Unity Software Inc.

UNITY SOFTWARE INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. 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 2025 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. For us, these estimates are used for, but not limited to, revenue recognition, the measurement of liabilities for uncertain tax positions and deferred tax assets and liabilities, the measurement of liabilities for future payments related to employee separation, the fair value of stock-based compensation, the fair value of redeemable noncontrolling interests, the fair value and useful lives of long-lived assets, the fair value of equity investments where we use the measurement alternative, and the fair value of assets and liabilities held for sale. Actual results could differ from those estimates, and such differences could be material to our financial position and results of operations.

We evaluate intangible assets and other long-lived assets for possible impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. In March 2026, we announced we would sunset the ironSource Ads Network, one of our monetization networks, effective April 30, 2026, and we began the process of exiting our Supersonic game publishing business. Due to this event, we evaluated the long-lived assets associated with those businesses and determined that the undiscounted cash flows were less than the carrying value of the asset group.

As a result, during the first quarter of 2026 we recorded $279 million of impairment charges, including $227 million within cost of revenue, and $47 million within sales and marketing expense. These impairment charges reduced our Intangible assets, net by $271 million, including $225 million in "Developed technology" and $46 million in "Customer relationships". The fair values of these assets were determined using a combined discounted cash flow analysis and market approach.

Furthermore as a result of this evaluation, we revised our estimates of the remaining useful lives for certain assets within the asset group, fromtwo tothree years down toone totwo years, effective April 1, 2026. These assets are primarily included in “Intangible assets, net” on our consolidated balance sheets, and are “developed technology” within intangible assets. The shortened useful lives are due to the shortened remaining time that Unity intends to operate these related businesses, as discussed in the above announcement. The effect of this change in estimate for both the three and six months ended June 30, 2026, was an increase in amortization expense and decrease in operating income of approximately

$3 million, an increase in net loss of approximately $2 million, and an increase in our basic and diluted net loss per share of approximately $0.01 per share.

Assets and Liabilities Held-for-Sale

As of June 30, 2026, we classified certain assets and liabilities associated with our Supersonic business as held-for-sale in connection with our strategic decision to exit the Supersonic business. The sale of our Supersonic business was subsequently completed on August 4, 2026 (see Note 12, "Subsequent Event" below for further discussion).

The assets held-for-sale consist primarily of accounts receivable, developed technology and customer relationship intangible assets, and an allocated portion of goodwill associated with the Supersonic business. Upon classification as held-for-sale, the related long-lived assets ceased being depreciated or amortized. The liabilities held-for-sale primarily include publisher payables, accrued expenses, and other operating liabilities directly associated with Supersonic.

In connection with the held-for-sale classification, we evaluated the recoverability of long-lived assets within the Supersonic disposal group and subsequently measured the disposal group at the lower of its carrying amount and fair value less cost to sell. As a result of this evaluation, we recognized no impairment charges during the three and six months ended June 30, 2026.

The following table summarizes the major classes of assets and liabilities classified as held-for-sale (in thousands):

Employee Separation and Restructuring Costs

In connection with our ongoing restructuring efforts, we incurred incremental employee separation costs and other non-employee charges of approximately $38 million in the six months ended June 30, 2026, primarily related to the planned closure of Unity France. These incremental charges are primarily within research and development. As of June 30, 2026, we have accrued $25 million of these incremental employee separation costs, primarily in "Accrued expenses and other" on our condensed consolidated balance sheets.

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

Recent Accounting Pronouncements Not Yet Adopted

In November 2024, the FASB issued a new Accounting Standards Update ("ASU 2024-03") amending the existing disclosure requirement for expenses within Statement of Operations, primarily requiring more disaggregated disclosure for certain costs and expenses on an annual and interim basis. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted, and can be applied on either a prospective or retroactive basis. We are currently evaluating ASU 2024-03 to determine its impact on our expense disclosures.

In September 2025, the FASB issued a new Accounting Standards Update ("ASU 2025-06") amending existing internal-use software guidance, changing the timing and thresholds for capitalizing these software costs. ASU 2025-06 is effective for annual and interim reporting periods beginning after December 15, 2027, with early adoption permitted and can be applied on either a prospective, modified, or retrospective basis. We are currently evaluating ASU 2025-06 to determine its impact on our financial statements.

2. Revenue

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

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

(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 statements of operations. As of June 30, 2026 and December 31, 2025, the allowance for uncollectible amounts was $9.0 million and $10.9 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, 2026, capitalized commissions, net of amortization, included in prepaid expenses and other and other assets were $4.4 million and $2.2 million, respectively. As of December 31, 2025, capitalized commissions, net of amortization, included in prepaid expenses and other and other assets were $5.4 million and $2.8 million, respectively.

During the three and six months ended June 30, 2026, we recorded amortization costs of $1.6 million and $3.2 million, respectively, in sales and marketing expenses, as compared to $1.9 million and $3.8 million during the three and six months ended June 30, 2025, respectively. We didnot incur any impairment losses for the three and six months ended June 30, 2026 and 2025.

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 $14.6 million and $15.8 million as of June 30, 2026 and December 31, 2025, 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, 2026 and December 31, 2025.

Contract liabilities (deferred revenue) relate to payments received in advance of performance under the contract. Revenue recognized during the six months ended June 30, 2026 that was included in the deferred revenue balances at January 1, 2026 was $160 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, 2026, were $505 million and relate primarily to Create Solutions subscriptions, Enterprise Support, and Strategic Partnerships. These commitments generally extend over the nextone tofive years and we expect to recognize approximately $232 million or 46% of this revenue during the next 12 months.

3. Financial Instruments

Cash, Cash Equivalents, and Restricted Cash

Cash, cash equivalents, and restricted cash 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, and restricted cash that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy (in thousands):

(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 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, 2026 and December 31, 2025, such equity investments totaled $20.0 million and $35.0 million, respectively. We recorded a $15.0 million impairment charge related to the wind down of a single investment, during the six months ended June 30, 2026. No other adjustments to the carrying value of these equity investments were recorded during the three and six months ended June 30, 2026, and 2025.

4. Investment in Unity China

The results of Unity China, of which third-party investors hold a 20.5% ownership interest, are included in our condensed consolidated financial statements. 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):

5. Leases

We have operating leases for offices, which have remaining lease terms of up toseven years.

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

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

As of June 30, 2026 and December 31, 2025, our operating leases had a weighted-average remaining lease term of 3.7 years and 3.8 years, respectively, and a weighted-average discount rate of 5.3% and 5.0%, respectively.

As of June 30, 2026, our lease liabilities were as follows (in thousands):

6. Borrowings

Convertible Notes

In February 2025, we issued an aggregate of $690 million principal amount of 0% convertible senior notes due 2030 (the "2030 Notes"). Proceeds from the issuance of the 2030 Notes were $677 million, net of debt issuance costs and the cash was used to purchase capped call transactions, and repurchase convertible notes as discussed below. The debt issuance costs are amortized to interest expense using the straight-line method, which approximates the effective interest method.

As of June 30, 2026, 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"), in “Current portion of convertible notes” and "Convertible notes" on our consolidated balance sheets. The table below summarizes the principal and unamortized debt issuance costs and other material features of the Notes (in thousands):

1. We entered into capped call transactions in connection with the 2026 and 2030 Notes. The cap price of the capped call transactions relating to the Notes was initially $343.02 and $47.74, respectively, subject to certain adjustments under the terms of the capped call transactions. See below "--Capped Call Transactions."

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 $6.1 million and $12.1 million for the three and six months ended June 30, 2026, respectively, and $6.0 million and $11.9 million for the three and six months ended June 30, 2025, respectively.

As of June 30, 2026 and December 31, 2025, the estimated fair value of the 2030 Notes was approximately $782 million and $1.0 billion, respectively, the estimated fair value of the 2027 Notes was approximately $1.1 billion and $1.2 billion, respectively, and the estimated fair value of the 2026 Notes was approximately $549 million and $540 million, respectively. The fair value of the 2027 Notes was based on a combination of a discounted cash flow and Black-Scholes option-pricing model. The fair value of the 2030 Notes and 2026 Notes was based on quoted prices as of that date.

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 and six months ended June 30, 2026, none of the conversion conditions of the 2026 Notes or the 2030 Notes were triggered, and neither the 2026 Notes nor the 2030 Notes were convertible as of June 30, 2026.

Any such conversion of the Notes described 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. The conversion rates for the Notes are subject to customary adjustments for certain events as described in the relevant indenture governing the Notes.

The Notes are subject to additional terms. 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. 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 those 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 June 30, 2026, 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

During the first quarter of 2025, and the first quarter of 2024, the Company repurchased in privately negotiated transactions and extinguished a portion of the 2026 Notes, with a total principal balance of $688 million and $480 million, respectively. The aggregate repurchase price for these notes was $642 million and $415 million, respectively, resulting in pre-tax gains of $42.7 million and $61.4 million, respectively, net of the write-off of unamortized issuance costs. These gains were included in Interest income and other income (expense), net, in the condensed consolidated statement of operations.

Capped Call Transactions

We entered into capped call transactions, to reduce the potential dilutive effect of the 2026 Notes (the "2026 Capped Call Transactions"), and 2030 Notes (the "2030 Capped Call Transactions", together with the 2026 Capped Call Transactions, the "Capped Call Transactions"), in connection with their pricing. The 2026 Capped Call Transactions, and the 2030 Capped Call Transactions, had net costs of $48.1 million and $44.4 million, respectively, with call options totaling approximately 5.6 million and 19.1 million shares of our common stock, and with expiration dates ranging from September 18, 2026 to November 12, 2026, and January 15, 2030 to March 13, 2030, respectively. The strike price of the 2026 Capped Call Transactions and the 2030 Capped Call Transactions are $308.72 and $36.15, respectively, and the cap prices are initially $343.02 and $47.74 per share, respectively, subject to adjustments in certain circumstances. The Capped Call Transactions are freestanding, are considered separately exercisable from the 2026 Notes and 2030 Notes, and meet the conditions for equity classification.

7. Commitments and Contingencies

The following table summarizes our non-cancelable contractual commitments as of June 30, 2026 (in thousands):

(1) Operating leases consist of obligations for real estate, including leases that are not yet commenced or reflected on our consolidated balance sheet with future minimum lease payments of $0.2 million. These leases will commence in 2026 with lease terms of approximatelyone year.

(2)Consists of purchase commitments with original terms greater than one year. The substantial majority of these commitments are related to agreements with our data center hosting providers.

(3)Convertible notes due 2026, 2027, and 2030. See Note 6, "Borrowings," above for further discussion.

(4)Consists of a binding obligation to acquire $100 million of shares in Appsflyer, subject to certain closing conditions and adjustments. We expect to complete this purchase by the end of 2027.

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 current knowledge, we believe that the resolution of such matters will not, either individually or in the 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, 2026, we have not incurred any material costs as a result of such obligations and we have not accrued any material liabilities related to such obligations in the accompanying condensed consolidated financial statements.

Letters of Credit

We had $5.1 million and $8.5 million of secured letters of credit outstanding as of June 30, 2026 and December 31, 2025, 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" and "Prepaid expenses and other" on our condensed consolidated balance sheets.

8. Stock‑Based Compensation

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

Stock Options

A summary of our stock option, including price-vested options ("PVO"), activity is as follows:

Restricted Stock Units

A summary of our restricted stock units ("RSU"), including price-vested units ("PVU"), and performance-based restricted stock units ("PSU"), activity is as follows:

Price-Vested Options and Price-Vested Units

The vesting for each of the PVOs and PVUs is subject to the fulfillment of both a service period that extends up tofour years and the achievement of a stock price hurdle during the relevant performance period that extends up tosix andseven years, respectively. The fair value of each PVO and PVU award is estimated using a Monte Carlo simulation that uses assumptions determined on the date of grant. No outstanding options or units, which had not already met their price hurdle in a prior period, attained their price hurdle in 2026.

Performance-Based Restricted Stock Units

Starting in the first quarter of 2025, we have periodically issued PSUs to certain executives as part of their compensation. The vesting for each PSU is subject to the fulfillment of both a service period ofthree years, and the level of achievement of certain performance goals (revenue and EBITDA metrics), over three annual performance periods ("tranche"). These goals are set as a range of target outcomes, in the first quarter of each year, and can be attained at a rate between 0% and 200%, based on where in the range the final results fall. The fair value of each PSU is estimated separately for each tranche of the award, using the closing price of Unity's common stock on the grant date. The grant date is the later of the day the performance goals are set for that tranche, or the date the units were issued. The expense is the fair value of the award multiplied by the expected attainment of the related performance goals as of the balance sheet date, recognized ratably for each tranche over the period between the grant date, and the end of the service period. The expense is adjusted each period for any changes in the expected attainment of the performance goals.

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 simulation for the PVUs and PVOs, with the following assumptions:

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:

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

During 2025, we suspended the ESPP program, effective in the first quarter of 2026. As a result of the suspension, no new offering periods have commenced after March 2, 2026.

9. 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, 2026 and 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 foreign losses taxed at different 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, U.S. state, and certain foreign jurisdictions will not be realized and we have maintained a full valuation allowance against such deferred tax assets.

As of June 30, 2026, we had $184.6 million of gross unrecognized tax benefits, of which $34.1 million would impact the effective tax rate, if recognized. It is reasonably possible that the amount of unrecognized tax benefits as of June 30, 2026 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.

10. 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 (in thousands) because the impact of including them would have been antidilutive:

11. Segment Information

We haveone reportable segment, software solutions. See "Revenue Recognition" in Note 1 of our 2025 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, assesses 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. 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.

The measure of segment assets is reported on the balance sheet as total consolidated assets. We do not have material intra-entity sales or transfers.

12. Subsequent Event

On August 4, 2026, we completed the sale of our Supersonic game publishing business to Tripledot Group Holdings Limited for cash consideration of $40 million, subject to certain post-close adjustments. The assets and liabilities of the Supersonic business were classified as held-for-sale as of June 30, 2026, as described in Note 1 "Accounting Policies".