Unity Takeover Talks at $25 Billion Valuation After Revenue Grows 32%
Key Facts
Unity has held takeover talks with a consortium including Silver Lake and Saudi Arabia’s Public Investment Fund after the two investors approached the company in recent weeks, according to a Reuters report citing two people familiar with the discussions. The investors discussed a valuation of about $25 billion before the company announced its third-quarter 2026 results. Unity’s market capitalization rose to about $21.5 billion after the results, according to the report. The talks remain preliminary, and there is no guarantee a deal will be completed or that its terms will hold. Reuters said Unity hired an investment bank to evaluate its options after receiving the approach.
The talks come as Unity reported quarterly results showing GAAP net income of $122 million in the third quarter, a 20% margin and diluted earnings per share of $0.25. The chief executive said this was "our first GAAP profitable quarter since going public." That description applies to net income under accounting standards, while the company says its profitability figures are for the quarter ended September 30, 2026. Revenue was $622.092 million, up 32% year over year from $470.615 million in the corresponding quarter of 2025. The financial performance provides direct context for the talks at a high valuation, but does not make them a definitive agreement.
The Vector advertising platform featured in the company’s comments on growth drivers; the chief executive said its revenue rose 126% year over year and 40% from the previous quarter. By business segment, Strategic Grow revenue increased 90% year over year to $431.502 million. Strategic Create revenue also grew 11% to $165.070 million. The difference in growth rates between the two segments is an important part of the results, with the larger increase coming from Strategic Grow. Unity describes its tools as a platform for developing, publishing and growing games and interactive experiences across mobile, computers, gaming consoles and extended reality.
The company reported revenue of $546.468 million in the second quarter of 2026, up 24% year over year from $440.944 million, while Strategic Grow revenue rose 63% to $328.955 million. Overall revenue growth therefore accelerated to 32% in the third quarter, and Strategic Grow growth increased to 90%, compared with the previous quarter’s rates. Non-strategic revenue consists mainly of the ironSource Ads network, which the company discontinued in the second quarter of 2026, and the Supersonic publishing business, which it sold on August 4, 2026. This background shows how the revenue mix changed during the year as one activity was discontinued and another sold. The reported results continue to focus on the expansion of the two strategic businesses and the Vector growth cited by the chief executive.
The stock reacted sharply to the news and results on November 5, 2026, surging about 15% during the regular session before rising 6.6% to $52.04 in extended trading by 19:16 Eastern Time, according to Investing.com. The move puts the share price in the context of the roughly $25 billion valuation investors discussed before the third-quarter results, compared with a market capitalization estimated at about $21.5 billion after the results were announced. Silver Lake’s current stake in Unity was reported at about 8% in a Reuters report, according to the source carrying it; it was not a separate focus of the company’s results announcement. The Electronic Arts deal provides a recent precedent involving some of the same parties: in August 2026, the company was sold for $55 billion to a group including the Public Investment Fund, Silver Lake and Affinity Partners. That precedent links two parties involved in the current talks to a completed large-scale deal in the gaming sector.
Attention now turns to Unity’s outlook for the fourth quarter of 2026, with the company targeting strategic revenue of between $683 million and $691 million and Adjusted EBITDA of between $290 million and $295 million. The company says its revenue target range represents year-over-year growth of between 65% and 67%, while its Adjusted EBITDA guidance includes growth of between 132% and 136%. The outlook follows third-quarter total revenue of $622.092 million and GAAP net income of $122 million. The takeover talks remain preliminary, their terms could change, and there is no confirmation that a deal will proceed. Any final valuation will therefore depend on the course of negotiations and the company’s results in subsequent periods.