What changed in this filing

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Item 1. Financial Statements

2025-08-06 compared with 2025-05-07 · 131 added, 76 removed, 391 unchanged (35% of the section changed)

3 unchanged sentences

(In thousands, except per share data)

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Current assets:

38 unchanged sentences

(In thousands, except per share data)

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

2025 2024 2025 2024

Revenue $ 440,944 $ 449,259 $ 875,944 $ 909,639

12 unchanged sentences

Net loss ( 107,365 ) ( 125,738 ) ( 185,272 ) ( 417,216 )

Net loss attributable to noncontrolling interest and redeemable noncontrolling interests ( 265 ) ( 404 )

Net income (loss) attributable to noncontrolling interest and redeemable noncontrolling interests 1,433 ( 164 ) 1,168 ( 568 )

Net loss attributable to Unity Software Inc.

8 unchanged sentences

(In thousands)

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

2025 2024 2025 2024

Net loss $ ( 107,365 ) $ ( 125,738 ) $ ( 185,272 ) $ ( 417,216 )

3 unchanged sentences

Comprehensive loss ( 104,649 ) ( 127,131 ) ( 181,378 ) ( 422,070 )

Net loss attributable to noncontrolling interest and redeemable noncontrolling interests ( 265 ) ( 404 )

Net income (loss) attributable to noncontrolling interest and redeemable noncontrolling interests 1,433 ( 164 ) 1,168 ( 568 )

Foreign currency translation attributable to noncontrolling interest and redeemable noncontrolling interests 564 ( 255 ) 818 ( 965 )

7 unchanged sentences

(In thousands, except share data)

Three Months Ended March 31, 2025

Three Months Ended June 30, 2025

Additional Other Unity Software Inc.

1 unchanged sentence

Shares Amount Capital Loss Deficit Equity Interest (1)

Balance at March 31, 2025 415,406,492 $ 2 $ 7,008,134 $ ( 8,501 ) $ ( 3,813,586 ) $ 3,186,049 $ 5,849 $ 3,191,898

Issuance of common stock from employee equity plans 1,170,423 9,783 9,783 9,783

Issuance of common stock for settlement of RSUs 3,863,949 — —

Stock‑based compensation expense 102,303 102,303 102,303

Net loss ( 108,798 ) ( 108,798 ) 98 ( 108,700 )

Adjustments to redeemable noncontrolling interest ( 4,096 ) ( 4,096 ) ( 4,096 )

Other comprehensive income 2,152 2,152 38 2,190

Balance at June 30, 2025 420,440,864 $ 2 $ 7,116,124 $ ( 6,349 ) $ ( 3,922,384 ) $ 3,187,393 $ 5,985 $ 3,193,378

Three Months Ended June 30, 2024

Additional Other Unity Software Inc.

Common Stock Paid-In Comprehensive Accumulated Stockholders' Noncontrolling Total

Shares Amount Capital Loss Deficit Equity Interest (1)

Balance at March 31, 2024 390,396,930 $ 2 $ 6,554,787 $ ( 7,760 ) $ ( 3,362,904 ) $ 3,184,125 $ 5,863 $ 3,189,988

Issuance of common stock from employee equity plans 1,904,693 — 11,305 — — 11,305 — 11,305

Issuance of common stock for settlement of RSUs 3,142,675 — — — — — — —

Stock‑based compensation expense — — 117,678 — — 117,678 — 117,678

Net loss — — — — ( 125,574 ) ( 125,574 ) ( 11 ) ( 125,585 )

Adjustments to redeemable noncontrolling interest — — ( 1,710 ) — — ( 1,710 ) — ( 1,710 )

Other comprehensive loss — — — ( 1,138 ) — ( 1,138 ) ( 18 ) ( 1,156 )

Balance at June 30, 2024 395,444,298 $ 2 $ 6,682,060 $ ( 8,898 ) $ ( 3,488,478 ) $ 3,184,686 $ 5,834 $ 3,190,520

(1) Excludes redeemable noncontrolling interests.

See accompanying Notes to Condensed Consolidated Financial Statements.

Unity Software Inc.

UNITY SOFTWARE INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY—CONTINUED

(In thousands, except share data)

Six Months Ended June 30, 2025

Additional Other Unity Software Inc.

Common Stock Paid‑In Comprehensive Accumulated Stockholders’ Noncontrolling Total

Shares Amount Capital Loss Deficit Equity Interest (1)

Balance at December 31, 2024 409,392,524 $ 2 $ 6,936,038 $ ( 9,425 ) $ ( 3,735,944 ) $ 3,190,671 $ 5,850 $ 3,196,521

6 unchanged sentences

Other comprehensive income 3,076 3,076 55 3,131

Balance at March 31, 2025 415,406,492 $ 2 $ 7,008,134 $ ( 8,501 ) $ ( 3,813,586 ) $ 3,186,049 $ 5,849 $ 3,191,898

Three Months Ended March 31, 2024

Balance at June 30, 2025 420,440,864 $ 2 $ 7,116,124 $ ( 6,349 ) $ ( 3,922,384 ) $ 3,187,393 $ 5,985 $ 3,193,378

Six Months Ended June 30, 2024

Additional Other Unity Software Inc.

8 unchanged sentences

Other comprehensive loss — — — ( 3,889 ) — ( 3,889 ) ( 66 ) ( 3,955 )

Balance at March 31, 2024 390,396,930 $ 2 $ 6,554,787 $ ( 7,760 ) $ ( 3,362,904 ) $ 3,184,125 $ 5,863 $ 3,189,988

Balance at June 30, 2024 395,444,298 $ 2 $ 6,682,060 $ ( 8,898 ) $ ( 3,488,478 ) $ 3,184,686 $ 5,834 $ 3,190,520

(1) Excludes redeemable noncontrolling interests.

4 unchanged sentences

(In thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Operating activities

Net loss $ ( 185,272 ) $ ( 417,216 )

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation and amortization 193,145 203,219

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Deferred revenue 31,060 ( 5,814 )

Net cash provided by (used in) operating activities 13,026 ( 7,373 )

Net cash provided by operating activities 146,122 81,003

Investing activities

Purchases of non-marketable investments ( 2,000 ) —

Purchases of intangible assets — ( 360 )

Purchases of property and equipment ( 12,164 ) ( 15,956 )

12 unchanged sentences

Supplemental disclosure of cash flow information:

Cash paid for interest $ 10,000 $ 10,000

Cash paid for (refunded from) income taxes, net $ ( 3,079 ) $ 16,307

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Actual results could differ from those estimates, and such differences could be material to our financial position and results of operations.

We review the useful lives of assets with a finite life on a recurring basis.

Effective July 1, 2025, we revised our estimate of the remaining useful life for certain intangible assets from four to seven years , down to one to three years .

These assets are included in “Intangible assets, net” on our consolidated balance sheets, are primarily “developed technology” within intangible assets, and primarily relate to assets arising from our acquisition of Wētā FX Limited in 2023.

The shortened useful lives are due to certain assets no longer being actively developed and absence of currently established plans for incorporation into future Unity offerings.

The effect of this change in estimate for the year ending December 31, 2025, is anticipated to be an increase in amortization expense and decrease in operating income of approximately $ 77 million.

Employee Separation and Restructuring Costs

In the three months ended March 31, 2025, we incurred incremental employee separation costs of approximately $ 14 million, primarily within sales and marketing and research and development.

In the three months ended March 31, 2024, we incurred incremental employee separation costs of approximately $ 193 million, which included $ 126 million of incremental stock-based compensation.

Of the incremental employee separation costs we incurred in the three months ended March 31, 2024, $ 15 million are within cost of revenue, $ 43 million are within research and development, $ 47 million are within sales and marketing, and $ 88 million are within general and administrative.

Additionally, for the three months ended March 31, 2025 and 2024, we incurred $ 6 million and $ 19 million, respectively, of other restructuring costs, primarily related to office closures.

In the six months ended June 30, 2025, we incurred incremental employee separation costs of approximately $ 20 million, primarily within sales and marketing and research and development.

In the six months ended June 30, 2024, we incurred incremental employee separation costs of approximately $ 201 million, which included $ 128 million of incremental stock-based compensation.

Of the incremental employee separation costs we incurred in the six months ended June 30, 2024, $ 15 million are within cost of revenue, $ 44 million are within research and development, $ 52 million are within sales and marketing, and $ 90 million are within general and administrative.

Additionally, for the six months ended June 30, 2025 and 2024, we incurred $ 11 million and $ 38 million, respectively, of other restructuring costs, primarily related to office closures.

Unity Software Inc.

The following table presents our revenue disaggregated by source, which also have similar economic characteristics (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Create Solutions $ 153,782 $ 150,777 $ 304,160 $ 314,447

1 unchanged sentence

Total revenue $ 440,944 $ 449,259 $ 875,944 $ 909,639

Unity Software Inc.

The following table presents our revenue disaggregated by geography, based on the invoice address of our customers (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

United States $ 122,367 $ 130,843 $ 248,655 $ 269,962

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The estimated losses on uncollectible amounts are recorded in general and administrative expense on our condensed consolidated statements of operations.

As of March 31, 2025 and December 31, 2024, the allowance for uncollectible amounts was $ 15.6 million and $ 17.3 million, respectively.

For the three months ended March 31, 2025 and 2024, the provision for uncollectible amounts was $ 0.5 million and $ 1.8 million, respectively.

As of June 30, 2025 and December 31, 2024, the allowance for uncollectible amounts was $ 13.2 million and $ 17.3 million, respectively.

For the six months ended June 30, 2025 and 2024, the provision for uncollectible amounts was $ 0.6 million and $ 5.3 million, respectively.

Sales Commissions

Sales commissions that have a benefit beyond one year are capitalized and amortized on a straight-line method over the expected period of benefit, which is generally three years .

As of March 31, 2025, capitalized commissions, net of amortization, included in prepaid expenses and other and other assets were $ 6.2 million and $ 4.5 million, respectively.

As of June 30, 2025, capitalized commissions, net of amortization, included in prepaid expenses and other and other assets were $ 6.2 million and $ 3.7 million, respectively.

As of December 31, 2024, capitalized commissions, net of amortization, included in prepaid expenses and other and other assets were $ 6.5 million and $ 5.4 million, respectively.

During the three months ended March 31, 2025, we recorded amortization costs of $ 1.9 million in sales and marketing expenses, as compared to $ 2.4 million during the three months ended March 31, 2024.

We did not incur any impairment losses for the three months ended March 31, 2025 and 2024.

During the three and six months ended June 30, 2025, we recorded amortization costs of $ 1.9 million and $ 3.8 million in sales and marketing expenses, as compared to $ 2.3 million and $ 4.7 million during the three and six months ended June 30, 2024.

We did not incur any impairment losses for the six months ended June 30, 2025 and 2024.

Contract Balances and Remaining Performance Obligations

Contract assets (unbilled receivables), primarily included in accounts receivable, net, are recorded when revenue is earned in advance of customer billing schedules.

Unbilled receivables totaled $ 20.3 million and $ 20.5 million as of March 31, 2025 and December 31, 2024, respectively.

The long term portion of those unbilled receivables was included in other long-term assets on our consolidated balance sheets, and was not material as of March 31, 2025 and December 31, 2024.

Unbilled receivables totaled $ 20.8

Unity Software Inc.

million and $ 20.5 million as of June 30, 2025 and December 31, 2024, respectively.

The long term portion of those unbilled receivables was included in other long-term assets on our consolidated balance sheets, and was not material as of June 30, 2025 and December 31, 2024.

Contract liabilities (deferred revenue) relate to payments received in advance of performance under the contract.

Revenue recognized during the three months ended March 31, 2025 that was included in the deferred revenue balances at January 1, 2025 was $ 78.7 million.

Revenue recognized during the six months ended June 30, 2025 that was included in the deferred revenue balances at January 1, 2025 was $ 130 million.

Additionally, we have performance obligations associated with commitments in customer contracts to perform in the future that had not yet been recognized in our consolidated financial statements.

For contracts with original terms that exceed one year, those commitments not yet recognized as of March 31, 2025, were $ 309 million and relate primarily to Create Solutions subscriptions, Enterprise Support, and

Unity Software Inc.

Strategic Partnerships.

For contracts with original terms that exceed one year, those commitments not yet recognized as of June 30, 2025, were $ 400 million and relate primarily to Create Solutions subscriptions, Enterprise Support, and Strategic Partnerships.

These commitments generally extend over the next one to five years and we expect to recognize approximately $ 183 million or 46 % of this revenue during the next 12 months.

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The following table summarizes, by major security type, our cash, cash equivalents, and restricted cash that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy (in thousands):

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Fair Value (1)

12 unchanged sentences

If we determine an impairment has occurred, the investment is written down to the estimated fair value.

As of March 31, 2025 and December 31, 2024, such equity investments totaled $ 33.0 million.

No material adjustments to the carrying value of these equity investments were recorded for the three months ended March 31, 2025 and 2024.

As of June 30, 2025 and December 31, 2024,

Unity Software Inc.

such equity investments totaled $ 35.0 million and $ 33.0 million, respectively.

No material adjustments to the carrying value of these equity investments were recorded for the three and six months ended June 30, 2025 and 2024.

Investment in Unity China

2 unchanged sentences

The redeemable noncontrolling interests in Unity China are recorded as temporary equity on our condensed consolidated balance sheet.

Unity Software Inc.

The following table presents the changes in redeemable noncontrolling interests (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025

Balance at beginning of period $ 234,740 $ 224,736 $ 230,627 $ 225,797

5 unchanged sentences

Components of lease expense were as follows (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Operating lease expense $ 8,144 $ 10,579 $ 15,572 $ 20,832

3 unchanged sentences

Supplemental balance sheet information related to leases was as follows (in thousands, except weighted-average figures):

Classification March 31, 2025 December 31, 2024

Classification June 30, 2025 December 31, 2024

Operating lease assets Other assets $ 69,599 $ 78,562

2 unchanged sentences

Total operating lease liabilities $ 107,805 $ 114,796

As of March 31, 2025 and December 31, 2024, our operating leases had a weighted-average remaining lease term of 4.2 years and 4.3 years, respectively, and a weighted-average discount rate of 5.5 % and 5.4 %, respectively.

During the three months ended March 31, 2025 and 2024, we recorded $ 0.3 million, and $ 3.7 million, respectively, of impairment charges on operating lease assets, primarily within general and administrative.

As of March 31, 2025, our lease liabilities were as follows (in thousands):

As of June 30, 2025 and December 31, 2024, our operating leases had a weighted-average remaining lease term of 4.2 years and 4.3 years, respectively, and a weighted-average discount rate of 5.6 % and 5.4 %, respectively.

During the three and six months ended June 30, 2024, we recorded $ 8.6 million and $ 12.2 million, respectively, of impairment charges on operating lease assets, primarily within general and administrative.

Unity Software Inc.

As of June 30, 2025, our lease liabilities were as follows (in thousands):

Operating Leases

2 unchanged sentences

Present value of lease liabilities $ 107,805

As of March 31, 2025, we have entered into leases that have not yet commenced with future minimum lease payments of $ 7.3 million which are not yet reflected on our consolidated balance sheet.

These operating leases will commence in 2025 with lease terms of approximately one to seven years .

Unity Software Inc.

As of June 30, 2025, we have entered into a lease that has not yet commenced with future minimum lease payments of $ 7.2 million which are not yet reflected on our consolidated balance sheet.

The operating lease will commence in 2025 with lease terms of approximately seven years .

Convertible Notes

2 unchanged sentences

The debt issuance costs are amortized to interest expense using the straight-line method, which approximates the effective interest method.

As of March 31, 2025, we had $ 2.2 billion of unsecured convertible notes outstanding including $ 690 million of the 2030 Notes, $ 1.0 billion issued in November 2022 (the "2027 Notes"), $ 558 million issued in November 2021 (the "2026 Notes", together with the 2027 Notes and 2030 Notes, the "Notes").

As of June 30, 2025, we had $ 2.2 billion of unsecured convertible notes outstanding including $ 690 million of the 2030 Notes, $ 1.0 billion issued in November 2022 (the "2027 Notes"), $ 558 million issued in November 2021 (the "2026 Notes", together with the 2027 Notes and 2030 Notes, the "Notes").

The table below summarizes the principal and unamortized debt issuance costs and other material features of the Notes (in thousands):

2 unchanged sentences

$1,000 Principal Conversion Price (1)

Maturities Stated Interest Rates March 31, 2025 December 31, 2024

Maturities Stated Interest Rates June 30, 2025 December 31, 2024

Convertible notes:

11 unchanged sentences

Interest on the Notes is payable semi-annually in arrears.

The combined interest expense on the Notes related to regular interest and the amortization of debt issuance cost was $ 5.9 million for the three months ended March 31, 2025 and $ 6.0 million for the three months ended March 31, 2024.

As of March 31, 2025, the estimated fair value of the 2030 Notes was approximately $ 624 million.

As of March 31, 2025 and December 31, 2024, the estimated fair value of the 2027 Notes was approximately $ 1.0 billion and $ 1.0 billion, respectively, and the estimated fair value of the 2026 Notes was approximately $ 518 million and $ 1.1 billion, respectively.

The combined interest expense on the Notes related to regular interest and the amortization of debt issuance cost was $ 6.0 million and $ 11.9 million for the three and six months ended June 30, 2025, respectively, and $ 5.8 million and $ 11.9 million for the three and six months ended June 30, 2024, respectively.

As of June 30, 2025, the estimated fair value of the 2030 Notes was approximately $ 710 million.

As of June 30, 2025 and December 31, 2024, the estimated fair value of the 2027 Notes was approximately $ 1.0 billion, and the estimated fair value of the 2026 Notes was approximately $ 520 million and $ 1.1 billion, respectively.

The fair value of the 2027 Notes was based on a combination of a discounted cash flow and Black-Scholes option-pricing model.

1 unchanged sentence

The 2027 Notes may be converted at the election of the holders thereof at any time prior to maturity.

The 2026 Notes and 2030 Notes are convertible at the option of the respective holders thereof if a conversion condition applicable to such series of Notes is triggered.

During the three months ended March 31, 2025, none of the conversion conditions of the 2026 Notes or the 2030 notes were triggered, and the 2026 Notes and 2030 Notes were not convertible as of March 31, 2025.

The 2026 Notes and 2030 Notes are convertible at the option of the respective holders thereof if

Unity Software Inc.

a conversion condition applicable to such series of Notes is triggered.

During the three and six months ended June 30, 2025, none of the conversion conditions of the 2026 Notes or the 2030 notes were triggered, and the 2026 Notes and 2030 Notes were not convertible as of June 30, 2025.

Any such conversion of the Notes noted above, may be satisfied at our election with either cash, shares of our common stock, or a combination of cash and shares of our common stock.

2 unchanged sentences

In connection with certain corporate events, as described in the indentures governing the Notes, we will increase the conversion rate for a holder of the applicable series of Notes who elects to convert those Notes in connection with the event.

Unity Software Inc.

portion of their notes at a price equal to 100 % of the principal amount to be repurchased, plus any accrued and unpaid interest to date.

Additionally, upon the occurrence of certain corporate events and subject to certain exceptions, as described in the indenture governing the applicable series of Notes, holders of those Notes may require us to repurchase all or a portion of their notes at a price equal to 100 % of the principal amount to be repurchased, plus any accrued and unpaid interest to date.

The 2026 Notes and 2030 Notes are also redeemable at our option if certain conditions are met, as described in the indentures governing the 2026 Notes and 2030 Notes respectively.

As of March 31, 2025, no holders of the Notes have exercised the conversion rights, and the if-converted value of the Notes did not exceed the principal amount.

As of June 30, 2025, no holders of the Notes have exercised the conversion rights, and the if-converted value of the Notes did not exceed the principal amount.

Convertible Note Repurchase

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The Capped Call Transactions are freestanding and are considered separately exercisable from the 2026 Notes and 2030 Notes.

As of March 31, 2025, the Capped Call Transactions met the conditions for equity classification and were not in the money.

As of June 30, 2025, the Capped Call Transactions met the conditions for equity classification and were not in the money.

Unity Software Inc.

Commitments and Contingencies

The following table summarizes our non-cancelable contractual commitments as of March 31, 2025 (in thousands):

The following table summarizes our non-cancelable contractual commitments as of June 30, 2025 (in thousands):

Total Remainder of 2025

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In addition, recoveries are shown as a reduction in legal costs in the period in which they are realized.

Unity Software Inc.

With respect to our outstanding matters, based on our current knowledge, we believe that the resolution of such matters will not, either individually or in aggregate, have a material adverse effect on our business or our condensed consolidated financial statements.

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These indemnifications may survive termination of the underlying agreement and the maximum potential amount of future indemnification payments may not be subject to a cap.

As of March 31, 2025, there were no known events or circumstances that have resulted in a material indemnification liability to us and we did not incur material costs to defend lawsuits or settle claims related to these indemnifications.

As of June 30, 2025, there were no known events or circumstances that have resulted in a material indemnification liability to us and we did not incur material costs to defend lawsuits or settle claims related to these indemnifications.

Letters of Credit

We had $ 10.5 million and $ 10.2 million of secured letters of credit outstanding as of March 31, 2025 and December 31, 2024, respectively.

We had $ 10.5 million and $ 10.2 million of secured letters of credit outstanding as of June 30, 2025 and December 31, 2024, respectively.

These primarily relate to our office space leases and are fully collateralized by certificates of deposit which we record in restricted cash as other assets on our condensed consolidated balance sheets.

Unity Software Inc.

Stock‑Based Compensation

Stock-based compensation expense is as follows (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Cost of revenue $ 9,861 $ 7,911 $ 18,973 $ 24,717

3 unchanged sentences

Total stock-based compensation expense $ 101,604 $ 115,399 $ 200,394 $ 381,276

Included in the above expenses for the three months ended March 31, 2024, is $ 93 million of incremental stock-based compensation expense from modifications, primarily within general and administrative.

Included in the above expenses for the three and six months ended June 30, 2024, is $ 3 million and $ 97 million, respectively, of incremental stock-based compensation expense from modifications, primarily within general and administrative.

These amounts predominately relate to the modification of awards held by the founders of ironSource Ltd.

that departed in the first quarter of 2024.

Unity Software Inc.

Stock Options

7 unchanged sentences

Forfeited, cancelled, or expired ( 1,235,512 ) $ 49.40

Balance as of March 31, 2025 20,491,516 $ 21.83 4.36

Balance as of June 30, 2025 18,685,565 $ 22.00 4.31

Restricted Stock Units

6 unchanged sentences

Forfeited ( 4,930,230 ) $ 23.58

Unvested as of March 31, 2025 28,781,282 $ 25.55

Unvested as of June 30, 2025 31,146,036 $ 23.70

Price-Vested Units and Price-Vested Options

1 unchanged sentence

The fair value of each PVU and PVO award is estimated using a Monte Carlo simulation that uses assumptions determined on the date of grant.

During the three months ended March 31, 2025, the price hurdle was not met by any outstanding options or units, which had not already attained them in a prior period.

Unity Software Inc.

the three and six months ended June 30, 2025, the price hurdle was not met by any outstanding options or units, which had not already attained them in a prior period.

Performance-Based Restricted Stock Units

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The expense is adjusted each period for any changes in the expected attainment of the performance goals.

Unity Software Inc.

Fair Value Assumptions

The calculated grant-date fair value of stock options, PVUs, and PVOs granted, were estimated using the Black-Scholes option-pricing model for stock options, and a Monte Carlo stimulation for the PVUs and PVOs, with the following assumptions:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2025 2024

Expected dividend yield — — —

Risk-free interest rate 4.3 % - 4.7 %

4.1 % 4.1 % - 4.7 %

Expected volatility 60.0 % - 66.5 %

69.5 % 60.0 % - 66.5 %

Expected term (in years) 6.25 - 10.00

6.25 6.25 - 10.00

Fair value of underlying common stock $ 17.95 - $ 24.27

$ 24.72 $ 17.95 - $ 26.89

Employee Stock Purchase Plan

1 unchanged sentence

The following table summarizes the assumptions used and the resulting grant-date fair values of our ESPP:

Three Months Ended March 31,

Six Months Ended June 30,

Expected dividend yield — —

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Additional information related to the ESPP is provided below (in thousands, except per share amounts):

Three Months Ended March 31,

Six Months Ended June 30,

Shares issued under the ESPP 693,873 551,146

Weighted-average price per share issued $ 14.19 $ 24.92

Unity Software Inc.

Our tax provision for interim periods is determined using an estimated annual effective tax rate, adjusted for discrete items arising in that quarter.

1 unchanged sentence

The estimated annual effective tax rate is subject to volatility due to several factors, including variability in accurately predicting our pre-tax income or loss and the mix of jurisdictions to which they relate, intercompany transactions, changes in how we do business, and tax law developments.

Our effective tax rate for the three months ended March 31, 2025 differs from the U.S.

Our effective tax rate for the three and six months ended June 30, 2025 differs from the U.S.

federal statutory tax rate of 21% primarily due to the need to record a valuation allowance on U.S.

losses and to a lesser extent tax expense on foreign earnings taxed at different rates.

Our effective tax rate for the three months ended March 31, 2024 differed from the U.S.

Our effective tax rate for the three and six months ended June 30, 2024 differed from the U.S.

federal statutory tax rate of 21% primarily due to the need to record a valuation allowance in the U.S.

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valuation allowance.

Unity Software Inc.

The realization of deferred tax assets is dependent upon the generation of sufficient taxable income of the appropriate character in future periods.

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jurisdictions will not be realized and we have maintained a full valuation allowance against such deferred tax assets.

As of March 31, 2025, we had $ 181.2 million of gross unrecognized tax benefits, of which $ 32.8 million would impact the effective tax rate, if recognized.

It is reasonably possible that the amount of unrecognized tax benefits as of March 31, 2025 could increase or decrease significantly as the timing of the resolution, settlement, and closure of audits is highly uncertain.

As of June 30, 2025, we had $ 182.5 million of gross unrecognized tax benefits, of which $ 33.9 million would impact the effective tax rate, if recognized.

It is reasonably possible that the amount of unrecognized tax benefits as of June 30, 2025 could increase or decrease significantly as the timing of the resolution, settlement, and closure of audits is highly uncertain.

We believe that we have adequately provided for any reasonably foreseeable outcome related to our tax audits and that any settlement will not have a material impact on our financial condition and operating results at this time.

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The following table presents potentially dilutive common stock excluded from the computation of diluted net loss per share (in thousands) because the impact of including them would have been antidilutive:

As of March 31,

As of June 30,

Convertible notes 41,348 24,488

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See "Revenue Recognition" in Note 1 of our 2024 Annual Report on Form 10-K, for detailed information regarding our products and services.

Our chief operating decision maker is the chief executive officer, who on a consolidated basis, assess the performance of, drives improvements in, and decides how to allocate resources in the reportable segment, based on multiple measures of performance including consolidated net income, adjusted EBITDA, adjusted gross margin, and adjusted EPS.

Unity Software Inc.

adjusted EBITDA, adjusted gross margin, and adjusted EPS.

As such, consolidated net income, which is reported and reconciled with all significant segment expenses on our consolidated statement of operations, is the measure that is most consistent with GAAP, while adjusted EBITDA, adjusted gross margin, and adjusted EPS are additional measures of our segment profitability.

3 unchanged sentences

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.

What changed 10-Q

Item 1. Financial Statements