Teleconferência de Resultados do 3T de 2026 da Unity (U): Crescimento do Vector impulsiona primeiro lucro GAAP

Principais destaques

• A Unity Software (NYSE: U) reportou receita estratégica de US$ 597 milhões no terceiro trimestre de 2026, alta de 59% na comparação anual.
• O EBITDA ajustado subiu 134%, para US$ 257 milhões, enquanto a margem EBITDA ajustada expandiu 1.800 pontos-base na comparação anual, para 41%.
• A Unity registrou seu primeiro trimestre com lucro líquido sob GAAP desde seu IPO, com lucro líquido de US$ 122 milhões e margem líquida de 20%.
• A receita do Strategic Grow aumentou 90%, para US$ 432 milhões. A receita do Unity Vector cresceu 126% na comparação anual e 40% na comparação trimestral, frente à projeção anterior da empresa de crescimento trimestral de 20%.
• O fluxo de caixa livre atingiu o recorde de US$ 220 milhões, deixando a Unity com US$ 2,65 bilhões em caixa no encerramento do trimestre.
• Para o quarto trimestre de 2026, a administração projetou receita estratégica de US$ 683 milhões a US$ 691 milhões e EBITDA ajustado de US$ 290 milhões a US$ 295 milhões.

Principais resultados financeiros

A margem bruta ajustada melhorou 200 pontos-base na comparação trimestral, impulsionada principalmente pela diluição dos custos com nuvem. As despesas ajustadas com P&D, vendas e marketing e G&A caíram de forma expressiva como proporção da receita e ficaram estáveis ou em queda em termos nominais na comparação com o 2T.

As despesas ajustadas com vendas e marketing caíram US$ 22 milhões na comparação trimestral, para 12% da receita, refletindo principalmente a venda da SuperSonic.

Desempenho operacional e dos negócios

Unity Vector impulsiona o Strategic Grow

O Vector permaneceu como o principal motor de crescimento da Unity. A administração atribuiu seu desempenho à otimização contínua de modelos de IA de autoaprendizado, ao lançamento de produtos focados nos clientes e ao acesso a dados de alta qualidade.

O otimizador Day 28, ganhos de eficiência em infraestrutura e atualizações de modelos contribuíram para o crescimento no 3T. O número de contas de anunciantes aumentou 27% na comparação trimestral, enquanto os anunciantes já existentes geraram 90% do crescimento do trimestre.

A administração afirmou que o crescimento do Vector refletiu principalmente volumes maiores de instalações e maior valor dos jogadores, em vez de mudanças no take rate. A empresa não gerencia o take rate como uma alavanca principal de crescimento, concentrando-se, em vez disso, em melhorar o retorno sobre os gastos com publicidade e aumentar o engajamento dos clientes.

O crescimento do Vector foi generalizado entre clientes, sistemas operacionais, tipos de campanha e regiões geográficas. A administração enfatizou, no entanto, que não se deve esperar um crescimento trimestral de 40% em todos os trimestres.

Create se beneficia do ARPU e da China

A receita do Strategic Create aumentou 11% na comparação anual, para US$ 165 milhões, sustentada por um ARPU mais elevado e pela força na China. A Unity espera que a melhora no ARPU continue sendo o principal motor do crescimento do Create no longo prazo.

A empresa também reportou um aumento de 25% nos usuários ativos diários de criadores desde o início de agosto, após abrir a Unity para agentes de programação. A Unity descreveu sua plataforma como agnóstica a modelos, permitindo que os desenvolvedores usem diferentes modelos de IA e gerenciem os gastos com tokens sem dependência exclusiva de fornecedor.

Unity Spark amplia o funil de criadores

O Unity Spark é uma plataforma de criação colaborativa baseada em navegador, desenvolvida por meio de uma parceria estratégica com o Google. A ferramenta foi projetada para permitir que usuários sem experiência em programação criem jogos de maior qualidade usando ferramentas da Unity e conteúdos da Unity Asset Store.

A administração espera que o Spark entre em versão beta fechada em 2026, com lançamento completo previsto para 2027. O modelo de negócios planejado combina assinaturas freemium e pagas, receita baseada em consumo e publicidade.

A Unity afirmou que a parceria com o Google não é exclusiva. Com o tempo, a empresa pretende distribuir o Spark de forma mais ampla. A administração também espera que o Spark crie inventário publicitário próprio fora do ecossistema intermediado da Unity.

Projeções da administração

Para o acumulado de 2026, a administração espera que a receita do Strategic Create cresça 9% na comparação anual. A empresa projeta taxas de crescimento anual semelhantes no futuro, impulsionadas principalmente por um ARPU mais elevado.

A Unity espera que as despesas com amortização recuem de US$ 77 milhões no 3T para US$ 50 milhões no 4T e, em seguida, para aproximadamente US$ 15 milhões por trimestre em 2027. Para 2027, a administração também projeta remuneração baseada em ações de US$ 75 milhões por trimestre e uma alíquota efetiva de impostos de 5% a 10%.

Riscos e pontos de atenção

• A administração caracterizou o crescimento do Vector no 3T como reflexo de uma mudança de patamar significativa e imprevista. O momento de ocorrência de novos ganhos de desempenho semelhantes não é previsível.
• O Vector ainda está no início de seu desenvolvimento, com sete trimestres desde o lançamento. A administração espera um crescimento sólido, mas alertou que aumentos trimestrais de 40% não devem ser presumidos para todos os trimestres.
• A precificação e a estrutura final de monetização do Spark ainda não foram definidas. A Unity planeja aprimorar seu modelo durante a fase beta com base, em parte, no uso de capacidade computacional e no comportamento dos criadores.
• A adoção da IA pode gerar turbulências de curto prazo para os desenvolvedores à medida que os usuários se familiarizam com novas ferramentas, embora a administração espere que a IA impulsione o crescimento do setor no longo prazo.
• A adesão ao compartilhamento de dados de runtime continua desigual. Mais de 90% dos projetos recém-criados optam por participar, mas apenas 30% dos 1.000 maiores anunciantes do Vector estavam compartilhando dados de runtime no momento da teleconferência.

Destaques da sessão de perguntas e respostas com analistas

Os analistas se concentraram fortemente na sustentabilidade do rápido crescimento do Vector. A administração afirmou que a resiliência deve vir do retreinamento contínuo de modelos, melhorias nos produtos, eficiência de infraestrutura e expansão das bases de dados. A Unity também destacou o aumento trimestral de 27% nas contas de anunciantes como um vento favorável para o crescimento futuro, já que esses clientes apenas começaram a testar e gastar no Vector.

Em relação aos dados de runtime, a administração descreveu uma oportunidade de longo prazo para ajudar os publishers a melhorar o engajamento e o lifetime value dos jogadores, e não apenas a aquisição de usuários. A Unity acredita que o feedback comportamental em tempo real de jogos desenvolvidos em sua plataforma pode ajudar os publishers a personalizar experiências e aumentar a monetização.

A administração rejeitou a visão de que a IA generativa elimina a necessidade de um motor de jogo tradicional. Ela argumentou que o diferencial da Unity reside em ferramentas de desenvolvimento de nível profissional, feedback em tempo de execução, na Asset Store e na capacidade de criar uma vez e distribuir em mais de 25 plataformas.

Em relação à economia do Spark, a Unity espera que os dados de comandos e consultas dos criadores ajudem a otimizar os custos com tokens ao longo do tempo. A empresa também vê potencial de receita com margens elevadas a partir de conteúdos próprios da Asset Store, vendas de ativos de terceiros, assinaturas, consumo e publicidade.

Transcrição completa da teleconferência de resultados

Transcrição completa da teleconferência de resultados

Comentários da administração

Operator

Ladies and gentlemen, thank you for joining us, and welcome to the Unity Technologies Q3 Earnings Call. [Operator Instructions] I will now hand the conference over to Alex Giaimo, Head of Investor Relations. Alex. Please go ahead.

Alex Giaimo

Good morning, everyone. Thank you for joining, and welcome to Unity's Third Quarter 2026 Earnings Call. I'm joined this morning by our CEO, Matt Bromberg; and our CFO, Jarrod Yahes. Before we begin, I want to note that today's discussion contains forward-looking statements, including statements about goals, business outlook, industry trends and expectations for future financial performance and similar items, all of which are subject to risks, uncertainties and assumptions. You can find more information about these risks and uncertainties in the Risk Factors section of our filings at sec.gov. .

Actual results may differ, and we take no obligation to revise or update any forward-looking statements. During today's meeting, we will discuss non-GAAP measures. These non-GAAP financials are in addition to and not substitute for or superior to measure the financial performance prepared in accordance with GAAP. A full reconciliation of GAAP to non-GAAP is available in our press release and on the sec.gov website. With that, I will turn it over to Matt.

Matthew Bromberg

Thank you, Alex. Good morning, and thank you to all of you for joining us this morning. It's a distinct privilege as always for us to share with you the work of our unit colleagues from all over the world. Typically, we begin our remarks by offering a high-level view of our performance. Today, let's get right into the numbers. Any [indiscernible] we might offer are already deeply embedded in the math. In Q3, Unity delivered strategic revenue growth of 59% year-over-year and adjusted EBITDA growth of 134% year-over-year.

And for the fourth quarter, we are guiding to continued acceleration in both revenue growth and margin expansion on a year-over-year basis. The quarter also marks a historic milestone for Unity as we achieved GAAP profitability for the first time since our IPO, and it was substantial profitability of that.

We delivered a 20% net income margin in Q3, supported by adjusted EBITDA margins, which have nearly doubled from where they were just a couple of years ago. And although these numbers do speak for themselves to a large degree. The progress at Unity remains deeply connected to the people that support and deliver it, the products that produce it and the strategy that helps both us and our customers make sense of it.

The Unity flywheel is just beginning to spin, and we expect the force is driving it to power our business well into the future. AI is making game creation more approachable and more efficient leading to both more creators and more games being launched, more creators and more games, drive more usage over offering in live operations platform, and as the market becomes more proud with new titles, the need for effective game discovery becomes more intense, propelling our advertising business forward.

At the very center of the flywheel producing these results this quarter sits Unity vector. So let's take a moment to establish a common understanding of how Vector is contributing such enormous value. Sector revenue grew 126% year-over-year and 40% quarter-over-quarter, which was double our guidance for 20% quarterly growth.

Vector performance continues to be driven by 3 pillars: caused an optimization of our self-learning AI models, new customer-centric product releases and unique high-quality data. These pillars operate together as we scale, as our models continuously retrain on larger, higher-quality data sets, that unlock superior targeting precision.

1More precision enables a better return on advertising spend, better return on advertising spend enables customers to acquire more players more profitably, which in turn fuels increased spend on our platform and great new product releases like our day 28 optimizer allow more customers to use our improved models to better effect, which intensifies the entire cycle especially as new customers learn of the positive impact we are having across the industry.

And just to be especially clear as it is often a topic of some speculation Vector's accelerating growth is primarily a result of greater volume of installs and higher player values, not changes in take rate. And we love this because it needs both at the underlying unit economics are healthy and that revenue continues to scale without impacting our customers' margins.

While Vector continues to deliver extraordinary value, the flywheel is also accelerating at its very genesis, the game creation process itself. By opening Unity to coating agents and providing a command line interface, we've transformed our authoring platform into a fully programmable agentic automation target.

We are completely model-agnostic, enabling our customers to avoid vendor lock-in and constantly optimize their token spend. And this is exactly where we want to be at the center of AI-driven game development connected to everyone, opening up the top of the funnel and maximizing downstream activity on our authoring platform.

Over the past quarter, we've experienced a very sharp increase in the use of coning agents on the Unity platform. And not surprisingly, as the power of the tool that becomes easier to access engagement and satisfaction for existing users is greatly enhanced. But this dynamic attracts new users as well. And Unity's overall daily active user count is already up 25% just since early August.

Opening up to Unity coating agents opening up a unit in coding agents is far from the only initiative we have that's aimed at growing the top of the funnel. At the beginning of October, we also announced our strategic partnership with Google and revealed Unity Spark, a breakthrough, browser-based, collaborative creation platform that will open game development to new creators all over the world no prior coding experience required.

By pairing intuitive creation tools directly with the rich library of artist created content in the net asset store, Spark has the potential to unlock the game developer living inside millions of players, modern and digital artists from around the world, anyone with the talent and patience to iterate on the creation of a real game experience.

We expect the partnership with Google to be impactful. We're aligned and wind to provide an upgrade path for the more casual users of their play grand creation product and looking forward to the opportunity to distribute Spark to the billions of users of Google's consumer products worldwide.

Spark will be in close band this year with a full launch in 2027, and we're excited about its potential to make a meaningful impact on our platform revenues in the years ahead. From our first day together a little over 2 years ago, our team has believed that Unity possessed a generational opportunity and that we could become 1 of the most consequential companies of the AI era.

Nearly 3 billion people play a Unipower game each month, and we are still just at the dawn of understanding how impactful our unique role in the content creation flywheel can be and where that opportunity will take us. I'll now pass the call over to Jarrod for a deeper discussion of our financials. Jarrod?

Jarrod Yahes

Thanks, Matt, and good morning, everyone. Unity delivered an incredible third quarter with strategic revenue of $597 million, representing growth of 59% year-over-year. Adjusted EBITDA dramatically exceeded our expectations, growing more than 2x the rate of revenue growth or 134% year-over-year. Strategic Growth is our largest and fastest-growing business with revenue of $432 million, up 90% year-over-year and now represents 69% of total revenues.

Growth accelerated dramatically, both quarter-on-quarter and year-over-year driven by Unity Vector. Vector continues to deliver robust compounding performance gains as model optimization, coupled with unique data and product enhancements drove improved performance for our customers. Vector's growth was broad-based across customers, operating systems, campaign types and geographies.

Our third quarter vector outperformance was powered by highly effective model updates major advancements in infrastructure efficiency and continued robust momentum in our day 28 realized product. Encouragingly, we saw significant new advertiser interest and onboarding. In fact, Vector grew the number of advertiser accounts 27% quarter-on-quarter in the third quarter.

In create, strategic revenue was $165 million, up 11% year-over-year, driven by ARPU growth and strength in China. Profitability was at record levels in the third quarter. Adjusted EBITDA was $257 million, 41% margins, up 1,800 basis points year-over-year.

Operating leverage, combined with disciplined expense management were the keys to robust margin expansion. Adjusted gross margins improved in the third quarter by 200 basis points sequentially. This is primarily as a result of leverage and cloud costs that sit in cost of goods sold.

Additionally, adjusted R&D, sales and marketing and G&A expenses all came down materially as a percentage of revenue. Operating leverage was further amplified by rigorous ongoing expense discipline. Adjusted R&D, sales and marketing and G&A were all flat to down in dollar terms from the second quarter as well.

The third quarter benefited from the strategic actions we took in the first half of the year. Notably, adjusted sales and marketing came down $22 million sequentially and now represents 12% of revenue. This cost reduction was driven primarily by the sale of SuperSonic and demonstrates how sharp focus is yielding dramatically faster revenue growth and contributing to materially higher levels of profitability.

We are also extraordinarily pleased to report Unity first quarter of GAAP profitability, delivering $122 million in net income in the third quarter combined with a 20% net margin. This is our first quarter of GAAP profitability since IPO and a clear indication of the health and trajectory of our business. Beyond a clear financial milestone this represents GAAP profitability unlocks significant potential advantages, including prospective eligibility for major equity indices, a broader institutional investor base and long-term credit rating upside potential.

The Q3 GAAP profitability is a further sign of the fundamentally different level of operating discipline we are applying entity. We expect amortization expenses and stock comp expense as a percentage of revenue to continue to fall and operating leverage to continue to increase. In order to help investors bridge the Uniti's net income margins, I note the following modeling assumptions.

In the fourth quarter, we expect amortization expense to step down to $50 million from the $77 million we recognized in the third quarter. Looking ahead to 2027, we anticipate a further step down of amortization expense to $15 million per quarter. And for 2027, we expect stock comp expense of $75 million per quarter and an effective tax rate of 5% to 10%.

Free cash flow in the third quarter was a record $220 million resulting in an ending cash balance of $2.65 billion. We remain disciplined from a capital allocation standpoint and expect to pay off the convertible debt coming due on November 15, with cash on the balance sheet.

Our significant cash generation provides us with tremendous flexibility as we think through investments in our product road map, potential M&A and returning capital to shareholders. With that, let's turn to guidance for the fourth quarter.

For the fourth quarter, we're guiding to total strategic revenue, $683 million to $691 million implying year-over-year revenue growth of 65% to 67%. This represents a further acceleration from the record growth rates we saw in the third quarter and would constitute Unity seventh consecutive quarter of accelerating revenue growth.

In strategic growth, we expect year-over-year revenue growth of 105% to 107%. And our guidance assumes 21% to 23% sequential growth rates for Unity Vector. In Strategic create for the fourth quarter, we expect 4% to 6% year-over-year revenue growth. For the full year 2026, strategic rate is expected to grow by 9% year-over-year, and we expect similar levels of annual growth going forward, driven primarily by improvements in ARPU.

Beyond our current business, we expect Unity Spark to tap into a new audience with the potential to drive downstream revenue across both to create and grow, reinforcing the Uniti flywheel. While we have not yet announced Spark pricing, our plan includes a mix of freemium and paid subscriptions, consumption-based revenues and advertising.

And lastly, we expect $5 million in nonstrategic grow revenue in the fourth quarter going to 0 in 2027. We're guiding to fourth quarter adjusted EBITDA of $290 million to $295 million, representing 132% to 136% growth year-over-year and a 42% adjusted EBITDA margin.

Our margins have continued to reach record highs with guidance implying another 100 basis points of margin expansion next quarter. Unity is delivering extraordinarily financial results across its entire business. With that, I'd like to thank you for joining us on Unity's Third Quarter 2026 Conference Call. I'll now turn the call over to Alex so that we can take your questions.

Alex Giaimo

Operator, ready for questions.

Operator

[Operator Instructions] Your first question comes from the line of Benjamin Black with Deutsche Bank.

Perguntas e respostas

Benjamin Black

I just want to Vector right, 40% growth sequentially and nearly twice the guide that you provided last quarter. So -- just digging a little bit more into the drivers of that outperformance. Was there maybe one particularly big unlock that you identified? And I guess as we look ahead to '27, how should we think about the durability of those trends?

And then a second question would be more so on the run time data that you have, right? If you think about maybe the opportunity to eventually help developers retain and monetize existing players rather than just acquiring new ones. How large that opportunity become relative to UA or user acquisition and which investments would you need to sort of unlock that opportunity?

Matthew Bromberg

Ben, thanks for the question. So a couple of things. Just to break that to its simplest elements. Vector is an AI prediction engine. So what we're doing is we're doing a better job of predicting which consumers are going to like with games. We're doing a better job valuing those consumers and then match in with the publisher of the corresponding game. It is really that simple.

There is no one still bullet in this business, as we've discussed before. As I mentioned in my introductory remarks, we think of this business around 3 major pillars: continuous product enhancement, we talked a little bit about the day 28 product, but that's just one of very many enhancements we make in a typical quarter, and we have lots of product demand that's coming up and a really long road map. So that's product enhancement continued access to very high quality and ever higher quality data sets and run time is a piece of that, which we'll get to in a second.

And then also continuous compounding model improvements every day, we optimize and retrain and we take into account both the impact of the product [indiscernible] have happened and changes in data. And that's a consistent process that we expect to continue to run well into the future.

Keep in mind, Vector is still very much in its infancy. We're 7 quarters into this. We have just started. So we don't think about durability in that sense. We think we're just at the outset now every quarter is not going to be a 40% quarter, but we're very confident about the healthy levels of growth going forward.

And as you all heard me say many, many times before, the way this business operates is, we have incremental solid growth and then occasional step change functions. You probably heard me say it's kind of 1,000 times. We know the step change functions are going to happen. You just don't always know exactly when all of this ultimately is driven by a massive and growing marketing inside mobile games, right? Mobile game advertising opportunity is at least $40 billion, and it's growing double digits.

So there are really healthy underlying drivers here as well. And then finally, I would just -- I'd point you to the flywheel we keep talking about. This is critical as you think about the nature of the world and the nature of our business going forward. We are not an ad network. We are an authoring platform. As a consequence, we participate in all phases of this business.

And as game creation becomes more efficient and more games get released, and more developers make more games. Our authoring platform has an opportunity to help publishers deploy and monetize and grow those experiences at scale. And the more games that enter the marketplace, and we've seen that go parabolic drives the premium of attention. It's harder and harder to find what you want to play and then having robust data set as we do of consumer behavioral understanding helps target those ads. So the whole thing feeds on itself and grows.

Now to your second part of your question. The opportunities that are provided by us being an authoring platform, a full offering platform that helps publishers run and grow their life services as the point you may have been is critical because the game development ecosystem is actually an equation that has 2 sides. And we spend all our time talking about 1 side, which is, okay, I have a certain LTV. How much money can I go out and spend to drive top line by getting installs, right? We spend all our time thinking about that. And we assume the LTV, right? We say, well, given a certain LTV, how much advertising spend, how much return can I get? And we talk about that.

What we don't talk a lot about is what game publishers spend 99% of their time talking which is how do I drive LTV up? How do I get engagement up because monetization is a downstream output of engagement. So how do I drive engagement and LTV up such that when it comes time for you to go into the market to find new installs, I can spend more.

And each 1 of the customers I derive and benefit, we'll spend more when they might game. And that's where we also have the opportunity to drive value because that game is being built on our platform, and it is connected to our run time and the run time provides feedback to the publisher at scale in real time on the behavior of the players inside that game, what they're bored with what they're interested in, what they like to spend. That is a critical and crucial advantage we have. It is a unique advantage that exists nowhere else. That is a critical part of our future.

And it's a long-term technical and strategic mode. We will get more and more sophisticated over time in how we derive value from the run time. I think the other thing that this conversation often loses as folks think about run time as sort of a static opportunity and you think about it just based on coverage. What percentage of the run time you get it, that's important but it's not the whole story because we will get better at understanding consumer behavior based on that run time over time.

And just the last point I'd make, because I did mention the opt-in. Our opt-in around runtime newly created projects remains over 90% of the top 1,000 spenders on Vector, 30% are now sharing run time data with us, and we expect this number to grow over time.

Operator

Your next question comes from the line of Matthew Cost with Morgan Stanley.

Matthew Cost

Matt, just following up on the point you made in the prepared remarks around most of the growth for Grow and Vector coming from gross spend and delivering better roaster customers as opposed to take rate -- how do you think about those 2 drivers of that revenue growth philosophically? And this an opportunity for take rate to go up over time? That's the first question.

Second question is just on Spark and the partnership with Playground. I guess it sort of ran against the narrative that was out there in the market that basically any of these frontier labs capabilities that basically negate the need for traditional game engine like Unity. What can Unity do? I guess if you could rebut that point, what Unity do that tools native to a playground can't do?

Matthew Bromberg

Matt, thank you very much for the question. On the -- on your take rate question, I'll just absorb at a high level and Jarrod, you can jump in afterwards, if we like it. We just don't think about take rate. We think about maximizing the value of players so that we can deliver more installs to customers. We don't manage it. It's not on lever that we use. And really, it's no more complicated than that. On Spark, yes, thank you for the question. We're really excited about Spark.

And we believe Spark is going to be highly differentiated in the market because it is designed in a fundamentally different way than some of the other things -- some of the other products you're seeing out there. And the fundamental difference is we have no interest in the very casual end of this market.

Unity has grown and our D&A comes from professional game developers, making the high-quality games that can be distributed across any platform. The insight that we have into how games get made and how a high-quality game builds and how we can use tools to help those products be built and then to provide continuous feedback over time from performance of those games based on the road time.

These are unique assets that we have. And that's what we're leaning into. Nobody in the world knows more about how to make video games than we do. We've been doing it for 20 years. And so our goal is not to help people make super casual things that they can share that people will pay for -- will play for 10 or 20 or 30 seconds, and you send it to a friend. And I'm not denigrating that. It's just not what we're about.

What Spark is a no code, browser-based collaborative, and that's super critical because what we -- the view here is that creative people who have creative talent aren't going to want to get together and build things together, things of very high quality. So the idea is to put the power of the Unity tool put that to use for creative folks who maybe just aren't strong coders, artists who didn't know how to code or coders who could build our or level designers who had other weaknesses in their skill set.

And so the idea is to create real, high-quality work and to connect that to the unit ecosystem. So we don't see anybody else in this space doing that, and we think we're perfectly positioned to deliver something really meaningful enough -- the last thing I'd say about it, which is really just the reiteration of a point I made earlier is that opening up the top of the funnel so that more and more creators can use our offering platform is at the very heart of our strategy.

So when we announced it Unit Spark a few months ago, that we were opening up to new platform to 20 agents. That was 1 big step. And we talked about how that's driving both usage and engagement on our platform and also new users. Spark is another really significant effort with a significant and major partnership to help us gain proper distribution that we think will open the platform to millions of new people to create real and distribute real things. And that's how we're thinking about it.

Operator

Your next question comes from the line of Vasily Karasyov with Cannonball.

Vasily Karasyov

My question is for Jarrod. Jarrod, the magnitude of the beat within Unity Vector was quite big and surprising, I would say. Given that, is there any change to your guidance philosophy? Or was this quarter just some anomaly? Can you help us understand this.

Jarrod Yahes

Thanks for the question, Vasily. And your observation is correct. I mean, the magnitude of the need is quite significant as compared to our guidance. The velocity has remained pretty consistent since Matt and I joined. We go into the quarter. We look at a variety of inputs. We look at the run rates, we look at the seasonality. We look at the expected upcoming model enhancements and product releases.

In certain quarters, the third quarter being a prime example of that there are unforeseen step changes in growth. So this was a significant unforeseen step change in the growth that we experienced. Our objective is always to meet and exceed our guidance but the magnitude of these beads can be outsized in certain circumstances.

We're going to continue to provide guidance based on what we see at the time. And if there are unexpected unforecast performance gains, those will be significant excesses above our guidance that we provide externally.

Operator

Your next question comes from the line of Alec Bandola with Wells Fargo.

Alec Brondolo

Yes. I appreciate the opportunity to ask you question. Maybe I'll ask a 2-parter I think over the last 2 months, there's definitely been an inflection in and around AI in the gaming category. You're calling it out on this call, I think Roblox spoke to it on their call. The really prominent people in gaming and tech have been writing about it. over the last few weeks. Two questions. One, what do you think changed with regards to the capabilities of the implementation that is enabling greater efficacy in the games category now as opposed to maybe a year or 2 ago when we all discovered that cloud code was going to be great.

And then maybe secondly, I think we're all sitting here wondering well, where does it show up in the numbers? Does it show up first and create, does it show up in growth because you have more potential advertisers now? Any thoughts on where we see the benefit of this inflection in AI in Unity's financials would be great as well.

Matthew Bromberg

Thank you very much for the question. I think that the quality of the models and the quality and kind of dimensionality of the harnesses that folks are learning to build to get the most out of those models are increasing. The quality of the compute is increasing, and we're just going to continue to see efficacy rises and everything that's touching AI. But yes, it's really at this point, particularly most advanced and most impactful in coding agents. And so you -- that's where you're seeing the impact there. So that's no surprise to us.

I think you're in our -- as we think about our own business, what I'm really trying to express with the flywheel metaphor is that we see this trend driving all of our business. Every piece of it, we see it as the single most important trend that will drive more creators to be able to make more and better games, which will lead to a greater intensity for the need for discovery which yes, drives our ad business, but importantly, as I noted, because we're a full authoring platform, the product enhancements that we can offer through our authoring platform to game publishers to help them manage and personalize the experiences that they're offering their players agentically, those opportunities are extraordinary.

And back to the first question about the sort of left side of the equation, if you will, in which how do you drive engagement and greater monetization by improving gameplay screen, the combination of kind of AI-infused run time-driven, vector-driven authoring platform, which helps game publishers create more engaging experiences, which create value in dollar terms. Those opportunities are absolutely there for us and then absolutely there for publishers and will also drive our business going forward.

And that's sort of why we chose this metaphor of a flywheel. It's not sort of too much of a [indiscernible] , but it accurately describes how we see this thing spinning and continuing to pick up pace and continue to accelerate, and we think it will drive not only our own business but also the entire industry forward. As much impact as this is had already, both in our own business, as you can see from our results this quarter and in previous quarters, but also as much impact as you're seeing, as you rightly point out in our industry, we are just at the dot of this.

There will be brand new game experiences that are enabled. This is going to drive substantial growth in the video market over time, and it will be a little bit bumpy in the beginning as it relates to as developers get comfortable with these tools as we continue to build out our tools to help them and it will create some dislocation along developers, as you were seeing but make them stick. This is going to drive our industry forward many, many years into the future. We're really excited about it, and we are already seeing all of these -- the beginnings of all these impacts in our business.

Operator

Your next question comes from the line of Brent Bill with Jefferies.

Brent Thill

Great. I know you mentioned you're not thinking about durability, but can you think about the predictability and visibility you have into the next quarters given the success you just saw?

Matthew Bromberg

Yes. And just to make sure I didn't speak. It's not that I think durability is bad. I think there really is good and we expect there to be a tremendous amount of durability. I'm just not worried about it. And I'm not worried about it because I can see every day, the road map that our team has in front of it and that we're executing against.

And we guided to 20% and delivered 40, we enhanced that guide and push it up to 23. We did that because we see progress in front of us. We see opportunity and because part of what we're seeing as we gain scale in this business is that success begets success.

And so as we have effectively to analyst product enhancement road map. Our ability to optimize models against those inputs gets better and better and more efficient. Our infrastructure use gets more efficient, which enables better optimization and the long-term strategic moat that we have around understanding the 3 billion consumers who play a man with Unity game to drive all of it is just, as I've said, I believe a generational opportunity.

And again, I would just -- I'd add because I know it's sometimes hard to keep in mind -- this is a product which is 7 quarters into its life span. So when I say we feel like we're just at the beginning, we really do. I mean, we see tremendous opportunity in continuing to build out in trials.

Jarrod Yahes

Just to add to what Matt said, Brent, Matt made a comment that success begets success. And 1 of the things we mentioned in our prepared remarks was that there was a 27% increase in new advertisers, advertising on Vector in the quarter. And that 27% is not a year-on-year increase in new advertisers. That's a quarter-on-quarter sequential increase in 1 single quarter in new advertisers.

What I'd also add is that 90% of the growth that we experienced in the quarter was from existing advertisers. And so those new advertisers who came on board have just started to spend with us -- and we expect that, that's a growth tailwind that we're getting. It's just another example of that virtuous cycle that takes place when you're delivering ROAs to customers, new customers come on board, they test, they expert, they spend when they see those results validated, they spend more.

And so we're really pleased to see that the existing customers are driving the significant majority of the growth, but we're also very excited to see a large number of new advertisers come to us test and experiment and see the value that Vector can provide.

Operator

Your next question comes from the line of Clark Lapin with BTIG. Clark, a reminder to kindly unmute yourself by pressing star 6.

Unknown Analyst

Continuing my string of technical problems during Q&A on these calls. One of these days, I guess, maybe next quarter. Matt, you made, as I read it, I think, a fairly constructive comment around the pipeline in answering Ben's initial question. And I think grow leadership may have teased 1 or 2 of these products recently during a podcast. And I'm curious if you'd be willing to maybe number one, share a little bit more detail around what's in development and what you think can be impactful.

And I guess, second, from our perspective, how we should think about contributing, I guess, not to come back to this point on durability, but how this could contribute eventually, I guess, to the durability of what we're seeing is really elevated Vector growth right now in 2027 and beyond. I hope the question makes sense.

Matthew Bromberg

Yes. Thank you, Clark. It makes sense. I hesitate to read out a list of product enhancements that we have planned, both because there are competitive issues associated with it. And obviously, we want to communicate with customers before we enroll them out before we talk about them publicly, but also because I don't know that there's any analytical probody in anchoring on any 1 of them.

In a given quarter, we might have 6, depending on the quarter, 10 significant changes to the product. And again, if we think about the day 28 offering, which is now about a quarter old, that is a cutoff. We view it as a fundamental table stakes product, right? You can't you can't expect to be a player at scale without a product at that. And it just took us because the product is so new it took us a little while to get there, but I -- but the point is that there are still there's still a really long list of fundamental changes like that are there for us and that are going to be as impactful as day 20 has been.

And you're just excited at a high level about the opportunity to partner with publishers to help drive their business. We or deep committed participants in this industry. It matters to us that we do well is partially why we're so excited about being able to deliver all this value -- and again, I think being just at the very start of this. And so I just -- to your point, we -- our folks do sometimes the broadcast and maybe I should tell them to stop, but I I think the best thing -- the best way to think about our business is to think about flywheel to think about our ability to optimize both sides of that equation. And to think about the long-term durable value of 3 billion consumers playing games and us getting ever enhanced sense of what that end game behavior is and how we can help publishers create better products as a consequence of being connected to those players.

That's why when I go -- when I start to talk about the business, I mean the less around, hey, let me read you out a list them, stuff we're going to do next quarter. And I'm pulling counter back just slightly to focusing on the scale and size of the opportunity, not because I'm trying to be obtuse, but because I want me to see what we see an enormous marketplace of billions of players worldwide who love to play, we'll always love to play at the dawn of an era, which is about to give them play experiences that are going to blow their minds. Play Experiences are driven by consumer behavior and AI and the genius of the humans who create those experiences. And we're sitting right in the middle of that opportunity, and we just -- we couldn't be more excited about.

Unknown Analyst

I don't know if I vote, but the podcast are great. .

Operator

Next question comes from the line of Eric Sheridan with Goldman Sachs.

Eric Sheridan

Maybe building on some of the comments around the Google partnership. Maybe just 2, if I could. One, how should we be thinking about the unit economics of that partnership, especially on the compute side of the equation and what that might mean in terms of incremental margins for your business if it scales beyond closed beta into much wider release. And based on what I read on the closed beta, how are we thinking about some of the frictions that have to be removed from closed beta to something wider in 2027 to broaden out the potential for distribution of creations made through the partnership.

Matthew Bromberg

Now let me offer a couple of introductory remarks and then Jarrod I'm sure we'll follow up. Thanks, Eric. There's a lot in there. So we're going to be in beta very shortly. And -- we haven't announced the pricing and the model of Smart, but it is going to be a mixture of subscription and advertising and some kind of all purchasing. And so let's kind of imagine a model which you begin to play you begin to build its free and then at some point, you may hit a wall in which we ask you to engage with us in some way. Those -- but that's just a very high level idea.

Those levers will all be tweaked as we're a beta as we see the number of -- the amount of compute that folks need to create great experiences and we are the best and most optimal way is most satisfying way to engage those creators. So we will figure that out over time. As it relates to that -- the friction you describe around distribution, I really appreciate you asking that because it's something we probably don't talk that much about, that friction is quite literally one of the founding reasons that Unity exists.

We are the only engine in the world that can allow you to build once and then seamlessly in a high-performance way to distribute that experience across 25-plus platforms, right? Consoles high-power mobile phones, low-power mobile phones, web, what have you. That is at the heart of the value proposition of unit. It has always been at the heart -- and so we feel really good about that being a really good example of an opportunity we have to deliver a seamless experience to folks that many others will struggle to deliver at the quality that we will relate.

Jarrod Yahes

A couple of things I would add to that, Eric, just on Unity Spark and the monetization model. As Matt laid out, we do expect to start with a premium model. There will be daily apocation. We're going to encourage people to create the experiences of their dreams. There are opportunities for consumption-based revenue streams on top of that as well as advertising opportunities. Those advertising opportunities are going to be outside of mediated ecosystem effectively allowing us a pathway for owned and operated ad inventory which is a new tremendous opportunity for Unity that we're extremely excited about.

There are 2 levers for monetization that I'm not quite sure everyone understands. The first is that, we have the unique ability to use data in the creation process to optimize token cost. Every prompt that is undertaken, every query that is undertaken is ingested by us and can be used to train models, fine-tune and optimize those models in order to decrease the cost of creation going forward. So that's a virtuous cycle that taken its scale is going to allow us to create the most cost-effective creation model that should exist out there.

The second piece that I would point out is the Unity Asset store is the largest asset store of its type. It is a unique and extraordinarily valuable asset. To the extent that there are assets and these are artist created assets that exist on the Unity asset store that are owned and operated assets that are used as part of the consumption process, that is a 100% flow-through margin to Unity. So that's an extremely attractive opportunity for Unity. We may use that for consumption-based revenues.

We may use that to upsell from a freemium to a subscription product. And moreover, to the extent that there are artist owned assets that are sold, that's also incremental flow-through margin for Unity. So I think our ability to optimize token costs in a unique fashion, our ability to leverage the asset store with a combination model of freemium, consumption-based and advertising really makes this an extraordinarily attractive opportunity for us as we think about scaling and growing Spark in the years to come.

Matthew Bromberg

That's really well said. I would just add 1 more piece in case it's not clear that although we're really absolutely thrilled and excited to be partnered with Google on this. It is ultimately a nonexclusive partnership. So you, over time, will see Unity Spark distributed ever. and so the opportunity over time do you think.

Operator

Your next question comes from the line of Dylan Becker with William Blair.

Dylan Becker

Appreciate it. Maybe 2 quick ones, and I think he kind of called this out, Matt to start with you. But I think you said top of funnel usage from daily users is up 25%. And Jarrod I think you said new advertisers on the platform is up 27%. It's probably too early to tie those 2 together. But maybe of that new daily user cohort, what are you seeing from a propensity to turn on monetization after they kind of started to toy around with the idea of creation -- and then I'll start there again I'll do that and then I'll ask a follow-up. .

Matthew Bromberg

Okay. Thanks. Sorry to interrupt. Yes, those are 2 separate numbers. So I wouldn't [indiscernible] them together. But I would say this, and this is a really important concept. I'm pleased to go you asked the question. One of the really interesting downstream impacts of shifting into a world in which the offering platform is very frequently agentically controlled right, where games are being built around the command line interface around the pro is that in the past, if you were building a game with you Unity, would, of course, download unit, and you do all sorts of things, you learn it and you begin building games. When it came time to partner with an ad network or to side, hey, I'd like to sell ads in my game more. "Gee, I need to buy some installs, right? You does go back on the Internet, and do some research you say, "Oh, there's a vector. I'm going to go get out and we download that SDK let me download the documentation around it.

Let me install that ununity.And let me go down the room and figure out how that works. So that was the old world. In the new world, you say, "Hey, I want to build a game, Gray, we're going to build it on Unity. All the unique services and including Vector and others are bound instantly at the moment of creation without you downloading or reading or any of the friction that used to happen in the old model, including, by the way, downloading unit.

So the part of the reason we're so excited about this new the new metaphor creation is that because we offer a full platform and services and having those integrated in that first instance is going to be on enormous value, both to the creator and over time to us. And so we do see those -- we do see those dynamics already playing out we absolutely see them playing out in their business already, but it's just going to become more intense because we're exceptionally in.

Dylan Becker

And then going back to kind of the asset store piece as well to -- if Spark obviously helps accelerate collaboration, bringing more creators into the ecosystem, democratize development, as we've talked about, I guess, just how you're thinking about the asset store as helping kind of balance that mix between quality of content as well as volume of content.

Matthew Bromberg

Yes. It's really important to us that we respect and do everything we can to respect and enhance the human element of game creation. And there is a meaningful and significant backlash against AI-created art. And the issues associated with the or not just sort of psychological or lab, if you will, but also have to do with the sort of genericization that happens when sort of models give you the median of what things look like.

And part of their consumer reaction that you see and part of the reason why they really aren't at least to my knowledge, any particularly successful games that are obviously tied to this kind of genericized arctic experience is that by consumers don't grant well to. So all of this is really important to us. And were combats built on momcentrality and the importance of the biglothecreator. What the Unity asset store allows us to do uniquely because as Jerkpointed out earlier, it is by far resource of harness freer in the world and we're going to be able to integrate it directly and deeply into Spark just as it is integrated into the current unit ecosystem is we think is what we'll do is help creators build better, more appealing product.

Remember that the whole point here is to create great gains the -- all the opportunities that happen downstream for creators and for unity and for everybody in Ecosystem happen as a consequence of building incredible experiences that consumers love. That's the thing that we want to be a part of. And if we can bring unique assets like the asset or assets are into that process, that we feel really good about.

Operator

Your final question comes from the line of Bernard McTernan with Needham.

Bernard McTernan

Matt, you mentioned a couple of times on the call, 3 billion consumers with you have supply. Basically, I wanted to ask, like, do you have enough supply to keep the strong growth going -- are you seeing any impact on no code games right now impacting that supply and maybe how you expect Spark to impact that next year? And then just a follow-up on a comment that Jarrod made about the owned and operating inventory with. Can you just detail what the implication of that is for access to other supply? .

Matthew Bromberg

Yes. So just to be clear about the statistic 3 billion of the number of individual consumers in a month that are playing made with Unity game. So I wouldn't confuse that with supply, if you're thinking about that as related to advertising inventory. So just a clarification for you there. The number of creators that are coming to our platform and the intensity of the use of our platform and the growth of the platform are all up into the right truck all of the dynamics that I've described are creating meaningful growth for Unity.

And that was the anchor that I mentioned in the in my prepared remarks around our DAU, our creator DAU being up 25% just since August, which is when we opened UV2 cousins. We expect that dynamic accelerate and to Jared's earlier points and some of the earlier questions around Spark.

The idea of bringing completely new set of potentially millions of new creators into that ecosystem through Uniti Spark, we think will be meaningful. And we think in the future, we can satisfy both our professional audience. And an audience of creators that are going to create new and different things that is 10 or 20 or 30 times as large as the gain the professional creators. They're going to create different things. It's going to be a different experience but it's going to be a bigger experience, and we're going to be able to set our wallet.

Operator

This concludes the question-and-answer session. I will now turn the call back to Alex for closing remarks.

Alex Giaimo

Thanks, everyone. Have a great day.