Unity Software Inc. 10-K

Item 7A. Quantitative and Qualitative Disclosures About Market Risk Foreign currency exchange risk The vast majority of our cash generated from revenue is denominated in U.S. dollars, with a small amount denominated in foreign currencies. Our expenses are generally denominated in the currencies of the jurisdictions in which we conduct our operations. Our results of current and future operations and cash flows are subject to fluctuations due to changes in foreign currency exchange rates. The effect of a hypothetical 10% change in foreign currency exchange rates applicable to our business would not have had a material impact on our historical consolidated financial statements. As the impact of foreign currency exchange rates has not been material to our historical operating results, we have not entered into derivative or hedging transactions, but we may do so in the future if our exposure to foreign currency becomes more significant. Interest rate risk The primary objectives of our investment activities are to preserve principle, provide liquidity, and maximize income without significantly increasing risk. Some of the securities we invest in are subject to interest rate risk. This means that a change in prevailing interest rates may cause the principal amount of the investment to fluctuate. To minimize this risk, we maintain our portfolio of cash, cash equivalents, and investments in a variety of securities, including U.S. treasury securities, commercial paper, corporate bonds, asset-backed securities, supranational bonds, and money market funds. The risk associated with fluctuating interest rates is limited to our investment portfolio. An increase of 100 basis points in interest rates would have resulted in a $5.5 million market value reduction in our investment portfolio as of December 31, 2021. 83 Table of Contents Unity Software Inc.