Item 1. Financial Statements
Item 1. Financial Statements
NOVOCURE LIMITED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands (except share data)
June 30,
2025 December 31, 2024
Unaudited Audited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 149,624 $ 163,767
Short-term investments 761,901 796,106
Restricted cash 2,509 2,327
Trade receivables, net 89,915 74,226
Receivables and prepaid expenses 39,139 35,063
Inventories 40,211 35,086
Total current assets 1,083,299 1,106,575
LONG-TERM ASSETS:
Property and equipment, net 80,333 77,660
Field equipment, net 18,591 14,811
Right-of-use assets 48,089 27,120
Other long-term assets 15,563 14,618
Total long-term assets 162,576 134,209
TOTAL ASSETS $ 1,245,875 $ 1,240,784
The accompanying notes are an integral part of these unaudited consolidated financial statements.
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NOVOCURE LIMITED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands (except share data)
June 30,
2025 December 31, 2024
Unaudited Audited
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Convertible note
$ 559,790 $ 558,160
Trade payables 103,678 105,086
Other payables, lease liabilities and accrued expenses 86,166 93,130
Total current liabilities 749,634 756,376
LONG-TERM LIABILITIES:
Senior secured credit facility, net
97,609 97,300
Long-term leases 42,853 19,971
Employee benefit liabilities 6,320 6,940
Other long-term liabilities 18 18
Total long-term liabilities 146,800 124,229
TOTAL LIABILITIES 896,434 880,605
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Share capital -
Ordinary shares no par value, unlimited shares authorized; issued and outstanding:
111,798,690 shares and 108,516,819 shares at June 30, 2025 (unaudited) and December 31, 2024, respectively
— —
Additional paid-in capital 1,583,138 1,519,809
Accumulated other comprehensive income (loss) ( 5,109 ) ( 5,500 )
Retained earnings (accumulated deficit) ( 1,228,588 ) ( 1,154,130 )
TOTAL SHAREHOLDERS' EQUITY 349,441 360,179
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,245,875 $ 1,240,784
The accompanying notes are an integral part of these unaudited consolidated financial statements.
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NOVOCURE LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands (except share and per share data)
Three months ended June 30, Six months ended June 30, Year ended December 31,
2025 2024 2025 2024 2024
Unaudited Unaudited Audited
Net revenues $ 158,805 $ 150,356 $ 313,799 $ 288,859 $ 605,220
Cost of revenues 41,472 34,654 79,993 68,343 137,181
Gross profit 117,333 115,702 233,806 220,516 468,039
Operating costs and expenses:
Research, development and clinical studies 55,833 54,955 109,610 106,553 209,645
Sales and marketing 57,066 56,616 112,858 111,822 239,063
General and administrative 43,955 37,711 88,724 77,241 189,827
Total operating costs and expenses 156,854 149,282 311,192 295,616 638,535
Operating income (loss) ( 39,521 ) ( 33,580 ) ( 77,386 ) ( 75,100 ) ( 170,496 )
Financial income (expenses), net 4,542 10,851 12,112 20,729 39,334
Income (loss) before income tax ( 34,979 ) ( 22,729 ) ( 65,274 ) ( 54,371 ) ( 131,162 )
Income tax 5,160 10,646 9,184 17,764 37,465
Net income (loss) $ ( 40,139 ) $ ( 33,375 ) $ ( 74,458 ) $ ( 72,135 ) $ ( 168,627 )
Basic and diluted net income (loss) per ordinary share $ ( 0.36 ) $ ( 0.31 ) $ ( 0.67 ) $ ( 0.67 ) $ ( 1.56 )
Weighted average number of ordinary shares used in computing basic and diluted net income (loss) per share 111,572,191 107,700,284 110,930,576 107,483,241 107,834,368
The accompanying notes are an integral part of these unaudited consolidated financial statements.
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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
U.S. dollars in thousands
Three months ended June 30, Six months ended June 30, Year ended December 31,
2025 2024 2025 2024 2024
Unaudited Unaudited Audited
Net income (loss) $ ( 40,139 ) $ ( 33,375 ) $ ( 74,458 ) $ ( 72,135 ) $ ( 168,627 )
Other comprehensive income (loss), net of tax:
Change in foreign currency translation adjustments ( 39 ) 102 319 ( 225 ) ( 1,200 )
Pension benefit plan ( 869 ) 530 72 2,179 1,169
Total comprehensive income (loss) $ ( 41,047 ) $ ( 32,743 ) $ ( 74,067 ) $ ( 70,181 ) $ ( 168,658 )
NOVOCURE LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
U.S. dollars in thousands (except share data)
Ordinary shares Additional
paid-in
capital Accumulated
other
comprehensive
income (loss)
Retained earnings (accumulated
deficit) Total shareholders'
equity
Balance as of December 31, 2024 (audited) 108,516,819 $ 1,519,809 $ ( 5,500 ) $ ( 1,154,130 ) $ 360,179
Share-based compensation to employees — 29,552 — — 29,552
Exercise of options and vested RSUs 2,965,781 5,247 — — 5,247
Other comprehensive income (loss), net of tax benefit of $ 0
— — 1,299 — 1,299
Net income (loss) — — — ( 34,319 ) ( 34,319 )
Balance as of March 31, 2025 (Unaudited) 111,482,600 $ 1,554,608 $ ( 4,201 ) $ ( 1,188,449 ) $ 361,958
Share-based compensation to employees — 26,143 — — 26,143
Proceeds from issuance of shares 141,192 2,136 — — 2,136
Exercise of options and vested RSUs 174,898 251 — 251
Other comprehensive income (loss), net of tax benefit of $ 0
— — ( 908 ) — ( 908 )
Net income (loss) — — — ( 40,139 ) ( 40,139 )
Balance as of June 30, 2025 (Unaudited) 111,798,690 $ 1,583,138 $ ( 5,109 ) $ ( 1,228,588 ) $ 349,441
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Ordinary shares Additional
paid-in
capital Accumulated
other
comprehensive
loss Retained earnings (accumulated
deficit) Total shareholders'
equity
Balance as of December 31, 2023 (audited) 107,075,754 $ 1,353,468 $ ( 5,469 ) $ ( 985,503 ) $ 362,496
Share-based compensation to employees — 34,084 — — 34,084
Exercise of options and vested RSUs 528,020 213 — — 213
Other comprehensive income (loss), net of tax benefit of $ 0
— — 1,322 — 1,322
Net income (loss) — — — ( 38,760 ) ( 38,760 )
Balance as of March 31, 2024 (Unaudited) 107,603,774 $ 1,387,765 $ ( 4,147 ) $ ( 1,024,263 ) $ 359,355
Share-based compensation to employees — 31,830 — — 31,830
Proceeds from issuance of shares 178,668 2,187 — — 2,187
Exercise of options and vested RSUs 231,388 1,121 — — 1,121
Other comprehensive income (loss), net of tax benefit of $ 0
— — 632 — 632
Net income (loss) — — — ( 33,375 ) ( 33,375 )
Balance as of June 30, 2024 (Unaudited) 108,013,830 $ 1,422,903 $ ( 3,515 ) $ ( 1,057,638 ) $ 361,750
The accompanying notes are an integral part of these unaudited consolidated financial statements.
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NOVOCURE LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Three months ended June 30, Six months ended June 30, Year ended December 31,
2025 2024 2025 2024 2024
Unaudited Unaudited Audited
Cash flows from operating activities:
Net income (loss) $ ( 40,139 ) $ ( 33,375 ) $ ( 74,458 ) $ ( 72,135 ) $ ( 168,627 )
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization 3,444 2,858 6,769 5,673 11,235
Accrued Interest 5,918 ( 349 ) 3,647 1,273 ( 651 )
Asset write-downs and impairment of field equipment 424 140 2,685 334 1,159
Share-based compensation 26,143 31,830 55,695 65,914 160,035
Foreign currency remeasurement loss (gain) 1,371 653 1,322 1,266 ( 227 )
Decrease (increase) in accounts receivables and prepaid expenses
( 10,447 ) ( 11,119 ) ( 19,053 ) ( 14,394 ) ( 26,358 )
Amortization of discount (premium) ( 6,460 ) ( 6,854 ) ( 13,114 ) ( 12,235 ) ( 25,644 )
Decrease (increase) in inventories ( 629 ) 1,888 ( 4,570 ) ( 2,762 ) 2,568
Decrease (increase) in other long-term assets 1,412 4,889 3,990 6,063 7,395
Increase (decrease) in accounts payables and accrued expenses 2,107 9,548 ( 14,313 ) ( 8,697 ) 19,106
Increase (decrease) in other long-term liabilities 920 ( 1,829 ) ( 201 ) ( 3,594 ) ( 6,360 )
Net cash provided by (used in) operating activities $ ( 15,936 ) $ ( 1,720 ) ( 51,601 ) ( 33,294 ) ( 26,369 )
Cash flows from investing activities:
Purchase of property, equipment and field equipment $ ( 5,486 ) $ ( 11,446 ) ( 16,097 ) ( 23,230 ) ( 42,855 )
Proceeds from maturity of short-term investments 420,000 160,000 540,000 418,000 778,000
Purchase of short-term investments ( 378,528 ) ( 522,994 ) ( 494,389 ) ( 522,994 ) ( 875,387 )
Net cash provided by (used in) investing activities $ 35,986 $ ( 374,440 ) 29,514 ( 128,224 ) ( 140,242 )
Cash flows from financing activities:
Proceeds from issuance of shares, net $ 2,136 $ 2,187 2,136 2,187 4,150
Proceeds from senior secured credit facility, net
— 96,922 — 96,922 96,922
Repayment and redemption of long-term debt
— ( 12,913 ) — ( 12,913 ) ( 12,913 )
Exercise of options 251 1,121 5,498 1,334 2,156
Net cash provided by (used in) financing activities $ 2,387 $ 87,317 7,634 87,530 90,315
Effect of exchange rate changes on cash, cash equivalents and restricted cash $ 265 $ ( 77 ) 492 ( 133 ) ( 174 )
Increase (decrease) in cash, cash equivalents and restricted cash 22,702 ( 288,920 ) ( 13,961 ) ( 74,121 ) ( 76,470 )
Cash, cash equivalents and restricted cash at the beginning of the period 129,431 457,363 166,094 242,564 242,564
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NOVOCURE LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Cash, cash equivalents and restricted cash at the end of the period $ 152,133 $ 168,443 $ 152,133 $ 168,443 $ 166,094
Supplemental cash flow activities:
Cash paid during the period for:
Income taxes paid (refunded), net $ 13,838 $ 7,501 $ 18,809 $ 10,415 $ 23,463
Interest paid $ 2,674 $ 1,968 $ 5,319 $ 1,970 $ 7,714
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents $ 149,624 $ 164,796 $ 149,624 $ 164,796 $ 163,767
Restricted cash 2,509 3,647 2,509 3,647 2,327
Total cash, cash equivalents and restricted cash $ 152,133 $ 168,443 $ 152,133 $ 168,443 $ 166,094
Non-cash activities:
Right-of-use assets obtained (disposed) in exchange for lease liabilities
$ 1,618 $ ( 1,649 ) $ 25,110 $ ( 1,367 ) $ 494
Purchase of property incurred but unpaid at period end $ 404 $ 401 $ 404 $ 401 $ 1,619
The accompanying notes are an integral part of these unaudited consolidated financial statements.
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NOVOCURE LIMITED AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share data)
NOTE 1: ORGANIZATION AND BASIS OF PRESENTATION
Organization . NovoCure Limited (including its consolidated subsidiaries, the "Company") was incorporated in the Bailiwick of Jersey and is principally engaged in the development, manufacture and commercialization of Tumor Treating Fields ("TTFields") devices, including Optune Gio and Optune Lua (collectively, our "Products"), for the treatment of solid tumor cancers. The Company markets Optune Gio and Optune Lua in multiple countries around the globe with the majority of revenues coming from the use of Optune Gio in the U.S., Germany, France and Japan. The Company also has a License and Collaboration Agreement (the "Zai Agreement") with Zai Lab (Shanghai) Co., Ltd. ("Zai") to market Optune in China, Hong Kong, Macau and Taiwan ("Greater China").
Financial statement preparation . The accompanying unaudited consolidated financial statements include the accounts of the Company and intercompany accounts and transactions have been eliminated. In the opinion of the Company’s management, the unaudited consolidated financial statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation for the periods presented. The preparation of these unaudited consolidated financial statements in conformity with U.S. generally accepted accounting principles ("GAAP") requires management to make estimates and assumptions that affect the amounts reported in these unaudited consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. These unaudited consolidated financial statements and accompanying notes should be read in conjunction with the Company’s annual consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (the "2024 10-K") filed with the Securities and Exchange Commission on February 27, 2025.
The significant accounting policies applied in the audited annual consolidated financial statements of the Company as disclosed in the 2024 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.
Recently announced accounting pronouncements
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires public entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2023-09 and will adopt it for fiscal year ending December 31, 2025.
In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2024-03.
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NOTE 2: 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, 2025 and December 31, 2024, the Company’s cash and cash equivalents and short-term investments were composed of:
June 30, 2025
Unaudited
Fair value level Adjusted cost basis Unrealized gains Unrealized losses Fair market value Recorded basis Cash and cash equivalents Short-term investments (2)
Cash $ 13,475 $ — $ — $ 13,475 $ 13,475 $ 13,475 $ —
Money market funds Level 1 134,949 — — 134,949 134,949 134,949 —
Certificate of deposits and term deposits Level 2 72,673 — — 72,673 72,673 1,200 71,473
HTM securities (1)
U.S. Treasury bills Level 1 $ 118,664 $ 4 $ ( 34 ) 118,634 118,664 $ — $ 118,664
Corporate debt securities Level 2 $ 571,764 $ 109 $ ( 116 ) 571,757 571,764 $ — $ 571,764
$ 690,428 $ 113 $ ( 150 ) $ 690,391 $ 690,428 $ — $ 690,428
Total $ 911,525 $ 113 $ ( 150 ) $ 911,488 $ 911,525 $ 149,624 $ 761,901
December 31, 2024
Audited
Fair value level Adjusted cost basis Unrealized gains Unrealized losses Fair market value Recorded basis Cash and cash equivalents Short-term investments (2)
Cash $ 11,848 $ — $ — $ 11,848 $ 11,848 $ 11,848 $ —
Money market funds Level 1 151,919 — — 151,919 151,919 151,919 —
Certificate of deposits and term deposits Level 2 170,120 — — 170,120 170,120 — 170,120
HTM securities (1)
U.S. Treasury bills Level 1 $ 118,618 $ 93 $ ( 1 ) 118,710 118,618 $ — $ 118,618
Government and governmental agencies Level 2 $ — $ — $ — — — $ — $ —
Corporate debt securities Level 2 $ 507,368 $ 920 $ ( 119 ) 508,169 507,368 $ — $ 507,368
$ 625,986 $ 1,013 $ ( 120 ) $ 626,879 $ 625,986 $ — $ 625,986
Total $ 959,873 $ 1,013 $ ( 120 ) $ 960,766 $ 959,873 $ 163,767 $ 796,106
(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.
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(2) Pursuant to a bank guaranty agreement, $ 17,614 of short-term investments are pledged. See Note 4.
In accordance with ASC 820, "Fair Value Measurements and Disclosures," the Company measures its money market funds at fair value. The fair value of the money market funds and HTM securities, which is presented for disclosure purposes, is classified within Level 1 or Level 2. 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, 2025 and December 31, 2024, all investments mature in one year or less.
Unrealized losses from debt securities are primarily attributable to changes in interest rates. The Company does not believe any remaining unrealized losses represent impairments based on the evaluation of available evidence.
NOTE 3: INVENTORIES
Inventories are stated at the lower of cost or net realizable value. The weighted average methodology is applied to determine cost. As of June 30, 2025 and December 31, 2024, the Company’s inventories were composed of:
June 30,
2025 December 31,
2024
Unaudited Audited
Raw materials $ 3,811 $ 4,004
Work in progress 3,986 7,969
Finished products 32,414 23,113
Total $ 40,211 $ 35,086
NOTE 4: COMMITMENTS AND CONTINGENT LIABILITIES
Operating Leases. The facilities of the Company are leased under various operating lease agreements for periods, including options for extensions, ending no later than 2044. The Company also leases motor vehicles under various operating leases, which expire on various dates, the latest of which is in 2028.
Pledged deposits and bank guarantees. As of June 30, 2025 and December 31, 2024, the Company pledged bank deposits of $ 5,100 and $ 4,909 , 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 $ 5,512 and $ 5,285 , respectively. In addition, € 15,000 ($ 17,614 ) of the Company's short term investments are pledged to a bank as guarantee for the Company's due execution of cash concentration agreements.
Legal Proceedings. In June 2023, a putative class action lawsuit was filed against the Company, its Executive Chairman and former Chief Executive Officer. The complaint, later amended to add our former Chief Financial Officer and present Chief Executive Officer as a defendant, which purports to be brought on behalf of a class of persons and/or entities who purchased or otherwise acquired ordinary shares of the Company from January 5, 2023 through June 5, 2023, alleges material misstatements and/or omissions in the Company’s public statements with respect to the results from its phase 3 LUNAR clinical trial. On March 18, 2025, the court granted the Company's motion to dismiss the complaint. The Plaintiffs did not appeal the court's ruling within the required timeframe and this matter is now closed.
NOTE 5: LONG-TERM DEBT, NET
a. Convertible notes
On November 5, 2020, the Company issued $ 575,000 aggregate principal amount of 0 % Convertible Senior Notes due 2025 (the “Notes”).
The Notes mature on November 1, 2025, unless earlier repurchased, redeemed or converted as set forth in the Notes. As of June 30, 2025, the conditions allowing holders of the Notes to convert were not met.
In June 2024 the Company redeemed $ 14,055 of Notes in consideration of $ 12,913 . The gain from redemption was reported as finance income in accordance with ASC 470 "Debt with Conversion and Other Options".
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The net carrying amount of the liability of the Notes as of June 30, 2025 and December 31, 2024 are as follows:
June 30,
2025 December 31,
2024
Unaudited Audited
Liability component, net:
Principal amount $ 560,945 $ 560,945
Unamortized issuance costs ( 1,155 ) ( 2,785 )
Net carrying amount of liability component (1) $ 559,790 $ 558,160
Presented as:
Short-term liability (2)
$ 559,790 $ 558,160
(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, 2025 and December 31, 2024 were $ 545,922 and $ 526,434 , 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.
(2) In January 2021, the Company elected to settle all conversions of Notes by a combination of cash and its ordinary shares and the cash portion per $ 1,000 principal amount of Notes for all conversion settlements shall be $ 1,000 . Holders have the right to convert Notes beginning in August 2025. Since any conversion will result in the payment of cash as described above, the liability has been reclassified as current.
Finance expense related to the Notes was as follows:
Three months ended June 30, Six months ended June 30, Year ended December 31,
2024
2025 2024 2025 2024
Unaudited Unaudited Audited
Gain from redemption of Notes
— ( 1,142 ) — ( 1,142 ) ( 1,142 )
Amortization of debt issuance costs
820 911 1,630 1,741 3,393
Total finance expenses (income) recognized
$ 820 $ ( 231 ) $ 1,630 $ 599 $ 2,251
b. Senior secured credit facility, net
On May 1, 2024 Novocure Luxembourg S.a.r.l. ("Borrower"), a wholly-owned subsidiary of the Company, entered into a new five-year senior secured credit facility of up to $ 400.0 million (the "Facility") with BPCR Limited Partnership and BioPharma Credit Investments V (Master) LP (collectively, the "Lenders"), BioPharma Credit PLC, as collateral agent for the Lenders, and the guarantors party to such agreement (the "Loan Agreement"). The Facility may be drawn in up to four drawings. The Loan Agreement provides for an initial term loan in the principal amount of $ 100.0 million (the "Tranche A Loan"), which was funded to the Borrower on May 1, 2024 (the "Tranche A Funding Date"). Under the Loan Agreement, the Borrower is required to give notice of its intent to draw $ 100.0 million on the Facility on or before June 30, 2025 (the "Tranche B Loan"), subject to customary conditions precedent as set forth in the Loan Agreement. Not later than December 31, 2025, the Borrower has the option to give notice of its intent to draw an additional $ 100.0 million of the Facility (the "Tranche C Loan") if (i) (A) the Company has received positive results from its PANOVA-3 phase 3 clinical trial or (B) the Company's trailing net revenues for the most recently completed four quarters as reported by the Company in its financial statements filed with the U.S. Securities and Exchange Commission ("Trailing Four Quarters of Net Revenue") are greater than $ 575.0 million and (ii) the Notes are extinguished in full and are no longer outstanding. Not later than March 31, 2026, the Borrower has the option to give notice of its intent to draw an additional $ 100.0 million of the Facility (the "Tranche D Loan") if (i) the Company receives an approval or clearance from the U.S. Food and Drug Administration for the Company's Tumor Treating Fields device for a pancreatic cancer indication or (ii) Trailing Four Quarters of Net Revenue is greater than $ 625.0 million. The closing date of each of the Tranche B Loan, Tranche C Loan and Tranche D Loan is ninety (90) days after the Company gives the respective notice of its intent to draw. The
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obligations under the Loan Agreement are guaranteed by certain of the Company's subsidiaries and secured by a first lien on the Borrower's and certain of the Company's other subsidiaries’ assets. Outstanding term loans under the Loan Agreement will bear interest at an annual rate equal to 6.25 % plus the three-month SOFR (subject to a 3.25 % floor), payable quarterly in arrears and calculated on the basis of actual days elapsed in a 360-day year. The Borrower must pay 2.5 % of additional consideration on each principal draw, with payment for the Tranche A Loan and the Tranche B Loan paid on the Tranche A Funding Date, and payments for the Tranche C Loan and the Tranche D Loan on their respective funding dates. Principal under the Facility will be repaid in eight equal quarterly repayments commencing with the third quarter of 2027 and continuing each quarter thereafter, with the final payment of outstanding principal due on the fifth anniversary of the Tranche A Funding Date. Voluntary prepayment of all, but not less than all, of the term loans outstanding is permitted at any time, subject to make-whole and prepayment premiums as set forth in the Loan Agreement. Prepayment of all term loans outstanding, subject to make-whole and prepayment premiums, is due and payable upon a change-in-control as defined in the Loan Agreement. Make-whole and prepayment premiums are due and payable for the Tranche B Loans for any voluntary prepayment of the term loans outstanding, upon a change-in-control (as defined in the Loan Agreement), and upon any acceleration of the maturity date, in each case regardless of whether the Tranche B Loan is drawn. The Loan Agreement contains a financial covenant only if the Tranche C Loan and/or Tranche D Loan are funded, in which case the Company is required to maintain at least Trailing Four Quarters of Net Revenue of at least $ 500.0 million, calculated on a trailing twelve-month basis as of the end of each fiscal quarter, beginning with the first quarter of 2027 based on year-end 2026 audited financial statements.
As of June 30, 2025 the Company had borrowed the Tranche A Loan in the principal amount of $ 100,000 and on that date gave its notice of intent to draw the Tranche B Loan, which will close on September 26, 2025.
June 30,
2025 December 31,
2024
Unaudited Audited
Liability component, net:
Principal amount $ 100,000 $ 100,000
Unamortized issuance costs ( 2,391 ) ( 2,700 )
Net carrying amount of liability component (1) $ 97,609 $ 97,300
(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, 2025 and December 31, 2024 were $ 108,346 and $ 112,836 , 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 $ 3,078 and are amortized to interest expense using the effective interest rate method over the contractual term of the Notes. For purposes of calculating the net carrying amount, the annual effective interest rate is assumed to be 12.2 % over the remaining contractual term of the Notes.
Finance expense related to the Facility was as follows:
Three months ended June 30, Six months ended June 30, Year ended December 31,
2024
2025 2024 2025 2024
Unaudited Unaudited Audited
Interest
2,666 1,962 5,306 1,962 7,693
Amortization of debt issuance costs
159 40 309 40 378
Total finance expense recognized
$ 2,825 $ 2,002 $ 5,615 $ 2,002 $ 8,071
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NOTE 6: REVENUE RECOGNITION
a. Net revenues
The Company’s net revenues by geographic region, based on the patient’s location are summarized as follows:
Three months ended June 30, Six months ended June 30, Year ended December 31,
2025 0 2024 2025 2024 2024
United States $ 94,261 $ 95,711 $ 187,415 $ 186,254 $ 391,801
International markets:
Germany 19,074 15,097 37,792 30,844 65,263
France 18,416 14,267 36,275 24,755 55,730
Japan 9,484 7,664 18,193 15,481 32,569
Other international markets 12,979 11,771 24,916 20,742 42,471
International markets - Total 59,953 48,799 117,176 91,822 196,033
Greater China (1)
4,591 5,846 9,208 10,783 17,386
Total net revenues $ 158,805 $ 150,356 $ 313,799 $ 288,859 $ 605,220
(1) For additional information, see Notes 12 and 13 to the Consolidated Financial Statements in the 2024 10-K.
The Company's net revenues by performance period are as follows:
Three months ended June 30, Six months ended June 30, Year ended December 31,
2025 0 2024 2025 2024 2024
Net revenues recognized in the reporting period from performance obligations satisfied in:
Reporting period $ 150,954 $ 138,857 $ 296,970 $ 269,343 $ 568,819
Previous periods 7,851 11,499 16,829 19,516 36,401
Total net revenues $ 158,805 $ 150,356 $ 313,799 $ 288,859 $ 605,220
b. Contract balances
The following table provides information about trade receivables, unbilled receivables and contract liabilities from contracts with customers:
June 30,
2025 December 31,
2024
Unaudited Audited
Trade receivables $ 82,966 $ 68,501
Unbilled receivables $ 6,949 $ 5,725
Deferred revenues (short-term contract liabilities) $ ( 15,354 ) $ ( 14,225 )
During the six months ended June 30, 2025 and 2024 and the year ended December 31, 2024 the Company recognized $ 14,225 , $ 16,224 and $ 16,224 , respectively, which were included in the deferred revenues (short-term contract liability) balance at January 1, 2025 and 2024.
NOTE 7: SHARE OPTION PLANS AND ESPP
In April 2024, the Company adopted the 2024 Omnibus Incentive Plan (the "2024 Plan"), which replaced the 2015 Omnibus Incentive Plan (the "2015 Plan"), effective June 5, 2024 (the "Effective Date") following approval from the
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Company's shareholders. Under the 2024 Plan, the Company can issue various types of equity compensation awards such as share options, restricted shares, performance shares, restricted share units (“RSUs”), performance-based share units (“PSUs”), long-term cash awards and other share-based awards. The total number of shares of the Company’s ordinary shares that may be granted under the 2024 Plan consists of (i) up to 9,000,000 ordinary shares (reduced by 433,018 shares subject to awards granted under the 2015 Plan after April 2, 2024), all of which were available under the 2015 Plan and which ceased to be available for future awards under the 2015 Plan as of the Effective Date and (ii) the number of undelivered shares subject to outstanding awards under the 2015 Plan that become available for future awards under the 2024 Plan as provided for in the 2024 Plan.
Options granted under the 2024 Plan generally will have a two-year or four-year vesting period and expire ten years after the date of grant. Options granted under the 2015 Plan and 2024 Plan that are canceled or forfeited before expiration become available for future grants under the 2024 Plan. RSUs granted under the 2024 Plan generally will vest over a three-year period. PSUs granted under the 2024 Plan generally will vest between a three - and six-year period as performance targets are attained. RSUs and PSUs granted under the 2015 Plan and 2024 Plan that are canceled before expiration become available for future grants under the 2024 Plan.
As of June 30, 2025, 5,718,009 ordinary shares were available for grant under the 2024 Plan.
A summary of the status of the Company’s option plans as of June 30, 2025 and changes during the period then ended is presented below:
Six months ended June 30, 2025
Unaudited
Number
of options Weighted
average
exercise
price
Outstanding at beginning of year 11,315,468 $ 31.41
Granted 944,888 17.96
Exercised ( 365,676 ) 15.03
Forfeited and canceled ( 387,966 ) 40.89
Outstanding as of June 30, 2025 11,506,714 $ 30.50
Exercisable options 7,362,522 $ 35.14
A summary of the status of the Company’s RSUs and PSUs as of June 30, 2025 and changes during the period then ended is presented below.
Six months ended June 30, 2025
Unaudited
Number
of RSU/PSUs Weighted
average
grant date fair value
Unvested at beginning of year 12,066,515 $ 27.19
Granted 5,165,100 19.02
Vested ( 2,775,003 ) 24.22
Forfeited and cancelled ( 788,207 ) 39.11
Unvested as of June 30, 2025 (1) 13,668,405 24.02
(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, 2025, in accordance with ASC 718 "Compensation — Stock Compensation" as follows:
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June 30, 2025
Number of
PSUs Fair value at grant date per PSU Total fair value at grant date
704,493 $ 16.30 $ 11,483
1,154,720 18.19 21,004
21,653 19.44 421
901,284 48.16 43,406
73,186 76.97 5,633
2,855,336 $ 81,947
These PSUs will be expensed over the performance period when the vesting conditions become probable in accordance with ASC 718.
In February 2025, the Company adopted the 2025 Novocure Employee Share Purchase Plan ("ESPP"), effective June 4, 2025 (the "ESPP Effective Date"), following approval from the Company's shareholders. The ESPP replaced the Company's expiring prior employee share purchase plan, which was adopted in 2015 (the "Prior ESPP"). The purpose of the ESPP is to encourage and enable eligible employees to acquire ownership of the Company’s ordinary shares purchased through accumulated payroll deductions on an after-tax basis. The total number of shares of the Company’s ordinary shares that may be issued under the ESPP consists of 6,507,843 Ordinary Shares, less 141,192 Ordinary Shares which were issued on the last “Purchase Date” pursuant to the Prior ESPP, all of which were available under the Prior ESPP and which ceased to be available for future awards under the Prior ESPP as of the ESPP Effective Date. 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, 2025, 6,366,651 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. For market condition awards, the Company also applied the Monte-Carlo simulation model. The Company assessed fair value using the following underlying assumptions:
Six months ended June 30, Year ended December 31,
2024
2025 2024
Unaudited Audited
Stock Option Plans
Expected term (years) 5.50 - 5.79
5.50 - 5.73
5.50 - 5.73
Expected volatility 75 %- 77 %
71 %- 73 %
71 %- 73 %
Risk-free interest rate 4.01 %- 4.02 %
3.88 %- 4.43 %
3.88 %- 4.43 %
Dividend yield 0.00 % 0.00 % 0.00 %
ESPP
Expected term (years) 0.50 0.50 0.50
Expected volatility 89 % 90 % 73 %- 90 %
Risk-free interest rate 4.16 % 5.13 % 5.13 %- 5.23 %
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, 2025 and 2024, and the year ended December 31, 2024 was:
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Three months ended June 30, Six months ended June 30, Year ended December 31,
2024
2025 2024 2025 2024
Unaudited Unaudited Audited
Cost of revenues $ 973 $ 1,698 $ 2,075 $ 3,446 $ 6,873
Research, development and clinical studies 5,787 9,517 11,988 18,127 32,716
Sales and marketing 5,358 9,896 13,875 20,944 43,097
General and administrative 14,025 10,719 27,757 23,397 77,349
Total share-based compensation expense $ 26,143 $ 31,830 $ 55,695 $ 65,914 $ 160,035
NOTE 8: Basic and diluted net income (loss) per ordinary share
Basic net income (loss) per share is computed based on the weighted average number of ordinary shares outstanding during each period. Diluted net income per share is computed based on the weighted average number of ordinary shares outstanding during the period, plus potential dilutive shares (deriving from options, RSUs, PSUs, Notes and the ESPP) considered outstanding during the period, in accordance with ASC 260-10 "Earnings Per Share", as determined under the treasury stock or if-converted method, as applicable.
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,
2024
2025 2024 2025 2024
Unaudited Unaudited Audited
Net income (loss) attributable to ordinary shares as reported used in computing basic and diluted net income (loss) per share $ ( 40,139 ) $ ( 33,375 ) $ ( 74,458 ) $ ( 72,135 ) $ ( 168,627 )
Weighted average number of ordinary shares used in computing diluted net income (loss) per share 111,572,191 107,700,284 110,930,576 107,483,241 107,834,368
Potentially anti-dilutive shares that were excluded from the computation of basic net income (loss) per share:
Options 9,069,460 9,931,469 8,902,549 9,112,573 9,558,506
RSUs and PSUs
4,365,034 3,918,515 4,899,273 3,284,521 4,560,415
ESPP 141,192 178,668 141,192 178,668 222,451
Weighted anti-dilutive shares outstanding which were not included in the diluted calculation 13,575,686 14,028,652 13,943,014 12,575,762 14,341,372
Basic and diluted net income (loss) per ordinary share $ ( 0.36 ) $ ( 0.31 ) $ ( 0.67 ) $ ( 0.67 ) $ ( 1.56 )
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NOTE 9: SUPPLEMENTAL INFORMATION
The Company operates in a single reportable segment.
The following table presents long-lived assets by location:
June 30,
2025 December 31,
2024
Unaudited Audited
United States $ 65,578 $ 62,897
Switzerland 49,552 27,014
Israel 14,924 16,120
Others 16,959 13,560
Total long lived assets $ 147,013 $ 119,591
NOTE 10: SUBSEQUENT EVENT
In July 2025, the United States tax code was amended, including significant changes primarily focused on the permanent extension of certain business and international tax provisions enacted as part of the 2017 Tax Cuts and Jobs Act. Except for certain provisions, the amendments are effective for tax years beginning on or after January 1, 2025 and include, among other things: (i) bonus depreciation that will allow for full expensing of qualified property; and (ii) immediate deductibility of domestic research or experimental expenditures. The Company is evaluating the impact of the tax law changes and currently estimates a decrease in tax expense of approximately $ 1.7 million related to the six months ended June 30, 2025.
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Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.