BTIG: Unity Software's AI advertising business continues to expand, reiterating a "buy" rating.

BTIG pointed out that Unity Software (U.US) seems to be ready to continue making progress with its AI advertising platform Vector, as the company is preparing to shut down its ironSource advertising network. The software company plans to cease operations of the ironSource advertising network on April 30 and has hired financial advisors to assist in divesting its Supersonic gaming distribution business. BTIG believes these moves are favorable, reaffirming their "buy" rating on the stock with a target price of $39. BTIG analysts Clark Lampen and Joseph Spiezio stated in an investor report released on Monday, "Based on our analysis of the consideration paid for ironSource as well as changes to the 21-22 amortization schedule, we believe that post-close, amortization expenses could be reduced by as much as $221 million, while the impact on depreciation is minimal (the acquisition price includes only $7 million in fixed assets). Applying these savings to our fundamental and optimistic forecasts for Vector, we estimate that with the easing of non-cash drags, Vector's potential profitability in 2027 could be around $0.20-0.60 per share." Unity plans to release its first-quarter financial performance for 2026 on May 7. Adjusted earnings per share are generally expected to be $0.24, with revenue of $5.0425 billion. In March of this year, Unity raised its first-quarter performance expectations. Unity expects revenue to be between $5.05 billion and $5.08 billion, higher than the previous expectations of $4.8 billion to $4.9 billion. Among these, Create business revenue is expected to be around $1.15 billion, while Grow business revenue is expected to be around $3.53 billion.