Unity Software Inc.U

Unity Software Inc. Commitments Disclosure

10-KFiled Feb 11, 20262 min read
Commitments and Contingencies
The following table summarizes our non-cancelable contractual commitments as of December 31, 2025 (in thousands):
Total20262027-20282029-2030Thereafter
Operating leases (1)
$105,313 $32,542 $47,953 $17,190 $7,628 
Purchase commitments (2)
753,459 251,886 378,285 123,288 — 
Convertible note principal and interest (3)
2,287,724 577,724 1,020,000 690,000 — 
Total$3,146,496 $862,152 $1,446,238 $830,478 $7,628 
(1)    Operating leases consist of obligations for real estate, including leases that are not yet commenced or reflected on our consolidated balance sheet with future minimum lease payments of $7.4 million. These leases will commence in 2026 with lease terms of approximately seven years.
(2)    The substantial majority of our purchase commitments are related to agreements with our data center hosting providers.
(3)    Convertible notes due 2026, 2027, and 2030. See Note 9, "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 current knowledge, we believe that the resolution of such matters will not, either individually or in the aggregate, have a material adverse effect on our business or our 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.
Letters of Credit
We had $8.5 million and $10.2 million of secured letters of credit outstanding as of December 31, 2025 and 2024, respectively. These primarily relate to our office space leases and are fully collateralized by certificates of deposit which we record in restricted cash as other assets and prepaid expenses and other on our consolidated balance sheets.

Historical Timeline

Fiscal YearFiled
2025Feb 11, 2026Showing above
2024Feb 21, 2025
2023Feb 29, 2024
2022Feb 27, 2023
2021Feb 22, 2022
2020Mar 5, 2021

About Commitments Disclosures

Commitments and contingencies disclosures catalog a company's off-balance-sheet obligations and legal exposures — purchase commitments, guarantee arrangements, pending litigation, and regulatory proceedings. These items represent potential future cash outflows that may not appear as liabilities on the balance sheet until they become probable and estimable.

Key signals: litigation reserves and disclosed loss ranges quantify management's estimate of legal exposure, but unquantified "reasonably possible" losses often represent the larger risk. Watch for changes in language around pending cases — shifts from "remote" to "reasonably possible" or increases in estimated loss ranges signal deteriorating outcomes. Unconditional purchase obligations and take-or-pay contracts create fixed cost structures that reduce operational flexibility. Guarantee arrangements for subsidiaries or joint ventures can create cascading obligations. Compare the total commitment schedule against projected free cash flow to assess whether the company can meet its obligations without additional financing.

Other Available Disclosures

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