Unity Software

Software - Application · Technology

Price

$28.99

-1.20 (-3.97%)

Market Cap

$12.66B

Winston Score

Winston is worried

Below-average fundamentals — multiple weak pillars.

Share count rising — dilution

+49.2% over 4y

The company has issued more shares over this period, which dilutes each existing shareholder’s stake.

Diluted shares outstanding: 282.2M (2021) → 420.9M (2025)

Unity Software makes the tools that video game developers use to build and run their games. Its main product is the Unity game engine — software that lets creators design 3D worlds, add physics, and publish games across more than 20 platforms, including phones, consoles, and PCs. Unity is especially popular with independent and mid-size game studios, and it powers a large share of the world's mobile games.

Unity makes money in two main ways: selling software subscriptions to developers, and running an advertising and monetization platform that helps game makers earn money from their players. The company operates globally, with customers in over 190 countries, and generates roughly $1.8 billion in annual revenue. Its main competitive advantage is how deeply its tools are embedded in developers' workflows, making it costly to switch to a rival engine like Unreal. The biggest risk is that Unity has been losing money consistently, and recent pricing changes upset many developers, raising questions about whether it can hold onto its user base while cutting costs.

Winston Score History

Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+16.8% YoY

YoY Growth Rate

Steady revenue growth

EPS Growth

-321.1% YoY

YoY Growth Rate

Earnings declining

R&D Spend

$930M/ year

→ Flat (+1% vs prior year)

50.3% of revenue

3.4x the sector average (15%)

Steady R&D investment year-over-year

Insider Activity

18.0%ownership

→ Flat

Insiders holding steady — not selling despite ability to

Cash Position

Cash flow positive

$2.1B cash & investments

Quarterly Free Cash Flow

↑ Burn rate improving

Company generates more cash than it spends — no dilution risk from fundraising

Growth + cash flow

Unity Software is a rare growth stock that's already generating positive cash flow while growing at 17%. The Winston Score doesn't fully credit this transition from "burner" to "earner."

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

Each metric is explained in plain language so you know exactly what you're looking at. Start your free trial now.

Quality

Gross Margin

30.8%

Modest — 30.8% gross margin

Operating Margin

-69.1%

Losing money on operations — -69.1%

ROCE

-6.7%

Weak — -6.7% return on capital

Negative ROIC means the business is losing money on every dollar invested in it.

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Growth

Sales YoY

+7.6%

Steady sales growth (7.6% YoY)

EPS YoY

N/A

—

Data not available

EPS Consistency

0/8 quarters

Earnings rarely grow — volatile business

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Cash Flow

Cash Conversion

N/A

—

Data not available

FCF Margin

24.1%

Converts sales into free cash efficiently (24.1%)

Free cash flow margin above 20%. Out of every $100 in sales, more than $20 is real cash they keep.

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Stability

Debt / Equity

0.75

Moderate — manageable debt (0.75)

Interest Cover

N/A

Data not available

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Valuation

P/E Ratio (TTM)

N/M

—

Negative earnings — P/E not meaningful

P/E vs Forward

N/A

not available

Data not available

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Dividends

Not applicable for this business.

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