CNBC Television
Unity Software CEO Bromberg: We're not seeing any pressure from the consumer in this environment
11/5/2025, 10:13:12 PM
Economic Summary
- Unity (U) reported stronger-than-expected Q3 results, beating guidance and consensus for both revenue and profit; advertising revenue grew 11% quarter-over-quarter, and subscription/creation revenue rose 13% year-over-year, indicating multi-channel momentum.
- Vector, Unity's AI-driven advertising product, is cited as a core driver of ad revenue growth and improved targeting, implying higher ad effectiveness and monetization potential for advertisers using Unity's platform.
- AI adoption at Unity is not only an efficiency play but also a growth lever: AI tools speed game creation for developers, enhance ad products, and automate internal workflows, supporting top-line growth and potential margin gains.
- The games sector remains relatively resilient amid consumer uncertainty because free-to-play mobile games offer a cost-efficient entertainment option; handset strength (noted via Qualcomm and Apple device momentum) is likely to increase downloads and playtime, benefiting mobile gaming ecosystems.
Bullish
- Vector AI driving advertising revenue growth (advertising +11% QoQ) and improving ad targeting.
- Creation/subscription business growing (creation/subscriptions +13% YoY), supporting recurring revenue.
- Mobile handset strength (new phones) should boost game downloads and engagement, aiding monetization.
- Company-wide AI adoption improves creator productivity and internal efficiency, supporting long-term margin expansion.
Bearish
- Wider video game industry is seeing cost pressures and cuts among major players, which could signal demand or margin risks.
- If consumer spending weakens more broadly, ad monetization could slow despite current resilience in gaming.
Bullish tickers
UQCOMAAPL
U
Bullish
Vector AI and creation subscriptions driving revenue growth; AI adoption improves creator productivity and ad monetization.
Bearish
Exposed to broader gaming industry pressures; margins could be squeezed if ad demand or consumer spending weakens.
META
Bullish
Large-scale ad platforms remain key comparators in ad targeting competition.
Bearish
Referenced as part of the broader digital ad landscape facing uncertain consumer segments.
GOOGL
Bullish
Alphabet's ad ecosystem underscores demand and investment in targeted digital advertising.
Bearish
Mentioned as another major ad-reporting peer with mixed signals for advertisers.
AMZN
Bullish
Amazon's ability to target consumers may keep advertiser demand elevated in certain product categories.
Bearish
Highlighted for its unique ad targeting position, which could intensify competition for ad dollars.
QCOM
Bullish
Strong premium handset demand supports mobile gaming engagement and ecosystem growth.
Bearish
Mobile handset cyclicality could pose risk if device demand falters.
AAPL
Bullish
Apparent strength in handsets and holiday device cycles should drive increased game downloads and usage.
Bearish
If handset upgrades slow, mobile gaming tailwinds could weaken.
People mentioned
Matthew BrombergJohn