Unity Software (U) 10-Q2 Aug 232023 Q2 Quarterly reportFinancial data

Company Profile

Cover

Cover - shares	6 Months Ended
Cover - shares	Jun. 30, 2023	Jul. 26, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2023
Document Transition Report	false
Entity File Number	001-39497
Entity Registrant Name	UNITY SOFTWARE INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	27-0334803
Entity Address, Address Line One	30 3rd Street
Entity Address, City or Town	San Francisco
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	94103‑3104
City Area Code	415
Local Phone Number	539‑3162
Title of 12(b) Security	Common stock, $0.000005 par value
Trading Symbol	U
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		383,457,326
Amendment Flag	false
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q2
Entity Central Index Key	0001810806
Current Fiscal Year End Date	--12-31

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 1,640,926	$ 1,485,084
Short-term investments	0	101,711
Accounts receivable, net	632,032	633,775
Prepaid expenses and other	121,406	144,070
Total current assets	2,394,364	2,364,640
Property and equipment, net	135,387	121,863
Goodwill	3,200,955	3,200,955
Intangible assets, net	1,725,438	1,922,234
Other assets	230,702	224,293
Total assets	7,686,846	7,833,985
Current liabilities:
Accounts payable	18,580	20,221
Accrued expenses and other	295,524	326,339
Publisher payables	445,950	445,622
Deferred revenue	215,012	218,102
Total current liabilities	975,066	1,010,284
Convertible notes	2,709,442	2,707,171
Long-term deferred revenue	78,859	103,442
Other long-term liabilities	255,604	258,959
Total liabilities	4,018,971	4,079,856
Commitments and contingencies (Note 7)
Redeemable noncontrolling interests	215,749	219,563
Stockholders’ equity:
Common stock, $0.000005 par value: Authorized shares - 1,000,000 and 1,000,000 Issued and outstanding shares - 383,291 and 374,243	2	2
Additional paid-in capital	6,149,631	5,779,776
Accumulated other comprehensive loss	(8,543)	(1,691)
Accumulated deficit	(2,695,010)	(2,249,819)
Total Unity Software Inc. stockholders’ equity	3,446,080	3,528,268
Noncontrolling interest	6,046	6,298
Total stockholders' equity	3,452,126	3,534,566
Total liabilities and stockholders’ equity	$ 7,686,846	$ 7,833,985

CONDENSED CONSOLIDATED BALANC_2

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 30, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Common stock, par value (USD per share)	$ 0.000005	$ 0.000005
Common stock, authorized (in shares)	1,000,000,000	1,000,000,000
Common stock, issued (in shares)	383,291,000	374,243,000
Common stock, outstanding (in shares)	383,291,000	374,243,000

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Income Statement [Abstract]
Revenue	$ 533,478	$ 297,043	$ 1,033,839	$ 617,169
Cost of revenue	158,827	96,836	320,791	190,669
Gross profit	374,651	200,207	713,048	426,500
Operating expenses
Research and development	267,955	215,960	548,435	437,000
Sales and marketing	209,131	100,908	425,258	204,847
General and administrative	89,017	81,005	185,791	153,480
Total operating expenses	566,103	397,873	1,159,484	795,327
Loss from operations	(191,452)	(197,666)	(446,436)	(368,827)
Interest expense	(6,142)	(1,123)	(12,271)	(2,234)
Interest income and other expense, net	9,061	(3,058)	22,676	(2,117)
Loss before income taxes	(188,533)	(201,847)	(436,031)	(373,178)
Provision for Income taxes	4,791	2,311	10,996	8,535
Net loss	(193,324)	(204,158)	(447,027)	(381,713)
Net loss attributable to noncontrolling interest and redeemable noncontrolling interests	(1,164)	0	(1,836)	0
Net loss attributable to Unity Software Inc.	$ (192,160)	$ (204,158)	$ (445,191)	$ (381,713)
Basic net loss per share attributable to Unity Software Inc. (USD per share)	$ (0.51)	$ (0.69)	$ (1.18)	$ (1.29)
Diluted net loss per share attributable to Unity Software Inc. (USD per share)	$ (0.51)	$ (0.69)	$ (1.18)	$ (1.29)
Weighted-average shares used in computation of basic net loss per share (in shares)	380,355	296,849	378,145	295,602
Weighted-average shares used in computation of diluted net loss per share (in shares)	380,355	296,849	378,145	295,602

CONDENSED CONSOLIDATED STATEM_2

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Statement of Comprehensive Income [Abstract]
Net loss	$ (193,324)	$ (204,158)	$ (447,027)	$ (381,713)
Other comprehensive income (loss), net of taxes:
Change in foreign currency translation adjustment	(12,155)	(366)	(8,998)	(347)
Change in unrealized losses on short-term investments	0	(1,291)	0	(5,719)
Change in unrealized gains (losses) on derivative instruments	616	0	289	0
Other comprehensive loss	(11,539)	(1,657)	(8,709)	(6,066)
Comprehensive loss	(204,863)	(205,815)	(455,736)	(387,779)
Net loss attributable to noncontrolling interest and redeemable noncontrolling interests	(1,164)	0	(1,836)	0
Foreign currency translation attributable to noncontrolling interest and redeemable noncontrolling interests	(2,506)	0	(1,857)	0
Comprehensive loss attributable to noncontrolling interest and redeemable noncontrolling interests	(3,670)	0	(3,693)	0
Comprehensive loss attributable to Unity Software Inc.	$ (201,193)	$ (205,815)	$ (452,043)	$ (387,779)

CONDENSED CONSOLIDATED STATEM_3

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - USD ($) $ in Thousands	Total	Unity Software Inc. Stockholders' Equity	Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Loss	Accumulated Deficit	Noncontrolling Interest
Beginning balance (in shares) at Dec. 31, 2021			292,592,356
Beginning balance at Dec. 31, 2021	$ 2,394,391	$ 2,394,391	$ 2	$ 3,729,874	$ (3,858)	$ (1,331,627)	$ 0	[1]
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock from employee equity plans (in shares)			3,246,743
Issuance of common stock from employee equity plans	37,718	37,718		37,718
Issuance of common stock for settlement of RSUs (in shares)			2,019,132
Common stock issued in connection with acquisitions (in shares)			169,321
Common stock issued in connection with acquisitions	16,072	16,072		16,072
Stock‑based compensation expense	221,669	221,669		221,669
Net loss	(381,713)	(381,713)				(381,713)
Other comprehensive loss	(6,066)	(6,066)			(6,066)
Ending balance (in shares) at Jun. 30, 2022			298,027,552
Ending balance at Jun. 30, 2022	2,282,071	2,282,071	$ 2	4,005,333	(9,924)	(1,713,340)	0	[2]
Beginning balance (in shares) at Mar. 31, 2022			295,846,751
Beginning balance at Mar. 31, 2022	2,362,142	2,362,142	$ 2	3,879,589	(8,267)	(1,509,182)	0	[2]
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock from employee equity plans (in shares)			1,086,699
Issuance of common stock from employee equity plans	7,502	7,502		7,502
Issuance of common stock for settlement of RSUs (in shares)			1,094,102
Stock‑based compensation expense	118,242	118,242		118,242
Net loss	(204,158)	(204,158)				(204,158)
Other comprehensive loss	(1,657)	(1,657)			(1,657)
Ending balance (in shares) at Jun. 30, 2022			298,027,552
Ending balance at Jun. 30, 2022	$ 2,282,071	2,282,071	$ 2	4,005,333	(9,924)	(1,713,340)	0	[2]
Beginning balance (in shares) at Dec. 31, 2022	374,243,000		374,243,196
Beginning balance at Dec. 31, 2022	$ 3,534,566	3,528,268	$ 2	5,779,776	(1,691)	(2,249,819)	6,298	[1]
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock from employee equity plans (in shares)	3,037,325		3,569,851
Issuance of common stock from employee equity plans	$ 41,944	41,944		41,944
Issuance of common stock for settlement of RSUs (in shares)			5,477,580
Stock‑based compensation expense	327,543	327,543		327,543
Net loss	(445,316)	(445,191)				(445,191)	(125)	[1]
Net loss	(447,027)
Adjustments to redeemable noncontrolling interest	368	368		368
Other comprehensive loss	(6,979)	(6,852)			(6,852)		(127)	[1]
Other comprehensive loss	$ (8,709)
Ending balance (in shares) at Jun. 30, 2023	383,291,000		383,290,627
Ending balance at Jun. 30, 2023	$ 3,452,126	3,446,080	$ 2	6,149,631	(8,543)	(2,695,010)	6,046	[1]
Beginning balance (in shares) at Mar. 31, 2023			378,373,685
Beginning balance at Mar. 31, 2023	3,466,296	3,460,000	$ 2	5,962,358	490	(2,502,850)	6,296	[2]
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock from employee equity plans (in shares)			2,094,090
Issuance of common stock from employee equity plans	19,973	19,973		19,973
Issuance of common stock for settlement of RSUs (in shares)			2,822,852
Stock‑based compensation expense	161,098	161,098		161,098
Net loss	(192,239)	(192,160)				(192,160)	(79)	[2]
Net loss	(193,324)
Adjustments to redeemable noncontrolling interest	6,202	6,202		6,202
Other comprehensive loss	(9,204)	(9,033)			(9,033)		(171)	[2]
Other comprehensive loss	$ (11,539)
Ending balance (in shares) at Jun. 30, 2023	383,291,000		383,290,627
Ending balance at Jun. 30, 2023	$ 3,452,126	$ 3,446,080	$ 2	$ 6,149,631	$ (8,543)	$ (2,695,010)	$ 6,046	[1]

[1] (1) Excludes redeemable noncontrolling interests. (1) Excludes redeemable noncontrolling interests.

CONDENSED CONSOLIDATED STATEM_4

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Operating activities
Net loss	$ (447,027)	$ (381,713)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	220,639	84,108
Stock-based compensation expense	320,562	221,669
Other	1,521	5,890
Changes in assets and liabilities, net of effects of acquisitions:
Accounts receivable, net	1,633	17,873
Prepaid expenses and other	22,849	(8,025)
Other assets	24,311	13,333
Accounts payable	(3,069)	(582)
Accrued expenses and other	(33,727)	(16,468)
Publisher payables	328	(40,006)
Other long-term liabilities	(37,802)	(15,663)
Deferred revenue	(27,674)	178,014
Net cash provided by operating activities	42,544	58,430
Investing activities
Purchases of short-term investments	(212)	(150,911)
Proceeds from principal repayments and maturities of short-term investments	102,673	231,349
Purchases of non-marketable investments	(500)	(15,000)
Sales of non-marketable investments	0	1,000
Purchases of property and equipment	(28,468)	(30,357)
Business acquisitions, net of cash acquired	0	(25,647)
Net cash provided by investing activities	73,493	10,434
Financing activities
Proceeds from issuance of common stock from employee equity plans	41,944	37,718
Net cash provided by financing activities	41,944	37,718
Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash	(8,785)	(41)
Increase in cash, cash equivalents, and restricted cash	149,196	106,541
Cash and restricted cash, beginning of period	1,505,688	1,066,599
Cash, cash equivalents, and restricted cash, end of period	1,654,884	1,173,140
Supplemental disclosure of cash flow information:
Cash paid for interest	10,389	0
Cash paid for income taxes, net of refunds	5,746	5,891
Cash paid for operating leases	20,206	12,653
Supplemental disclosures of non‑cash investing and financing activities:
Fair value of common stock issued as consideration for business and asset acquisitions	0	16,072
Assets acquired under operating lease	$ 37,293	$ 8,683

Accounting Policies

Accounting Policies	6 Months Ended
Accounting Policies	Jun. 30, 2023
Accounting Policies [Abstract]
Accounting Policies	Accounting Policies Basis of Presentation and Consolidation We prepared the accompanying unaudited condensed consolidated financial statements in accordance with United States ("U.S.") generally accepted accounting principles ("GAAP") and applicable rules and regulations of the Securities and Exchange Commission ("SEC") for interim financial reporting. The condensed consolidated financial statements include the accounts of Unity Software Inc., its wholly owned subsidiaries, and entities consolidated under the voting interest model. We have eliminated all intercompany balances and transactions. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. In our opinion, all adjustments, which include normal recurring adjustments necessary for a fair presentation, have been included. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year or other periods. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in our 2022 Annual Report on Form 10-K. Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make certain estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates, and such differences could be material to our financial position and results of operations.

Revenue

Revenue	6 Months Ended
Revenue	Jun. 30, 2023
Revenue from Contract with Customer [Abstract]
Revenue	Revenue The following table presents our revenue disaggregated by source, which also have similar economic characteristics (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Create Solutions $ 193,110 $ 164,594 $ 380,479 $ 329,138 Grow Solutions 340,368 132,449 653,360 288,031 Total revenue $ 533,478 $ 297,043 $ 1,033,839 $ 617,169 The following table presents our revenue disaggregated by geography, based on the invoice address of our customers (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 United States $ 138,711 $ 69,768 $ 269,612 $ 143,714 Greater China (1) 69,750 42,286 117,262 86,130 EMEA (2) 188,219 101,835 374,943 217,147 APAC (3) 119,107 75,068 238,671 151,761 Other Americas (4) 17,691 8,087 33,351 18,417 Total revenue $ 533,478 $ 297,043 $ 1,033,839 $ 617,169 (1) Greater China includes China, Hong Kong, and Taiwan. (2) Europe, the Middle East, and Africa ("EMEA") (3) Asia- Pacific , excluding Greater China ("APAC") (4) Canada and Latin America ("Other Americas") Accounts Receivable, Net Accounts receivable are recorded at the original invoiced amount, net of allowances for uncollectible amounts. We estimate losses on uncollectible amounts based on expected losses, including our historical experience of actual losses. The estimated losses on uncollectible amounts are recorded in general and administrative expense on our condensed consolidated statement of operations. As of June 30, 2023 and December 31, 2022, the allowance for uncollectible amounts was $16.0 million and $9.4 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 June 30, 2023, capitalized commissions, net of amortization, included in prepaid expenses and other and other assets were $7.5 million and $3.5 million, respectively. During the three and six months ended June 30, 2023, we recorded amortization costs of $2.5 million and $5.0 million, respectively, in sales and marketing expenses, as compared to $2.2 million and $4.5 million during the three and six months ended June 30, 2022, respectively. Contract Balances and Remaining Performance Obligations Contract assets (unbilled receivables) included in accounts receivable, net, are recorded when revenue is earned in advance of customer billing schedules. Unbilled receivables totaled $44.3 million and $37.5 million as of June 30, 2023 and December 31, 2022, respectively. Contract liabilities (deferred revenue) relate to payments received in advance of performance under the contract. Revenue recognized during the six months ended June 30, 2023 that was included in the deferred revenue balances at January 1, 2023 w as $142.3 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 June 30, 2023, were $624.1 million and relate primarily to Create Solutions subscriptions, enterprise support, and strategic partnerships. These commitments generally extend over the next one $291.7 million or 47% of this revenue during the next 12 months.

Financial Instruments

Financial Instruments	6 Months Ended
Financial Instruments	Jun. 30, 2023
Investments, Debt and Equity Securities [Abstract]
Financial Instruments	Financial Instruments Cash, Cash Equivalents, Restricted Cash, and Short-term Investments Cash, cash equivalents, restricted cash, and short-term investments are recorded at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value. • Level 1—Valuations based on quoted prices in active markets for identical assets or liabilities. • Level 2—Valuations based on quoted prices for similar assets and liabilities in active markets or inputs that are observable for the assets or liabilities, either directly or indirectly through market corroboration. • Level 3—Valuations based on unobservable inputs reflecting our own assumptions used to measure assets and liabilities at fair value. These valuations require significant judgment. The following table summarizes, by major security type, our cash, cash equivalents, restricted cash, and short-term investments that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy (in thousands) : June 30, 2023 December 31, 2022 Fair Value (1) Cash $ 688,074 $ 699,340 Level 1: Restricted cash and cash equivalents: Restricted cash $ 13,958 $ 20,604 Money market funds 754,469 373,619 Time deposits 198,383 412,125 Total restricted cash and cash equivalents $ 966,810 $ 806,348 Short-term investments $ — $ 101,711 Total cash, cash equivalents, restricted cash, and short-term investments $ 1,654,884 $ 1,607,399 (1) Due to the highly liquid nature of our investments, amortized cost approximates fair value. Nonrecurring Fair Value Measurements We hold equity investments in certain unconsolidated entities without a readily determinable fair value. These strategic investments represent less than a 20% ownership interest in each of the entities, and we do not have significant influence over or control of the entities. We use the measurement alternative to account for adjustments to these investments for observable transactions for the same or similar investments of the same issuer in any given quarter. If we determine an impairment has occurred, the investment is written down to the estimated fair value. As of June 30, 2023 and December 31, 2022, such equity investments totaled $31.6 million. No adjustments to the carrying value of these equity investments were recorded for the three and six months ended June 30, 2023 and 2022.

Investment in Unity China

Investment in Unity China	6 Months Ended
Investment in Unity China	Jun. 30, 2023
Noncontrolling Interest [Abstract]
Investment in Unity China	Investment in Unity ChinaThe results of Unity China, of which third-party investors hold 20.5%, are included in our condensed consolidated financial statements and were not material for the three and six months ended June 30, 2023. Under certain conditions we may be required to repurchase the third-party interest in Unity China. The redeemable noncontrolling interests in Unity China are recorded as temporary equity on our condensed consolidated balance sheet. The following table presents the changes in redeemable noncontrolling interests (in thousands): Three Months Ended June 30, 2023 Six Months Ended June 30, 2023 Balance at beginning of period $ 225,376 $ 219,563 Net loss attributable to redeemable noncontrolling interests (1,086) (1,712) Accretion for redeemable noncontrolling interests 3,676 6,374 Foreign currency translation and foreign exchange adjustments for redeemable noncontrolling interests (12,217) (8,476) Balance at end of period $ 215,749 $ 215,749

Leases

Leases	6 Months Ended
Leases	Jun. 30, 2023
Leases [Abstract]
Leases	Leases We have operating leases for offices, which have remaining lease terms of up to ten years. Components of lease expense were as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Operating lease expense $ 10,375 $ 8,163 $ 19,768 $ 15,783 Variable lease expense 1,164 1,393 2,442 2,838 Sublease income (440) — (824) — Total lease expense $ 11,099 $ 9,556 $ 21,386 $ 18,621 Supplemental balance sheet information related to leases was as follows (in thousands, except weighted-average figures): As of Classification June 30, 2023 December 31, 2022 Operating lease assets Other assets $ 140,792 $ 120,535 Current operating lease liabilities Accrued expenses and other $ 39,880 $ 34,469 Long-term operating lease liabilities Other long-term liabilities 122,502 107,776 Total operating lease liabilities $ 162,382 $ 142,245 As of June 30, 2023 and December 31, 2022, our operating leases had a weighted-average remaining lease term o f 5.3 years and 5.0 years, respectively, and a weighted-average discount rate of 4.9% and 4.0%, respectively. As of June 30, 2023, our lease liabilities were as follows (in thousands): Operating Leases Gross lease liabilities $ 184,754 Less: imputed interest (22,372) Present value of lease liabilities $ 162,382

Borrowings

Borrowings	6 Months Ended
Borrowings	Jun. 30, 2023
Debt Disclosure [Abstract]
Borrowings	Borrowings Convertible Notes 2027 Notes In November 2022, we issued $1.0 billion in aggregate amount of 2.0% convertible notes due 2027 (the " 2027 Notes"). The closing of the issuance and sale of the 2027 Notes (the "PIPE") occurred promptly following the closing of the transactions contemplated by the Agreement and Plan of Merger (the "Merger Agreement"), dated July 13, 2022, by and among Unity Software Inc., Ursa Aroma Merger Subsidiary Ltd., a company organized under the laws of the State of Israel and a direct wholly owned subsid iary of Unity, and ironSource Ltd., a company organized under the laws of the State of Israel ("ironSource", and such transactions, the "ironSource Merger"). The 2027 Notes were issued to certain affiliates of Silver Lake and Sequoia Capital (the “Purchasers”), pursuant to an indenture dated November 8, 2022 (the “Indenture”), in accordance with the Investment Agreement entered among the Company and certain affiliates of the Purchasers dated July 13, 2022 (the “Investment Agreement”). Proceeds from the issuance of the 2027 Notes were approximately $1.0 billion, net of debt issuance costs. The debt issuance costs are amortized to interest expense using the straight-line method, which approximates the effective interest method. The 2027 Notes are general unsecured obligations which bear regular interest of 2.0%. We may elect for additional interest to accrue on the 2027 Notes as the sole remedy for any failure by us to comply with certain reporting requirements under the Indenture. Holders of the 2027 Notes may receive additional interest under specified circumstances as outlined in the Indenture. Additional interest, if any, will be payable in the same manner as the regular interest, which is semiannually in arrears on May 15 and November 15 of each year, beginning on May 15, 2023. The 2027 Notes will mature on November 15, 2027 unless earlier converted, redeemed, or repurchased. The 2027 Notes are convertible into cash, shares of our common stock, or a combination of cash and shares of our common stock, at our election, at an initial conversion rate of 20.4526 shares of common stock per $1,000 principal amount of 2027 Notes, which is equivalent to an initial conversion price of approximately $48.89 per share of our common stock. The conversion rate is subject to customary adjustments for certain events as described in the Indenture governing the 2027 Notes. Pursuant to the Investment Agreement, the Purchasers are restricted from converting the 2027 Notes prior to the earlier of (i) twelve months after the date of issuance and (ii) the consummation of a change of control of our company or entry into a definitive agreement for a transaction that, if consummated, would result in a change of control, subject to certain exceptions. In connection with a make-whole fundamental change, as defined in the Indenture, or in connection with certain corporate events that occur prior to the maturity date or a notice of redemption, in each case as described in the Indentures, we will increase the conversion rate for a holder of the 2027 Notes who elects to convert its 2027 Notes in connection with such a corporate event or during the related redemption period in certain circumstances. Additionally, in the event of a fundamental change, subject to certain limitations described in the Indenture, holders of the 2027 Notes may require us to repurchase all or a portion of the 2027 Notes at a price equal to 100% of the principal amount of 2027 Notes to be repurchased, plus any accrued and unpaid additional interest, if any, to, but excluding, the fundamental change repurchase date. We accounted for the issuance of the 2027 Notes as a single liability measured at its amortized cost, as no other embedded features require bifurcation and recognition as derivatives. Combined interest expense on the 2027 Notes related to regular interest and the amortization of debt issuance costs was $5.0 million and $10.0 million for the three and six months ended June 30, 2023, respectively. 2026 Notes In November 2021, we issued an aggregate of $1.7 billion principal amount of 0% Convertible Senior Notes due 2026 (the "2026 Notes"). Proceeds from the issuance of the 2026 Notes were $1.7 billion, net of debt issuance costs and cash used to purchase the capped call transactions ("Capped Call Transactions") discussed below. The debt issuance costs are amortized to interest expense using the straight-line method, which approximates the effective interest method. The 2026 Notes are general unsecured obligations which do not bear regular interest and for which the principal balance will not accrete. The 2026 Notes will mature on November 15, 2026 unless earlier converted, redeemed, or repurchased. The 2026 Notes are convertible into cash, shares of our common stock, or a combination of cash and shares of our common stock, at our election, at an initial conversion rate of 3.2392 shares of common stock per $1,000 principal amount of 2026 Notes, which is equivalent to an initial conversion price of approximately $308.72 per share of our common stock. The conversion rate is subject to customary adjustments for certain events as described in the indenture governing the 2026 Notes. Interest expense on the 2026 Notes related to the amortization of debt issuance costs was $1.1 million and $2.2 million for the three and six months ended June 30, 2023, respectively. The table below summarizes the principal and unamortized debt issuance costs for the 2026 and 2027 Notes (in thousands): As of June 30, 2023 Convertible notes: Principal - 2026 Notes $ 1,725,000 Principal - 2027 Notes 1,000,000 Unamortized debt issuance cost - 2026 and 2027 Notes (15,558) Net carrying amount $ 2,709,442 As of June 30, 2023, no holders of the 2027 and 2026 Notes have exercised the conversion rights, and the if-converted value of the 2027 and 2026 Notes did not exceed the principal amount. Capped Call Transactions In connection with the pricing of the 2026 Notes, we entered into the Capped Call Transactions with certain counterparties at a net cost of $48.1 million with call options totaling approximately 5.6 million of our common shares, and expiration dates beginning on September 18, 2026 and ending on November 12, 2026. The strike price of the Capped Call Transactions is $308.72, and the cap price is initially $343.02 per share of our common stock and is subject to certain adjustments under the terms of the Capped Call Transactions. The Capped Call Transactions are freestanding and are considered separately exercisable from the 2026 Notes. The Capped Call Transactions are intended to reduce potential dilution to our common stock upon any conversion of the 2026 Notes and/or offset any cash payments we are required to make in excess of the principal amount of converted 2026 Notes, as the case may be, with such reduction and/or offset subject to a cap based on the cap price described above. The cost of the Capped Call Transactions was recorded as a reduction of our additional paid-in capital on our consolidated balance sheets. The Capped Call Transactions will not be remeasured as long as they continue to meet the conditions for equity classification. As of June 30, 2023, the Capped Call Transactions met the conditions for equity classification and were not in the money.

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
Commitments and Contingencies	Jun. 30, 2023
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies The following table summarizes our non-cancelable contractual commitments as of June 30, 2023 (in thousands): Total Remainder of 2023 2024‑2025 2026‑2027 Thereafter Operating leases (1) $ 184,754 $ 23,171 $ 78,906 $ 43,425 $ 39,252 Purchase commitments (2) 855,697 156,608 480,212 218,877 — Convertible notes (3) 2,725,000 — — 2,725,000 — Total $ 3,765,451 $ 179,779 $ 559,118 $ 2,987,302 $ 39,252 (1) Operating leases consist of obligations for real estate that are active. (2) The substantial majority of our purchase commitments are related to agreements with our data center hosting providers. (3) Convertible notes due 2026 and 2027. See Note 6, "Borrowings," above for further discussion. We expect to meet our remaining commitments. Legal Matters In the normal course of business, we are subject to various legal matters. We accrue a liability when management believes that it is both probable that a liability has been incurred and the amount of loss can be reasonably estimated. We also disclose material contingencies when we believe a loss is not probable but reasonably possible. Legal costs related to such potential losses are expensed as incurred. In addition, recoveries are shown as a reduction in legal costs in the period in which they are realized. 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. However, litigation is inherently uncertain, and the outcome of these matters cannot be predicted with certainty. Accordingly, cash flows or results of operations could be materially affected in any particular period by the resolution of one or more of these matters. Indemnifications In the ordinary course of business, we may provide indemnifications of varying scope and terms to customers, vendors, lessors, investors, directors, officers, employees and other parties with respect to certain matters. Indemnification may include losses from our breach of such agreements, services we provide, or third-party intellectual property infringement claims. 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 June 30, 2023, 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 $14.0 million and $20.6 million of secured letters of credit outstanding as of June 30, 2023 and December 31, 2022. 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.

Stock-Based Compensation

Stock-Based Compensation	6 Months Ended
Stock-Based Compensation	Jun. 30, 2023
Share-Based Payment Arrangement [Abstract]
Stock-Based Compensation	Stock‑Based Compensation We recorded stock-based compensation expense related to grants to employees on our condensed consolidated statements of operations as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Cost of revenue $ 19,801 $ 11,877 $ 38,650 $ 20,671 Research and development 71,058 60,110 147,541 115,363 Sales and marketing 34,680 25,125 70,197 48,959 General and administrative 31,999 21,130 64,178 36,676 Total stock-based compensation expense $ 157,538 $ 118,242 $ 320,566 $ 221,669 Stock Options A summary of our stock option activity is as follows: Options Outstanding Stock Weighted-Average Weighted-Average Balance as of December 31, 2022 35,718,803 $ 18.05 5.60 Granted 241,400 $ 34.29 Exercised (3,037,325) $ 9.27 Forfeited, cancelled, or expired (581,129) $ 45.40 Balance as of June 30, 2023 32,341,749 $ 18.50 5.19 The calculated grant-date fair value of stock options granted was estimated using the Black-Scholes option-pricing model with the following assumptions: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Expected dividend yield — — — — Risk-free interest rate 3.8% 3.0% 3.8% - 4.2% 1.7% - 3.0% Expected volatility 56.3% 33.3% 54.7% - 56.3% 33.3% - 33.8% Expected term (in years) 6.25 6.25 6.25 6.25 Fair value of underlying common stock $35.84 $38.47 $29.33 - $35.84 $38.47 - $89.01 Restricted Stock Units A summary of our restricted stock unit ("RSU"), including price-vested unit ("PVU"), activity is as follows: Unvested RSUs Number of Weighted-Average Unvested as of December 31, 2022 38,105,462 $ 48.37 Granted 3,650,818 $ 31.24 Vested (5,497,011) $ 54.60 Forfeited (4,094,425) $ 52.64 Unvested as of June 30, 2023 32,164,844 $ 45.62 Price-Vested Units In October 2022, we granted to certain of our executive officers a total of 989,880 PVUs, which are RSUs for which vesting is subject to the fulfillment of both a service period that extends up to four years and the achievement of a stock price hurdle during the relevant performance period that extends up to seven years. The fair value of each PVU award is estimated using a Monte Carlo simulation that uses assumptions determined on the date of grant. During the three and six months ended June 30, 2023, the service period condition and stock price hurdle were not met. Employee Stock Purchase Plan The fair value of shares offered under our Employee Stock Purchase Plan ("ESPP") was determined on the grant date using the Black-Scholes option pricing model. The following table summarizes the assumptions used and the resulting grant-date fair values of our ESPP: Six Months Ended June 30, 2023 2022 Expected dividend yield — — Risk-free interest rate 5.2% 0.6% Expected volatility 94.5% 40.0% Expected term (in years) 0.50 0.50 Grant-date fair value per share $12.44 $27.42 Additional information related to the ESPP is provided below (in thousands, except per share amounts): Six Months Ended June 30, 2023 2022 Shares issued under the ESPP 532,643 207,986 Weighted-average price per share issued $25.87 $90.48 No shares were issued under the ESPP during the three months ended June 30, 2023 or 2022.

Income Taxes

Income Taxes	6 Months Ended
Income Taxes	Jun. 30, 2023
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes Our tax provision for interim periods is determined using an estimated annual effective tax rate, adjusted for discrete items arising in that quarter. In each quarter, we update the estimated annual effective tax rate and make a year-to-date adjustment to the provision. 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 and six months ended June 30, 2023 differs from the U.S. federal statutory tax rate of 21% primarily due to the need to record a valuation allowance in the U.S. on losses and to a lesser extent tax expense on foreign earnings taxed at different rates. In addition, we undertook certain tax restructuring efforts during the first quarter of 2023 that enhanced our ability to offset deferred tax liabilities in the U.S. in future periods, thereby partially reducing the need for a valuation allowance. Our effective tax rate for the three and six months ended June 30, 2022 differed from the U.S. federal statutory tax rate of 21% primarily due to the base-erosion and anti-abuse tax ("BEAT") mainly arising as a result of mandatory R&D capitalization under the IRC Section 174, losses that cannot be benefited due to the valuation allowance on U.S., Denmark, and United Kingdom ("U.K.") entities, and to a lesser extent, foreign earnings taxed at different tax rates. The realization of deferred tax assets is dependent upon the generation of sufficient taxable income of the appropriate character in future periods. We regularly assess the ability to realize our deferred tax assets and establish a valuation allowance if it is more-likely-than-not that some portion of the deferred tax assets will not be realized. In performing this assessment with respect to each jurisdiction, we review all available positive and negative evidence. Primarily due to our history of losses, we believe that it is more likely than not that the deferred tax assets of our U.S. federal, certain state, Denmark, U.K., and certain non-U.S. jurisdictions will not be realized and we have maintained a full valuation allowance against such deferred tax assets. As of June 30, 2023, we had $181.2 million of gross unrecognized tax benefits, of which $27.7 million would impact the effective tax rate, if recognized. It is reasonably possible that the amount of unrecognized tax benefits as of June 30, 2023 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.

Net Loss per Share of Common St

Net Loss per Share of Common Stock	6 Months Ended
Net Loss per Share of Common Stock	Jun. 30, 2023
Earnings Per Share [Abstract]
Net Loss per Share of Common Stock	Net Loss per Share of Common Stock Basic and diluted net loss per share is the same for all periods presented because the effects of potentially dilutive items were antidilutive given our net loss in each period. The following table presents potentially dilutive common stock excluded from the computation of diluted net loss per share for the following periods (in thousands) because the impact of including them would have been antidilutive: Three and Six Months Ended 2023 2022 Convertible notes 26,042 5,588 Stock options 32,342 27,187 Unvested RSUs and PVUs 32,165 16,852

Pay vs Performance Disclosure

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Pay vs Performance Disclosure
Net Income (Loss)	$ (192,160)	$ (204,158)	$ (445,191)	$ (381,713)

Insider Trading Arrangements

Insider Trading Arrangements	3 Months Ended	6 Months Ended
Insider Trading Arrangements	Jun. 30, 2023 shares	Jun. 30, 2023 shares
Trading Arrangements, by Individual
Material Terms of Trading Arrangement		The adoption or termination of contracts, instructions or written plans for the purchase or sale of our securities by our directors and officers (as defined in Rule 16a-1(f) under the Exchange Act) for the three months ended June 30, 2023, each of which is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act, were as follows: Name Title Action Date Adopted Expiration Date Aggregate # of Securities to be Purchased/Sold Anirma Gupta (1) Senior Vice President, Chief Legal Officer and Corporate Secretary Adopted May 12, 2023 December 31, 2024 (1) Robynne Sisco (2) Director Adopted May 12, 2023 August 14, 2024 25,768 John Riccitiello (3) President, Chief Executive Officer and Executive Chairman of the Board Adopted May 19, 2023 August 21, 2024 1,696,250 Luis Visoso (4) Executive Vice President, Chief Financial Officer Adopted May 31, 2023 May 30, 2025 70,000 (1) Ms. Gupta's plan provides for the potential sale of up to $500,000 of our common stock held in account and future vesting events. The plan expires on December 31, 2024, or upon the earlier completion of all authorized transactions under the plan. (2) Ms. Sisco's plan provides for the potential exercise of vested stock options and the associated sale of up to 25,768 shares of our common stock. The plan expires on August 14, 2024, or upon the earlier completion of all authorized transactions under the plan. (3) Mr. Riccitiello and his spouse entered into the plan, which provides for the potential exercise of vested stock options and associated sale of up to 1,696,250 shares of our common stock, of which 1,500,000 options and 196,250 options are contemplated to be exercised and sold on behalf of Mr. Riccitiello and his spouse, respectively. The plan expires on August 21, 2024, or upon the earlier completion of all authorized transactions under the plan. (4) Mr. Visoso's plan provides for the potential sale of up to 70,000 shares of our common stock held in account and future vesting events. The plan expires on May 30, 2025, or upon the earlier completion of all authorized transactions under the plan.
Rule 10b5-1 Arrangement Terminated	false
Anirma Gupta [Member]
Trading Arrangements, by Individual
Name	Anirma Gupta (1)
Title	Senior Vice President, Chief Legal Officer and Corporate Secretary
Rule 10b5-1 Arrangement Adopted	true
Adoption Date	May 12, 2023
Arrangement Duration	599 days
Robynne Sisco [Member]
Trading Arrangements, by Individual
Name	Robynne Sisco (2)
Title	Director
Rule 10b5-1 Arrangement Adopted	true
Adoption Date	May 12, 2023
Arrangement Duration	460 days
Aggregate Available	25,768	25,768
John Riccitiello [Member]
Trading Arrangements, by Individual
Name	John Riccitiello (3)
Title	President, Chief Executive Officer and Executive Chairman of the Board
Rule 10b5-1 Arrangement Adopted	true
Adoption Date	May 19, 2023
Arrangement Duration	460 days
Aggregate Available	1,696,250	1,696,250
Luis Visoso [Member]
Trading Arrangements, by Individual
Name	Luis Visoso (4)
Title	Executive Vice President, Chief Financial Officer
Rule 10b5-1 Arrangement Adopted	true
Adoption Date	May 31, 2023
Arrangement Duration	730 days
Aggregate Available	70,000	70,000

Accounting Policies (Policies)

Accounting Policies (Policies)	6 Months Ended
Accounting Policies (Policies)	Jun. 30, 2023
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation and ConsolidationWe prepared the accompanying unaudited condensed consolidated financial statements in accordance with United States ("U.S.") generally accepted accounting principles ("GAAP") and applicable rules and regulations of the Securities and Exchange Commission ("SEC") for interim financial reporting.
Consolidation	The condensed consolidated financial statements include the accounts of Unity Software Inc., its wholly owned subsidiaries, and entities consolidated under the voting interest model. We have eliminated all intercompany balances and transactions. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. In our opinion, all adjustments, which include normal recurring adjustments necessary for a fair presentation, have been included. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year or other periods. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in our 2022 Annual Report on Form 10-K.
Use of Estimates	Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make certain estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates, and such differences could be material to our financial position and results of operations.
Accounts Receivable, Net	Accounts Receivable, NetAccounts receivable are recorded at the original invoiced amount, net of allowances for uncollectible amounts. We estimate losses on uncollectible amounts based on expected losses, including our historical experience of actual losses.
Sales Commissions	Sales CommissionsSales 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.
Cash, Cash Equivalents, Restricted Cash	Cash, Cash Equivalents, Restricted Cash, and Short-term Investments Cash, cash equivalents, restricted cash, and short-term investments are recorded at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value. • Level 1—Valuations based on quoted prices in active markets for identical assets or liabilities. • Level 2—Valuations based on quoted prices for similar assets and liabilities in active markets or inputs that are observable for the assets or liabilities, either directly or indirectly through market corroboration. • Level 3—Valuations based on unobservable inputs reflecting our own assumptions used to measure assets and liabilities at fair value. These valuations require significant judgment.
Short-term Investments	Cash, Cash Equivalents, Restricted Cash, and Short-term Investments Cash, cash equivalents, restricted cash, and short-term investments are recorded at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value. • Level 1—Valuations based on quoted prices in active markets for identical assets or liabilities. • Level 2—Valuations based on quoted prices for similar assets and liabilities in active markets or inputs that are observable for the assets or liabilities, either directly or indirectly through market corroboration. • Level 3—Valuations based on unobservable inputs reflecting our own assumptions used to measure assets and liabilities at fair value. These valuations require significant judgment.

Revenue (Tables)

Revenue (Tables)	6 Months Ended
Revenue (Tables)	Jun. 30, 2023
Revenue from Contract with Customer [Abstract]
Schedule of Revenue Disaggregated by Source	The following table presents our revenue disaggregated by source, which also have similar economic characteristics (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Create Solutions $ 193,110 $ 164,594 $ 380,479 $ 329,138 Grow Solutions 340,368 132,449 653,360 288,031 Total revenue $ 533,478 $ 297,043 $ 1,033,839 $ 617,169
Schedule of Revenue by Geographic Area	The following table presents our revenue disaggregated by geography, based on the invoice address of our customers (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 United States $ 138,711 $ 69,768 $ 269,612 $ 143,714 Greater China (1) 69,750 42,286 117,262 86,130 EMEA (2) 188,219 101,835 374,943 217,147 APAC (3) 119,107 75,068 238,671 151,761 Other Americas (4) 17,691 8,087 33,351 18,417 Total revenue $ 533,478 $ 297,043 $ 1,033,839 $ 617,169 (1) Greater China includes China, Hong Kong, and Taiwan. (2) Europe, the Middle East, and Africa ("EMEA") (3) Asia- Pacific , excluding Greater China ("APAC") (4) Canada and Latin America ("Other Americas")

Financial Instruments (Tables)

Financial Instruments (Tables)	6 Months Ended
Financial Instruments (Tables)	Jun. 30, 2023
Investments, Debt and Equity Securities [Abstract]
Schedule of Cash Equivalents and Marketable Securities	The following table summarizes, by major security type, our cash, cash equivalents, restricted cash, and short-term investments that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy (in thousands) : June 30, 2023 December 31, 2022 Fair Value (1) Cash $ 688,074 $ 699,340 Level 1: Restricted cash and cash equivalents: Restricted cash $ 13,958 $ 20,604 Money market funds 754,469 373,619 Time deposits 198,383 412,125 Total restricted cash and cash equivalents $ 966,810 $ 806,348 Short-term investments $ — $ 101,711 Total cash, cash equivalents, restricted cash, and short-term investments $ 1,654,884 $ 1,607,399 (1) Due to the highly liquid nature of our investments, amortized cost approximates fair value.
Schedule of Cash Equivalents	The following table summarizes, by major security type, our cash, cash equivalents, restricted cash, and short-term investments that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy (in thousands) : June 30, 2023 December 31, 2022 Fair Value (1) Cash $ 688,074 $ 699,340 Level 1: Restricted cash and cash equivalents: Restricted cash $ 13,958 $ 20,604 Money market funds 754,469 373,619 Time deposits 198,383 412,125 Total restricted cash and cash equivalents $ 966,810 $ 806,348 Short-term investments $ — $ 101,711 Total cash, cash equivalents, restricted cash, and short-term investments $ 1,654,884 $ 1,607,399 (1) Due to the highly liquid nature of our investments, amortized cost approximates fair value.

Investment in Unity China (Tabl

Investment in Unity China (Tables)	6 Months Ended
Investment in Unity China (Tables)	Jun. 30, 2023
Noncontrolling Interest [Abstract]
Schedule of Redeemable Noncontrolling Interest	The following table presents the changes in redeemable noncontrolling interests (in thousands): Three Months Ended June 30, 2023 Six Months Ended June 30, 2023 Balance at beginning of period $ 225,376 $ 219,563 Net loss attributable to redeemable noncontrolling interests (1,086) (1,712) Accretion for redeemable noncontrolling interests 3,676 6,374 Foreign currency translation and foreign exchange adjustments for redeemable noncontrolling interests (12,217) (8,476) Balance at end of period $ 215,749 $ 215,749

Leases (Tables)

Leases (Tables)	6 Months Ended
Leases (Tables)	Jun. 30, 2023
Leases [Abstract]
Schedule of Lease Cost	Components of lease expense were as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Operating lease expense $ 10,375 $ 8,163 $ 19,768 $ 15,783 Variable lease expense 1,164 1,393 2,442 2,838 Sublease income (440) — (824) — Total lease expense $ 11,099 $ 9,556 $ 21,386 $ 18,621
Schedule of Lessee Assets and Liabilities	Supplemental balance sheet information related to leases was as follows (in thousands, except weighted-average figures): As of Classification June 30, 2023 December 31, 2022 Operating lease assets Other assets $ 140,792 $ 120,535 Current operating lease liabilities Accrued expenses and other $ 39,880 $ 34,469 Long-term operating lease liabilities Other long-term liabilities 122,502 107,776 Total operating lease liabilities $ 162,382 $ 142,245
Schedule of Future Minimum Lease Payments	As of June 30, 2023, our lease liabilities were as follows (in thousands): Operating Leases Gross lease liabilities $ 184,754 Less: imputed interest (22,372) Present value of lease liabilities $ 162,382

Borrowings (Tables)

Borrowings (Tables)	6 Months Ended
Borrowings (Tables)	Jun. 30, 2023
Debt Disclosure [Abstract]
Schedule of Convertible Debt	The table below summarizes the principal and unamortized debt issuance costs for the 2026 and 2027 Notes (in thousands): As of June 30, 2023 Convertible notes: Principal - 2026 Notes $ 1,725,000 Principal - 2027 Notes 1,000,000 Unamortized debt issuance cost - 2026 and 2027 Notes (15,558) Net carrying amount $ 2,709,442

Commitments and Contingencies (

Commitments and Contingencies (Tables)	6 Months Ended
Commitments and Contingencies (Tables)	Jun. 30, 2023
Commitments and Contingencies Disclosure [Abstract]
Schedule of Non-Cancelable Contractual Commitments	The following table summarizes our non-cancelable contractual commitments as of June 30, 2023 (in thousands): Total Remainder of 2023 2024‑2025 2026‑2027 Thereafter Operating leases (1) $ 184,754 $ 23,171 $ 78,906 $ 43,425 $ 39,252 Purchase commitments (2) 855,697 156,608 480,212 218,877 — Convertible notes (3) 2,725,000 — — 2,725,000 — Total $ 3,765,451 $ 179,779 $ 559,118 $ 2,987,302 $ 39,252 (1) Operating leases consist of obligations for real estate that are active. (2) The substantial majority of our purchase commitments are related to agreements with our data center hosting providers. (3) Convertible notes due 2026 and 2027. See Note 6, "Borrowings," above for further discussion.

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	6 Months Ended
Stock-Based Compensation (Tables)	Jun. 30, 2023
Share-Based Payment Arrangement [Abstract]
Schedule of Stock-Based Compensation Expense	We recorded stock-based compensation expense related to grants to employees on our condensed consolidated statements of operations as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Cost of revenue $ 19,801 $ 11,877 $ 38,650 $ 20,671 Research and development 71,058 60,110 147,541 115,363 Sales and marketing 34,680 25,125 70,197 48,959 General and administrative 31,999 21,130 64,178 36,676 Total stock-based compensation expense $ 157,538 $ 118,242 $ 320,566 $ 221,669
Schedule of Stock Options	A summary of our stock option activity is as follows: Options Outstanding Stock Weighted-Average Weighted-Average Balance as of December 31, 2022 35,718,803 $ 18.05 5.60 Granted 241,400 $ 34.29 Exercised (3,037,325) $ 9.27 Forfeited, cancelled, or expired (581,129) $ 45.40 Balance as of June 30, 2023 32,341,749 $ 18.50 5.19
Schedule of Valuation Assumptions of Stock Options	The calculated grant-date fair value of stock options granted was estimated using the Black-Scholes option-pricing model with the following assumptions: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Expected dividend yield — — — — Risk-free interest rate 3.8% 3.0% 3.8% - 4.2% 1.7% - 3.0% Expected volatility 56.3% 33.3% 54.7% - 56.3% 33.3% - 33.8% Expected term (in years) 6.25 6.25 6.25 6.25 Fair value of underlying common stock $35.84 $38.47 $29.33 - $35.84 $38.47 - $89.01
Schedule of Restricted Stock Unit Activity	A summary of our restricted stock unit ("RSU"), including price-vested unit ("PVU"), activity is as follows: Unvested RSUs Number of Weighted-Average Unvested as of December 31, 2022 38,105,462 $ 48.37 Granted 3,650,818 $ 31.24 Vested (5,497,011) $ 54.60 Forfeited (4,094,425) $ 52.64 Unvested as of June 30, 2023 32,164,844 $ 45.62
Schedule of Valuation Assumptions of Employee Stock Purchase Plans	The following table summarizes the assumptions used and the resulting grant-date fair values of our ESPP: Six Months Ended June 30, 2023 2022 Expected dividend yield — — Risk-free interest rate 5.2% 0.6% Expected volatility 94.5% 40.0% Expected term (in years) 0.50 0.50 Grant-date fair value per share $12.44 $27.42
Schedule of Employee Stock Purchase Plan	Additional information related to the ESPP is provided below (in thousands, except per share amounts): Six Months Ended June 30, 2023 2022 Shares issued under the ESPP 532,643 207,986 Weighted-average price per share issued $25.87 $90.48

Net Loss per Share of Common _2

Net Loss per Share of Common Stock (Tables)	6 Months Ended
Net Loss per Share of Common Stock (Tables)	Jun. 30, 2023
Earnings Per Share [Abstract]
Schedule of Antidilutive Securities Excluded from Computation of Diluted Net Loss Per Share	The following table presents potentially dilutive common stock excluded from the computation of diluted net loss per share for the following periods (in thousands) because the impact of including them would have been antidilutive: Three and Six Months Ended 2023 2022 Convertible notes 26,042 5,588 Stock options 32,342 27,187 Unvested RSUs and PVUs 32,165 16,852

Revenue - Disaggregation of Rev

Revenue - Disaggregation of Revenue By Source (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Disaggregation of Revenue [Line Items]
Revenue	$ 533,478	$ 297,043	$ 1,033,839	$ 617,169
Create Solutions
Disaggregation of Revenue [Line Items]
Revenue	193,110	164,594	380,479	329,138
Grow Solutions
Disaggregation of Revenue [Line Items]
Revenue	$ 340,368	$ 132,449	$ 653,360	$ 288,031

Revenue - Disaggregation of R_2

Revenue - Disaggregation of Revenue by Geographic Area (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Disaggregation of Revenue [Line Items]
Revenue	$ 533,478	$ 297,043	$ 1,033,839	$ 617,169
United States
Disaggregation of Revenue [Line Items]
Revenue	138,711	69,768	269,612	143,714
Greater China
Disaggregation of Revenue [Line Items]
Revenue	69,750	42,286	117,262	86,130
EMEA
Disaggregation of Revenue [Line Items]
Revenue	188,219	101,835	374,943	217,147
APAC
Disaggregation of Revenue [Line Items]
Revenue	119,107	75,068	238,671	151,761
Other Americas
Disaggregation of Revenue [Line Items]
Revenue	$ 17,691	$ 8,087	$ 33,351	$ 18,417

Revenue - Accounts Receivable,

Revenue - Accounts Receivable, Net (Details) - USD ($) $ in Millions	Jun. 30, 2023	Dec. 31, 2022
Revenue from Contract with Customer [Abstract]
Accounts receivable, allowances	$ 16	$ 9.4

Revenue - Sales Commissions (De

Revenue - Sales Commissions (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Disaggregation of Revenue [Line Items]
Capitalized contract cost, amortization period	3 years		3 years
Capitalized contract cost, amortization	$ 2.5	$ 2.2	$ 5	$ 4.5
Prepaid Expenses and Other Current Assets
Disaggregation of Revenue [Line Items]
Capitalized contract costs	7.5		7.5
Other Assets
Disaggregation of Revenue [Line Items]
Capitalized contract costs	$ 3.5		$ 3.5

Revenue - Contract Balances and

Revenue - Contract Balances and Remaining Performance Obligations (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2023	Dec. 31, 2022
Revenue from Contract with Customer [Abstract]
Unbilled receivables	$ 44.3	$ 37.5
Revenue recognized	$ 142.3

Revenue - Narrative (Details)

Revenue - Narrative (Details) $ in Millions	6 Months Ended
Revenue - Narrative (Details) $ in Millions	Jun. 30, 2023 USD ($)
Disaggregation of Revenue [Line Items]
Revenue, remaining performance obligation, amount	$ 624.1
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-07-01
Disaggregation of Revenue [Line Items]
Revenue, remaining performance obligation, amount	$ 291.7
Revenue, remaining performance obligation, percentage	47%
Recognition period	12 months
Minimum
Disaggregation of Revenue [Line Items]
Commitment term	1 year
Maximum
Disaggregation of Revenue [Line Items]
Commitment term	5 years

Financial Instruments - Schedul

Financial Instruments - Schedule of Cash Equivalents and Marketable Securities (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Debt Securities, Available-for-sale [Line Items]
Cash	$ 688,074	$ 699,340
Restricted cash and cash equivalents:
Short-term investments	0	101,711
Total cash, cash equivalents, restricted cash, and short-term investments	1,654,884	1,607,399
Level 1:
Restricted cash and cash equivalents:
Restricted cash, fair value	13,958	20,604
Restricted cash and cash equivalents, fair value	966,810	806,348
Short-term investments	0	101,711
Level 1: \| Money market funds
Restricted cash and cash equivalents:
Money market funds, fair value	754,469	373,619
Level 1: \| Time deposits
Restricted cash and cash equivalents:
Money market funds, fair value	$ 198,383	$ 412,125

Financial Instruments - Narrati

Financial Instruments - Narrative (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2023	Dec. 31, 2022
Debt Securities, Available-for-sale [Line Items]
Equity investments	$ 31.6	$ 31.6
Maximum
Debt Securities, Available-for-sale [Line Items]
Ownership interest less than	20%

Investment in Unity China - Nar

Investment in Unity China - Narrative (Details)	Jun. 30, 2023
Third Party Investors \| Unity China
Noncontrolling Interest [Line Items]
Noncontrolling interest, percentage sold	20.50%

Investment in Unity China - Non

Investment in Unity China - Noncontrolling Interests (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2023
Increase (Decrease) in Temporary Equity [Roll Forward]
Balance at beginning of period	$ 225,376	$ 219,563
Net loss attributable to redeemable noncontrolling interests	(1,086)	(1,712)
Accretion for redeemable noncontrolling interests	3,676	6,374
Foreign currency translation and foreign exchange adjustments for redeemable noncontrolling interests	(12,217)	(8,476)
Balance at end of period	$ 215,749	$ 215,749

Leases - Narrative (Details)

Leases - Narrative (Details)	Jun. 30, 2023	Dec. 31, 2022
Leases [Abstract]
Operating lease term (up to)	10 years
Operating lease, weighted average remaining lease term	5 years 3 months 18 days	5 years
Operating lease, weighted average discount rate, percent	4.90%	4%

Leases - Schedule of Lease Cost

Leases - Schedule of Lease Cost (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Leases [Abstract]
Operating lease expense	$ 10,375	$ 8,163	$ 19,768	$ 15,783
Variable lease expense	1,164	1,393	2,442	2,838
Sublease income	(440)	0	(824)	0
Total lease expense	$ 11,099	$ 9,556	$ 21,386	$ 18,621

Leases - Schedule of Assets And

Leases - Schedule of Assets And Liabilities, Lessee (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Leases [Abstract]
Operating lease assets	$ 140,792	$ 120,535
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration]	Accrued expenses and other	Accrued expenses and other
Current operating lease liabilities	$ 39,880	$ 34,469
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration]	Other long-term liabilities	Other long-term liabilities
Long-term operating lease liabilities	$ 122,502	$ 107,776
Total operating lease liabilities	$ 162,382	$ 142,245

Leases - Schedule of Future Min

Leases - Schedule of Future Minimum Lease Payments (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Leases [Abstract]
Gross lease liabilities	$ 184,754
Less: imputed interest	(22,372)
Present value of lease liabilities	$ 162,382	$ 142,245

Borrowings - Convertible Notes

Borrowings - Convertible Notes (Details) - Convertible Debt $ / shares in Units, $ in Millions	1 Months Ended		3 Months Ended	6 Months Ended
	Nov. 30, 2022 USD ($) $ / shares	Nov. 30, 2021 USD ($) $ / shares	Jun. 30, 2023 USD ($)	Jun. 30, 2023 USD ($)
Principal - 2027 Notes
Debt Instrument [Line Items]
Debt face amount	$ 1,000
Stated interest rate	2%
Proceeds from issuance of notes	$ 1,000
Debt interest rate	2%
Conversion ratio	0.0204526
Conversion price (USD per share) \| $ / shares	$ 48.89
Redemption restricted period after issuance	12 months
Redemption price percentage	100%
Interest expense related to amortization of debt			$ 5	$ 10
Principal - 2026 Notes
Debt Instrument [Line Items]
Debt face amount		$ 1,700
Stated interest rate		0%
Proceeds from issuance of notes		$ 1,700
Conversion ratio		0.0032392
Conversion price (USD per share) \| $ / shares		$ 308.72
Interest expense related to amortization of debt			$ 1.1	$ 2.2

Borrowings - Schedule of Conver

Borrowings - Schedule of Convertible Note (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Net carrying amount	$ 2,709,442	$ 2,707,171
2026 and 2027 Notes \| Convertible Debt
Debt Instrument [Line Items]
Unamortized debt issuance cost - 2026 and 2027 Notes	(15,558)
Net carrying amount	2,709,442
Principal - 2026 Notes \| Convertible Debt
Debt Instrument [Line Items]
Principal	1,725,000
Principal - 2027 Notes \| Convertible Debt
Debt Instrument [Line Items]
Principal	$ 1,000,000

Borrowings - Capped Call Transa

Borrowings - Capped Call Transaction (Details) - Principal - 2026 Notes $ / shares in Units, shares in Millions, $ in Millions	1 Months Ended
	Nov. 30, 2021 USD ($) $ / shares shares
Debt Instrument [Line Items]
Net cost incurred \| $	$ 48.1
Number of common shares (in shares) \| shares	5.6
Strike price (USD per share)	$ 308.72
Cap price (USD per share)	$ 343.02

Commitments and Contingencies -

Commitments and Contingencies - Non-Cancelable Contractual Commitments (Details) $ in Thousands	Jun. 30, 2023 USD ($)
Operating leases
Total	$ 184,754
Remainder of 2023	23,171
2024‑2025	78,906
2026‑2027	43,425
Thereafter	39,252
Purchase commitments
Total	855,697
Remainder of 2023	156,608
2024‑2025	480,212
2026‑2027	218,877
Thereafter	0
Convertible notes
Total	2,725,000
Remainder of 2023	0
2024‑2025	0
2026‑2027	2,725,000
Thereafter	0
Total
Total	3,765,451
Remainder of 2023	179,779
2024‑2025	559,118
2026‑2027	2,987,302
Thereafter	$ 39,252

Commitments and Contingencies_2

Commitments and Contingencies - Narrative (Details) - USD ($) $ in Millions	Jun. 30, 2023	Dec. 31, 2022
Letter of Credit
Long-term Purchase Commitment [Line Items]
Letter of credit outstanding	$ 14	$ 20.6

Stock-Based Compensation - Stoc

Stock-Based Compensation - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation expense	$ 157,538	$ 118,242	$ 320,566	$ 221,669
Cost of revenue
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation expense	19,801	11,877	38,650	20,671
Research and development
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation expense	71,058	60,110	147,541	115,363
Sales and marketing
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation expense	34,680	25,125	70,197	48,959
General and administrative
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation expense	$ 31,999	$ 21,130	$ 64,178	$ 36,676

Stock-Based Compensation - Sche

Stock-Based Compensation - Schedule of Stock Options (Details) - $ / shares	6 Months Ended	12 Months Ended
	Jun. 30, 2023	Dec. 31, 2022
Stock Options Outstanding
Beginning balance (in shares)	35,718,803
Granted (in shares)	241,400
Exercised (in shares)	(3,037,325)
Forfeited, cancelled, or expired (in shares)	(581,129)
Ending balance (in shares)	32,341,749	35,718,803
Weighted-Average Exercise Price
Beginning balance (USD per share)	$ 18.05
Granted (USD per share)	34.29
Exercised (USD per share)	9.27
Forfeited, cancelled, or expired (USD per share)	45.40
Ending balance (USD per share)	$ 18.50	$ 18.05
Weighted-Average Remaining Contractual Term (In Years)
Options outstanding, Weighted average remaining contractual term	5 years 2 months 8 days	5 years 7 months 6 days

Stock-Based Compensation - Summ

Stock-Based Compensation - Summary of Valuation Assumptions of Stock Options (Details) - Stock options - $ / shares	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Expected dividend yield	0%	0%	0%	0%
Risk-free interest rate	3.80%	3%
Risk-free interest rate minimum			3.80%	1.70%
Risk-free interest rate maximum			4.20%	3%
Expected volatility	56.30%	33.30%
Expected volatility minimum			54.70%	33.30%
Expected volatility maximum			56.30%	33.80%
Expected term (in years)	6 years 3 months	6 years 3 months	6 years 3 months	6 years 3 months
Fair value of underlying common stock (USD per share)	$ 35.84	$ 38.47
Minimum
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Fair value of underlying common stock (USD per share)			$ 29.33	$ 38.47
Maximum
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Fair value of underlying common stock (USD per share)			$ 35.84	$ 89.01

Stock-Based Compensation - Su_2

Stock-Based Compensation - Summary of Restricted Stock Unit Activity (Details) - Unvested RSUs and PVUs	6 Months Ended
	Jun. 30, 2023 $ / shares shares
Number of Shares
Unvested at beginning of period (in shares) \| shares	38,105,462
Granted (in shares) \| shares	3,650,818
Vested (in shares) \| shares	(5,497,011)
Forfeited (in shares) \| shares	(4,094,425)
Unvested at end of period (in shares) \| shares	32,164,844
Weighted-Average Grant-Date Fair Value
Unvested at beginning of period (USD per share) \| $ / shares	$ 48.37
Granted (USD per share) \| $ / shares	31.24
Vested (USD per share) \| $ / shares	54.60
Forfeited (USD per share) \| $ / shares	52.64
Unvested at end of period (USD per share) \| $ / shares	$ 45.62

Stock-Based Compensation - Pric

Stock-Based Compensation - Price-Vested Units (Details) - Price-Vested Units	1 Months Ended
	Oct. 31, 2022 shares
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Granted (in shares)	989,880
Award requisite service period	4 years
Award performance period	7 years

Stock-Based Compensation - Empl

Stock-Based Compensation - Employee Stock Purchase Plan (Details) - Employee Stock Purchase Plan - $ / shares	3 Months Ended	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2023	Jun. 30, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected dividend yield		0%	0%
Risk-free interest rate	5.20%		0.60%
Expected volatility	94.50%		40%
Expected term (in years)	6 months		6 months
Grant-date fair value per share (USD per share)	$ 12.44		$ 27.42

Stock-Based Compensation - Su_3

Stock-Based Compensation - Summary of ESPP (Details) - Employee Stock Purchase Plan - $ / shares	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares issued under the ESPP (in shares)	0	0	532,643	207,986
Weighted-average price per share issued (USD per share)			$ 25.87	$ 90.48

Income Taxes - Narrative (Detai

Income Taxes - Narrative (Details) $ in Millions	Jun. 30, 2023 USD ($)
Income Tax Disclosure [Abstract]
Unrecognized tax benefits	$ 181.2
Unrecognized tax benefits that would impact effective tax rate	$ 27.7

Net Loss per Share of Common _3

Net Loss per Share of Common Stock - Antidilutive Securities Excluded From Computation (Details) - shares shares in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Convertible notes
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	26,042	5,588	26,042	5,588
Stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	32,342	27,187	32,342	27,187
Unvested RSUs and PVUs
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	32,165	16,852	32,165	16,852