to Vector and a pickup in Create. (Unity Technologies)
On the earnings call, Bromberg told analysts that “this January was Vector’s best revenue month ever,” as the company leans on its newer ad product to steady the Grow business. (Investing.com Nigeria)
The slide followed a very different tone earlier in the week. Oppenheimer analyst Martin Yang upgraded the stock on Tuesday and argued that “world models” such as Google’s Project Genie were not built to replace engines like Unity, calling the worry “fundamentally misplaced.” (Investing)
Unity also disclosed board changes a day before the earnings report. The company said it appointed gaming and technology veteran Bernard Kim as an independent director effective May 1, while co-founder David Helgason and Tomer Bar-Zeev stepped down from the board effective Feb. 5. Board chair Jim Whitehurst said Kim brings “deep experience building and scaling global, public companies.” (Unity Technologies)
A filing on Wednesday showed Unity attached its results press release as an exhibit to a Form 8-K and posted supplemental material to its investor relations site. (SEC)
But the forecast leaves less room for error. If ad demand softens or the Grow segment fails to re-accelerate, the quarter could turn into another reset for a stock already sensitive to shifts in software sentiment and new AI-driven competition.
For the next session, traders will be watching whether Unity stabilizes after the guidance-driven repricing, and whether management’s comments on Vector and Create demand change the tone. Friday’s U.S. inflation data is the next hard date on the calendar for rate-sensitive tech names.
