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Stock-Based Compensation
 3 Months Ended
Mar. 31, 2025
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,
20252024
Cost of revenue$9,112 $16,806 
Research and development50,594 87,738 
Sales and marketing19,961 63,971 
General and administrative19,123 97,362 
Total stock-based compensation expense$98,790 $265,877 
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, including price-vested options ("PVO"), activity is as follows:
Options Outstanding
Stock
Options
Outstanding		Weighted-Average
Exercise
Price		Weighted-Average
Remaining
Contractual
Term
(In Years)
Balance as of December 31, 202423,158,212 $21.10 4.24
Granted206,244 $24.72 
Exercised(2,272,956)$5.19 
Forfeited, cancelled, or expired(599,984)$57.66 
Balance as of March 31, 202520,491,516 $21.83 4.36
Restricted Stock Units
A summary of our restricted stock unit ("RSU"), including price-vested unit ("PVU"), and performance-based restricted stock unit ("PSU"), activity is as follows:
Unvested RSUs
Number of
Shares		Weighted-Average
Grant-Date
Fair Value
Unvested as of December 31, 202430,013,275 $26.03 
Granted4,486,262 $24.45 
Vested(2,964,091)$31.28 
Forfeited(2,754,164)$22.79 
Unvested as of March 31, 202528,781,282 $25.55 
Price-Vested Units and Price-Vested Options
The vesting for each of the PVUs and PVOs 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 six and seven years, respectively. The fair value of each PVU and PVO award is estimated using a Monte Carlo simulation that uses assumptions determined on the date of grant. During the three months ended March 31, 2025, the price hurdle was not met by any outstanding options or units, which had not already attained them in a prior period.
Performance-Based Restricted Stock Units
Starting in the first quarter of 2025, we have issued PSUs to certain executives as part of their compensation. The vesting for each PSU is subject to the fulfillment of both a service period of 3 years, and the level of achievement of certain performance goals (revenue and EBITDA metrics), over three annual performance periods ("tranche"). These goals are set as a range of target outcomes, in the first quarter of each year, and can be attained at a rate between 0% and 150%, based on where in the range the final results fall. The fair value of each PSU is estimated separately for each tranche of the award, using the closing price of Unity's common stock on the day the performance goals are set for that tranche. The expense is the fair value of the award multiplied by the expected attainment of the related performance goals as of the balance sheet date, recognized ratably for each tranche over the period between the day the performance goal is set, and the end of the service period. The expense is adjusted each period for any changes in the expected attainment of the performance goals.
Fair Value Assumptions
The calculated grant-date fair value of stock options, PVUs, and PVOs granted, were estimated using the Black-Scholes option-pricing model for stock options, and a Monte Carlo stimulation for the PVUs and PVOs, with the following assumptions:
Three Months Ended March 31,
20252024
Expected dividend yield——
Risk-free interest rate4.1%4.1%
Expected volatility69.5%66.4%
Expected term (in years)6.256.25
Fair value of underlying common stock$24.72$26.89
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,
20252024
Expected dividend yield——
Risk-free interest rate4.3%5.3%
Expected volatility73.4%56.0%
Expected term (in years)0.500.50
Grant-date fair value per share$9.26$9.11
Additional information related to the ESPP is provided below (in thousands, except per share amounts):
Three Months Ended March 31,
20252024
Shares issued under the ESPP693,873551,146
Weighted-average price per share issued$14.19$24.92