Unity Software Inc. (U) saw its stock surge over 5% in pre-market trading on Friday, following the company's better-than-expected fourth quarter 2024 results and positive outlook for future growth.

The key highlights that drove Unity's stock rally include:

• Revenue from the strategic portfolio of $442 million, up 4% year-over-year and exceeding guidance by $15 million. The Create Solutions segment, which includes game engine subscriptions, grew 9% year-over-year, driven by a 15% increase in subscription revenue and a 50% surge in industry revenue.
• The successful launch of Unity 6, with 38% of active users upgrading and 2.8 million downloads since its release. Unity's focus on core values like stability and performance resonated positively with customers.
• Announcement of the upcoming migration to the Unity Vector AI platform for advertising, expected to enhance targeting precision, increase audience scale, and improve real-time adaptability. While this transition may cause some near-term disruption, the company expressed confidence in its long-term growth prospects.
• Strong performance in the industry segment, with revenue growth of 50%, fueled by new customers like Toyota and Raytheon adopting Unity's tools for visualization and simulation.

Analysts were optimistic about Unity's prospects, with several raising their price targets on the stock following the earnings release. The company's strategic initiatives, including the transition to Unity Vector and the successful adoption of Unity 6, position it well for sustainable growth in the competitive gaming and interactive content creation markets.