Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2024 | May 01, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2024 | |
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 | 638-9950 | |
Title of 12(b) Security | Common stock, $0.000005 par value | |
Trading Symbol | U | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 390,861,717 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0001810806 | |
Current Fiscal Year End Date | --12-31 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 1,179,962 | $ 1,590,325 |
Accounts receivable, net | 621,184 | 611,723 |
Prepaid expenses and other | 140,092 | 122,843 |
Total current assets | 1,941,238 | 2,324,891 |
Property and equipment, net | 122,783 | 140,887 |
Goodwill | 3,166,304 | 3,166,304 |
Intangible assets, net | 1,318,787 | 1,406,745 |
Other assets | 204,151 | 204,614 |
Total assets | 6,753,263 | 7,243,441 |
Current liabilities: | ||
Accounts payable | 18,862 | 14,517 |
Accrued expenses and other | 302,207 | 307,704 |
Publisher payables | 410,671 | 385,113 |
Deferred revenue | 170,435 | 186,769 |
Total current liabilities | 902,175 | 894,103 |
Convertible notes | 2,236,415 | 2,711,750 |
Long-term deferred revenue | 9,080 | 6,015 |
Other long-term liabilities | 190,869 | 217,195 |
Total liabilities | 3,338,539 | 3,829,063 |
Commitments and Contingencies (Note 7) | ||
Redeemable noncontrolling interests | 224,736 | 225,797 |
Stockholders' equity: | ||
Common stock, $0.000005 par value: Authorized shares - 1,000,000 and 1,000,000; Issued and outstanding shares - 390,397 and 384,872 | 2 | 2 |
Additional paid-in capital | 6,554,787 | 6,259,479 |
Accumulated other comprehensive loss | (7,760) | (5,009) |
Accumulated deficit | (3,362,904) | (3,071,830) |
Total Unity Software Inc. stockholders' equity | 3,184,125 | 3,182,642 |
Noncontrolling interest | 5,863 | 5,939 |
Total stockholders' equity | 3,189,988 | 3,188,581 |
Total liabilities and stockholders' equity | $ 6,753,263 | $ 7,243,441 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2024 | Dec. 31, 2023 |
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) | 390,397,000 | 384,872,000 |
Common stock, outstanding (in shares) | 390,397,000 | 384,872,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Income Statement [Abstract] | ||
Revenue | $ 460,380 | $ 500,361 |
Cost of revenue | 144,387 | 161,964 |
Gross profit | 315,993 | 338,397 |
Operating expenses | ||
Research and development | 282,728 | 280,480 |
Sales and marketing | 230,625 | 216,127 |
General and administrative | 177,569 | 96,774 |
Total operating expenses | 690,922 | 593,381 |
Loss from operations | (374,929) | (254,984) |
Interest expense | (6,035) | (6,129) |
Interest income and other income (expense), net | 76,643 | 13,615 |
Loss before income taxes | (304,321) | (247,498) |
Provision for (benefit from) Income taxes | (12,843) | 6,205 |
Net loss | (291,478) | (253,703) |
Net loss attributable to noncontrolling interest and redeemable noncontrolling interests | (404) | (672) |
Net loss attributable to Unity Software Inc. | $ (291,074) | $ (253,031) |
Basic net loss per share attributable to Unity Software Inc. (USD per share) | $ (0.75) | $ (0.67) |
Diluted net loss per share attributable to Unity Software Inc. (USD per share) | $ (0.75) | $ (0.67) |
Weighted-average shares used in computation of basic net loss per share (in shares) | 387,151 | 375,909 |
Weighted-average shares used in computation of diluted net loss per share (in shares) | 387,151 | 375,909 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (291,478) | $ (253,703) |
Other comprehensive income (loss), net of taxes: | ||
Change in foreign currency translation adjustment | (3,461) | 3,157 |
Change in unrealized gains (losses) on derivative instruments | 0 | (327) |
Other comprehensive income (loss) | (3,461) | 2,830 |
Comprehensive loss | (294,939) | (250,873) |
Net loss attributable to noncontrolling interest and redeemable noncontrolling interests | (404) | (672) |
Foreign currency translation attributable to noncontrolling interest and redeemable noncontrolling interests | (710) | 649 |
Comprehensive loss attributable to noncontrolling interest and redeemable noncontrolling interests | (1,114) | (23) |
Comprehensive loss attributable to Unity Software Inc. | $ (293,825) | $ (250,850) |
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 | [1] |
Beginning balance (in shares) at Dec. 31, 2022 | 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 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of common stock from employee equity plans (in shares) | 1,475,761 | |||||||
Issuance of common stock from employee equity plans | 21,971 | 21,971 | 21,971 | |||||
Issuance of common stock for settlement of RSUs (in shares) | 2,654,728 | |||||||
Stock‑based compensation expense | 166,445 | 166,445 | 166,445 | |||||
Net loss | (253,077) | (253,031) | (253,031) | (46) | ||||
Adjustments to redeemable noncontrolling interest | (5,834) | (5,834) | (5,834) | |||||
Other comprehensive loss | 2,225 | 2,181 | 2,181 | 44 | ||||
Ending balance (in shares) at Mar. 31, 2023 | 378,373,685 | |||||||
Ending balance at Mar. 31, 2023 | $ 3,466,296 | 3,460,000 | $ 2 | 5,962,358 | 490 | (2,502,850) | 6,296 | |
Beginning balance (in shares) at Dec. 31, 2023 | 384,872,000 | 384,871,561 | ||||||
Beginning balance at Dec. 31, 2023 | $ 3,188,581 | 3,182,642 | $ 2 | 6,259,479 | (5,009) | (3,071,830) | 5,939 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of common stock from employee equity plans (in shares) | 1,960,774 | 2,511,920 | ||||||
Issuance of common stock from employee equity plans | $ 25,997 | 25,997 | 25,997 | |||||
Issuance of common stock for settlement of RSUs (in shares) | 3,013,449 | |||||||
Stock‑based compensation expense | 269,288 | 269,288 | 269,288 | |||||
Net loss | (291,102) | (291,074) | (291,074) | (28) | ||||
Adjustments to redeemable noncontrolling interest | 23 | 23 | 23 | |||||
Other comprehensive loss | $ (2,799) | (2,751) | (2,751) | (48) | ||||
Ending balance (in shares) at Mar. 31, 2024 | 390,397,000 | 390,396,930 | ||||||
Ending balance at Mar. 31, 2024 | $ 3,189,988 | $ 3,184,125 | $ 2 | $ 6,554,787 | $ (7,760) | $ (3,362,904) | $ 5,863 | |
[1] (1) Excludes redeemable noncontrolling interests. |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Operating activities | ||
Net loss | $ (291,478) | $ (253,703) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 101,810 | 109,560 |
Stock-based compensation expense | 265,877 | 163,028 |
Gain on repayment of convertible note | (61,371) | 0 |
Other | 16,516 | 379 |
Changes in assets and liabilities, net of effects of acquisitions: | ||
Accounts receivable, net | (9,740) | 21,013 |
Prepaid expenses and other | (16,779) | 7,589 |
Other assets | (2,399) | 11,169 |
Accounts payable | 5,273 | 7,450 |
Accrued expenses and other | (4,269) | (7,305) |
Publisher payables | 25,558 | (27,756) |
Other long-term liabilities | (23,584) | (18,302) |
Deferred revenue | (12,787) | (18,221) |
Net cash used in operating activities | (7,373) | (5,099) |
Investing activities | ||
Purchases of short-term investments | 0 | (212) |
Proceeds from principal repayments and maturities of short-term investments | 0 | 102,673 |
Purchases of property and equipment | (7,190) | (14,350) |
Net cash provided by (used in) investing activities | (7,190) | 88,111 |
Financing activities | ||
Repayments of convertible note | (414,999) | 0 |
Proceeds from issuance of common stock from employee equity plans | 25,998 | 21,971 |
Net cash provided by (used in) financing activities | (389,001) | 21,971 |
Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash | (6,202) | 3,151 |
Increase (decrease) in cash, cash equivalents, and restricted cash | (409,766) | 108,134 |
Cash, cash equivalents, and restricted cash, beginning of period | 1,604,267 | 1,505,688 |
Cash, cash equivalents, and restricted cash, end of period | 1,194,501 | 1,613,822 |
Supplemental disclosure of cash flow information: | ||
Cash paid for income taxes, net of refunds | 11,041 | 3,751 |
Cash paid for operating leases | 13,540 | 10,181 |
Supplemental disclosures of non‑cash investing and financing activities: | ||
Assets acquired under operating lease | $ 9,273 | $ 24,528 |
Accounting Policies
Accounting Policies | 3 Months Ended |
Mar. 31, 2024 | |
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 2023 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. Employee Separation and Restructuring Costs In January 2024, we committed to a plan to eliminate approximately 25% of our workforce, and we mutually agreed to the departure of the founders of ironSource Ltd. Following these announcements, we incurred incremental employee separation costs of approximately $193 million in the first quarter of 2024, which included $126 million of incremental stock-based compensation. Additionally we incurred $19 million of restructuring costs, primarily related to office closures. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2024 | |
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 March 31, 2024 2023 Create Solutions $ 163,670 $ 187,369 Grow Solutions 296,710 312,992 Total revenue $ 460,380 $ 500,361 The following table presents our revenue disaggregated by geography, based on the invoice address of our customers (in thousands): Three Months Ended March 31, 2024 2023 United States $ 139,119 $ 132,994 Greater China (1) 59,690 59,548 EMEA (2) 166,770 186,724 APAC (3) 84,036 107,528 Other Americas (4) 10,765 13,567 Total revenue $ 460,380 $ 500,361 (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 March 31, 2024 and December 31, 2023, the allowance for uncollectible amounts was $16.6 million and $16.9 million, respectively. For the three months ended March 31, 2024 and 2023, the provision for uncollectible amounts was $1.8 million and $2.9 million. Sales Commissions Sales commissions that have a benefit beyond one year are capitalized and amortized on a straight-line method over the expected period of benefit, which is generally three years. As of March 31, 2024, capitalized commissions, net of amortization, included in prepaid expenses and other and other assets were $6.4 million and $4.9 million, respectively. During the three months ended March 31, 2024, we recorded amortization costs of $2.4 million in sales and marketing expenses, as compared to $2.5 million during the three months ended March 31, 2023, respectively. Contract Balances and Remaining Performance Obligations Contract assets (unbilled receivables), primarily included in accounts receivable, net, are recorded when revenue is earned in advance of customer billing schedules. Unbilled receivables totaled $20.1 million and $31.3 million as of March 31, 2024 and December 31, 2023, respectively. Of this total as of March 31, 2024, $6.0 million was included in Other Long-Term Assets on our consolidated balance sheets. Contract liabilities (deferred revenue) relate to payments received in advance of performance under the contract. Revenue recognized during the three months ended March 31, 2024 that was included in the deferred revenue balances at January 1, 2024 was $76.3 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 March 31, 2024, were $357 million and relate primarily to Create Solutions subscriptions, Enterprise Support, and Strategic Partnerships. These commitments generally extend over the next one |
Financial Instruments
Financial Instruments | 3 Months Ended |
Mar. 31, 2024 | |
Investments, Debt and Equity Securities [Abstract] | |
Financial Instruments | 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): March 31, 2024 December 31, 2023 Fair Value (1) Cash $ 888,092 $ 834,877 Level 1: Restricted cash and cash equivalents: Restricted cash $ 14,539 $ 13,942 Money market funds 92,762 502,754 Time deposits 199,108 252,694 Total restricted cash and cash equivalents $ 306,409 $ 769,390 Total cash, cash equivalents, and restricted cash $ 1,194,501 $ 1,604,267 (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 March 31, 2024 and December 31, 2023, such equity investments totaled $33.6 million. No adjustments to the carrying value of these equity investments were recorded for the three months ended March 31, 2024 and 2023. |
Investment in Unity China
Investment in Unity China | 3 Months Ended |
Mar. 31, 2024 | |
Noncontrolling Interest [Abstract] | |
Investment in Unity China | 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): Three Months Ended March 31, 2024 2023 Balance at beginning of period $ 225,797 $ 219,563 Net loss attributable to redeemable noncontrolling interests (376) (626) Accretion for redeemable noncontrolling interests 3,075 2,698 Foreign currency translation and foreign exchange adjustments for redeemable noncontrolling interests (3,760) 3,741 Balance at end of period $ 224,736 $ 225,376 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2024 | |
Leases [Abstract] | |
Leases | Leases We have operating leases for offices, which have remaining lease terms of up to nine years. Components of lease expense were as follows (in thousands): Three Months Ended March 31, 2024 2023 Operating lease expense $ 10,253 $ 9,393 Variable lease expense 1,721 1,278 Sublease income (244) (384) Total lease expense $ 11,730 $ 10,287 Supplemental balance sheet information related to leases was as follows (in thousands, except weighted-average figures): As of Classification March 31, 2024 December 31, 2023 Operating lease assets Other assets $ 104,599 $ 113,256 Current operating lease liabilities Accrued expenses and other $ 37,566 $ 39,132 Long-term operating lease liabilities Other long-term liabilities 98,521 111,669 Total operating lease liabilities $ 136,087 $ 150,801 As of March 31, 2024 and December 31, 2023, our operating leases had a weighted-average remaining lease term of 5.0 years and 5.1 years, respectively, and a weighted-average discount rate of 5.2% and 5.2%, respectively. As of March 31, 2024, our lease liabilities were as follows (in thousands): Operating Leases Gross lease liabilities $ 154,385 Less: imputed interest 18,298 Present value of lease liabilities $ 136,087 |
Borrowings
Borrowings | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Borrowings | Borrowings Convertible Notes As of March 31, 2024, we had $2.2 billion of unsecured convertible notes outstanding including $1.0 billion issued in November 2022 (the "2027 Notes") and $1.2 billion issued in November 2021 (the "2026 Notes"). The table below summarizes the principal and unamortized debt issuance costs and other material features of the Notes (in thousands): Carrying Amount as of Conversion Rate per Conversion Price Maturities Stated Interest Rates March 31, 2024 December 31, 2023 Convertible notes: Principal – 2026 Notes 3.2392 $ 308.72 2026 0.0% $ 1,245,232 $ 1,725,000 Principal – 2027 Notes 20.4526 $ 48.89 2027 2.0% 1,000,000 1,000,000 Unamortized debt issuance costs, net (8,817) (13,250) Net carrying amount $ 2,236,415 $ 2,711,750 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 $6.0 million and $6.1 million for the three months ended March 31, 2024 and March 31, 2023, respectively. As of March 31, 2024 and December 31, 2023, the estimated fair value of the 2027 Notes were approximately $1.1 billion and 1.3 billion, respectively, and the estimated fair value of the 2026 Notes were approximately $1.1 billion and 1.4 billion, respectively. The fair value of the 2027 Notes was based on a combination of a discounted cash flow and Black-Scholes option-pricing model. The fair value of the 2026 Notes was based on quoted prices as of that date. The 2026 Notes are convertible at the option of the holder if a conversion condition of the 2026 Notes is triggered. During the three months ended March 31, 2024, none of the conversion conditions of the 2026 Notes were triggered and the 2026 Notes were not convertible as of March 31, 2024. The 2027 Notes are convertible at the option of the holder prior to maturity. Upon conversion of the Notes, we will deliver cash, shares of our common stock, or a combination of cash and shares of our common stock,at our election. The conversion rates for the Notes is subject to customary adjustments for certain events as described in the indentures governing the Notes. The Notes are subject to additional terms. In connection with certain corporate events, as described in the Indentures, we will increase the conversion rate for a holder of the 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 Indentures, holders of the Notes may require us to repurchase all or a portion of their notes at a price equal to 100% of the principal amount to be repurchased, plus any accrued and unpaid interest to date. The 2026 Notes are also redeemable at our option if certain conditions are met, as described in the Indenture governing the 2026 Notes. As of March 31, 2024, 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. Convertible Note Repurchase During 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 $480 million. The aggregate repurchase price for these notes was $415 million, resulting in pre-tax gains of $61.4 million, net of the write-off of unamortized issuance costs. The gain was included in Interest income and other income (expense), net, in the condensed consolidated statement of operations. Capped Call Transactions In connection with the pricing of the 2026 Notes, we entered into the Capped Call Transactions at a net cost of $48.1 million, with call options totaling approximately 5.6 million of our common shares, and with expiration dates ranging from September 18, 2026 to November 12, 2026. The strike price is $308.72, and the cap price is initially $343.02 per share, subject to adjustments in certain circumstances. 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. As of March 31, 2024, the Capped Call Transactions met the conditions for equity classification and were not in the money. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies The following table summarizes our non-cancelable contractual commitments as of March 31, 2024 (in thousands): Total Remainder of 2024 2025‑2026 2027‑2028 Thereafter Operating leases (1) $ 154,385 $ 32,892 $ 60,279 $ 36,591 $ 24,623 Purchase commitments (2) 643,505 180,782 433,298 29,425 — Convertible note principal and interest (3) 2,325,232 20,000 1,285,232 1,020,000 — Total $ 3,123,122 $ 233,674 $ 1,778,809 $ 1,086,016 $ 24,623 (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 March 31, 2024, 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 $14.5 million and $13.9 million of secured letters of credit outstanding as of March 31, 2024 and December 31, 2023, respectively. These primarily relate to our office space leases and are fully collateralized by certificates of deposit which we record in restricted cash as other assets on our condensed consolidated balance sheets. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock‑Based Compensation Stock-based compensation expense is as follows (in thousands): Three Months Ended March 31, 2024 2023 Cost of revenue $ 16,806 $ 18,849 Research and development 87,738 76,483 Sales and marketing 63,971 35,517 General and administrative 97,362 32,179 Total stock-based compensation expense $ 265,877 $ 163,028 Included in the above expenses for the three months ended March 31, 2024, is $93 million of incremental stock-based compensation expense from modifications, primarily within general and administrative. These amounts predominately relate to the modification of awards held by the founders of ironSource Ltd. that departed in the first quarter of 2024. Stock Options A summary of our stock option activity is as follows: Options Outstanding Stock Weighted-Average Weighted-Average Balance as of December 31, 2023 31,541,466 $ 19.35 4.79 Granted 86,854 $ 26.89 Exercised (1,960,774) $ 6.25 Forfeited, cancelled, or expired (175,140) $ 82.32 Balance as of March 31, 2024 29,492,406 $ 19.86 3.77 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 March 31, 2024 2023 Expected dividend yield — — Risk-free interest rate 4.1% 4.2% Expected volatility 66.4% 54.7% Expected term (in years) 6.25 6.25 Fair value of underlying common stock $26.89 $29.33 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, 2023 37,332,551 $ 38.31 Granted 1,570,357 $ 30.14 Vested (3,017,254) $ 45.83 Forfeited (3,409,225) $ 42.68 Unvested as of March 31, 2024 32,476,429 $ 36.76 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 months ended March 31, 2024, 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: Three Months Ended March 31, 2024 2023 Expected dividend yield — — Risk-free interest rate 5.3% 5.2% Expected volatility 56.0% 94.5% Expected term (in years) 0.50 0.50 Grant-date fair value per share $9.11 $12.44 Additional information related to the ESPP is provided below (in thousands, except per share amounts): Three Months Ended March 31, 2024 2023 Shares issued under the ESPP 551,146 532,643 Weighted-average price per share issued $24.92 $25.87 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2024 | |
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 months ended March 31, 2024 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, a tax benefit on foreign losses in connection with employee separation costs, and to a lesser extent tax expense on foreign earnings taxed at different rates. In addition, during the first quarter of 2024, we continued to restructure our tax operations which resulted in a reduction to our U.S. valuation allowance. Our effective tax rate for the three months ended March 31, 2023 differed from the U.S. federal statutory tax rate of 21% primarily due to the need to record a valuation allowance in the U.S. on losses and to a lesser extent, tax expense on foreign earnings taxed at different rates. In addition, the Company undertook certain tax restructuring efforts during the period 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. 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 U.S. states, Denmark, U.K., and other non-U.S. jurisdictions will not be realized and we have maintained a full valuation allowance against such deferred tax assets. As of March 31, 2024, we had $184.3 million of gross unrecognized tax benefits, of which $29.7 million would impact the effective tax rate, if recognized. It is reasonably possible that the amount of unrecognized tax benefits as of March 31, 2024 could increase or decrease significantly as the timing of the resolution, settlement, and closure of audits is highly uncertain. We believe that we have adequately provided for any reasonably foreseeable outcome related to our tax audits and that any settlement will not have a material impact on our financial condition and operating results at this time. |
Net Loss per Share of Common St
Net Loss per Share of Common Stock | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Net Loss per Share of Common Stock | Net Loss per Share of Common Stock Basic and diluted net loss per share is the same for all periods presented because the effects of potentially dilutive items were antidilutive given our net loss in each period. The following table presents potentially dilutive common stock excluded from the computation of diluted net loss per share (in thousands) because the impact of including them would have been antidilutive: As of March 31, 2024 2023 Convertible notes 24,488 26,042 Stock options 29,492 34,461 Unvested RSUs and PVUs 32,476 36,079 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Pay vs Performance Disclosure | ||
Net Income (Loss) | $ (291,074) | $ (253,031) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 31, 2024 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 March 31, 2024, 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 Tomer Bar-Zeev (1) Director Adopted February 29, 2024 December 21, 2024 1,450,000 Michelle Lee (2) Director Adopted March 13, 2024 September 18, 2024 3,200 Robynne Sisco (2) Director Adopted March 5, 2024 June 5, 2025 14,700 (1) Mr. Bar-Zeev's plan provides for the potential sale of shares of our common stock held in account. The plan expires on the date shown above, or upon the earlier completion of all authorized transactions under the plan. (2) Each of Ms. Lee's and Ms. Sisco's plans provides for the potential sale of our common stock currently held in account and future vesting events. The plans expire on the respective dates shown above, or upon the earlier completion of all authorized transactions under the plans. |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Tomer Bar-Zeev [Member] | |
Trading Arrangements, by Individual | |
Name | Tomer Bar-Zeev |
Title | Director |
Rule 10b5-1 Arrangement Adopted | true |
Adoption Date | February 29, 2024 |
Arrangement Duration | 296 days |
Aggregate Available | 1,450,000 |
Michelle Lee [Member] | |
Trading Arrangements, by Individual | |
Name | Michelle Lee |
Title | Director |
Rule 10b5-1 Arrangement Adopted | true |
Adoption Date | March 13, 2024 |
Arrangement Duration | 189 days |
Aggregate Available | 3,200 |
Robynne Sisco [Member] | |
Trading Arrangements, by Individual | |
Name | Robynne Sisco |
Title | Director |
Rule 10b5-1 Arrangement Adopted | true |
Adoption Date | March 5, 2024 |
Arrangement Duration | 457 days |
Aggregate Available | 14,700 |
Accounting Policies (Policies)
Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation and Consolidation |
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 2023 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, Net |
Sales Commissions and Contract Balances and Remaining Performance Obligations | Sales Commissions |
Cash, Cash Equivalents, Restricted Cash | 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. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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 March 31, 2024 2023 Create Solutions $ 163,670 $ 187,369 Grow Solutions 296,710 312,992 Total revenue $ 460,380 $ 500,361 |
Schedule of Revenue Disaggregated by Geography | The following table presents our revenue disaggregated by geography, based on the invoice address of our customers (in thousands): Three Months Ended March 31, 2024 2023 United States $ 139,119 $ 132,994 Greater China (1) 59,690 59,548 EMEA (2) 166,770 186,724 APAC (3) 84,036 107,528 Other Americas (4) 10,765 13,567 Total revenue $ 460,380 $ 500,361 (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) | 3 Months Ended |
Mar. 31, 2024 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Cash, Cash Equivalents, and Restricted Cash Measured at Fair Value on a Recurring Basis | The following table summarizes, by major security type, our cash, cash equivalents, and restricted cash that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy (in thousands): March 31, 2024 December 31, 2023 Fair Value (1) Cash $ 888,092 $ 834,877 Level 1: Restricted cash and cash equivalents: Restricted cash $ 14,539 $ 13,942 Money market funds 92,762 502,754 Time deposits 199,108 252,694 Total restricted cash and cash equivalents $ 306,409 $ 769,390 Total cash, cash equivalents, and restricted cash $ 1,194,501 $ 1,604,267 (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) | 3 Months Ended |
Mar. 31, 2024 | |
Noncontrolling Interest [Abstract] | |
Schedule of Changes in Redeemable Noncontrolling Interests | The following table presents the changes in redeemable noncontrolling interests (in thousands): Three Months Ended March 31, 2024 2023 Balance at beginning of period $ 225,797 $ 219,563 Net loss attributable to redeemable noncontrolling interests (376) (626) Accretion for redeemable noncontrolling interests 3,075 2,698 Foreign currency translation and foreign exchange adjustments for redeemable noncontrolling interests (3,760) 3,741 Balance at end of period $ 224,736 $ 225,376 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Leases [Abstract] | |
Schedule of Components of Lease Expense | Components of lease expense were as follows (in thousands): Three Months Ended March 31, 2024 2023 Operating lease expense $ 10,253 $ 9,393 Variable lease expense 1,721 1,278 Sublease income (244) (384) Total lease expense $ 11,730 $ 10,287 |
Schedule of Supplemental Balance Sheet Information Related to Leases | Supplemental balance sheet information related to leases was as follows (in thousands, except weighted-average figures): As of Classification March 31, 2024 December 31, 2023 Operating lease assets Other assets $ 104,599 $ 113,256 Current operating lease liabilities Accrued expenses and other $ 37,566 $ 39,132 Long-term operating lease liabilities Other long-term liabilities 98,521 111,669 Total operating lease liabilities $ 136,087 $ 150,801 |
Schedule of Lease Liabilities | As of March 31, 2024, our lease liabilities were as follows (in thousands): Operating Leases Gross lease liabilities $ 154,385 Less: imputed interest 18,298 Present value of lease liabilities $ 136,087 |
Borrowings (Tables)
Borrowings (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Schedule of Principal and Unamortized Debt Issuance Costs and Other Material Features of Notes | The table below summarizes the principal and unamortized debt issuance costs and other material features of the Notes (in thousands): Carrying Amount as of Conversion Rate per Conversion Price Maturities Stated Interest Rates March 31, 2024 December 31, 2023 Convertible notes: Principal – 2026 Notes 3.2392 $ 308.72 2026 0.0% $ 1,245,232 $ 1,725,000 Principal – 2027 Notes 20.4526 $ 48.89 2027 2.0% 1,000,000 1,000,000 Unamortized debt issuance costs, net (8,817) (13,250) Net carrying amount $ 2,236,415 $ 2,711,750 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Non-Cancelable Contractual Commitments | The following table summarizes our non-cancelable contractual commitments as of March 31, 2024 (in thousands): Total Remainder of 2024 2025‑2026 2027‑2028 Thereafter Operating leases (1) $ 154,385 $ 32,892 $ 60,279 $ 36,591 $ 24,623 Purchase commitments (2) 643,505 180,782 433,298 29,425 — Convertible note principal and interest (3) 2,325,232 20,000 1,285,232 1,020,000 — Total $ 3,123,122 $ 233,674 $ 1,778,809 $ 1,086,016 $ 24,623 (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) | 3 Months Ended |
Mar. 31, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Stock-Based Compensation Expense | Stock-based compensation expense is as follows (in thousands): Three Months Ended March 31, 2024 2023 Cost of revenue $ 16,806 $ 18,849 Research and development 87,738 76,483 Sales and marketing 63,971 35,517 General and administrative 97,362 32,179 Total stock-based compensation expense $ 265,877 $ 163,028 |
Schedule of Stock Option Activity | A summary of our stock option activity is as follows: Options Outstanding Stock Weighted-Average Weighted-Average Balance as of December 31, 2023 31,541,466 $ 19.35 4.79 Granted 86,854 $ 26.89 Exercised (1,960,774) $ 6.25 Forfeited, cancelled, or expired (175,140) $ 82.32 Balance as of March 31, 2024 29,492,406 $ 19.86 3.77 |
Schedule of Grant-Date Fair Value of Stock Options Granted | 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 March 31, 2024 2023 Expected dividend yield — — Risk-free interest rate 4.1% 4.2% Expected volatility 66.4% 54.7% Expected term (in years) 6.25 6.25 Fair value of underlying common stock $26.89 $29.33 |
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, 2023 37,332,551 $ 38.31 Granted 1,570,357 $ 30.14 Vested (3,017,254) $ 45.83 Forfeited (3,409,225) $ 42.68 Unvested as of March 31, 2024 32,476,429 $ 36.76 |
Schedule of Grant-Date Fair Values of ESPP | The following table summarizes the assumptions used and the resulting grant-date fair values of our ESPP: Three Months Ended March 31, 2024 2023 Expected dividend yield — — Risk-free interest rate 5.3% 5.2% Expected volatility 56.0% 94.5% Expected term (in years) 0.50 0.50 Grant-date fair value per share $9.11 $12.44 |
Schedule of Additional Information Related to ESPP | Additional information related to the ESPP is provided below (in thousands, except per share amounts): Three Months Ended March 31, 2024 2023 Shares issued under the ESPP 551,146 532,643 Weighted-average price per share issued $24.92 $25.87 |
Net Loss per Share of Common _2
Net Loss per Share of Common Stock (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Schedule of Antidilutive Securities Excluded from Computation of Diluted Net Loss Per Share | The following table presents potentially dilutive common stock excluded from the computation of diluted net loss per share (in thousands) because the impact of including them would have been antidilutive: As of March 31, 2024 2023 Convertible notes 24,488 26,042 Stock options 29,492 34,461 Unvested RSUs and PVUs 32,476 36,079 |
Accounting Policies (Details)
Accounting Policies (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended |
Jan. 31, 2024 | Mar. 31, 2024 | |
Restructuring Cost and Reserve [Line Items] | ||
Percentage of reduction in workforce | 25% | |
Employee Severance | ||
Restructuring Cost and Reserve [Line Items] | ||
Employee separation costs | $ 193 | |
Stock-Based Compensation | ||
Restructuring Cost and Reserve [Line Items] | ||
Employee separation costs | 126 | |
Facility Closing | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring costs | $ 19 |
Revenue - Schedule of Revenue D
Revenue - Schedule of Revenue Disaggregated by Source (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 460,380 | $ 500,361 |
Create Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 163,670 | 187,369 |
Grow Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 296,710 | $ 312,992 |
Revenue - Schedule of Revenue_2
Revenue - Schedule of Revenue Disaggregated by Geography (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 460,380 | $ 500,361 |
United States | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 139,119 | 132,994 |
Greater China | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 59,690 | 59,548 |
EMEA | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 166,770 | 186,724 |
APAC | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 84,036 | 107,528 |
Other Americas | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 10,765 | $ 13,567 |
Revenue - Accounts Receivable,
Revenue - Accounts Receivable, Net (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |||
Accounts receivable, allowances | $ 16.6 | $ 16.9 | |
Provision for uncollectible amounts | $ 1.8 | $ 2.9 |
Revenue - Sales Commissions (Na
Revenue - Sales Commissions (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Disaggregation of Revenue [Line Items] | ||
Capitalized contract cost, amortization period | 3 years | |
Capitalized contract cost, amortization | $ 2.4 | $ 2.5 |
Prepaid Expenses and Other Current Assets | ||
Disaggregation of Revenue [Line Items] | ||
Capitalized contract costs | 6.4 | |
Other Assets | ||
Disaggregation of Revenue [Line Items] | ||
Capitalized contract costs | $ 4.9 |
Revenue - Contract Balances (Na
Revenue - Contract Balances (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Dec. 31, 2023 | |
Capitalized Contract Cost [Line Items] | ||
Unbilled receivables | $ 20.1 | $ 31.3 |
Revenue recognized | 76.3 | |
Other Noncurrent Assets | ||
Capitalized Contract Cost [Line Items] | ||
Unbilled receivables | $ 6 |
Revenue - Remaining Performance
Revenue - Remaining Performance Obligations (Narrative) (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Disaggregation of Revenue [Line Items] | |
Revenue, remaining performance obligation, amount | $ 357 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-04-01 | |
Disaggregation of Revenue [Line Items] | |
Revenue, remaining performance obligation, amount | $ 205 |
Revenue, remaining performance obligation, percentage | 57% |
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, Cash Equivalents, and Restricted Cash Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 | Mar. 31, 2023 | Dec. 31, 2022 |
Debt Securities, Available-for-sale [Line Items] | ||||
Cash | $ 888,092 | $ 834,877 | ||
Restricted cash and cash equivalents: | ||||
Total cash, cash equivalents, and restricted cash | 1,194,501 | 1,604,267 | $ 1,613,822 | $ 1,505,688 |
Level 1: | ||||
Restricted cash and cash equivalents: | ||||
Restricted cash | 14,539 | 13,942 | ||
Total restricted cash and cash equivalents | 306,409 | 769,390 | ||
Level 1: | Money market funds | ||||
Restricted cash and cash equivalents: | ||||
Cash equivalents | 92,762 | 502,754 | ||
Level 1: | Time deposits | ||||
Restricted cash and cash equivalents: | ||||
Cash equivalents | $ 199,108 | $ 252,694 |
Financial Instruments - Narrati
Financial Instruments - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Dec. 31, 2023 | |
Debt Securities, Available-for-sale [Line Items] | ||
Equity investments | $ 33.6 | $ 33.6 |
Maximum | ||
Debt Securities, Available-for-sale [Line Items] | ||
Ownership interest less than | 20% |
Investment in Unity China - Nar
Investment in Unity China - Narrative (Details) | Mar. 31, 2024 |
Third Party Investors | Unity China | |
Noncontrolling Interest [Line Items] | |
Noncontrolling interest, percentage sold | 20.50% |
Investment in Unity China - Sch
Investment in Unity China - Schedule of Changes in Redeemable Noncontrolling Interests (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Increase (Decrease) in Temporary Equity [Roll Forward] | ||
Balance at beginning of period | $ 225,797 | $ 219,563 |
Net loss attributable to redeemable noncontrolling interests | (376) | (626) |
Accretion for redeemable noncontrolling interests | 3,075 | 2,698 |
Foreign currency translation and foreign exchange adjustments for redeemable noncontrolling interests | (3,760) | 3,741 |
Balance at end of period | $ 224,736 | $ 225,376 |
Leases - Narrative (Details)
Leases - Narrative (Details) | Mar. 31, 2024 | Dec. 31, 2023 |
Lessee, Lease, Description [Line Items] | ||
Operating lease, weighted average remaining lease term | 5 years | 5 years 1 month 6 days |
Operating lease, weighted average discount rate, percent | 5.20% | 5.20% |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease term (up to) | 9 years |
Leases - Schedule of Components
Leases - Schedule of Components of Lease Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Leases [Abstract] | ||
Operating lease expense | $ 10,253 | $ 9,393 |
Variable lease expense | 1,721 | 1,278 |
Sublease income | (244) | (384) |
Total lease expense | $ 11,730 | $ 10,287 |
Leases - Schedule of Supplement
Leases - Schedule of Supplemental Balance Sheet Information Related to Leases (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Leases [Abstract] | ||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Other assets | Other assets |
Operating lease assets | $ 104,599 | $ 113,256 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Accrued expenses and other | Accrued expenses and other |
Current operating lease liabilities | $ 37,566 | $ 39,132 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other long-term liabilities | Other long-term liabilities |
Long-term operating lease liabilities | $ 98,521 | $ 111,669 |
Total operating lease liabilities | $ 136,087 | $ 150,801 |
Leases - Schedule of Lease Liab
Leases - Schedule of Lease Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Leases [Abstract] | ||
Gross lease liabilities | $ 154,385 | |
Less: imputed interest | 18,298 | |
Present value of lease liabilities | $ 136,087 | $ 150,801 |
Borrowings - Convertible Notes
Borrowings - Convertible Notes (Narrative) (Details) - Convertible Debt - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | ||
Nov. 30, 2022 | Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Debt Instrument [Line Items] | ||||
Debt face amount | $ 2,200 | |||
2026 and 2027 Notes | ||||
Debt Instrument [Line Items] | ||||
Interest expense related to amortization of debt | 6 | $ 6.1 | ||
Principal – 2027 Notes | ||||
Debt Instrument [Line Items] | ||||
Debt face amount | 1,000 | |||
Debt instrument, fair value | 1,100 | $ 1,300 | ||
Redemption price percentage | 100% | |||
Principal – 2026 Notes | ||||
Debt Instrument [Line Items] | ||||
Debt face amount | 1,200 | |||
Debt instrument, fair value | $ 1,100 | $ 1,400 |
Borrowings - Schedule of Princi
Borrowings - Schedule of Principal and Unamortized Debt Issuance Costs and Other Material Features of Notes (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 USD ($) $ / shares | Dec. 31, 2023 USD ($) | |
Debt Instrument [Line Items] | ||
Net carrying amount | $ 2,236,415 | $ 2,711,750 |
2026 and 2027 Notes | Convertible Debt | ||
Debt Instrument [Line Items] | ||
Unamortized debt issuance costs, net | (8,817) | (13,250) |
Net carrying amount | $ 2,236,415 | 2,711,750 |
Principal – 2026 Notes | Convertible Debt | ||
Debt Instrument [Line Items] | ||
Conversion ratio | 0.0032392 | |
Conversion price (USD per share) | $ / shares | $ 308.72 | |
Stated Interest Rates | 0% | |
Principal | $ 1,245,232 | 1,725,000 |
Principal – 2027 Notes | Convertible Debt | ||
Debt Instrument [Line Items] | ||
Conversion ratio | 0.0204526 | |
Conversion price (USD per share) | $ / shares | $ 48.89 | |
Stated Interest Rates | 2% | |
Principal | $ 1,000,000 | $ 1,000,000 |
Borrowings - Convertible Note R
Borrowings - Convertible Note Repurchase (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Debt Instrument [Line Items] | ||
Pre-tax gains | $ 61,371 | $ 0 |
Principal – 2026 Notes | Convertible Debt | ||
Debt Instrument [Line Items] | ||
Repurchased principal amount | 480,000 | |
Aggregate repurchase price | 415,000 | |
Pre-tax gains | $ 61,400 |
Borrowings - Capped Call Transa
Borrowings - Capped Call Transactions (Narrative) (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 - Schedule of Non-Cancelable Contractual Commitments (Details) $ in Thousands | Mar. 31, 2024 USD ($) |
Operating leases | |
Total | $ 154,385 |
Remainder of 2024 | 32,892 |
2025‑2026 | 60,279 |
2027‑2028 | 36,591 |
Thereafter | 24,623 |
Purchase commitments | |
Total | 643,505 |
Remainder of 2024 | 180,782 |
2025‑2026 | 433,298 |
2027‑2028 | 29,425 |
Thereafter | 0 |
Convertible note principal and interest | |
Total | 2,325,232 |
Remainder of 2024 | 20,000 |
2025‑2026 | 1,285,232 |
2027‑2028 | 1,020,000 |
Thereafter | 0 |
Total | |
Total | 3,123,122 |
Remainder of 2024 | 233,674 |
2025‑2026 | 1,778,809 |
2027‑2028 | 1,086,016 |
Thereafter | $ 24,623 |
Commitments and Contingencies_2
Commitments and Contingencies - Narrative (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Letter of Credit | ||
Long-term Purchase Commitment [Line Items] | ||
Letter of credit outstanding | $ 14.5 | $ 13.9 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation expense | $ 265,877 | $ 163,028 |
Cost of revenue | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation expense | 16,806 | 18,849 |
Research and development | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation expense | 87,738 | 76,483 |
Sales and marketing | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation expense | 63,971 | 35,517 |
General and administrative | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation expense | $ 97,362 | $ 32,179 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended |
Oct. 31, 2022 | Mar. 31, 2024 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Incremental stock expense | $ 93 | |
Price-Vested Units | ||
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 - Sc_2
Stock-Based Compensation - Schedule of Stock Option Activity (Details) - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Stock Options Outstanding | ||
Beginning balance (in shares) | 31,541,466 | |
Granted (in shares) | 86,854 | |
Exercised (in shares) | (1,960,774) | |
Forfeited, cancelled, or expired (in shares) | (175,140) | |
Ending balance (in shares) | 29,492,406 | 31,541,466 |
Weighted-Average Exercise Price | ||
Beginning balance (USD per share) | $ 19.35 | |
Granted (USD per share) | 26.89 | |
Exercised (USD per share) | 6.25 | |
Forfeited, cancelled, or expired (USD per share) | 82.32 | |
Ending balance (USD per share) | $ 19.86 | $ 19.35 |
Weighted-Average Remaining Contractual Term (In Years) | ||
Options outstanding, Weighted average remaining contractual term | 3 years 9 months 7 days | 4 years 9 months 14 days |
Stock-Based Compensation - Sc_3
Stock-Based Compensation - Schedule of Grant-Date Fair Value of Stock Options Granted (Details) - Stock options - $ / shares | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Expected dividend yield | 0% | 0% |
Risk-free interest rate | 4.10% | 4.20% |
Expected volatility | 66.40% | 54.70% |
Expected term (in years) | 6 years 3 months | 6 years 3 months |
Fair value of underlying common stock (USD per share) | $ 26.89 | $ 29.33 |
Stock-Based Compensation - Sc_4
Stock-Based Compensation - Schedule of Restricted Stock Unit Activity (Details) - Unvested RSUs and PVUs | 3 Months Ended |
Mar. 31, 2024 $ / shares shares | |
Number of Shares | |
Unvested at beginning of period (in shares) | shares | 37,332,551 |
Granted (in shares) | shares | 1,570,357 |
Vested (in shares) | shares | (3,017,254) |
Forfeited (in shares) | shares | (3,409,225) |
Unvested at end of period (in shares) | shares | 32,476,429 |
Weighted-Average Grant-Date Fair Value | |
Unvested at beginning of period (USD per share) | $ / shares | $ 38.31 |
Granted (USD per share) | $ / shares | 30.14 |
Vested (USD per share) | $ / shares | 45.83 |
Forfeited (USD per share) | $ / shares | 42.68 |
Unvested at end of period (USD per share) | $ / shares | $ 36.76 |
Stock-Based Compensation - Sc_5
Stock-Based Compensation - Schedule of Grant-Date Fair Values of ESPP (Details) - Employee Stock Purchase Plan - $ / shares | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected dividend yield | 0% | 0% |
Risk-free interest rate | 5.30% | 5.20% |
Expected volatility | 56% | 94.50% |
Expected term (in years) | 6 months | 6 months |
Grant-date fair value per share (USD per share) | $ 9.11 | $ 12.44 |
Stock-Based Compensation - Sc_6
Stock-Based Compensation - Schedule of Additional Information Related to ESPP (Details) - Employee Stock Purchase Plan - $ / shares | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares issued under the ESPP (in shares) | 551,146 | 532,643 |
Weighted-average price per share issued (USD per share) | $ 24.92 | $ 25.87 |
Income Taxes (Details)
Income Taxes (Details) $ in Millions | Mar. 31, 2024 USD ($) |
Income Tax Disclosure [Abstract] | |
Unrecognized tax benefits | $ 184.3 |
Unrecognized tax benefits that would impact effective tax rate | $ 29.7 |
Net Loss per Share of Common _3
Net Loss per Share of Common Stock (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Convertible notes | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 24,488 | 26,042 |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 29,492 | 34,461 |
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) | 32,476 | 36,079 |