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Video game design and animation software maker Unity Software (U) saw its shares hit a record high on Wednesday after the company beat Wall Street’s targets for the third quarter. Unity stock initially fell, but then raced higher.

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The San Francisco-based company late Tuesday said it lost an adjusted 6 cents a share on sales of $286.3 million in the September quarter. Analysts had expected Unity to lose 7 cents a share on sales of $266.5 million, according to FactSet. In the year-earlier period, Unity lost 9 cents a share on sales of $200.8 million.

In other news, Unity announced plans to buy visual effects firm Weta Digital for $1.625 billion in cash and stock. Unity expects to complete the acquisition this quarter.

Under the terms of the deal, Unity will purchase Weta Digital’s technology, tools and engineering talent. The award-winning visual effects studio WetaFX is not included in the deal, but is expected to become Unity’s largest customer in the media and entertainment space. WetaFX has produced special effects for such movies as “Avatar,” “Lord of the Rings” and “Wonder Woman.”

Unity Stock Rises

For the current quarter, Unity forecast sales of $287.5 million, up 30.5% year over year, based on the midpoint of its outlook. Analysts were modeling sales of $287.7 million, FactSet said.

On the stock market today, Unity stock rose 2.8% to close at 176.45. Earlier in the session, Unity stock hit an all-time high of 189.15.

Unity describes itself as “the world’s leading platform for creating and operating interactive, real-time 3D content.” The company says its technology could provide a foundation for the coming metaverse.

Chief Executive John Riccitiello said Unity plans to offer the Weta Digital tools to more creators. “We are thrilled to democratize these industry-leading tools,” he said in a news release.

On Aug. 11, Unity stock broke out of a cup-with-handle base at a buy point of 111.84, according to IBD MarketSmith charts. The breakout occurred after Unity delivered a beat-and-raise June-quarter report.

Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.

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