Motley Fool Money – Episode Summary

Episode Title: Unity Soars and Airlines Could Be In Trouble
Date: November 6, 2025
Host: Tyler Crowe
Guests: Matt Frankel, Jon Kwast

Episode Overview

In this episode, the Motley Fool Money team takes a close look at Unity Software’s turnaround and explosive earnings report, analyzes growing trouble for the airline industry amid a government shutdown, and wraps up with each analyst sharing a stock currently on their radar. The conversation blends thoughtful long-term investing insights, humor, and practical analysis for retail investors.

Key Discussion Points

1. Unity Software’s Turnaround and Q3 Earnings Surge

• Unity’s Strong Earnings:
  Unity Software’s stock soared 18% after reporting a third quarter that beat Wall Street expectations, ending a streak of six consecutive quarters of year-over-year revenue declines.

  • Quote (Tyler Crowe, 00:26):
    “Shares of Unity software were up 18% after reporting third quarter earnings that solidly beat Wall street expectations and ended the company's not so great streak of six consecutive quarters of year over year revenue declines.”

• New Management’s Positive Impact:
  CEO Matthew Bromberg (appointed just over a year ago from Zynga) was credited for effective turnaround strategies, product innovation, and regaining customer trust.

  • Quote (Matt Frankel, 01:52):
    “He led [Zynga’s] turnaround. So who better to lead a gaming company's turnaround? And so far he's been making all the right moves ... providing excellent perceived value for customers, which is what former management was missing.”

• By The Numbers:

  • Revenue up 5% YoY
  • Adjusted EPS up 5%
  • Free cash flow up 31% YoY
  • Q4 revenue guidance projects further acceleration to 6% growth

• Broader Market Opportunity:
  Beyond gaming, Unity is expanding into automotive (e.g., Toyota partnership), robotics, and other industries.

  • Quote (Matt Frankel, 02:58):
    “The numbers might not look fantastic at first glance ... But this quarter represents excellent progress and with turnarounds like this, progress over perfection all day.”

• Stock-based Compensation Concerns:
  Jon notes that prior mismanagement and excessive stock-based compensation negatively affected the business. Under Bromberg, there’s marked improvement, though work remains.

  • Quote (Jon Kwast, 05:44):
    “One of my top concerns with Unity was its liberal use of stock based compensation ... Simply put, stock based compensation needed to come down. Under Bromberg, it is heading in the right direction.”

Memorable Moment

• Tyler Crowe, 07:14:
  “I think if we were ever to do a show just for us, it would be a whole show just on the good and bad of stock based compensation. But I think we might put everyone to sleep if we were to do that.”

2. Airlines in the Crosshairs Amid Government Shutdown

• FAA Cuts Flights:
  FAA announced a 10% reduction in flights at 40 major U.S. metro markets due to the ongoing government shutdown's impact on TSA agents and air traffic controllers—right before the Thanksgiving holiday season.

  • Quote (Tyler Crowe, 08:15):
    “Earlier this week, the Federal Aviation Administration announced it was going to reduce flights by 10% across the U.S. at 40 metro markets.”

• Ripple Effects:

  • Disruptions are not just to airlines, but cruise lines, hotels, the Las Vegas gaming industry, Airbnb, and the broader travel ecosystem.
  • Quote (Matt Frankel, 09:20):
    “So the airlines are an obvious industry to watch, but it could have a big impact on adjacent industries. ... The boat isn’t going to wait for you, you have to be able to fly to your destination to get on a ship.”

• Industry Vulnerability:
  This is the first time U.S. flights have been reduced due to an air traffic control staffing shortage, underscoring the fragility of the sector.

  • Quote (Jon Kwast, 10:39):
    “Transportation Secretary Sean Duffy said that this actually hasn't ever happened before, that we haven't reduced flights due to an air traffic control thing.”

• Airlines as a Perennial Poor Investment:
  Tyler strongly argues that airlines are perpetually prone to crises, are capital-intensive, have low margins, and regularly face unpredictable setbacks, making them poor long-term investments.

  • Quote (Tyler Crowe, 12:04):
    “I almost feel like your brokerage should have a ‘Are you sure you want to do this?’ when you try to buy airline stocks ... this has been the case for going on 20 years now.”

• Consensus on Avoiding Airline Stocks:
  Both Jon and Matt echo Tyler’s aversion, citing lack of revenue growth, inability to improve margins, and continual disruptions. Even Warren Buffett and Berkshire’s optimistic airline bets ultimately failed.

  • Quote (Matt Frankel, 13:48):
    “It's also been a hard industry to disrupt. ... There's one reason after another that airline profits just crash. And I would never touch an air[lines stock]. I've never owned an airline stock. It's one of the few industries I've never invested in and I probably never will.”

Memorable Moment

• Tyler Crowe, 14:20 (with a wink):
  “Congratulations for Matt Frankel for one of the worst puns about talking airline stocks crashing.”

3. Stocks on Our Radar

(Segment begins at 15:24)

Jon Kwast: Waste Management (WM) [15:37]

• “This is a trash company, and I mean that in a nice way.”
• Competitive advantages: Largest landfill operator in the U.S., high barriers to entry, 99% customer retention.
• Recent pullback of 17% (second only to the COVID-19 market crash in the past decade) presents a buying opportunity.
• Diversifying into medical waste via Stericycle acquisition; harvesting natural gas from landfills.

Tyler Crowe: Farmer Mac (AGM) [17:32]

• “This is basically Freddie Mac or Fannie Mae of the rural development, agricultural, farm and ranch sort of market.”
• Has navigated industry struggles and posted strong recent earnings, with net income up 10%, a healthy capital ratio, and a growing dividend (10% CAGR over 10 years).
• “A well-run business ... 3.5% dividend yield and trading at 9 times earnings.”

Matt Frankel: Pinterest [18:56]

• Pinpointed recent post-earnings stock drop (22%) as an overreaction.
• Problems are due to international advertising tariffs, not fundamental weaknesses.
• “Over 80% of its users are outside of North America ... ended the quarter with really strong monetization and more active users than it’s ever had before and now trades for less than 14 times forward earnings despite a double digit growth rate still.”

Notable Quotes & Timestamps

• Matt Frankel on Unity's turnaround:
  “With turnarounds like this, progress over perfection all day.” [02:58]
• Jon Kwast on management catalysts:
  “When a new management team comes in, that is a good period that could result in a change in how they're doing business.” [04:53]
• Tyler Crowe on airline stocks:
  “It seems to be beset by one disaster after another ... I almost feel like your brokerage should have a ‘Are you sure you want to do this?’ when you try to buy airline stocks.” [12:07]
• Matt Frankel on airline industry disruption:
  “A lot of companies have said, ‘I'm going to do this differently.’ ... some of those can work as investments until they don't.” [13:48]
• Jon Kwast on Waste Management:
  “If you've been waiting for a pullback on one of the most dependable, recession resistant, advantaged businesses in the world, this pullback for waste management is historically about as good as it gets.” [17:07]

Episode Flow

• Unity Software’s comeback and why it may mark a true inflection point
• Analysts’ evolving views on Unity as a long-term holding
• Airline and travel disruptions from the government shutdown—what it means for travel, adjacent industries, and investors
• Candid take: Why airlines remain a no-go zone for long-term investors
• Lighter finish: Analysts each offer a top “stock on their radar,” highlight fundamental strengths and current valuation opportunities

Takeaway

This episode delivers an insightful and entertaining exploration of a major software comeback, a timely warning about the travel industry’s vulnerabilities, and three actionable stock ideas explained with both rigor and wit. The hosts maintain the classic Motley Fool candid, down-to-earth style, making it a valuable listen for investors of all levels.