What changed in this filing

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Item 1. Financial Statements

2023-10-26 compared with 2023-07-27 · 76 added, 36 removed, 344 unchanged (25% of the section changed)

3 unchanged sentences

dollars in thousands (except share data)

September 30,

2023 December 31, 2022

19 unchanged sentences

dollars in thousands (except share data)

September 30,

2023 December 31, 2022

18 unchanged sentences

issued and outstanding:

106,605,331 shares and 105,049,411 shares at June 30, 2023 (unaudited) and December 31, 2022, respectively

106,748,270 shares and 105,049,411 shares at September 30, 2023 (unaudited) and December 31, 2022, respectively

Additional paid-in capital 1,334,120 1,222,063

7 unchanged sentences

dollars in thousands (except share and per share data)

Three months ended June 30, Six months ended June 30, Year ended December 31,

Three months ended September 30, Nine months ended September 30, Year ended December 31,

2023 2022 2023 2022 2022

18 unchanged sentences

dollars in thousands

Three months ended June 30, Six months ended June 30, Year ended December 31,

Three months ended September 30, Nine months ended September 30, Year ended December 31,

2023 2022 2023 2022 2022

28 unchanged sentences

Balance as of June 30, 2023 (Unaudited) 106,605,331 $ 1,306,603 $ ( 1,981 ) $ ( 888,939 ) $ 415,683

Share-based compensation to employees — 26,346 — — 26,346

Exercise of options and vested RSUs 142,939 1,171 — — 1,171

Other comprehensive income (loss), net of tax benefit of $ 0

— — ( 11 ) — ( 11 )

Net income (loss) — — — ( 49,485 ) ( 49,485 )

Balance as of September 30, 2023 (Unaudited) 106,748,270 $ 1,334,120 $ ( 1,992 ) $ ( 938,424 ) $ 393,704

Ordinary shares Additional

17 unchanged sentences

Balance as of June 30, 2022 (Unaudited) 104,727,685 $ 1,158,348 $ ( 2,095 ) $ ( 714,581 ) $ 441,672

Share-based compensation to employees — 26,305 — — 26,305

Exercise of options and vested RSUs 215,256 4,211 — — 4,211

Other comprehensive income (loss), net of tax benefit of $ 0

— — ( 211 ) — ( 211 )

Net income (loss) — — — ( 26,576 ) ( 26,576 )

Balance as of September 30, 2022 (Unaudited) 104,942,941 $ 1,188,864 $ ( 2,306 ) $ ( 741,157 ) $ 445,401

The accompanying notes are an integral part of these unaudited consolidated financial statements.

2 unchanged sentences

dollars in thousands

Three months ended June 30, Six months ended June 30, Year ended December 31,

Three months ended September 30, Nine months ended September 30, Year ended December 31,

2023 2022 2023 2022 2022

36 unchanged sentences

Interest paid $ — $ 1 $ 1 $ 3 $ 41

Reconciliation of cash, cash equivalents and restricted cash:

Cash and cash equivalents $ 154,860 $ 243,805 $ 154,860 $ 243,805 $ 115,326

Restricted cash 1,652 231 1,652 231 508

Total cash, cash equivalents and restricted cash $ 156,512 $ 244,036 $ 156,512 $ 244,036 $ 115,834

Non-cash activities:

18 unchanged sentences

The significant accounting policies applied in the audited annual consolidated financial statements of the Company as disclosed in the 2022 10-K are applied consistently in these unaudited interim consolidated financial statements.

Concentration Risks.

The Company's cash, cash equivalents, short-term investments and trade receivables are potentially subject to a concentration of risk.

Cash, cash equivalents and short-term investments are invested at top tier financial institutions globally and the total value invested at any one institution is limited pursuant to the Company's investment policy.

These investments may be in excess of insured limitations or not insured in certain jurisdictions.

Generally, these investments may be redeemed upon demand according to the terms of the securities.

The Company's trade receivables are due from numerous governments and federal and state agencies that are paid from their respective budgets, and from hundreds of health insurance companies.

The Company does not believe that there are significant default risks associated with these governments, agencies and health insurance companies based upon the Company's historical experience.

The Company has no off-balance sheet concentrations of credit risk such as foreign exchange contracts, option contracts or other foreign hedging arrangements.

CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS

Cash equivalents include items almost as liquid as cash, with maturity periods of three months or less when purchased, and short-term investments include items with maturity dates between three months and one year when purchased.

As of June 30, 2023 and December 31, 2022, the Company’s cash and cash equivalents and short-term investments were composed of:

June 30, 2023

As of September 30, 2023 and December 31, 2022, the Company’s cash and cash equivalents and short-term investments were composed of:

September 30, 2023

Fair value level Adjusted cost basis Unrealized gains Unrealized losses Fair market value Recorded basis Cash and cash equivalents Short-term investments (2)

20 unchanged sentences

(1) Changes in fair value of held-to-maturity ("HTM") securities are presented for disclosure purposes as required by ASC 320 "Investments — Debt Securities" and are recorded as finance expenses only if the unrealized loss is identified as a credit loss.

(2) Pursuant to a bank guaranty, $ 15,862 of short-term investments are pledged.

In November 2022, the Company transferred all of its available-for-sale portfolio to HTM as part of the Company's investment strategy.

2 unchanged sentences

These securities continue to be reported in accumulated comprehensive income (loss) and are amortized over the remaining lives of the securities as an adjustment to the yield.

As of June 30, 2023 and December 31, 2022, the unamortized unrealized loss balances were $ 20 and $ 445 , respectively, and are reported in accumulated other comprehensive income (loss).

As of September 30, 2023 and December 31, 2022, the unamortized unrealized loss balances were $ 5 and $ 445 , respectively, and are reported in accumulated other comprehensive income (loss).

In accordance with ASC 820, "Fair Value Measurements and Disclosures," the Company measures its money market funds at fair value.

1 unchanged sentence

This is because these assets are valued using quoted market prices or alternative pricing sources and models utilizing market observable inputs.

As of June 30, 2023 and December 31, 2022, all investments mature in one year or less.

As of September 30, 2023 and December 31, 2022, all investments mature in one year or less.

Unrealized losses from debt securities are primarily attributable to changes in interest rates.

2 unchanged sentences

The weighted average methodology is applied to determine cost.

As of June 30, 2023 and December 31, 2022, the Company’s inventories were composed of:

As of September 30, 2023 and December 31, 2022, the Company’s inventories were composed of:

September 30,

2023 December 31,

9 unchanged sentences

Pledged deposits and bank guarantees.

As of June 30, 2023 and December 31, 2022, the Company pledged bank deposits of $ 2,346 and $ 2,296 , respectively, to cover bank guarantees in respect of its leases of operating facilities and obtained bank guarantees for the fulfillment of the Company’s lease and other contractual commitments of $ 2,700 and $ 2,459 , respectively .

As of September 30, 2023 and December 31, 2022, the Company pledged bank deposits of $ 2,643 and $ 2,296 , respectively, to cover bank guarantees in respect of its leases of operating facilities and obtained bank guarantees for the fulfillment of the Company’s lease and other contractual commitments of $ 2,991 and $ 2,459 , respectively.

In addition, € 15,000 ($ 15,862 ) of the Company's short term investments are pledged to a bank as guarantee for the Company's due execution of cash concentration agreements.

Senior secured revolving credit facility.

5 unchanged sentences

The commitments under the 2020 Credit Facility were guaranteed by certain of the Company's subsidiaries and secured by a first lien on the Company's and certain of its subsidiaries’ assets.

Outstanding loans bore interest per annum at a sliding scale based on the our secured leverage ratio from 2.75 % to 3.25 % above the applicable

interbank borrowing reference rate for the currency in which the loan is denominated.

Outstanding loans bore interest per annum at a sliding scale based on a secured leverage ratio from 2.75 % to 3.25 % above the applicable interbank borrowing reference rate for the currency in which the loan is denominated.

Additionally, the 2020 Credit Facility contained a fee for the unused revolving credit commitments at a sliding scale based on our secured leverage ratio from 0.35 % to 0.45 %.

4 unchanged sentences

The Company believes that the action is without merit and plans to defend the lawsuit vigorously.

As of June 30, 2023, the Company has not accrued any amounts in respect of this claim, as it believes liability is not probable and the amount of any potential liability cannot be reasonably estimated.

As of September 30, 2023, the Company has not accrued any amounts in respect of this claim, as it believes liability is not probable and the amount of any potential liability cannot be reasonably estimated.

CONVERTIBLE NOTE

1 unchanged sentence

The Notes mature on November 1, 2025, unless earlier repurchased, redeemed or converted as set forth in the Notes.

As of June 30, 2023, the conditions allowing holders of the Notes to convert were not met.

The Notes are therefore not convertible as of June 30, 2023 and are classified as long-term liability.

The net carrying amount of the liability of the Notes as of June 30, 2023 and December 31, 2022 are as follows:

As of September 30, 2023, the conditions allowing holders of the Notes to convert were not met.

The Notes are therefore not convertible as of September 30, 2023 and are classified as long-term liability.

The net carrying amount of the liability of the Notes as of September 30, 2023 and December 31, 2022 are as follows:

September 30,

2023 December 31,

5 unchanged sentences

(1) An effective interest rate determines the fair value of the Notes, therefore they are categorized as Level 3 in accordance with ASC 820.

The estimated fair value of the net carrying amount of liability component of the Notes as of June 30, 2023 and December 31, 2022 were $ 473,001 and $ 455,091 , respectively.

The estimated fair value of the net carrying amount of liability component of the Notes as of September 30, 2023 and December 31, 2022 were $ 480,791 and $ 455,091 , respectively.

The net carrying amount of the liability is represented by the principal amount of the Notes, less total issuance costs plus any amortization of issuance costs.

The total issuance costs upon issuance of the Notes were $ 16,561 and are amortized to interest expense using the effective interest rate method over the contractual term of the Notes.

Interest expense is recognized at an annual effective interest rate of 0.59 % over the contractual term of the Notes.

Finance expense related to the Notes was as follows:

Three months ended June 30, Six months ended June 30, Year ended December 31,

Three months ended September 30, Nine months ended September 30, Year ended December 31,

2023 2022 2023 2022

10 unchanged sentences

RSUs granted under the 2015 Plan generally vest over a three-year period.

PSUs granted under the 2015 Plan generally vest between a three - and six-year period as performance targets are

PSUs granted under the 2015 Plan generally vest between a three - and six-year period as performance targets are attained.

RSUs and PSUs granted under the 2015 Plan that are canceled before expiration become available for future grants.

As of June 30, 2023, 18,945,024 ordinary shares were available for grant under the 2015 Plan.

A summary of the status of the Company’s option plans as of June 30, 2023 and changes during the period then ended is presented below:

Six months ended June 30, 2023

As of September 30, 2023, 18,729,954 ordinary shares were available for grant under the 2015 Plan.

A summary of the status of the Company’s option plans as of September 30, 2023 and changes during the period then ended is presented below:

Nine months ended September 30, 2023

of options Weighted

3 unchanged sentences

Forfeited and canceled ( 321,556 ) 73.09

Outstanding as of June 30, 2023 8,621,859 $ 41.44

Outstanding as of September 30, 2023 8,619,882 $ 41.31

Exercisable options 6,810,232 $ 31.18

For the six months ended June 30, 2023, options to purchase 704,027 ordinary shares were exercised, resulting in the issuance of 704,027 ordinary shares.

A summary of the status of the Company’s RSUs and PSUs as of June 30, 2023 and changes during the period then ended is presented below.

Six months ended June 30, 2023

For the nine months ended September 30, 2023, options to purchase 787,569 ordinary shares were exercised, resulting in the issuance of 787,569 ordinary shares.

A summary of the status of the Company’s RSUs and PSUs as of September 30, 2023 and changes during the period then ended is presented below.

Nine months ended September 30, 2023

of RSU/PSUs Weighted

4 unchanged sentences

Forfeited and cancelled ( 178,399 ) 86.51

Unvested as of June 30, 2023 (1) 5,753,313 65.95

(1) Includes PSUs that have a mix of service, market and other milestone performance vesting conditions which are vested upon achievements of performance milestones that are not probable as of June 30, 2023, in accordance with ASC 718 "Compensation — Stock Compensation" as follows:

June 30, 2023

Unvested as of September 30, 2023 (1) 5,827,181 64.60

(1) Includes PSUs that have a mix of service, market and other milestone performance vesting conditions which are vested upon achievements of performance milestones that are not probable as of September 30, 2023, in accordance with ASC 718 "Compensation — Stock Compensation" as follows:

September 30, 2023

PSUs Fair value at grant date per PSU Total fair value at grant date

9 unchanged sentences

In the United States, the ESPP is intended to be an “employee stock purchase plan” within the meaning of Section 423 of the Internal Revenue Code and the provisions of the ESPP are construed in a manner consistent with the requirements of such section.

As of June 30, 2023, 4,787,003 ordinary shares were available to be purchased by eligible employees under the ESPP.

As of September 30, 2023, 4,787,003 ordinary shares were available to be purchased by eligible employees under the ESPP.

The fair value of share-based awards was estimated using the Black-Scholes model for all equity grants.

1 unchanged sentence

The Company assessed fair value using the following underlying assumptions:

Six months ended June 30, Year ended December 31,

Nine months ended September 30, Year ended December 31,

Unaudited Audited

9 unchanged sentences

Risk-free interest rate 4.76 %- 5.38 %

0.19 %- 2.52 %

Dividend yield 0.00 % 0.00 % 0.00 %

The total non-cash share-based compensation expense related to all of the Company’s equity-based awards recognized for the three and six months ended June 30, 2023 and 2022, and the year ended December 31, 2022 was:

Three months ended June 30, Six months ended June 30, Year ended December 31,

The total non-cash share-based compensation expense related to all of the Company’s equity-based awards recognized for the three and nine months ended September 30, 2023 and 2022, and the year ended December 31, 2022 was:

Three months ended September 30, Nine months ended September 30, Year ended December 31,

2023 2022 2023 2022

9 unchanged sentences

The following table sets forth the computation of the Company’s basic and diluted net income (loss) per ordinary share:

Three months ended June 30, Six months ended June 30, Year ended December 31,

Three months ended September 30, Nine months ended September 30, Year ended December 31,

2023 2022 2023 2022

1 unchanged sentence

Net income (loss) attributable to ordinary shares as reported used in computing basic and diluted net income (loss) per share $ ( 49,485 ) $ ( 26,576 ) $ ( 159,964 ) $ ( 55,231 ) $ ( 92,534 )

Weighted average number of ordinary shares used in computing basic and diluted net income (loss) per share 106,289,073 104,627,789 105,979,791 104,408,164 104,660,476

Weighted average number of ordinary shares used in computing diluted net income (loss) per share 106,772,814 104,884,583 106,219,194 104,552,803 104,660,476

Potentially anti-dilutive shares that were excluded from the computation of basic net income (loss) per share:

Options 6,250,189 6,440,190 6,354,627 6,695,719 6,387,275

RSUs and PSUs

2,590,322 827,789 1,470,542 920,364 822,421

ESPP 96,444 21,462 150,930 52,601 62,910

Weighted anti-dilutive shares outstanding which were not included in the diluted calculation 8,936,955 7,289,441 7,976,099 7,668,684 7,272,606

3 unchanged sentences

The following table presents long-lived assets by location:

September 30,

2023 December 31,

8 unchanged sentences

The Company’s revenues by geographic region, based on the customer’s location, are summarized as follows:

Three months ended June 30, Six months ended June 30, Year ended December 31,

Three months ended September 30, Nine months ended September 30, Year ended December 31,

2023 2022 2023 2022

8 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements