On Wednesday, shares of Unity Software Inc. (U.US) rose sharply, gaining over 11% to $39.94 at the time of writing. The surge followed the company's third-quarter earnings report, which significantly surpassed market expectations, boosting investor sentiment.

For the fiscal third quarter ended September 30, Unity reported adjusted earnings per share of $0.20, well above Wall Street's estimate of $0.17. Revenue increased 5% year-over-year to $471 million, also exceeding the consensus forecast of $450 million.

By segment, Create Solutions revenue reached $152 million, up from $147 million in the same period last year, while Grow Solutions revenue grew from $299 million to $318 million, demonstrating steady expansion across core product lines.

Adjusted EBITDA for the quarter stood at $109 million, with operating cash flow at $155 million and free cash flow at $151 million, reflecting improved profitability and strong cash flow generation.

Unity CEO Matthew Bromberg stated, "Driven by Unity Vector AI and sustained growth in our Create business, both revenue and adjusted EBITDA significantly exceeded expectations this quarter. As consumer demand for interactive entertainment continues to rise, Unity is entering a new growth cycle."

Looking ahead to Q4, the company expects revenue between $480 million and $490 million, above analysts' prior estimate of $473 million. Adjusted EBITDA is projected at $110 million to $115 million, underscoring management's confidence in continued profitability.