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We have experienced significant net losses on a GAAP basis in each period since inception.
−Removed: In addition, our revenue growth rate has varied and has in certain quarters declined and could vary and decline in the future, particularly in a difficult macroeconomic climate.
+Added: In addition, our revenue has varied and, in certain quarters and annual periods, declined and could vary and decline in the future.
We are not certain whether we will achieve or maintain profitability in the future.
−Removed: We are engaging in cost cutting efforts, but our costs and expenses may increase in the long term on a GAAP basis, which could negatively affect our future results of operations.
+Added: Our costs and expenses may increase in the long term on a GAAP basis, which could negatively affect our future results of operations.
In addition, we may continue to make investments in such areas as:
−Removed: • research and development, including investments in our engineering teams and in further differentiating our platform and solutions with improvements to our Create and Grow Solutions, as well as the development of new solutions and features;
+Added: • research and development, including investments in our engineering teams and in further differentiating our platform, as well as the development of new solutions and features;
• our sales and marketing organizations to engage our existing and prospective customers, increase brand awareness and drive adoption and expansion of our platform and solutions;
−Removed: • research and development and sales and marketing initiatives to grow our presence in new industries and use cases beyond the gaming industry;
+Added: • initiatives to grow our presence in new industries and use cases beyond the gaming industry;
• our technology infrastructure, including systems architecture, scalability, availability, performance, and security;
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• global expansion;
−Removed: • our general and administration organization, including legal, IT, and accounting expenses associated with ongoing public company compliance and reporting obligations, including maintaining proper and effective internal controls over financial reporting.
+Added: • our general and administration organization, including legal, IT, and accounting expenses.
Our efforts to achieve profitability may be costlier than we expect and may not be effective.
Even if such investments increase our revenue, any such increase may not be enough to offset increased operating expenses.
−Removed: Cost-cutting efforts, such as discontinuing certain product offerings, reducing our workforce or reducing our office footprint layoffs, may not be effective or may not be effective on the timelines we expect.
−Removed: If we fail to successfully execute our plans to reset our portfolio to focus on our strategic portfolio and to right-size our investments, our business will be harmed.
−Removed: We are resetting our portfolio to focus on the Unity Engine and Monetization solutions as well as AI, exiting other businesses and right-sizing our investments.
−Removed: These efforts may not be effective or sufficient to offset our expenses, and may themselves have adverse impacts, such as loss of continuity or accumulated knowledge, inefficiency during transitional periods, distraction, and potential challenges operating our business with fewer resources.
−Removed: For example, we recently announced plans to restructure, which included a reduction in approximately 25% of our employee workforce, and the departure of certain
−Removed: Unity Software Inc.
−Removed: members of our management team, including the ironSource founders from their operational roles.
−Removed: The departure of these employees may create a loss of accumulated knowledge, inefficiency, and other challenges to operating our business.
−Removed: If we fail to efficiently execute on these plans to restructure, or if the benefits from these efforts are not achieved on the timeline we expect, we may fail to achieve or maintain profitability.
+Added: Cost-cutting efforts, such as discontinuing certain product offerings, reducing our workforce or reducing our office footprint, may not be effective or may not be effective on the timelines we expect.
We have a limited history operating our business at its current scale, and as a result, our past results may not be indicative of future operating performance.
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You should not rely on our past results of operations as indicators of future performance.
−Removed: Overall growth of our revenue is difficult to predict and depends in part on our ability to execute on our integration of ironSource and other growth strategies.
+Added: Overall growth of our revenue is difficult to predict and depends in part on our ability to execute on enhancing our machine learning stack and data infrastructure capabilities, our portfolio reset, and other growth strategies.
You should consider and evaluate our prospects in light of the risks and uncertainties frequently encountered by growing companies in rapidly evolving markets.
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To do so, we need to continuously improve our platform’s capabilities, features and functionality.
−Removed: In addition, we will need to appropriately scale our internal business, IT, and financial, operating and administrative systems to serve our growing customer base, while continuing to manage headcount, capital and operating and reporting processes, and continue to integrate them with ironSource's, in an efficient manner.
−Removed: Any failure of or delay in these efforts could result in impaired performance and reduced customer satisfaction, resulting in decreased sales to new customers or lower dollar-based net expansion rates, which would hurt our revenue growth and our reputation.
+Added: In addition, we will need to appropriately scale our internal business, IT, and financial, operating and administrative systems to serve our growing customer base, while continuing to manage headcount, capital and operating and reporting processes in an efficient manner.
+Added: Any failure of or delay in these efforts could result in impaired
+Added: Unity Software Inc.
+Added: performance and reduced customer satisfaction, resulting in decreased sales to new customers or lower dollar-based net expansion rates, which would hurt our revenue growth and our reputation.
Further, any failure in optimizing the costs associated with our third-party cloud services could negatively impact our gross margins.
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Cost-cutting interventions and improvements to our internal infrastructure to offset expenses may not be effectively implemented on a timely basis, and such failures could harm our business, financial condition and results of operations.
−Removed: We may fail to realize the possible synergies between our Create and Grow Solutions, including the benefits of the ironSource Merger, or those synergies may take longer to realize than expected.
−Removed: We believe that there are significant benefits and synergies that may be realized through leveraging our Create and Grow Solutions.
−Removed: However, the efforts to realize these benefits and synergies is a complex process and may disrupt our existing operations if not implemented in a timely and efficient manner.
−Removed: The full benefits of these synergies, including those from the ironSource Merger, may not be realized as expected or may not be achieved within the anticipated time frame, or at all.
−Removed: In addition, we may incur additional or unexpected costs in order to realize these revenue synergies.
−Removed: Failure to achieve these synergies could adversely affect our results of operations or cash flows, cause dilution to our earnings per share, and negatively impact our stock price.
−Removed: Our success will depend, in part, on our ability to manage our expansion, which poses numerous risks and uncertainties, including the ongoing integration of the operations and business of ironSource into our existing business in an efficient and timely manner, to combine systems and management controls and to integrate relationships with industry contacts and business partners.
−Removed: We are devoting significant attention and resources to the integration and operation of the combined company, and to successfully aligning the business practices and operations of Unity and ironSource, in order to recognize the synergies between our Create and Grow Solutions.
+Added: If we fail to timely release updates and new features to our platform and adapt and respond effectively to rapidly changing technology, evolving industry standards, changing regulations, or changing customer needs, requirements, or preferences, our platform may become less competitive.
+Added: The markets in which we compete are subject to rapid technological change, evolving industry standards, and changing regulations, as well as changing customer needs, requirements and preferences.
+Added: The success of our business will depend, in part, on our ability to adapt and respond effectively to these changes on a timely basis.
+Added: For example, in the third quarter of 2024, we announced the launch of Unity 6 and we began a comprehensive rebuild of our machine learning stack and data infrastructure.
+Added: In the first quarter of 2025 we announced the roll out of our new machine-learning model, Vector.
+Added: If Unity 6 fails to gain market acceptance, or if we fail to execute on the rebuild and launch of our machine learning stack and data infrastructure, on a timely basis or at all, our business could be harmed.
+Added: Similarly, emerging technologies like artificial intelligence could impact the way that customers utilize our solutions as well as enhance the functionality of our solutions.
+Added: Accordingly, our ability to increase our revenue depends in large part on our ability to maintain, improve and differentiate our existing platform and introduce new functionality promptly and effectively.
+Added: We must continue to improve existing features and add new features and functionality to our platform in order to retain our existing customers and attract new ones.
+Added: For example, if the technology underlying our high-definition rendering pipeline or our graphics, animation and audio tools become obsolete or do not address the needs of our customers, our business would suffer.
+Added: In addition, if our investments in fundamental product enhancements do not increase performance in a sustainable manner, or fail to do so on the timelines we expect, then our revenue, particularly from our Grow Solutions, would be harmed.
+Added: Revenue growth from our offerings depends on our ability to continue to develop and offer effective features and functionality for our customers and to respond to frequently changing privacy and data security laws and regulations, policies, advancements in competing technologies, and end-user demands and expectations, which will require us to incur additional costs to implement.
+Added: If we do not continue to improve our platform with additional features and functionality in a timely fashion, or if intended improvements to our platform are ineffective or otherwise not well received by customers, our revenue could be adversely affected.
+Added: If we fail to deliver timely releases of our solutions that are ready for commercial use, release a new version, service, tool or update with material errors, or are unable to enhance our platform to keep pace with rapid technological and regulatory changes or respond to new offerings by our competitors, or if new technologies emerge that are able to deliver competitive solutions at lower prices, more efficiently, more conveniently or more securely than our solutions, or if new operating systems, gaming platforms or devices are developed and we are unable to support our customers' deployment of games and other applications onto those systems, platforms or devices, our business, financial condition and results of operations could be adversely affected.
Unity Software Inc.
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Under such models, our customers depend on us as a source of their own revenue, which in some cases may represent a significant portion of their revenue.
−Removed: Should customers lose confidence in the value or effectiveness of our Monetization solutions or if our Grow Solutions are less effective, consumption of these offerings could decline.
−Removed: For example, our revenue growth in the first half of 2022 was negatively impacted by challenges with certain of our Grow Solutions (including a fault in our platform that resulted in reduced accuracy of one of our monetization tools, as well as the consequences of ingesting bad data from a large customer) that reduced the efficacy of such products.
−Removed: We focused our resources on addressing the data quality and accuracy challenges we observed with certain monetization tools in the first quarter of 2022.
−Removed: Our interventions to address such challenges were effective;
−Removed: however, external factors, including the competitive landscape, negative macroeconomic conditions, longer sales cycles, and reduced advertiser spend prolonged our recovery and negatively impacted the growth of our Grow Solutions.
−Removed: We must continually add new features and functionality to our Grow Solutions to remain competitive and respond to our customers' needs.
−Removed: If we are not successful in retaining and attracting new customers to our Grow Solutions, our business and results of operations would be adversely affected.
−Removed: In addition, if we fail to attract or retain existing ironSource customers into our Grow Solutions, our business could be harmed.
+Added: Should customers lose confidence in the value or effectiveness of our Grow Solutions or if our Grow Solutions are less effective, consumption of these offerings could decline.
+Added: For example, our revenue growth in the first half of 2022 was negatively impacted by challenges with certain of our Grow Solutions that reduced the efficacy of such products.
+Added: We must continually add new features and functionality to our Grow Solutions to remain competitive and respond to our customers' needs, particularly in a competitive environment.
+Added: For example, in the third quarter of 2024 we began a comprehensive rebuild of our machine learning stack and data infrastructure.
+Added: And in the first quarter of 2025, we announced that we were beginning the roll out of our machine-learning model, Vector.
+Added: If we fail to execute on the rebuild of our machine learning stack and data infrastructure and our offerings, or if our improvements on those offerings such as Vector, fail to perform properly, our business could be harmed.
+Added: Our Grow Solutions customers rely on us to attract a broad range of advertisers to our platform to generate demand for their impressions through our offerings such as LevelPlay, Unity Ads, and Sonic.
+Added: If we are unable to also serve the needs of advertisers, they may reduce their consumption of our solutions and, because the advertising market is highly competitive, they may shift their business to other advertising solutions or supply paths, which could adversely affect our revenue.
+Added: In addition, macroeconomic factors like labor shortages, supply chain disruptions, and inflation continue to cause logistical challenges, increased input costs, and inventory constraints for advertisers.
+Added: These factors have in the past decreased, and may in the future decrease or halt, advertiser spending.
Our Grow Solutions are also dependent upon the continued proliferation of mobile connected devices, such as smartphones and tablets, as well as the increased consumption of content through those devices.
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If user adoption of mobile connected devices or user consumption of content on those devices do not continue to grow, our business could be harmed.
−Removed: Create Solutions customers have no obligation to renew their subscriptions, which are primarily one to three years in length, after they expire, and have no obligation to continue using our Grow Solutions, which are primarily sold under revenue-share or profit-share-based models.
−Removed: In the third quarter of 2023 we announced changes to our pricing model for our Create Solutions, which will become effective for users of the next major release of the software expected to be available in 2024.
+Added: Create Solutions customers have no obligation to renew their subscriptions, which are primarily one to five years in length, after they expire, and have no obligation to continue using our Grow Solutions, which are primarily sold under revenue-share or profit-share-based models.
+Added: We periodically review our pricing structures and business models and in the third quarter of 2023 we announced changes to our pricing model for our Create Solutions, which were to become effective for users of the next major release of the software expected to be available in 2024.
We experienced a high volume of negative customer feedback including a boycott and a slowdown of signing new contracts and renewals as a result of these changes, which we believe negatively impacted our Grow Solutions revenue in the second half of 2023.
−Removed: If we fail to recover or reengage our customers or fail to attract new customers as a result of this announcement, our business could be harmed.
−Removed: Our Grow Solutions customers rely on us to attract a broad range of advertisers to our platform to generate demand for their impressions through our offerings such as LevelPlay, Unity Ads, and Sonic.
−Removed: If we are unable to also serve the needs of advertisers, they may reduce their consumption of our solutions and, because the advertising market is highly competitive, they may shift their business to other advertising solutions or supply paths, which could adversely affect our revenue.
−Removed: All of our offerings are also subject to factors and events beyond our control.
−Removed: Macroeconomic factors like labor shortages, supply chain disruptions, and inflation continue to cause logistical challenges, increased input costs, and inventory constraints for advertisers.
−Removed: These factors have in the past decreased, and may in the future decrease or halt, advertiser spending.
+Added: In light of this customer feedback, we reviewed our pricing structure and announced a new pricing structure during the third quarter of 2024.
+Added: Although this later announcement was favorably received, decisions to change how we price our products or services have been and may in the future be viewed unfavorably and harm our business.
For us to maintain or improve our results of operations, it is important that our Create Solutions customers renew and expand their subscriptions with us and that our Grow Solutions customers continue using and expanding their use of our solutions.
−Removed: We invest in targeted sales and account-based marketing efforts to identify opportunities to grow use of our solutions within and across multiple studios within a
−Removed: Unity Software Inc.
−Removed: single customer.
+Added: We invest in targeted sales and account-based marketing efforts to identify opportunities to grow use of our solutions within and across multiple studios within a single customer.
However, our efforts may not be successful despite the resources we devote to them.
−Removed: Even if one or several studios within a customer adopt our Create or Grow Solutions, other studios within that customer may choose to adopt different solutions or to continue to employ internally-developed solutions.
+Added: Even if one or several studios within a customer adopt our Create or Grow Solutions, other studios within
+Added: Unity Software Inc.
+Added: that customer may choose to adopt different solutions or to continue to employ internally-developed solutions.
It is also important for us to cross-sell more Create Solutions to our Grow Solutions customers, as well as Grow Solutions to our Create Solutions customers.
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Specifically, we have faced and may continue to face competition as a result of:
+Added: • increased costs for advertisers to target users due to changes in the privacy landscape;
+Added: • reduced supply from publishers, who may also use channels beyond in-app advertising to grow revenue;
+Added: • rapid technological change, such as the rise of AI and machine learning, increasing use of data and trained models, evolving industry standards, changing regulations, as well as changing customer needs, requirements and preferences;
• the internal development of alternative solutions by a significant number of companies, including other gaming companies;
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• the introduction of alternative solutions by larger, more experienced companies that offer 2D and 3D design solutions in the industries in which we may expand into.
−Removed: • rapid technological change, such as the rise of AI and machine learning, evolving industry standards, changing regulations, as well as changing customer needs, requirements and preferences.
Our competitors may have greater name recognition, longer operating histories, more established customer relationships, larger marketing budgets and greater financial and operational resources than we do.
We cannot assure you that we will not be forced to engage in price-cutting or revenue limiting initiatives, change payment terms or increase our advertising and other expenses to attract and retain customers in response to competitive pressures.
−Removed: For example, in the third quarter of 2023 we announced changes to our pricing model for our Create Solutions, which will become effective for users of the next major release of the software expected to be available in 2024.
−Removed: We experienced a high volume of negative customer feedback including a boycott and a slowdown of signing new contracts and renewals as a result of these changes.
−Removed: If we fail to recover or reengage our customers, or fail to attract new customers, as a result of this announcement, our business could be harmed.
For all of these reasons, we may not be able to compete successfully against our current or future competitors, which could result in the failure of our platform to continue to achieve or maintain market acceptance, which would harm our business, financial condition, and results of operations.
+Added: If we fail to successfully execute our plans to reset our portfolio to focus on our Strategic Portfolio and to right-size our investments, our business will be harmed.
+Added: We have reset our portfolio to focus on the Unity Engine and related consumption services, and Monetization solutions, exiting other businesses and right-sizing our investments.
+Added: These efforts may not be effective or sufficient to offset our expenses, and may themselves have adverse impacts, such as loss of continuity or accumulated knowledge, inefficiency during transitional periods, distraction, and potential challenges operating our business with fewer resources.
+Added: For example, in the first quarter of 2024 we reduced our employee workforce by approximately 25%, and certain members of our management team, including the ironSource founders, departed from their operational roles.
+Added: The departure of these employees may create a loss of accumulated knowledge, inefficiency, and other challenges to operating
+Added: Unity Software Inc.
+Added: our business.
+Added: If we fail to efficiently execute on these plans to restructure, or if the benefits from these efforts are not achieved on the timeline we expect, we may fail to achieve or maintain profitability.
Our estimates of market opportunity and forecasts of market growth may prove to be inaccurate, and even if the market in which we compete achieves the forecasted growth, our business could fail to grow at a similar rate, if at all.
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The variables that affect the calculation of our market opportunity are also subject to change over time.
−Removed: Unity Software Inc.
We cannot assure you that any particular number or percentage of addressable users or companies covered by our market opportunity estimates will purchase our solutions at all or generate any particular level of revenue for us.
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Each may also change its fee structure, add fees associated with access to and use of its platform, alter how customers are able to advertise or monetize on their platform, change how the personal or other user information is made available to application developers on their platform, limit the use of personal information for advertising purposes or restrict how end users can share information on their platform or across other platforms.
−Removed: In particular, operating system platform providers or application stores such as Apple or Google may change their technical requirements or policies in a manner that adversely impacts the way in which we or our customers offer solutions or collect, use, and share data from end-user devices.
+Added: In particular, operating system platform providers or application stores such as Apple or Google have in the past and may in the future change their technical requirements or policies in a manner that adversely impacts the way in which we or our customers offer solutions or collect, use, and share data from end-user devices.
Restrictions on our ability to collect and use data as desired could negatively impact our Create Solutions and Grow Solutions as well as our resource planning and feature development planning for our software.
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Any limitation on or discontinuation of our or our customers' access to any third-party platform or application store could adversely affect our business, financial condition, or results of operations.
+Added: Unity Software Inc.
If we are unable to further expand into new industries, or if our solutions for any new industry fail to achieve market acceptance, our growth and operating results could be adversely affected, and we may be required to reconsider our growth strategy.
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Market acceptance of our platform in industries beyond gaming may not grow as we expect and if our platform does not achieve widespread adoption in these other markets, our ability to grow our revenue may suffer.
−Removed: Unity Software Inc.
In addition, the investments we make to grow our business by expanding into new industries will continue to increase our costs and operating expenses on an absolute basis.
−Removed: We expect to invest significant research and development resources to develop and expand our solutions' functionality to meet the needs of customers in these industries, and we will need to increase our sales and marketing, legal and compliance and other efforts as we seek to expand into new industries that require a different go-to-market strategy than the gaming industry.
+Added: We expect to invest in sales and marketing resources to develop and expand the use of our solutions by customers in these industries, and we will need to increase our sales and marketing, legal and compliance and other efforts as we seek to expand into new industries that require a different go-to-market strategy than the gaming industry.
These investments will occur in advance of our realization of significant revenue from such industries, particularly given that customers in these industries are typically enterprise customers with long contracting cycles, which will make it difficult to determine if we are allocating our resources effectively and efficiently.
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The gaming market is characterized by intense competition, rapid technological change, increased focus by regulators, and economic uncertainty and, as such, there is no guarantee that any of our customers' games will gain any meaningful traction with end users.
−Removed: In addition, some of our offerings, like Multiplay and Vivox, are more reliant on certain customers.
While our large and diverse customer portfolio has helped to reduce the fluctuations in our Grow Solutions revenue as a whole resulting from the success of customers' games and the timing of game releases, we cannot assure you that the size and diversification of our customer portfolio will sufficiently mitigate this risk.
−Removed: If our customers fail to create or operate popular games using our platform, and we are not able to maintain a diversified portfolio of "winners and losers," our results of operations may be adversely affected.
+Added: Unity Software Inc.
+Added: customers fail to create or operate popular games using our platform, and we are not able to maintain a diversified portfolio of "winners and losers," our results of operations may be adversely affected.
Our results of operations have fluctuated in the past and are expected to fluctuate in the future, making it difficult to project future results, and if we fail to meet the expectations of securities analysts or investors with respect to our results of operations, our stock price, and the value of your investment could decline.
Our results of operations have fluctuated in the past and are expected to fluctuate in the future due to a variety of factors, many of which are outside of our control.
−Removed: As a result, our past results may not be
−Removed: Unity Software Inc.
−Removed: indicative of our future performance.
+Added: As a result, our past results may not be indicative of our future performance.
In addition to the other risks described herein, factors that may affect our results of operations include the following:
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• timing of acquisitions and costs associated with integrating acquired companies;
−Removed: • general economic, social and public health conditions, both domestically and globally, including uncertain macroeconomic conditions, as well as conditions specifically affecting industries in which our customers operate, which can impact customer spending and result in longer deal cycles;
+Added: • uncertain macroeconomic conditions, including changing international trade relations, as well as conditions specifically affecting industries in which our customers operate, which can impact customer spending and result in longer deal cycles;
• incorrect estimates or judgments relating to our critical accounting policies;
• impact of new accounting pronouncements or changes in accounting principles;
−Removed: • costs that we incur in order to comply with changing regulatory, tax or legal requirements, especially with respect to privacy and security matters;
+Added: • costs that we incur in order to comply with changing regulatory, tax or legal requirements, especially with respect to AI, privacy and security matters;
+Added: Unity Software Inc.
• significant security breaches of, technical difficulties with or interruptions to the delivery and use of our platform.
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If our quarterly results of operations fall below the expectations of investors and securities analysts who follow our stock, the price of our common stock could decline substantially, and we could face costly lawsuits, including securities class action suits.
−Removed: Unity Software Inc.
Third parties with whom we do business may be unable to honor their obligations to us or their actions may put us at risk.
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Our direct sales force targets larger customers, and sales to these customers involve risks that may not be present or that are present to a lesser extent with respect to sales to smaller customers.
−Removed: We utilize a direct sales organization to increase adoption within larger enterprise customers and to expand into new industries, such as automotive, where potential customers are typically larger organizations.
+Added: We utilize a direct sales organization to increase adoption within larger enterprise customers and to expand into new industries, such as automotive, where potential customers are typically larger
+Added: Unity Software Inc.
+Added: organizations.
In particular, our success for our Grow Solutions depends in part on larger enterprise customers.
Sales to larger customers involve risks that may not be present or that are present to a lesser extent with sales to smaller customers, such as longer sales cycles, more complex customer requirements, substantial upfront sales costs, and less predictability in completing some of our sales.
−Removed: If we do not effectively expand our direct sales capabilities to address these industries effectively or develop effective sales and marketing strategies for those industries, or if we focus our efforts on non-gaming
−Removed: Unity Software Inc.
−Removed: industries that end up being slow adopters of our platform and solutions, our ability to increase sales of our platform and solutions to industries and for use cases outside gaming will be adversely affected.
−Removed: We provide service-level agreement commitments related to certain of our Create and Grow Solutions.
−Removed: If we fail to meet these contractual commitments, we could be obligated to provide refunds of prepaid amounts or other credits, which would lower our revenue and harm our business, financial condition, and results of operations.
−Removed: Certain of our Create and Grow Solutions include service-level agreements commitments.
−Removed: If we are unable to meet the stated service-level commitments, including failure to meet the uptime and response time requirements under our customer agreements, we could face terminations and/or refunds of prepaid amounts or other credits, which could significantly affect both our current and future revenue.
+Added: If we do not effectively expand our direct sales capabilities to address these industries effectively or develop effective sales and marketing strategies for those industries, or if we focus our efforts on non-gaming industries that end up being slow adopters of our platform and solutions, our ability to increase sales of our platform and solutions to industries and for use cases outside gaming will be adversely affected.
+Added: We provide service-level agreement commitments related to certain of our Create and Grow Solutions customers.
+Added: If we fail to meet these contractual commitments, our business could be harmed.
+Added: Certain of our Create and Grow Solutions customers are entitled to service-level agreements commitments.
+Added: If we are unable to meet the stated service-level commitments, including failure to meet the uptime and response time requirements under our customer agreements, we could face terminations.
Any service-level failures could also damage our reputation, which could also adversely affect our business, financial condition and results of operations.
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Our insurance coverage may not compensate us for losses that may occur in the event of an earthquake or other significant natural disaster.
−Removed: In addition, certain of our operations could be impacted by militarization or war, discussed below.
−Removed: If any disaster were to occur, our ability to operate our business at our facilities could be impaired and we could incur significant losses, require substantial recovery time and experience significant expenditures in order to resume operations.
−Removed: If we are unable to develop adequate plans to ensure that our business functions continue to operate during and after a disaster and
+Added: In addition, certain of our operations could be impacted by
Unity Software Inc.
−Removed: to execute successfully on those plans in the event of a disaster or emergency, our business would be harmed.
−Removed: Conditions in Israel, including political unrest, militarization and war, has impacted and may further adversely affect our operations.
−Removed: Because many of the operations of Grow Solutions are conducted in Israel, many of our employees, including certain management members, are located in Israel.
+Added: militarization or war, discussed below.
+Added: If any disaster were to occur, our ability to operate our business at our facilities could be impaired and we could incur significant losses, require substantial recovery time and experience significant expenditures in order to resume operations.
+Added: If we are unable to develop adequate plans to ensure that our business functions continue to operate during and after a disaster and to execute successfully on those plans in the event of a disaster or emergency, our business would be harmed.
+Added: Conditions in Israel, including political unrest, militarization and war, have impacted and may further adversely affect our operations.
+Added: Because many of the operations of Grow Solutions are conducted in Israel, many of our employees, are located in Israel.
Political unrest, militarization, or continued war in Israel or the surrounding region has not materially impacted our operations as a whole, but has impacted our employee productivity in Israel, and may further adversely affect our business.
−Removed: Following attacks in Israel by Hamas, a U.S.
−Removed: designated terrorist organization, Israel formally declared war.
−Removed: In addition, there have also been rocket attacks by Hezbollah, also a U.S.
−Removed: designated terrorist organization, in the north of the country.
−Removed: Several hundred thousand Israeli military reservists have been drafted into immediate military service.
−Removed: If a substantial number of our employees, key members of our management team, or employees of our service providers in Israel are conscripted into military service on a prolonged basis, our operations and result of operations, particularly of our Grow Solutions, may be harmed.
+Added: As a result of the evolving geopolitical situation, several hundred thousand Israeli military reservists were drafted into immediate military service.
+Added: While most reservists were released from active service, if a substantial number of our employees, or employees of our service providers in Israel are conscripted into military service on a prolonged basis, our operations and result of operations, particularly of our Grow Solutions, may be harmed.
In the event that our facilities in Israel or facilities of providers of critical services to our operations in Israel are damaged, our ability to deliver or provide solutions and services in a timely manner to meet our contractual obligations with customers, partners and vendors and otherwise meet users' expectations, and our ability to develop our solutions in order to be competitive, could be adversely affected.
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Such efforts may impact the operations of Grow Solutions and harm our business.
−Removed: The intensity and duration of Israel’s current war against Hamas and the hostilities on the northern border are difficult to predict, as are their impacts on Israel's economy in general and on our business and operations that are conducted in Israel.
+Added: The intensity and duration of the war in the region are difficult to predict, as are its impacts on our business and operations that are conducted in Israel.
Our current operations are and will continue to be global in scope, creating a variety of operational challenges.
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Our current and future global business and operations involve a variety of risks, including:
−Removed: • slower than anticipated availability and adoption of our platform by creators outside the U.S., for example, in China where we experienced softness throughout 2023;
+Added: • slower than anticipated availability and adoption of our platform by creators outside the U.S., for example, in China where we experienced softness throughout 2023 and 2024;
• the need to adapt and localize our platform for specific countries;
1 unchanged sentence
• difficulty collecting accounts receivable and potential for longer payment cycles;
−Removed: • increased reliance on resellers and other third parties for our global expansion;
Unity Software Inc.
+Added: • increased reliance on resellers and other third parties for our global expansion;
• burdens of complying with a variety of foreign laws, including costs associated with legal structures, accounting, statutory filings and tax liabilities;
−Removed: • stringent and evolving regulations relating to privacy and data security and the unauthorized use of, or access to, commercial and personal information, particularly in Europe and China;
+Added: • stringent and evolving regulations relating to privacy and data security and the unauthorized use of, or access to, commercial and personal information, particularly in Europe and China and certain U.S.
• differing and potentially more onerous labor regulations and practices, especially in Europe;
• challenges inherent in efficiently managing, and the increased costs associated with, an increased number of employees over large geographic distances, including the need to implement appropriate systems, policies, benefits, statutory equity requirements and compliance programs that are specific to each jurisdiction;
−Removed: • unexpected changes in trade relations, regulations, laws or enforcement, including changes to export control restrictions, economic sanctions, and trade embargoes;
+Added: • changes in trade relations, particularly with China, regulations, laws or enforcement, including changes to export control restrictions, economic sanctions, and trade embargoes;
• difficulties in managing a business in new markets with diverse cultures, languages, customs, legal systems, alternative dispute systems, and regulatory systems;
16 unchanged sentences
Our Create Solutions typically include upfront purchase commitments for a one- to three-year subscription, which may be invoiced over multiple reporting periods, increasing these risks.
−Removed: We rely on payments from advertisers in order to pay our Grow Solutions customers their revenue earned from Unity Ads, LevelPlay, and Sonic.
−Removed: We are generally obligated to pay our customers for revenue earned within a negotiated period of time, regardless of whether or not our advertisers have paid us on time, or at all.
−Removed: While we attempt to negotiate a longer payment period with our customers and shorter periods for our
+Added: We rely on payments from advertisers in order to pay our Grow Solutions customers their revenue earned from our Monetization solutions.
+Added: We are generally obligated to pay our customers for revenue earned within a
Unity Software Inc.
−Removed: advertisers, we are not always successful.
+Added: negotiated period of time, regardless of whether or not our advertisers have paid us on time, or at all.
+Added: While we attempt to negotiate a longer payment period with our customers and shorter periods for our advertisers, we are not always successful.
As a result, we can face a timing issue with our accounts payable on shorter cycles than our accounts receivable, requiring us to remit payments from our own funds, and accept the risk of bad debt.
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dollars, we also face remeasurement exposure to fluctuations in currency exchange rates, which could hinder our ability to predict our future results and earnings and could materially impact our results of operations.
−Removed: As a result of the ironSource Merger, we have certain limited forward currency contracts in place to hedge foreign currency exposure, but we have not otherwise engaged in currency hedging activities to limit the risk of exchange fluctuations and, as a result, our financial condition and operating results have been and could continue to be adversely affected by such fluctuations.
+Added: We do not currently engage in currency hedging activities to limit the risk of exchange fluctuations and, as a result, our financial condition and operating results have been and could continue to be adversely affected by such fluctuations.
We may require additional capital to support the growth of our business, and this capital might not be available on acceptable terms, if at all.
We cannot be certain when or if our operations will generate sufficient cash to fully fund our ongoing operations or the growth of our business.
−Removed: We intend to continue to make investments to support our business and may require additional funds to respond to business challenges, including the need to develop new solutions, products, services or enhance our existing solutions, products or services, enhance our operating infrastructure, expand globally and acquire complementary businesses and technologies.
−Removed: Additional financing may not be available on terms favorable to us, if at all.
+Added: We intend to continue to make investments to support our business and may require additional funds to respond to business challenges, including the need to develop new solutions, products, services or enhance our existing solutions, products or services, enhance our operating infrastructure, expand globally and acquire complementary businesses and
Unity Software Inc.
−Removed: funds are not available on acceptable terms, we may be unable to invest in future growth opportunities, which could harm our business, operating results, and financial condition.
+Added: technologies.
+Added: Additional financing may not be available on terms favorable to us, if at all.
+Added: If adequate funds are not available on acceptable terms, we may be unable to invest in future growth opportunities, which could harm our business, operating results, and financial condition.
In addition, we may need to take other measures that would impact our liquidity.
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Even if we are able to raise such capital, we cannot assure you that it will enable us to achieve better operating results or grow our business.
+Added: We may fail to realize the possible platform advantages between our Create and Grow Solutions, or those advantages may take longer to realize than expected.
+Added: We believe that there are significant benefits and advantages that may be realized through leveraging our Create and Grow Solutions.
+Added: However, the efforts to realize these benefits and advantages is a complex process.
+Added: The full benefits of these advantages may not be realized as expected or may not be achieved within the anticipated time frame, or at all.
+Added: In addition, we may incur additional or unexpected costs in order to leverage the advantages of being a single platform designed to deliver value to developers across the entire lifecycle.
+Added: Failure to achieve these platform advantages could adversely affect our results of operations or cash flows, cause dilution to our earnings per share, and negatively impact our stock price.
Risks Related to Our Platform and Technology
1 unchanged sentence
Our platform can be complex to use, and our ability to expand the appeal of our platform depends in part on ensuring that it can be used by a variety of creators.
−Removed: While certain features of our solutions are designed to address the needs of professional developers, we believe that our ability to expand adoption of our platform will depend in part on our ability to address the needs of creators with varied needs and levels of expertise, including artists, animators and sound technicians, as well as new categories of creators and end users, such as architects, civil and mechanical engineers, and designers, in industries beyond gaming.
+Added: While certain features of our solutions are designed to address the needs of professional developers, we believe that our ability to expand adoption of our platform will depend in part on our ability to address the needs of creators with varied needs and levels of expertise, including artists, animators and sound technicians, as well as new categories of creators and end users in industries beyond gaming such as architects, civil and mechanical engineers, and designers.
Accordingly, it will be important to our future success that we continue to increase the accessibility of our platform and if we are not able to, our ability to increase adoption of our platform will suffer.
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If we do not provide effective training resources for our customers on how to efficiently and effectively use our platform, our ability to grow our business will suffer, and our business and results of operations may be adversely affected.
−Removed: Additionally, when we announce or release new versions of our platform or advancements in our technology, we could fail to sufficiently explain or train our customers on how to use such new versions or advancements or we may announce or release such versions prematurely.
−Removed: These failures on our part may lead to our customers being confused about use of our offerings or expected technology releases, and our ability to grow our business, results of operations, brand and reputation may be adversely affected.
+Added: Additionally, when we announce or release new versions of our platform or advancements in our technology, such as Unity 6, we could fail to sufficiently explain or train our customers on how to use such new versions or advancements or we may announce or release such versions prematurely.
+Added: These failures may lead to our customers being confused about use of our offerings or expected technology releases, and our ability to grow our business, results of operations, brand and reputation may be adversely affected.
For example, such failures have in the past led to customers expressing frustration with our platform on social media and other internet sites.
+Added: Unity Software Inc.
Interruptions, performance problems, or defects associated with our platform may adversely affect our business, financial condition, and results of operations.
2 unchanged sentences
We have experienced, and may in the future experience, disruptions, outages and other performance problems due to a variety of factors, including infrastructure changes, introductions of new functionality, human or software errors, capacity constraints due to an overwhelming number of customers accessing our platform simultaneously, denial-of-service attacks or other security-related incidents.
−Removed: Unity Software Inc.
It may become increasingly difficult to maintain and improve our performance, especially during peak usage times and as our customer base grows and our platform becomes more complex.
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We have from time to time found defects or errors in our platform, and new defects or errors in our existing platform or new solutions may be detected in the future by us or our users.
−Removed: For example, our revenue growth in the first half of 2022 was negatively impacted by challenges with certain of our Grow Solutions (including a fault in our platform that resulted in reduced accuracy of one of our monetization tools, as well as the consequences of ingesting bad data from a large customer) that reduced the efficacy of such products.
+Added: For example, in the first half of 2022, we experienced challenges with certain of our Grow Solutions (including a fault in our platform that resulted in reduced accuracy of one of our monetization tools, as well as the consequences of ingesting bad data from a large customer) that reduced the efficacy of such products.
We cannot assure you that our existing platform and new offerings will not contain defects.
3 unchanged sentences
We are increasingly building AI into certain of our offerings, and issues raised by the use of AI in our offerings may adversely affect our business, reputation, or financial results.
−Removed: We are increasingly building AI into certain of our offerings, such as Unity Muse, an expansive platform for AI-driven assistance during creation, and Unity Sentis, which allows creators to embed an AI model in the Unity Runtime for their game or application, enhancing gameplay and other functionality.
+Added: We are increasingly building AI into certain of our offerings, such as Vector, our new machine-learning model, Unity Muse, an expansive platform for AI-driven assistance during creation, and Unity Sentis, which allows creators to embed an AI model in the Unity Runtime for their game or application, enhancing gameplay and other functionality.
We continue to advance machine learning algorithms in our Grow Solutions, which are designed to enable us to provide customers with better performance.
AI technologies are complex and rapidly evolving, and we face significant competition from other companies as well as an evolving regulatory landscape.
−Removed: The evolving regulatory landscape and our product development efforts may result in new or enhanced governmental or regulatory scrutiny, litigation, ethical concerns, or other complications that could adversely affect our business, reputation, or financial results.
+Added: The evolving regulatory landscape and our product development efforts may result in new or enhanced governmental or regulatory scrutiny, litigation, ethical
+Added: Unity Software Inc.
+Added: concerns, or other complications that could adversely affect our business, reputation, or financial results.
For example, the use of datasets to develop and be referenced by AI models, the content generated by AI systems, or the application of AI systems may be found to be insufficient, offensive, biased, or harmful, or violate current or future laws and regulations or third-party rights.
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Our solutions that use AI could fail to achieve market acceptance, or our competitors may use AI technologies more efficiently than we do.
−Removed: We may incur significant costs and may
−Removed: Unity Software Inc.
−Removed: not achieve any significant revenue from these offerings.
+Added: We may incur significant costs and may not achieve any significant revenue from these offerings.
Any of these factors could adversely affect our business, reputation, or financial results.
−Removed: If we or our third-party service providers experience a security breach or unauthorized parties otherwise obtain access to our customers' data, our data, or our platform, our platform may be perceived as not secure, our reputation may be harmed, our business operations may be disrupted, demand for our solutions may be reduced, and we may incur significant liabilities.
−Removed: Operating our business and platform involves the collection, storage and transmission of sensitive, proprietary and confidential information, including personal information of our personnel, customers and their end users, our proprietary and confidential information and the confidential information we collect from our partners, customers and creators.
−Removed: Cyber-attacks, malicious internet-based activity, online and offline fraud, and other similar activities threaten the confidentiality, integrity, and availability of our sensitive information and information technology systems, and those of the third parties upon which we rely.
+Added: If we or the third parties with whom we work experience a security breach or unauthorized parties otherwise obtain access to our customers' data, our data, or our platform, our platform may be perceived as not secure, our reputation may be harmed, our business operations may be disrupted, demand for our solutions may be reduced, and we may incur significant liabilities.
+Added: Operating our business and platform involves the collection, processing, storage and transmission of sensitive, proprietary and confidential information, including personal information of our personnel, customers and their end users, our proprietary and confidential information and the confidential information we collect from our partners, customers and creators.
+Added: Cyber-attacks, malicious internet-based activity, online and offline fraud, and other similar activities threaten the confidentiality, integrity, and availability of our sensitive information and information technology systems, and those of the third parties with whom we work.
Such threats are prevalent and continue to rise, are increasingly difficult to detect, and come from a variety of sources, including traditional computer "hackers," threat actors, "hacktivists" organized criminal threat actors, personnel (such as through theft, misuse, or accident), sophisticated nation states, and nation-state-supported actors.
+Added: During times of war and other major conflicts, we, the third parties with whom we work, and our customers may be vulnerable to a heightened risk of these attacks, including retaliatory cyber-attacks, that could materially disrupt our systems and operations, supply chain, and ability to produce, sell and distribute our services.
For example, the increased hostilities and militarization in and around Israel, where a significant part of our Grow Solutions operations is based, may lead to an increase in politically motivated cyber-attacks which could impact our operations and harm our business.
−Removed: We and the third parties upon which we rely are subject to a variety of constantly evolving threats, including but not limited to, computer malware (including as a result of advanced persistent threat intrusions), software bugs and vulnerabilities, malicious code, viruses and worms, social engineering (including spear phishing and ransomware attacks), denial-of-service attacks (such as credential stuffing attacks), credential harvesting, personnel misconduct or error, supply chain attacks server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, telecommunications failures, and other similar threats.
−Removed: Such incidents have become more prevalent in our industry in recent years and the emergence of new AI technologies presents risks of further vulnerabilities.
+Added: We and the third parties with whom we work are subject to a variety of constantly evolving threats, including but not limited to, computer malware (including as a result of advanced persistent threat intrusions), software bugs and vulnerabilities, malicious code, viruses and worms, social engineering (including through deep fakes, which are increasingly more difficult to identify as fake, spear phishing and ransomware attacks), denial-of-service attacks, credential stuffing attacks, credential harvesting, personnel misconduct or error, supply chain attacks server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, telecommunications failures, attacks enhanced or facilitated by AI and other similar threats.
+Added: Such threats have become more prevalent in our industry in recent years and the emergence of new AI technologies presents risks of further vulnerabilities.
For example, attempts by malicious actors to fraudulently induce our personnel into disclosing usernames, passwords or other information that can be used to access our systems have increased and could be successful.
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Extortion payments may alleviate the negative impact of a ransomware attack, but we may be unwilling or unable to make such payments due to, for example, applicable laws or regulations prohibiting payments.
−Removed: Our security measures could also be compromised by personnel, theft or errors, or be insufficient to prevent harm resulting from security vulnerabilities in software or systems on which we rely.
+Added: Our security measures could also be
+Added: Unity Software Inc.
+Added: compromised by personnel, theft or errors, and have been in the past and may in the future be insufficient to prevent harm resulting from security vulnerabilities in software or systems on which we rely.
Additionally, our remote workforce poses increased risks to our IT assets and data.
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Moreover, AI/ML models may create incomplete, inaccurate, or otherwise flawed outputs, some of which may appear correct.
+Added: This may happen if the inputs that the model relied on were inaccurate, incomplete or flawed (including if a bad actor "poisons" the AI/ML with bad inputs or logic), or if the logic of the AI/ML is flawed (a so-called "hallucination").
We may use AI/ML outputs to make certain decisions.
−Removed: Due to these potential flaws, the model could lead us to make decisions that could bias certain individuals or
−Removed: Unity Software Inc.
−Removed: classes of individuals and adversely impact their rights.
+Added: Due to these potential inaccuracies or flaws, the model could lead us to make decisions that could bias certain individuals or classes of individuals and adversely impact their rights.
As a result, we could face adverse consequences, including exposure to reputational and competitive harm, customer loss, and legal liability.
Such incidents have occurred in the past, and may occur in the future, resulting in unauthorized, unlawful or inappropriate access to, inability to access, disclosure of or loss of the sensitive, proprietary and confidential information that we handle.
−Removed: For example, like many companies, we use Log4j with respect to certain software or systems to log security and performance information.
+Added: We take steps designed to detect, mitigate, and remediate vulnerabilities in our information security systems, but we have not always been, and may in the future not be, able to detect, mitigate, and remediate all such vulnerabilities.
+Added: As one example, like many companies, we use Log4j with respect to certain software or systems to log security and performance information.
A vulnerability in Log4j was discovered in late 2021 and widely exploited by threat actors, and, upon learning of this vulnerability, we made updates to our offerings and infrastructure intended to reduce risks associated with the vulnerability.
−Removed: Investigations into potential incidents occur on a regular basis as part of our security program.
+Added: Investigations into potential incidents occur as part of our security program.
+Added: Moreover, we have experienced and may in the future experience delays in developing and deploying remedial measures and patches designed to address any identified vulnerabilities.
Security incidents could also damage our IT systems, our ability to provide our products and services, and our ability to make the financial reports and other public disclosures required of public companies.
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In the course of providing their services, these third parties may support or operate critical business systems for us or store or process personal, sensitive, proprietary and/or confidential information on our behalf.
−Removed: These third-party providers may not have adequate security measures and have experienced and could experience in the future security incidents that compromise the confidentiality, integrity or availability of the systems they operate for us or the information they process on our behalf.
+Added: Our ability to monitor these third parties' information security practices is limited and these third-party providers may not have adequate security measures and have experienced and could experience in the future security incidents that compromise the confidentiality, integrity or availability of the systems they operate for us or the information they process on our behalf.
Such occurrences could adversely affect our business to the same degree as if we had experienced these occurrences directly and we may not have recourse to the responsible third parties for the resulting liability we incur.
−Removed: Because there are many different cybercrime and hacking techniques and such techniques continue to evolve, we may be unable to anticipate attempted security breaches, react in a timely or effective manner or implement adequate preventative measures.
−Removed: While we have developed systems and processes designed to protect the integrity, confidentiality and security of our and our customers' confidential, proprietary, and personal information under our control, we cannot assure you that any security measures that we or our third-party service providers have implemented will be effective against current or future security threats.
+Added: We employ a shared responsibility model where our customers are responsible for using, configuring and otherwise implementing security measures related to our platform, services and products in a manner that meets applicable cybersecurity standards, complies with laws, and addresses their information security risk.
+Added: As part of this shared responsibility security model, we make certain security features available to our customers that can be implemented at our customers' discretion, or identify security areas or measures for which our customers are responsible.
+Added: For example, our customers are responsible for implementing multi-factor authentication to access their accounts.
+Added: In certain cases where our customers choose not to implement, or incorrectly implement, those features or measures, misuse
+Added: Unity Software Inc.
+Added: our services, or otherwise experience their own vulnerabilities, policy violations, credential exposure or security breaches, even if we are not the cause of a resulting customer security issue or incident, our customer relationships reputation, and revenue may be adversely impacted.
+Added: Because there are many different cybercrime and hacking techniques and such techniques continue to evolve, we have in the past been and may in the future be unable to anticipate attempted security breaches, react in a timely or effective manner or implement adequate preventative measures.
+Added: While we have developed systems and processes designed to protect the integrity, confidentiality and security of our and our customers' confidential, proprietary, and personal information under our control or under the control of third parties with whom we work, we cannot assure you that any security measures that we or our third-party service providers have implemented has been or will in the future be effective against current or future security threats.
A security breach or other security incident, or the perception that one has occurred, could result in a loss of customer confidence in the security of our platform and damage to our reputation and brand, reduce demand for our solutions, disrupt normal business operations, require us to incur material costs to investigate and remedy the incident and prevent recurrence, expose us to litigation, regulatory enforcement action, fines, penalties and damages and adversely affect our business, financial condition and results of operations.
These risks are likely to increase as we continue to grow and process, store and transmit an increasingly large volume of data.
−Removed: We have contractual and legal obligations to notify relevant stakeholders of security breaches.
+Added: We have contractual and legal obligations to notify relevant stakeholders of security breaches or to take other actions, such as providing credit monitoring and identifying theft protection services.
Most jurisdictions have enacted laws requiring companies to notify individuals, regulatory authorities and others of security breaches involving certain types of data.
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Additionally, we cannot be certain that our insurance coverage will be adequate for data security liabilities actually incurred, will cover any indemnification claims against us relating to any incident, will continue to be available to us on economically reasonable terms, or at all, or that any insurer will not deny coverage as to any future claim.
−Removed: The successful assertion of one or more large claims against us that
−Removed: Unity Software Inc.
−Removed: exceed available insurance coverage, or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could adversely affect our reputation, business, financial condition and results of operations.
+Added: The successful assertion of one or more large claims against us that exceed available insurance coverage, or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could adversely affect our reputation, business, financial condition and results of operations.
In addition, we continue to expend significant costs to seek to protect our platform and solutions and to introduce additional security features for our customers, and we expect to continue to have to expend significant costs in the future.
Any increase in these costs will adversely affect our business, financial condition and results of operations.
−Removed: If we fail to timely release updates and new features to our platform and adapt and respond effectively to rapidly changing technology, evolving industry standards, changing regulations, or changing customer needs, requirements, or preferences, our platform may become less competitive.
−Removed: The market in which we compete is subject to rapid technological change, evolving industry standards, and changing regulations, as well as changing customer needs, requirements and preferences.
−Removed: The success of our business will depend, in part, on our ability to adapt and respond effectively to these changes on a timely basis.
−Removed: For example, Apple has announced that it is working with us to further develop its Vision Pro offerings.
−Removed: If Apple's Vision Pro fails to gain market acceptance, or if our offerings used to advance Vision Pro fail to perform properly, our business could be harmed.
−Removed: Similarly, emerging technologies like artificial intelligence could impact the way that customers utilize our solutions as well as enhance the functionality of our solutions.
−Removed: Accordingly, our ability to increase our revenue depends in large part on our ability to maintain, improve and differentiate our existing platform and introduce new functionality promptly and effectively.
−Removed: We must continue to improve existing features and add new features and functionality to our platform in order to retain our existing customers and attract new ones.
−Removed: For example, if the technology underlying our high-definition rendering pipeline or our graphics, animation and audio tools become obsolete or do not address the needs of our customers, our business would suffer.
−Removed: Revenue growth from our offerings depends on our ability to continue to develop and offer effective features and functionality for our customers and to respond to frequently changing privacy and data security laws and regulations, policies, and end-user demands and expectations, which will require us to incur additional costs to implement.
−Removed: If we do not continue to improve our platform with additional features and functionality in a timely fashion, or if intended improvements to our platform are ineffective or otherwise not well received by customers, our revenue could be adversely affected.
−Removed: If we fail to deliver timely releases of our solutions that are ready for commercial use, release a new version, service, tool or update with material errors, or are unable to enhance our platform to keep pace with rapid technological and regulatory changes or respond to new offerings by our competitors, or if new technologies emerge that are able to deliver competitive solutions at lower prices, more efficiently, more conveniently or more securely than our solutions, or if new operating systems, gaming platforms or devices are developed and we are unable to support our customers' deployment of games and other applications onto those systems, platforms or devices, our business, financial condition and results of operations could be adversely affected.
Our business depends on the interoperability of our solutions across third-party platforms, operating systems, and applications, and on our ability to ensure our platform and solutions operate effectively on those platforms.
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Our customers rely on our solutions to create and simultaneously deploy content to a variety of third-party platforms.
−Removed: Similarly, we and our customers also rely on our solutions' interoperability with third-party platforms in order to deliver services.
+Added: Similarly, we and our customers also rely on our solutions' interoperability with third-party platforms in order to deliver
+Added: Unity Software Inc.
Currently, we support and have strategic partnerships with over 20 such platforms.
Third-party platforms are constantly evolving, and we may not be able to modify our solutions to assure compatibility with that of other third parties following development changes within a timely manner.
−Removed: For example, third-
−Removed: Unity Software Inc.
−Removed: party platforms frequently deploy updates to their hardware or software and modify their system requirements.
+Added: For example, third-party platforms frequently deploy updates to their hardware or software and modify their system requirements.
The success of our business depends on our ability to incorporate these updates to third-party licensed software into our technology, effectively respond to changes to device and operating system platform requirements, and maintain our relationships with third-party platforms.
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We currently serve our users from co-located data centers in the U.S.
−Removed: We also use various third-party cloud hosting providers such as Google Cloud, AWS and Tencent to provide cloud infrastructure for our platform.
+Added: We also use various third-party cloud hosting providers such as Google Cloud, AWS, Azure, and Tencent to provide cloud infrastructure for our platform.
Our Create Solutions and Grow Solutions rely on the operations of this infrastructure.
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We will not be able to protect our intellectual property rights if we are unable to enforce our rights or if we do not detect unauthorized use of our intellectual property rights.
−Removed: If we fail to protect our intellectual property rights adequately, or fail to continuously innovate and advance our technology, our competitors could gain access to our proprietary technology and develop and commercialize substantially identical products, services or technologies.
−Removed: In addition, defending our intellectual property rights might entail significant
+Added: If we fail to protect our intellectual property
Unity Software Inc.
+Added: rights adequately, or fail to continuously innovate and advance our technology, our competitors could gain access to our proprietary technology and develop and commercialize substantially identical products, services or technologies.
+Added: In addition, defending our intellectual property rights might entail significant expense.
Any patents, trademarks or other intellectual property rights that we have or may obtain may be challenged or circumvented by others or invalidated or held unenforceable through administrative processes.
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In order to protect our intellectual property rights, we may be required to spend significant resources to monitor and protect our intellectual property rights.
−Removed: Litigation may be necessary in the future to enforce our intellectual property rights, such as rights under our software licenses, and to protect our trade secrets.
+Added: For example, we have commenced in the past and may in the future commence litigation proceedings to enforce our intellectual property rights, such as rights under our software licenses, and to protect our trade secrets.
Litigation brought to protect and enforce our intellectual property rights could be costly, time-consuming and distracting to management, and could result in the impairment or loss of portions of our intellectual property.
Further, our efforts to enforce our intellectual property rights may be met with defenses, counterclaims and countersuits attacking the validity and enforceability of our intellectual property rights, and if such defenses, counterclaims or countersuits are successful, we could lose valuable intellectual property rights.
−Removed: Our inability to enforce our unique licensing structure, including financial eligibility tiers, and our inability to protect our proprietary technology against unauthorized copying or use, including circumvention of licensing or usage restrictions as well as any costly litigation or diversion of our management's attention and resources, could delay further sales or the implementation of our solutions, impair the functionality of our platform, delay introductions of new solutions, result in our substituting inferior or more costly technologies into our offerings, or injure our reputation.
+Added: Our inability to enforce our unique licensing structure, including financial eligibility tiers, and our inability to protect our proprietary technology against unauthorized copying or use, including circumvention of licensing or usage restrictions as well as any costly litigation or diversion of our management's attention and resources, could delay further sales or the implementation of our solutions,
Unity Software Inc.
+Added: impair the functionality of our platform, delay introductions of new solutions, result in our substituting inferior or more costly technologies into our offerings, or injure our reputation.
We license and make available software to customers.
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In addition, we may need to settle litigation and disputes on terms that are unfavorable to us.
−Removed: Although we carry general liability insurance and patent infringement insurance, our insurance may not cover potential claims of this type or may not be adequate to indemnify us for all liability that may be imposed.
+Added: Although we carry general liability insurance, our insurance may not cover potential claims of this type or may not be adequate to indemnify us for all liability that may be imposed.
We cannot predict the outcome of lawsuits and cannot ensure that the results of any such actions will not have an adverse effect on our business, financial condition or results of operations.
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• obtain a license, which may not be available on reasonable terms or at all, to sell or use the relevant technology;
−Removed: • redesign or rebrand the allegedly infringing solutions to avoid infringement, misappropriation or violation, which could be costly, time-consuming or impossible.
Unity Software Inc.
+Added: • redesign or rebrand the allegedly infringing solutions to avoid infringement, misappropriation or violation, which could be costly, time-consuming or impossible.
Even if the claims do not result in litigation or are resolved in our favor, there could be public announcements of the results of hearings, motions or other interim proceedings or developments and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common stock.
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Changes in our management team could disrupt our business.
−Removed: We also are dependent on the continued service of our existing software engineers because of the complexity of our solutions.
−Removed: The loss of one or more members of our senior management or key employees could harm our business, and we may not be able to find adequate replacements.
−Removed: For example, in October 2023 John Riccitiello retired from his prior role as our President and Chief Executive Officer and resigned from our board of directors.
−Removed: Our board of directors appointed James Whitehurst as Interim Chief Executive Officer and a member of our board of directors.
−Removed: Our board of directors is currently engaged in a search process for a permanent Chief Executive Officer and any inability to successfully transition the Chief Executive Officer role and/or attract a permanent successor for such role could adversely impact our business.
−Removed: Additionally, we cannot ensure that we will be able to retain the services of any members of our senior management or key employees.
+Added: For example, we've recently experienced significant management turnover, including the recent appointment of Jarrod Yahes as our Senior Vice President and Chief Financial Officer.
+Added: Any inability to successfully manage executive transitions, retain senior executives or key employees, or find adequate replacements, could disrupt our operations and harm our business.
+Added: In addition, we must attract and retain highly qualified personnel, such as software engineers because of the complexity of our solutions.
+Added: We have had difficulty quickly filling certain open positions in the past, and despite reevaluating our headcount needs, slowing down our hiring efforts, and reducing our
Unity Software Inc.
−Removed: In addition, we must attract and retain highly qualified personnel.
−Removed: We have had difficulty quickly filling certain open positions in the past, and despite recently reevaluating our headcount needs, slowing down our hiring efforts, and reducing our headcount, we expect to have significant future hiring needs.
−Removed: Competition is intense, particularly in the San Francisco Bay Area, Tel Aviv, and other areas in which we have offices, for engineers experienced in designing and developing cloud-based platform solutions, data scientists with experience in machine learning and artificial intelligence and experienced sales professionals.
−Removed: As a global workforce, we must align our company values across employees from different cultures and value systems.
+Added: headcount in 2024, we expect to have future hiring needs.
+Added: Competition is intense, particularly in the San Francisco Bay Area, Tel Aviv, and other areas in which we have offices, for engineers experienced in designing and developing cloud-based platform solutions, data scientists and machine learning engineers with experience in machine learning and artificial intelligence and experienced sales professionals.
+Added: New hires require training and take time before they achieve full productivity.
+Added: New employees may not become as productive as we expect, and we may be unable to hire or retain sufficient numbers of qualified individuals.
+Added: And, as a global workforce, we must align our company values across employees from different cultures and value systems, and often with employees who are geographically remote from one another.
Failure to successfully create a cohesive company culture could harm our ability to attract and retain talent.
1 unchanged sentence
If the perceived or actual value of our equity awards declines, it may not be as effective an incentive for attracting, retaining, and motivating employees.
−Removed: New hires require training and take time before they achieve full productivity.
−Removed: New employees may not become as productive as we expect, and we may be unable to hire or retain sufficient numbers of qualified individuals.
If we fail to attract new personnel or fail to retain and motivate our current personnel, our business and future growth prospects would be harmed.
9 unchanged sentences
Risks Related to Laws, Regulations, and the Global Economy
−Removed: We are subject to rapidly changing and increasingly stringent laws, regulations, and industry standards relating to privacy, data security, and the protection of children.
+Added: We and the third parties with whom we work are subject to rapidly changing and increasingly stringent laws, regulations, contractual obligations, industry standards and other obligations relating to privacy and, data security, and the protection of children.
The restrictions and costs imposed by these requirements, or our actual or perceived failure to comply with them, could harm our business.
−Removed: Our offerings, and particularly our Grow Solutions, rely on our ability to process sensitive, proprietary, confidential, and regulated information, including personal information, that belongs to us or that we handle on behalf of others such as our customers.
+Added: Our offerings, and particularly our Grow Solutions, rely on our ability to process sensitive, proprietary, confidential, and regulated information, including personal information, that belongs to us or that we, or the third parties with whom we work, handle on behalf of others such as our customers.
These activities are regulated by an increasing number of various federal, state, local, and foreign privacy and data security laws and regulations.
2 unchanged sentences
Unity Software Inc.
+Added: As we embark on a comprehensive rebuild of our machine learning stack and data infrastructure, we may encounter challenges in complying with data privacy and similar laws aimed at regulating technology.
Most jurisdictions in which we or our customers operate have adopted privacy and data security laws.
1 unchanged sentence
Regulators, courts, and platforms have increasingly interpreted the GDPR and other privacy and data security laws as requiring affirmative opt-in consent to use cookies and similar technologies for personalization, advertising, and analytics.
−Removed: Proposed regulations could also impose onerous obligations related to AI, the use of cookies and other online tracking technologies on which our offerings rely, and online direct marketing.
−Removed: Any of these could increase our exposure to regulatory enforcement actions, increase our compliance costs, and adversely affect our business.
−Removed: In addition, certain jurisdictions have enacted laws that may require data localization and have imposed requirements for cross-border transfers of personal information.
−Removed: For example, the cross-border transfer landscape in Europe remains unstable despite an agreement between the U.S.
+Added: Existing and proposed regulations could also impose onerous obligations related to AI, the use of cookies and other online tracking technologies on which our offerings rely, and online direct marketing.
+Added: Any of these could increase our exposure to litigation or regulatory enforcement actions, increase our compliance costs, and adversely affect our business.
+Added: In addition, certain jurisdictions may enact or have already enacted data localization cross-border data transfer laws.
+Added: For example, the cross-border data transfer landscape in Europe remains unstable despite an agreement between the U.S.
and Europe, and other countries outside of Europe have enacted or are considering enacting cross border data transfer restrictions and laws requiring data residency.
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In addition, the California Consumer Privacy Act ("CCPA"), which applies to personal information of consumers, business representatives, employees, and other individuals with whom we interact, imposes a number of obligations on covered businesses, including requirements to respond to requests from California residents related to their personal information.
−Removed: The CCPA contains significant potential penalties for noncompliance (up to $7,500 per violation).
+Added: The CCPA contains significant potential penalties for noncompliance.
Additionally, the California Privacy Rights Act expanded the CCPA's requirements, including by adding new rights and establishing a new regulatory agency to implement and enforce the law.
1 unchanged sentence
Our actual or perceived noncompliance with these and other emerging state laws could harm our business.
+Added: Unity Software Inc.
We also use AI, including generative AI, and ML technologies in our products and services.
2 unchanged sentences
Several jurisdictions worldwide, including Europe and certain U.S.
−Removed: states, have proposed or
−Removed: Unity Software Inc.
−Removed: enacted laws governing AI/ML.
+Added: states, have proposed or enacted laws governing AI/ML.
For example, the European Union is deliberating over legislation that would impose obligations on various actors in the AI value chain, and we expect other jurisdictions will adopt similar laws.
Additionally, certain privacy and data security laws extend rights to consumers and regulate automated decision making in ways that may be incompatible with our use of AI/ML.
−Removed: These obligations may make it harder for us to conduct our business using AI/ML, lead to regulatory fines or penalties, require us to change our business practices, retrain our AI/ML, delete our models, or prevent or limit our use of AI/ML.
−Removed: For example, the FTC has required other companies to turn over (or disgorge) valuable insights or trainings generated through the use of AI/ML, as well as to delete algorithms and models derived from or trained on allegedly unlawfully collected data, where it has alleged the company has violated privacy and consumer protection laws.
+Added: These obligations may make it harder for us to conduct our business using AI/ML, lead to litigation or regulatory fines or penalties, require us to change our business practices, retrain our AI/ML, delete our models, or prevent or limit our use of AI/ML.
+Added: For example, the FTC has required other companies to delete algorithms and models derived from or trained on allegedly unlawfully collected data, where it has alleged the company has violated privacy or consumer protection laws.
If we cannot use AI/ML or that use is restricted, our business may be less efficient, and we may be at a competitive disadvantage.
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Another area of increasing focus by regulators is children's privacy.
−Removed: Enforcement of longstanding privacy laws, such as the Children's Online Privacy Protection Act ("COPPA"), has increased and may continue under the new generation of privacy and data security laws and regulations, such as the GDPR, CCPA, the UK's Information Commissioner's Office Age-Appropriate Design Code ("Children's Code"), and the California Age-Appropriate Design Code Act ("Design Code").
+Added: Enforcement of longstanding privacy laws, such as the Children's Online Privacy Protection Act ("COPPA"), has increased and may continue under the new generation of privacy and data security laws and regulations, such as the GDPR, CCPA, the UK's Information Commissioner's Office Age-Appropriate Design Code ("Children's Code"), and the California Age-Appropriate Design Code Act ("Design Code"), and similar laws enacted by other U.S.
European regulators are expected to introduce guidance for age appropriate design across all countries implementing the GDPR as well.
1 unchanged sentence
In addition to increasing government regulation, we have obligations relating to privacy and data security under our published policies and documentation, contracts and applicable industry standards.
−Removed: For example, we may also be subject to the Payment Card Industry Data Security Standard ("PCI DSS"), which requires companies to adopt certain measures to ensure the security of cardholder information, including using and maintaining firewalls, adopting proper password protections for certain devices and software, and restricting data access.
+Added: For example, we are subject to the Payment Card Industry Data Security Standard ("PCI DSS"), which requires companies to adopt certain measures to ensure the security of cardholder information, including using and maintaining firewalls, adopting proper password protections for certain devices and software, and restricting data access.
Noncompliance with PCI-DSS can result in penalties ranging from $5,000 to $100,000 per month by credit card companies, litigation, damage to our reputation, and revenue losses.
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Similarly, Google announced similar plans to adopt additional privacy controls on its Android devices to allow users to limit sharing of their data with third parties and reduce cross-device tracking for advertising purposes.
−Removed: Additionally, Google has announced that it intends to phase out third-party cookies in its Chrome browser, which could make it more difficult for us to target advertisements.
−Removed: Other browsers, such as Firefox and Safari, have already adopted similar measures.
+Added: Additionally, Google has announced that it intends to phase out third-party cookies in its Chrome browser, which could make it more difficult for
Unity Software Inc.
+Added: us to target advertisements.
+Added: Other browsers, such as Firefox and Safari, have already adopted similar measures.
In addition, legislative proposals and present laws and regulations regulate the use of cookies and other tracking technologies, electronic communications, and marketing.
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Individuals are now more aware of options related to consent, "do not track" mechanisms (such as browser signals from the Global Privacy Control), and "ad-blocking" software to prevent the collection of their personal information for targeted advertising purposes.
−Removed: As a result, we may be required to change the way we market our offerings, and any of these developments or changes could materially impair our ability to reach new or existing customers or otherwise negatively affect our operations.
+Added: As a result, we have been and may be required to change the way we market our offerings, and any of these developments or changes could materially impair our ability to reach new or existing customers or otherwise negatively affect our operations.
Although we endeavor to comply with these obligations, we may have actually or allegedly failed to do so or have otherwise processed data improperly.
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export control regulations relating to China have created restrictions with respect to the sale of our solutions to various Chinese customers and further changes to regulations could result in additional restrictions.
−Removed: Additionally, proposed restrictions in the U.S.
−Removed: on outbound investment may impair our ability to support our subsidiaries in China, including our majority owned joint venture.
China also regulates the gaming industry, including on mobile and other games which has impacted our growth rates and any changes by the Chinese government with respect to the gaming industry could have a negative impact on our business.
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We are subject to governmental export and import controls and economic sanctions laws that could impair our ability to compete in global markets or subject us to liability if we violate the controls.
−Removed: Various countries in which we operate regulate the import and export of certain encryption and other technology, including import and export licensing requirements, and have enacted laws that could
+Added: Various countries in which we operate regulate the import and export of certain encryption and other technology, including import and export licensing requirements, and have enacted laws that could limit our ability to distribute our solutions or could limit our customers' ability to implement our solutions in those countries.
+Added: Our products and services are subject to export controls and economic sanctions laws
Unity Software Inc.
−Removed: limit our ability to distribute our solutions or could limit our customers' ability to implement our solutions in those countries.
−Removed: Our products and services are subject to export controls and economic sanctions laws and regulations of the United States and potentially other jurisdictions in which we have operations.
+Added: and regulations of the United States and potentially other jurisdictions in which we have operations.
Compliance with such laws and regulations can be time-consuming and may result in the delay or loss of sales opportunities.
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• changes in the relative amounts of income before taxes in the various jurisdictions in which we operate that have differing statutory tax rates;
−Removed: • changes in tax laws, tax treaties, and regulations or the interpretation of them, including Pillar One and Pillar Two related taxes as proposed by the OECD and which are being implemented by many jurisdictions in which we operate beginning in 2024.
−Removed: At this time, we do not expect Pillar 2 legislation to have a material impact to our consolidated financial statement;
+Added: • changes in tax laws, tax treaties, and regulations or the interpretation of them, including Pillar One and Pillar Two related taxes as proposed by the Organization for Economic Co-operation and Development (the "OECD") and which began to be implemented by many jurisdictions in which we operate in 2024.
+Added: At this time, we do not expect Pillar Two legislation to have a material impact to our consolidated financial statements;
• changes to our assessment of our ability to realize our deferred tax assets that are based on estimates of our future results, the feasibility of possible tax planning strategies, and the economic and political environments in which we do business;
10 unchanged sentences
As of December 31, 2024, we had net operating loss ("NOL") carryforwards for U.S.
−Removed: federal, state, and foreign purposes of $642 million, $398 million, and $936 million, respectively, which may be available to offset taxable income in the future, and portions of which expire in various years beginning in 2025.
−Removed: A lack of future taxable income would adversely affect our ability to utilize a portion of these NOLs before they expire.
−Removed: Under the current law, federal NOLs incurred in tax years beginning after December 31, 2017, may be carried forward indefinitely, but the deductibility of such federal NOLs, is limited to 80% of taxable income.
+Added: federal, state, and foreign purposes of $619 million, $472 million, and $1.0 billion, respectively, which may be available to offset taxable income in the future, and portions of which expire in various years beginning in 2026.
+Added: A lack of future taxable income would adversely affect our ability to utilize a portion of these NOL carryforwards before they expire.
+Added: federal NOLs incurred in tax years beginning after December 31, 2017, may be carried forward indefinitely, but such federal NOL carryforwards are permitted to be used in any taxable year to offset only up to 80% of taxable income in such year.
In addition, under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the "Code"), a corporation that undergoes an "ownership change" (as defined under Section 382 of the Code and applicable Treasury Regulations) is subject to limitations on its ability to utilize its pre-change NOL carryforwards and certain other tax attributes to offset post-change taxable income or taxes.
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Furthermore, our ability to utilize NOL carryforwards of companies that we have acquired or may acquire in the future may be subject to limitations.
−Removed: In addition, at the state level, there may be periods during which the use of NOL carryforwards is suspended or otherwise limited, which could accelerate or permanently increase state taxes owed.
−Removed: For these reasons, we may not be able to
+Added: In addition, at the state level, there may be periods during which the use of NOL carryforwards is suspended or otherwise limited, which could accelerate or permanently increase state
Unity Software Inc.
−Removed: utilize all of the NOLs, even if we attain profitability, which could potentially result in increased future tax liability to us and could adversely affect our operating results and financial condition.
+Added: For these reasons, we may not be able to utilize all of our NOL carryforwards, even if we attain profitability, which could potentially result in increased future tax liability to us and could adversely affect our operating results and financial condition.
The tax benefits that are available to us require us to continue to meet various conditions and may be terminated or reduced in the future, which could increase our costs and taxes.
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federal government and its agencies, such as the Federal Trade Commission ("FTC"), U.S.
−Removed: states and state agencies or foreign jurisdictions, which may vary significantly across jurisdictions, could require that certain game content be modified or removed from games, increase the
+Added: states and state agencies or foreign jurisdictions, which may vary significantly across
Unity Software Inc.
−Removed: costs of operating our customer's games, impact player engagement and thus the functionality and effectiveness of our Grow Solutions or otherwise harm our business performance.
+Added: jurisdictions, could require that certain game content be modified or removed from games, increase the costs of operating our customer's games, impact player engagement and thus the functionality and effectiveness of our Grow Solutions or otherwise harm our business performance.
For example, one of our acquired products within our Grow Solutions, Tapjoy's Offerwall, is subject to certain obligations under a consent order which resulted from an FTC investigation.
15 unchanged sentences
Our Notes and the issuance of shares of our common stock upon conversion of the Notes, if any, may impact our financial results, result in dilution to our stockholders, create downward pressure on the price of our common stock, and restrict our ability to raise additional capital or to engage in a beneficial takeover.
−Removed: In November 2022, we issued $1.0 billion in aggregate principal amount of 2.0% convertible senior notes due 2027 (the "2027 Notes"), and in November 2021 we issued $1.7 billion in aggregate principal amount of 0% convertible senior notes due 2026 (the "2026 Notes," together with the 2027 Notes, the "Notes").
+Added: In November 2022, we issued $1.0 billion in aggregate principal amount of 2.0% convertible senior notes due 2027 (the "2027 Notes"), and in November 2021, we issued approximately $1.7 billion in aggregate principal amount of 0% convertible senior notes due 2026 (the "2026 Notes," together with the 2027 Notes, the "Notes").
+Added: In March 2024, we repurchased approximately $480 million aggregate principal amount of our 2026 Notes in privately negotiated transactions with holders of the 2026 Notes and as of December 31, 2024, we had approximately $1.2 billion aggregate principal amount of 2026 Notes outstanding.
We are subject to a variety of risks related to the Notes, such as:
• servicing our debt requires a significant amount of cash, and we may not have sufficient cash flow from our business to pay our substantial debt, and our ability to make scheduled payments of the principal and interest, or to refinance or repurchase our Notes depends on our future performance, which is subject to economic, financial, competitive and other factors beyond our control;
−Removed: • our ability to refinance or repurchase our indebtedness will depend on the capital markets and our financial condition at such time, and if we are unable to engage in any of these activities or engage in these activities on desirable terms, we may be unable to meet the obligations of our Notes;
Unity Software Inc.
+Added: • our ability to refinance or repurchase our indebtedness will depend on the capital markets and our financial condition at such time, and if we are unable to engage in any of these activities or engage in these activities on desirable terms, we may be unable to meet the obligations of our Notes;
• if shares of our common stock are issued to the holders of the Notes upon conversion, there will be dilution to our stockholders' equity and the market price of our common stock may decrease due to the additional selling pressure in the market.
1 unchanged sentence
• certain provisions in the indentures governing the Notes may delay or prevent an otherwise beneficial takeover attempt of us;
−Removed: • We may from time to time seek to retire or purchase our outstanding debt, including the Notes, through cash purchases and/or exchanges for equity securities, in open market purchases, privately negotiated transactions or otherwise.
+Added: • we may from time to time seek to retire or purchase our outstanding debt, including the Notes, through cash purchases and/or exchanges for other securities, in open market purchases, privately negotiated transactions or otherwise.
Such repurchases or exchanges, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions, and other factors.
1 unchanged sentence
Further, any such purchases or exchanges may result in us acquiring and retiring a substantial amount of such indebtedness, which could impact the trading liquidity of such indebtedness;
−Removed: • the conditional conversion feature of the Notes, if triggered, may adversely affect our liquidity if we are required to settle a portion or all of our conversion obligation through the payment of cash.
+Added: • the conditional conversion feature of the 2026 Notes, if triggered, and the conversion feature of the 2027 Notes may adversely affect our liquidity if we elect or are required to settle a portion or all of our conversion obligation through the payment of cash.
+Added: The conditional conversion feature of the 2026 Notes, if triggered, and the conversion feature of the 2027 Notes may adversely affect our financial condition and operating results.
+Added: In the event the conditional conversion feature of the 2026 Notes is triggered, holders of the 2026 Notes will be entitled under the indenture governing the 2026 Notes to convert their 2026 Notes at any time during specified periods at their option.
+Added: Holders of the 2027 Notes are entitled under the indenture governing the 2027 Notes to convert their 2027 Notes at any time prior to maturity.
+Added: If one or more holders elect to convert their 2026 Notes, unless we elect to satisfy our conversion obligation by delivering solely shares of our common stock (other than paying cash in lieu of delivering any fractional share), we would be required to settle a portion or all of our conversion obligation through the payment of cash, which could adversely affect our liquidity.
+Added: As of December 31, 2024, the 2026 Notes were not convertible at the option of the holder.
+Added: In addition, even if holders do not elect to convert their 2026 Notes, we could be required under applicable accounting rules to classify or reclassify all or a portion of the outstanding principal of the 2026 Notes as a current rather than long-term liability, which would result in a material reduction of our net working capital.
The capped call transactions may affect the value of the 2026 Notes and our common stock.
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In connection with establishing their initial hedges of the Capped Call Transactions, the counterparties or their respective affiliates likely entered into various derivative transactions with respect to our common stock and/or purchased shares of our common stock concurrently with or shortly after the pricing of the 2026 Notes, including with certain investors in the 2026 Notes.
−Removed: The counterparties and/or or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to our common stock and/or purchasing or selling our common stock or other securities of ours in secondary market transactions prior to the maturity of the 2026 Notes (and are likely to do so on each exercise date of the Capped Call Transactions or, to the extent we exercise the relevant election under the Capped Call Transactions, following any repurchase, redemption or conversion of the 2026 Notes).
−Removed: We cannot make any prediction as to the direction or magnitude of any potential effect that the transactions described above may have on the prices of the 2026 Notes or the shares of our common stock.
−Removed: Any of these activities could adversely affect the value of the 2026 Notes and our common stock.
−Removed: The conditional conversion feature of the Notes, if triggered, may adversely affect our financial condition and operating results.
−Removed: In the event the conditional conversion feature of the Notes is triggered, holders of the Notes will be entitled under each indenture to convert their notes at any time during specified periods at their option.
−Removed: If one or more holders elect to convert their Notes, unless we elect to satisfy our conversion obligation by delivering solely shares of our common stock (other than paying cash in lieu of delivering any fractional share), we would be required to settle a portion or all of our conversion obligation through the payment of cash, which could adversely affect our liquidity.
−Removed: As of December 31, 2023, the Notes are not convertible at the option of the holder.
−Removed: In addition, even if holders do not elect to convert their Notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the
+Added: The counterparties and/or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to our common stock and/or purchasing or selling our
Unity Software Inc.
−Removed: Notes as a current rather than long-term liability, which would result in a material reduction of our net working capital.
+Added: common stock or other securities of ours in secondary market transactions prior to the maturity of the 2026 Notes (and are likely to do so on each exercise date of the Capped Call Transactions or, to the extent we exercise the relevant election under the Capped Call Transactions, following any repurchase, redemption or conversion of the 2026 Notes).
+Added: We cannot make any prediction as to the direction or magnitude of any potential effect that the transactions described above may have on the prices of the 2026 Notes, the 2027 Notes or the shares of our common stock.
+Added: Any of these activities could adversely affect the value of the 2026 Notes, the 2027 Notes and our common stock.
We are subject to counterparty risk with respect to the Capped Call Transactions.
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We are unable to predict the timing of or the effect that future sales may have on the prevailing market price of our common stock.
−Removed: Our share repurchase program, while intended to help offset dilution from the ironSource Merger, may not achieve such goal and the amount of such repurchases may be impacted by new legislation.
−Removed: The proceeds from the issuance and sale of the 2027 Notes (the "PIPE") have been and are expected to be continued to be used to partially fund the repurchase of up to $2.5 billion of shares of our common stock pursuant to our previously announced stock repurchase program, with the objective to offset potential dilution to our stockholders as a result of the issuance of the ironSource Merger consideration.
−Removed: However, we are not obligated to repurchase any shares of our common stock and there is no assurance that we will do so on the timeline intended.
−Removed: As of December 31, 2023, $750 million remains available for future share repurchases under this program.
−Removed: While we expect the share repurchases to be accretive to our earnings per share, there may be factors that will reduce the expected anti-dilutive effects of the potential repurchases.
−Removed: Although the 2027 Notes were priced at a premium to the market price of our common stock at the time of signing, and we intend to repurchase the shares at prices lower than the conversion price of the 2027 Notes, we can't provide any assurance that our stock price will not fluctuate significantly prior to any share repurchases, including as a result of downward pressure on the price of our common stock caused by the conversion of the 2027 Notes.
−Removed: As a result, if we are unable to repurchase shares of our common stock at a price that is
−Removed: Unity Software Inc.
−Removed: lower than the conversion price of the 2027 Notes, any anti-dilutive effect of such repurchases may be less than expected and dilution resulting from the issuance of merger consideration may be more than expected.
−Removed: In addition, repurchases are subject to the 1% Share Repurchase Excise Tax enacted by the Inflation Reduction Act, which may be offset by shares newly issued during that fiscal year (the "Share Repurchase Excise Tax").
−Removed: We have and will continue to take the Share Repurchase Excise Tax into account with respect to our decisions to repurchase shares, but there can be no assurance that such tax will not reduce the number of shares we are able to or ultimately decide to repurchase.
−Removed: Concentration of ownership of our common stock among our existing executive officers, directors, and principal stockholders may prevent new investors from influencing significant corporate decisions.
−Removed: Our executive officers, directors, and current beneficial owners of 5% or more of our common stock beneficially own a significant percentage of our outstanding common stock.
−Removed: These persons, acting together, will be able to significantly influence all matters requiring stockholder approval, including the election and removal of directors and any merger or other significant corporate transactions.
−Removed: The interests of this group of stockholders may not coincide with the interests of other stockholders.
Our issuance of additional capital stock in connection with financings, acquisitions, investments, our equity incentive plans or otherwise will dilute all other stockholders.
We expect to issue additional capital stock in the future that will result in dilution to all other stockholders.
−Removed: We grant and expect to continue granting equity awards to employees, directors and consultants under our equity incentive plans.
+Added: We grant and expect to continue granting equity awards to employees and directors under our equity incentive plans.
We may also raise capital through the sale and issuance of equity securities or convertible securities in the future.
1 unchanged sentence
Any such issuances of additional capital stock may cause stockholders to experience significant dilution of their ownership interests and the per share value of our common stock to decline.
+Added: Unity Software Inc.
We do not intend to pay dividends for the foreseeable future and, as a result, your ability to achieve a return on your investment will depend on appreciation in the price of our common stock.
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Our compliance with Section 404 requires that we incur substantial expenses and expend significant management efforts.
−Removed: Our current controls and any new controls that we develop may become inadequate because of changes in conditions in our business, including in connection with the ironSource Merger.
+Added: Our current controls and any new controls that we develop may become inadequate because of changes in conditions in our business.
In addition, changes in accounting principles or interpretations could also challenge our internal controls and require that we establish new business processes, systems and controls to accommodate such changes.
−Removed: Additionally, if these new systems, controls or standards and the associated process changes do not give rise to the benefits that we expect or do not operate as intended, it could adversely affect our financial reporting systems and processes, our ability to produce timely and accurate financial reports or the effectiveness of
−Removed: Unity Software Inc.
−Removed: internal control over financial reporting.
+Added: Additionally, if these new systems, controls or standards and the associated process changes do not give rise to the benefits that we expect or do not operate as intended, it could adversely affect our financial reporting systems and processes, our ability to produce timely and accurate financial reports or the effectiveness of internal control over financial reporting.
Moreover, our business may be harmed if we experience problems with any new systems and controls that result in delays in their implementation or increased costs to correct any post-implementation issues that may arise.
6 unchanged sentences
Any of the foregoing provisions could limit the price that investors might be willing to pay in the future for shares of our common stock, and they could deter potential acquirers of our company, thereby reducing the likelihood that you would receive a premium for your shares of our common stock in an acquisition.
+Added: Unity Software Inc.
Our amended and restated certificate of incorporation designates the Court of Chancery of the State of Delaware and the federal district courts of the United States of America as the exclusive forums for certain disputes between us and our stockholders, which restricts our stockholders' ability to choose the judicial forum for disputes with us or our directors, officers, or employees.
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.