Please read the following discussion and analysis of our financial condition and results of operations together with our condensed consolidated financial statements and related notes included under Part I, Item 1 of this Quarterly Report on Form 10-Q. The following discussion and analysis contains forward-looking statements that involve risks and uncertainties. Forward-looking statements are statements that attempt to forecast or anticipate future developments in our business, financial condition, or results of operations. When reviewing the discussion below, you should keep in mind the substantial risks and uncertainties that could impact our business. In particular, we encourage you to review the risks and uncertainties described in “Part I, Item 1A. Risk Factors” of our Annual Report on Form 10-K filed with the SEC on February 11, 2026, “Part II, Item 1A. Risk Factors” of our Form 10-Q filed with the SEC on May 7, 2026, and "Part II, Item 1A. Risk Factors" included elsewhere in this report. These risks and uncertainties could cause actual results to differ materially from those projected in forward-looking statements contained in this report or implied by past results and trends. Forward-looking statements, like all statements in this report, speak only as of their date (unless another date is indicated), and we undertake no obligation to update or revise these statements in light of future developments. See the section titled "Note Regarding Forward-Looking Statements" in this report. Overview Unity offers a suite of tools to develop, deploy, and grow games and interactive experiences across all major platforms from mobile, PC, and console, to extended reality (XR). Our platform consists of two complementary sets of solutions: Create Solutions and Grow Solutions. Recent Developments in Our Business In the first quarter of 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. As a result, revenue from these businesses is now included in non-strategic revenue for all periods presented. The sunset of the ironSource Ads Network was substantially completed in the second quarter of 2026, and the sale of our Supersonic business was completed on August 4, 2026. As a result of these decisions, we incurred impairments on related long-lived assets of $279 million, in the six months ended June 30, 2026. The impairment charges include $227 million within cost of revenue, and $47 million within sales and marketing expense. For additional details, refer to the section titled "Risk Factors." 20 Table of Contents Unity Software Inc. Results of Operations The following table summarizes our condensed consolidated statements of operations data for the periods indicated (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Revenue $ 546,468 $ 440,944 $ 1,054,706 $ 875,944 Cost of revenue 111,709 114,211 463,346 228,168 Gross profit 434,759 326,733 591,360 647,776 Operating expenses Research and development 278,275 214,807 532,700 435,432 Sales and marketing 132,368 161,513 327,745 323,526 General and administrative 56,335 69,165 114,547 135,505 Total operating expenses 466,978 445,485 974,992 894,463 Loss from operations (32,219) (118,752) (383,632) (246,687) Interest expense (6,032) (6,030) (12,052) (11,921) Interest income and other income (expense), net 17,941 19,837 21,405 77,948 Loss before income taxes (20,310) (104,945) (374,279) (180,660) Provision for (benefit from) Income taxes 2,362 2,420 (4,680) 4,612 Net loss $ (22,672) $ (107,365) $ (369,599) $ (185,272) The following table sets forth the components of our condensed consolidated statements of operations data as a percentage of revenue for the periods indicated: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Revenue 100 % 100 % 100 % 100 % Cost of revenue 20 26 44 26 Gross profit 80 74 56 74 Operating expenses Research and development 51 48 50 50 Sales and marketing 24 37 31 37 General and administrative 11 16 11 15 Total operating expenses 86 101 92 102 Loss from operations (6) (27) (36) (28) Interest expense (1) (1) (1) (1) Interest income and other income (expense), net 3 4 2 8 Loss before income taxes (4) (24) (35) (21) Provision for (benefit from) Income taxes — — — — Net loss (4) % (24) % (35) % (21) % Revenue Create Solutions We generate Create Solutions revenue primarily through our suite of Create Solutions subscriptions inclusive of enterprise support, professional services, and consumption services. Our subscriptions provide customers access to technologies that allow them to edit, run, and iterate interactive, RT3D and 2D experiences that can be created once and deployed to a variety of platforms. Enhanced support services are provided to our enterprise customers and are generally sold separately from the Create 21 Table of Contents Unity Software Inc. Solutions subscriptions. Professional services are provided to our customers which are primarily platform integrations, but also include consulting, training, and custom application and workflow development. Consumption services consist of cloud and hosting services provided to our customers to simplify and enhance the way our users access and harness our solutions. Grow Solutions We generate Grow Solutions revenue primarily through our monetization solutions and game publishing services. Our monetization solutions allow publishers, original equipment manufacturers, and mobile carriers to sell available advertising inventory on their mobile applications or hardware devices to advertisers for in-application or on-device placements. Our revenue represents the amount we retain from the transaction we are facilitating through our auction and mediation platform. Our game publishing services provide game developers with the infrastructure and expertise to launch their mobile games and manage their growth; this is achieved through marketability testing tools, live games management tools and game design support, and optimizing the implementation of the customer's commercial model. Through these publishing services, we generate revenue from in-app advertising and related purchases in published games. As a result of the sunsetting of the ironSource Ads Network (one of our monetization networks), and divestiture of our Supersonic game publishing services, we expect Grow Solutions revenue to consist primarily of our "Unity Ads Network" (our principal monetization network), by the end of 2026. Our total revenue is summarized as follows (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2026 2025 2026 2025 Create Solutions $ 157,618 $ 153,782 314,265 304,160 Grow Solutions 388,850 287,162 740,441 571,784 Total revenue $ 546,468 $ 440,944 $ 1,054,706 $ 875,944 Total revenue increased in the three and six months ended June 30, 2026, compared to the comparable prior year periods, primarily due to an increase in Grow Solutions revenue from growth in the Unity Ads Network, driven by “Unity Vector”, partially offset by decreases in revenue from the ironSource Ads Network. The increase in total revenue was further driven by a slight increase in Create Solutions revenue, primarily due to increases in subscription revenue, partially offset by decreases in cloud and hosting services revenue, driven by our portfolio reset in 2025. Create Solutions subscription revenue in 2025 also benefited from the sale of a term license for approximately $12 million in the second quarter of that year. Included in revenue in the six months ended June 30, 2026 and 2025, are approximately $136 million and $204 million, respectively, of non-strategic portfolio revenue, primarily in Grow Solutions. Cost of Revenue, Gross Profit, and Gross Margin Cost of revenue consists primarily of the amortization and impairment of intangible assets, hosting expenses, personnel costs (including salaries, benefits, and stock-based compensation) for employees and subcontractors associated with our product support and professional services organizations, and direct costs associated with our advertising offerings. Gross profit, or revenue less cost of revenue, has been and will continue to be affected by various factors, including our product mix, the costs associated with third-party hosting services and the extent to which we expand and drive efficiencies in our hosting costs, professional services, and customer support organizations. We expect our gross profit to increase in absolute dollars in the long term, but to fluctuate from period to period as a percentage of revenue. 22 Table of Contents Unity Software Inc. Cost of revenue for the three months ended June 30, 2026 was approximately flat, compared to the comparable prior year period, primarily due to decreases in amortization of intangible assets, driven by the impairment we recognized in the first quarter of 2026, offset by increases in hosting expenses, and in direct costs associated with our advertising offerings. Cost of revenue for the six months ended June 30, 2026 increased, compared to the comparable prior year period, primarily due to an impairment of long-lived intangible assets in the first quarter of 2026. Operating Expenses Our operating expenses consist of research and development, sales and marketing, and general and administrative expenses. The most significant component of our operating expenses is personnel-related costs, including salaries and wages, sales commissions, bonuses, benefits, stock-based compensation, and payroll taxes. During 2025 we had workforce reductions from our ongoing restructuring efforts. In the six months ended June 30, 2025, we incurred incremental employee separation costs related to these actions of approximately $20 million, primarily within research and development, and sales and marketing. In addition, we incurred approximately $11 million of non-employee charges associated with this restructuring in 2025. In the first quarter of 2026, we announced we would sunset the ironSource Ads Network, effective April 30, 2026, and we began the process of exiting our Supersonic game publishing business. Following these announcements, we incurred incremental impairment charges of $279 million, in the six months ended June 30, 2026, associated with these decisions. The impairment charges include $227 million within cost of revenue, and $47 million within sales and marketing expense. Furthermore, in the six months ended June 30, 2026, we incurred employee separation costs and other non-employee charges of approximately $38 million from our ongoing global restructuring efforts, primarily related to the planned closure of Unity France. These incremental charges are primarily in research and development. Research and Development Research and development expenses primarily consist of personnel-related costs for the design and development of our platform, amortization expenses related to intangible assets, and hosting expenses. We expect our research and development expenses to increase in absolute dollars in the long term, as we invest in new solutions, expand features and functionality with existing solutions, support our artificial intelligence ("AI") and machine learning ("ML") initiatives, and enter new markets. We expect research and development expenses to fluctuate as a percentage of revenue from period to period. Research and development expense for the three and six months ended June 30, 2026 increased, compared to the comparable prior year periods, primarily due to an increase in amortization costs from the change in useful lives of certain intangible assets in 2025, and an increase in hosting expenses. Sales and Marketing Our sales and marketing expenses consist primarily of personnel-related costs, the amortization and impairment of intangible assets, and advertising and marketing programs, including user acquisition costs and digital account-based marketing, user events such as developer-centric conferences and our Unite user conferences. We expect that our sales and marketing expense will decrease as a result of the divestiture of the Supersonic business. Sales and marketing expense for the three months ended June 30, 2026 decreased, compared to the comparable prior year period, primarily due to decreases in amortization of intangible assets, driven by the impairment we recognized in the first quarter of 2026. Sales and marketing expense for the six months ended June 30, 2026 was approximately flat, compared to the comparable prior year period, primarily due to an impairment of long-lived intangible assets recognized in the first quarter of 2026, offset by decreases in amortization of intangible assets, driven by the same impairment, and personnel costs. 23 Table of Contents Unity Software Inc. General and Administrative Our general and administrative expenses primarily consist of personnel-related costs for finance, legal, human resources, IT and administrative employees; allocated overhead; and professional fees for external legal, accounting, and other professional services. General and administrative expense for the three and six months ended June 30, 2026 decreased, compared to the comparable prior year periods, primarily due to decreases in allocated overhead and personnel-related costs, both driven by reductions in our real estate footprint and in headcount, due to restructuring in 2025. Interest Expense Interest expense consists primarily of interest expense associated with our convertible debt and amortization of debt issuance costs. Interest expense for the three and six months ended June 30, 2026 was approximately flat, compared to the comparable prior year periods. Interest Income and Other Income (Expense), Net Interest income and other income (expense), net, consists primarily of interest income earned on our cash and cash equivalents, impairments of equity investments, and foreign currency gains and losses. Our exposure to fluctuations in foreign currencies results primarily from our global operations, and related personnel expense. Interest income and other income (expense), net, for the three months ended June 30, 2026 decreased, compared to the comparable prior year period, primarily due to losses from foreign exchange, offset by increases in interest income. Interest income and other income (expense), net, for the six months ended June 30, 2026 decreased, compared to the comparable prior year period, primarily due to gains on the repurchase of convertible debt of $42.7 million in the first quarter of 2025, and an impairment of an equity investment of $15.0 million in the first quarter of 2026. Provision for (benefit from) Income taxes Provision for (benefit from) income taxes consists primarily of income taxes in certain foreign jurisdictions where we conduct business. We have a valuation allowance against certain of our deferred tax assets, including net operating loss ("NOL") carryforwards and tax credits related primarily to research and development. Our overall effective income tax rate in future periods may be affected by the geographic mix of earnings in the countries in which we operate. Our future effective tax rate may also be affected by changes in the valuation of our deferred tax assets or liabilities, or changes in tax laws, regulations, or accounting principles in the jurisdictions in which we conduct business. See Note 9, "Income Taxes," of the Notes to Condensed Consolidated Financial Statements. Benefit from income taxes for the six months ended June 30, 2026 changed, compared to the provision for income taxes in the comparable prior year period, primarily due to a larger current-year tax benefit in foreign jurisdictions resulting from restructuring activities initiated in the first quarter of 2026. For the three months ended June 30, 2026, the provision for income taxes was approximately flat compared to the prior year period. Non-GAAP Financial Measures To supplement our consolidated financial statements prepared and presented in accordance with GAAP, we use certain non-GAAP financial measures, as described below, to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe the following non-GAAP measures are useful in evaluating our operating performance. We are presenting these non-GAAP financial measures because we believe, when taken collectively, they may be helpful to investors because they provide consistency and comparability with past financial performance. 24 Table of Contents Unity Software Inc. However, non-GAAP financial measures have limitations in their usefulness to investors because they have no standardized meaning prescribed by GAAP and are not prepared under any comprehensive set of accounting rules or principles. In addition, other companies, including companies in our industry, may calculate similarly-titled non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. As a result, our non-GAAP financial measures are presented for supplemental informational purposes only and should not be considered in isolation or as a substitute for our consolidated financial statements presented in accordance with GAAP. Adjusted Gross Profit, Adjusted EBITDA, and Adjusted EPS We define adjusted gross profit as GAAP gross profit excluding expenses associated with stock-based compensation, amortization and impairment of acquired intangible assets, depreciation, and restructurings and reorganizations. We define adjusted gross margin as adjusted gross profit as a percentage of revenue. We define adjusted EBITDA as net income or loss excluding benefits or expenses associated with stock-based compensation, amortization and impairment of acquired intangible assets, depreciation, restructurings and reorganizations, interest, income tax, and other non-operating activities, which primarily consist of foreign exchange rate gains or losses. We define adjusted EPS as net income or loss excluding benefits or expenses associated with stock-based compensation, amortization and impairment of acquired intangible assets, depreciation, restructurings and reorganizations, and the income tax impact of the preceding adjustments (cumulatively "adjusted net income"), increased by the tax effected impacts from any relevant dilutive securities, divided by the diluted weighted-average outstanding shares. The effective tax rate used in calculating adjusted EPS is estimated for each period, based on the net income or loss adjusted for the items noted above, and may differ from the effective rate used in our financial statements. Shares of common stock that are excluded in our calculation of GAAP diluted net loss per share due to their antidilutive impact on such calculations, are included in the diluted weighted average outstanding shares used in our calculation of adjusted EPS, to the extent they have a dilutive impact on adjusted EPS given the adjusted net income in each period. We use adjusted gross profit, adjusted EBITDA, and adjusted EPS, in conjunction with traditional GAAP measures to evaluate our financial performance. We believe that adjusted gross profit, adjusted EBITDA, and adjusted EPS provide our management and investors consistency and comparability with our past financial performance and facilitates period-to-period comparisons of operations, as these metrics exclude expenses that we do not consider to be indicative of our overall operating performance. The following table presents a reconciliation of our adjusted gross profit to our GAAP gross profit, the most directly comparable measure as determined in accordance with GAAP, for the periods presented (in thousands): Three Months Ended June 30, 2026 2025 GAAP gross profit $ 434,759 $ 326,733 Add: Stock-based compensation expense 6,712 9,861 Amortization of intangible assets expense 6,550 26,997 Depreciation expense 1,309 1,766 Restructuring and reorganization costs 3,915 275 Adjusted gross profit $ 453,245 $ 365,632 GAAP gross margin 80 % 74 % Adjusted gross margin 83 % 83 % 25 Table of Contents Unity Software Inc. The following table presents a reconciliation of our adjusted EBITDA to net loss, the most directly comparable measure as determined in accordance with GAAP, for the periods presented (in thousands): Three Months Ended June 30, 2026 2025 GAAP net loss $ (22,672) $ (107,365) Stock-based compensation expense 75,576 101,435 Amortization of intangible assets expense 77,490 86,218 Depreciation expense 7,985 10,710 Restructuring and reorganization costs 31,359 10,886 Interest expense 6,032 6,030 Interest income and other income (expense), net (17,941) (19,837) Provision for Income taxes 2,362 2,420 Adjusted EBITDA $ 160,191 $ 90,497 26 Table of Contents Unity Software Inc. The following table presents a reconciliation of adjusted EPS to diluted net loss per share attributable to Unity Software Inc., the most directly comparable measures as determined in accordance with GAAP, for the periods presented (in thousands): Three Months Ended June 30, 2026 2025 GAAP net loss $ (22,672) $ (107,365) Stock-based compensation expense 75,576 101,435 Amortization of intangible assets expense 77,490 86,218 Depreciation expense 7,985 10,710 Restructuring and reorganization costs 31,359 10,886 Income tax impact of adjusting items (36,302) (20,527) Adjusted net income used for calculation of adjusted EPS, before impact of dilutive instruments $ 133,436 $ 81,357 Increase from forgone financing costs on dilutive convertible notes, net of tax 4,676 789 Adjusted net income used for calculation of adjusted EPS, including impact of dilutive instruments $ 138,112 $ 82,146 Weighted-average common shares used in GAAP diluted net loss per share attributable to Unity Software Inc. 437,898 417,566 Convertible notes 41,348 20,896 Stock options and PVOs 2,660 5,385 Unvested RSUs, PVUs, and PSUs 7,585 4,572 ESPP — 4 Non-GAAP weighted-average common shares used in adjusted EPS 489,491 448,423 GAAP diluted net loss per share attributable to Unity Software Inc. $ (0.05) $ (0.26) Total impact on diluted net loss per share attributable to Unity Software Inc. from non-GAAP adjustments $ 0.36 $ 0.45 Total impact on diluted net loss per share attributable to Unity Software Inc. from antidilutive common stock now included $ (0.03) $ (0.01) Adjusted EPS $ 0.28 $ 0.18 Free Cash Flow We define free cash flow as net cash provided by operating activities less cash used for purchases of property and equipment. We believe that free cash flow is a useful indicator of liquidity as it measures our ability to generate cash, or our need to access additional sources of cash, to fund operations and investments. 27 Table of Contents Unity Software Inc. The following table presents a reconciliation of free cash flow to net cash provided by operating activities, the most directly comparable measure as determined in accordance with GAAP, for the periods presented (in thousands): Six Months Ended June 30, 2026 2025 Net cash provided by operating activities $ 276,908 $ 146,122 Less: Purchases of property and equipment (8,492) (12,164) Free cash flow $ 268,416 $ 133,958 Net cash used in investing activities $ (8,492) $ (14,164) Net cash provided by financing activities $ 16,194 $ 22,031 Liquidity and Capital Resources As of June 30, 2026, our principal sources of liquidity were cash and cash equivalents totaling $2.4 billion, which were primarily held for working capital purposes. Our cash equivalents are invested primarily in time deposits and in government money market funds. Our material cash requirements from known contractual and other obligations consist of our convertible notes, obligations under operating leases for office space, contractual obligations for hosting services to support our business operations, and our commitment to acquire shares of AppsFlyer. See Part I, Item I, Note 7 — "Commitments and Contingencies" for additional discussion of our principal contractual commitments. In the first quarter of 2025 we issued $690 million in aggregate principal amount of the 2030 Notes, the proceeds of which were used to fund repurchases of outstanding 2026 Notes. We previously issued $1.7 billion in aggregate principal amount of the 2026 Notes in November 2021, of which $688 million in aggregate principal amount was repurchased in first quarter 2025 for $642 million, and $480 million in aggregate principal amount was repurchased in March 2024 for $415 million. We also previously issued $1.0 billion in aggregate principal amount of the 2027 Notes. See Part I, Item I, Note 6, "Borrowings" for additional discussion of the Notes. Since our inception, we have generated losses from our operations as reflected in our accumulated deficit of $4.5 billion as of June 30, 2026. As a result, we may require additional capital to execute our strategic initiatives to grow our business. We believe our existing sources of liquidity will be sufficient to meet our working capital and capital expenditures for at least the next 12 months, including the repayment of the 2026 Notes in cash upon their maturity in November 2026. We believe we will meet longer-term expected future cash requirements and obligations through a combination of cash flows from operating activities, available cash balances, and potential future equity or debt transactions. Our future capital requirements, however, will depend on many factors, including our growth rate; the timing and extent of spending to support our research and development efforts; capital expenditures to build out new facilities and purchase hardware and software; the expansion of sales and marketing activities; and our continued need to invest in our IT infrastructure to support our growth. In addition, we have in the past entered into, and may in the future enter into, additional strategic partnerships as well as agreements to acquire or invest in complementary offerings, teams and technologies, including intellectual property rights, which could increase our cash requirements. As a result of these and other factors, we may choose or be required to seek additional equity or debt financing sooner than we currently anticipate. In addition, depending on prevailing market conditions, our liquidity requirements, contractual restrictions, and other factors, we may also from time to time seek to retire or purchase our outstanding debt, including the Notes, through cash purchases and/or exchanges for equity securities, in open market purchases, privately negotiated transactions or otherwise. If additional financing is required from outside sources, we may not be able to raise it on terms acceptable 28 Table of Contents Unity Software Inc. to us, or at all, including as a result of macroeconomic conditions such as high interest rates, volatility in the capital markets and liquidity concerns at, or failures of, banks and other financial institutions. If we are unable to raise additional capital when required, or if we cannot expand our operations or otherwise capitalize on our business opportunities because we lack sufficient capital, our business, results of operations, and financial condition would be adversely affected. Our changes in cash flows were as follows (in thousands): Six Months Ended June 30, 2026 2025 Net cash provided by operating activities $ 276,908 $ 146,122 Net cash used in investing activities (8,492) (14,164) Net cash provided by financing activities 16,194 22,031 Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash 8,210 19,637 Net change in cash, cash equivalents, and restricted cash $ 292,820 $ 173,626 Cash Provided by Operating Activities During the six months ended June 30, 2026, net cash provided by operating activities was primarily due to our net loss, adjusted for certain non-cash items, which include impairments, depreciation and amortization, stock-based compensation, and other, and to a lesser extent, an increase in operating assets and liabilities. Our cash flows can fluctuate from period to period due to revenue seasonality, timing of billings, collections, and publisher payments, and historical cash flows are not necessarily indicative of our results in any future period. Cash Used in Investing Activities During the six months ended June 30, 2026, net cash used in investing activities consisted primarily of purchases of property and equipment. Cash Provided by Financing Activities During the six months ended June 30, 2026, net cash provided by financing activities consisted of proceeds from the issuance of common stock under our employee equity plans. Critical Accounting Policies and Estimates Management's discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP. These principles require us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosures. Our estimates are based on our historical experience and on various other assumptions that we believe are reasonable under the circumstances. To the extent that there are material differences between these estimates and our actual results, our future financial statements will be affected. There have been no material changes to our critical accounting policies and estimates from those disclosed in Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 11, 2026.