Unity Software's Q2 2025 Earnings Call: Contradictions Unveiled on Vector's Impact and Revenue Dynamics

Vector's impact on Unity Ad Network revenue, Create's revenue decline and strategic impact, Vector's impact on installs and user quality, Unity Vector transition impact on ad business, and Vector's impact on cloud costs and P&L are the key contradictions discussed in Unity Software's latest 2025Q2 earnings call.



Strong Performance in Grow Segment:
- Unity's Grow revenue increased by 1% sequentially in Q2 2025, with the Unity Ad Network contributing significantly.
- This growth was driven by the successful implementation of Unity Vector, which led to a 15% sequential increase in revenue.

Create Segment Growth:
- The Create revenue in Q2 2025 was $154 million, marking an increase of 2% both year-over-year and sequentially.
- This was attributed to double-digit subscription growth and the successful adoption of Unity 6, which has seen more than 6.6 million downloads.

Operational Efficiency and Profitability:
- Unity achieved record free cash flow of $127 million in Q2 2025, representing an improvement of $47 million year-over-year.
- This improvement was due to strong profitability and the timing of publisher payments.

Expansion in China and Strategic Partnerships:
- Unity's revenue from China grew by $20 million sequentially, driven by improvements in both Create and Grow segments.
- The company announced major multiyear partnerships with Tencent and Scopely, enhancing its presence in the Chinese market and strengthening its platform.