NovoCure Ltd 10-K

ITEM 8. FINANCIAL STATEMENTS NovoCure Limited Index to consolidated financial statements Page Report of Independent Registered Public Accounting Firm (PCAOB ID Number 1281 ) 65 Consolidated Balance Sheets as of December 31, 2025 and 2024 68 Consolidated Statements of Operations for the years ended December 31, 2025, 2024 and 2023 70 Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2025, 2024 and 2023 71 Statements of Changes in Shareholders’ Equity for the years ended December 31, 2025, 2024 and 2023 72 Consolidated Statements of Cash Flows for the years ended December 31, 2025, 2024 and 2023 73 Notes to Consolidated Financial Statements 75 64 Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of NovoCure Limited Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of NovoCure Limited and its subsidiaries ("the Company") as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income (loss), changes in shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2025 and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) ("PCAOB"), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 26, 2026 expressed an unqualified opinion thereon. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. 65 Revenue recognition – Measuring variable consideration Description of the Matter As per the Company's consolidated statements of operations, the net revenues recognized during the fiscal year of 2025 amounted to a sum of $655 million, which included variable consideration estimates. As described in Note 2 to the consolidated financial statements, the transaction price is determined based on the consideration which the Company will be entitled to in exchange for providing Optune solutions. The Company provides certain patients with implicit price concessions, which results in variable consideration. The Company adjusts the transaction price for estimated implicit price concessions to reflect the revenues which the Company expects to receive. Auditing the Company's measurement of variable consideration involved challenging judgment because the calculation involves uncertainty and subjective management assumptions about estimates of expected price concessions. The implicit discount includes both an estimate of claims that will pay at an amount less than billed and an estimate of claims that will not pay within a given time horizon. How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of internal controls over the Company's process to calculate variable consideration, including the underlying assumptions about estimates of expected price concessions. Our audit procedures included, among others, evaluating the methodology used, analyzing the significant assumptions, and testing the accuracy and completeness of the underlying data used in management's calculation. This included testing inputs of the calculation by reconciliation of the data between the various information systems, performing independent recalculation of the Company's estimate and evaluating the historical accuracy of management's estimates by comparing such estimates to subsequent actual results. /s/ KOST FORER GABBAY & KASIERER A Member of EY Global We have served as the Company‘s auditor since 2003. Tel-Aviv, Israel February 26, 2026 66 Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of NovoCure Limited Opinion on Internal Control Over Financial Reporting We have audited NovoCure Limited and subsidiaries' internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control–Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, NovoCure Limited and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on the COSO criteria. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income (loss) changes in shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2025 and the related notes, and our report dated February 26, 2026 expressed an unqualified opinion thereon. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management's Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ KOST FORER GABBAY & KASIERER A Member of EY Global Tel-Aviv, Israel February 26, 2026 67 NovoCure Limited and subsidiaries Consolidated balance sheets December 31, U.S. dollars in thousands 2025 2024 Assets Current assets: Cash and cash equivalents $ 93,548 $ 163,767 Short-term investments 354,126 796,106 Restricted cash 9,842 2,327 Trade receivables, net 89,435 74,226 Receivables and prepaid expenses 58,669 35,063 Inventories 41,111 35,086 Total current assets 646,731 1,106,575 Long-term assets: Property and equipment, net 77,606 77,660 Field equipment, net 22,066 14,811 Right-of-use assets 47,327 27,120 Other long-term assets 10,596 14,618 Total long-term assets 157,595 134,209 Total assets $ 804,326 $ 1,240,784 The accompanying notes are an integral part of the consolidated financial statements. 68 NovoCure Limited and subsidiaries Consolidated balance sheets December 31, U.S. dollars in thousands, except share and per share data 2025 2024 Liabilities and shareholders’ equity Current liabilities: Convertible note $ — $ 558,160 Trade payables 122,231 105,086 Other payables, lease liabilities and accrued expenses 100,997 93,148 Total current liabilities 223,228 756,394 Long-term liabilities: Senior secured credit facility, net 195,047 97,300 Long term leases 41,647 19,971 Employee benefit liabilities 3,938 6,940 Total long-term liabilities 240,632 124,211 Total liabilities 463,860 880,605 Commitments and contingencies Shareholders’ equity: Share capital - Ordinary shares - No par value, Unlimited shares authorized; Issued and outstanding: 112,492,667 shares and 108,516,819 shares at December 31, 2025 and December 31, 2024 respectively; — — Additional paid-in capital 1,634,264 1,519,809 Accumulated other comprehensive income (loss) ( 3,441 ) ( 5,500 ) Retained earnings (accumulated deficit) ( 1,290,357 ) ( 1,154,130 ) Total shareholders’ equity 340,466 360,179 Total liabilities and shareholders’ equity $ 804,326 $ 1,240,784 The accompanying notes are an integral part of the consolidated financial statements. 69 NovoCure Limited and subsidiaries Consolidated statements of operations Year ended December 31, U.S. dollars in thousands, except share and per share data 2025 2024 2023 Net revenues $ 655,353 $ 605,220 $ 509,338 Cost of revenues 166,879 137,181 128,280 Gross profit 488,474 468,039 381,058 Operating costs and expenses: Research, development and clinical studies 224,544 209,645 223,062 Sales and marketing 240,064 239,063 226,809 General and administrative 177,666 189,827 164,057 Total operating costs and expenses 642,274 638,535 613,928 Operating income (loss) ( 153,800 ) ( 170,496 ) ( 232,870 ) Financial (expenses) income, net 17,550 39,334 41,130 Income (loss) before income taxes ( 136,250 ) ( 131,162 ) ( 191,740 ) Income tax ( 23 ) 37,465 15,303 Net income (loss) $ ( 136,227 ) $ ( 168,627 ) $ ( 207,043 ) Basic and diluted net income (loss) per ordinary share $ ( 1.22 ) $ ( 1.56 ) $ ( 1.95 ) Weighted average number of ordinary shares used in computing basic and diluted net income (loss) per share 111,471,991 107,834,368 106,391,178 The accompanying notes are an integral part of the consolidated financial statements. 70 NovoCure Limited and subsidiaries Consolidated statements of comprehensive income (loss) Year ended December 31, U.S. dollars in thousands 2025 2024 2023 Net income (loss) $ ( 136,227 ) $ ( 168,627 ) $ ( 207,043 ) Other comprehensive income (loss), net of tax : Change in foreign currency translation adjustments 289 ( 1,200 ) 1,473 Unrealized gain (loss) from debt securities — — 445 Pension benefit plan 1,770 1,169 ( 4,954 ) Total comprehensive income (loss) $ ( 134,168 ) $ ( 168,658 ) $ ( 210,079 ) The accompanying notes are an integral part of the consolidated financial statements. 71 NovoCure Limited and subsidiaries Statements of changes in shareholders’ equity Ordinary shares U.S. dollars in thousands, except share data (Shares) Additional paid-in capital Accumulated other comprehensive income (loss) Retained earnings (accumulated deficit) Total shareholders’ equity Balance as of December 31, 2022 105,049,411 $ 1,222,063 $ ( 2,433 ) $ ( 778,460 ) $ 441,170 Share-based compensation — 115,608 — — 115,608 Exercise of options and vested RSUs 1,823,851 11,381 — — 11,381 Issuance of shares in connection with employee stock purchase plan 202,492 4,416 — — 4,416 Other comprehensive income (loss) net of tax expense of $ 0 — — ( 3,036 ) — ( 3,036 ) Net income (loss) — — — ( 207,043 ) ( 207,043 ) Balance as of December 31, 2023 107,075,754 1,353,468 ( 5,469 ) ( 985,503 ) 362,496 Share-based compensation — 160,035 — — 160,035 Exercise of options and vested RSUs 1,129,280 2,156 — — 2,156 Issuance of shares in connection with employee stock purchase plan 311,785 4,150 — — 4,150 Other comprehensive income (loss) net of tax expense of $ 0 — — ( 31 ) — ( 31 ) Net income (loss) — — — ( 168,627 ) ( 168,627 ) Balance as of December 31, 2024 108,516,819 1,519,809 ( 5,500 ) ( 1,154,130 ) 360,179 Share-based compensation — 104,832 — — 104,832 Exercise of options and vested RSUs 3,696,398 6,113 — — 6,113 Tax payments related to net share settlement on equity awards — ( 146 ) — — ( 146 ) Issuance of shares in connection with employee stock purchase plan 279,450 3,656 — — 3,656 Other comprehensive income (loss), net of tax expense of $ 0 — — 2,059 — 2,059 Net income (loss) — — — ( 136,227 ) ( 136,227 ) Balance as of December 31, 2025 112,492,667 $ 1,634,264 $ ( 3,441 ) $ ( 1,290,357 ) $ 340,466 The accompanying notes are an integral part of the consolidated financial statements. 72 NovoCure Limited and subsidiaries Consolidated statements of cash flows Year ended December 31, U.S. dollars in thousands 2025 2024 2023 Cash flows from operating activities: Net income (loss) $ ( 136,227 ) $ ( 168,627 ) $ ( 207,043 ) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 14,650 11,235 10,969 Accrued interest 4,949 ( 651 ) ( 95 ) Asset write-downs and impairment of field equipment 4,851 1,159 493 Share-based compensation 104,832 160,035 115,608 Foreign currency remeasurement loss (gain) 1,251 ( 227 ) 161 Decrease (increase) in accounts receivables and prepaid expenses ( 38,938 ) ( 26,358 ) 29,414 Amortization of discount (premium) ( 23,262 ) ( 25,644 ) ( 23,084 ) Decrease (increase) in inventories ( 5,668 ) 2,568 ( 8,919 ) Decrease (increase) in other long-term assets 10,847 7,395 4,072 Increase (decrease) in accounts payables and accrued expenses 18,958 19,106 14,869 Increase (decrease) in other long-term liabilities ( 5,274 ) ( 6,360 ) ( 9,781 ) Net cash provided by (used in) operating activities $ ( 49,031 ) $ ( 26,369 ) $ ( 73,336 ) Cash flows from investing activities: Purchase of property, equipment and field equipment ( 26,648 ) ( 42,855 ) ( 27,093 ) Proceeds from maturity of short-term investments 1,285,000 778,000 1,214,982 Purchase of short-term investments ( 821,076 ) ( 875,387 ) ( 1,003,741 ) Net cash provided by (used in) investing activities $ 437,276 $ ( 140,242 ) $ 184,148 The accompanying notes are an integral part of the consolidated financial statements. 73 NovoCure Limited and subsidiaries Consolidated statements of cash flows Year ended December 31, U.S. dollars in thousands 2025 2024 2023 Cash flows from financing activities: Proceeds from issuance of shares, net $ 3,656 $ 4,150 $ 4,416 Proceeds from senior secured credit facility, net 99,979 96,922 — Repayment and redemption of long-term debt ( 560,945 ) ( 12,913 ) ( 10 ) Tax payments related to net settlements on equity awards ( 146 ) — — Exercise of options 6,113 2,156 11,381 Net cash provided by (used in) financing activities $ ( 451,343 ) $ 90,315 $ 15,787 Effect of exchange rate changes on cash, cash equivalents and restricted cash $ 394 $ ( 174 ) $ 131 Increase (decrease) in cash, cash equivalents and restricted cash ( 62,704 ) ( 76,470 ) 126,730 Cash, cash equivalents and restricted cash at the beginning of the year 166,094 242,564 115,834 Cash, cash equivalents and restricted cash at the end of the year $ 103,390 $ 166,094 $ 242,564 Supplemental cash flow activities: Cash paid during the year for: Income taxes paid (refunded), net $ 30,673 $ 23,463 $ 13,665 Interest paid $ 13,406 $ 7,714 $ 6 Reconciliation of cash, cash equivalents and restricted cash: Cash and cash equivalents $ 93,548 $ 163,767 $ 240,821 Restricted cash $ 9,842 $ 2,327 $ 1,743 Total cash, cash equivalents and restricted cash $ 103,390 $ 166,094 $ 242,564 Non-cash activities: Right-of-use assets obtained in exchange for lease liabilities $ 29,369 $ 494 $ 18,063 Purchase of property incurred but unpaid at period end $ 886 $ 1,619 $ 1,714 The accompanying notes are an integral part of the consolidated financial statements. 74 Table of Contents NovoCure Limited and subsidiaries Notes to consolidated financial statements U.S. dollars in thousands (except share and per share data) Note 1: 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, Optune Lua and Optune Pax (collectively, its "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. Optune Pax is marketed in the U.S. Note 2: Basis of presentation and significant accounting policies The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). a. Use of estimates: The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The Company evaluates on an ongoing basis its assumptions, including those related to contingencies, deferred taxes, tax liabilities, useful-life of field equipment, right-of-use assets and lease liabilities, pension liabilities, revenue, accrued expenses and share-based compensation costs. The Company’s management believes that the estimates, judgment and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities at the dates of the consolidated financial statements, and the reported amounts of net revenue and expenses during the reporting period. Actual results could differ from those estimates. b. Financial statements in U.S. dollars: The accompanying financial statements have been prepared in U.S. dollars in thousands, except for share and per-share data. The Company finances its operations in U.S. dollars and a substantial portion of its costs and revenues from its primary markets is incurred in U.S. dollars. As such, the Company’s management believes that the U.S. dollar is the currency of the primary economic environment in which NovoCure Limited and certain subsidiaries operate. The Company’s reporting currency is U.S. dollars. Transactions and balances denominated in U.S. dollars are presented at their original amounts. Monetary accounts maintained in currencies other than the U.S. dollar are re-measured into dollars in accordance with Accounting Standards Codification (ASC) No. 830-10, "Foreign Currency Matters." All transaction gains and losses of the re-measurement of monetary balance sheet items are reflected in the consolidated statements of operations as financial income or expenses, as applicable. For a subsidiary whose functional currency has been determined to be its local currency, assets and liabilities are translated at year-end exchange rates and statement of operations items are translated at average exchange rates prevailing during the year. Such translation adjustments are recorded as a separate component of accumulated other comprehensive income (loss) in shareholders' equity. c. Principles of consolidation: The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. Intercompany transactions and balances, including unrealized profits from intercompany sales, have been eliminated upon consolidation. d. Cash equivalents: Cash equivalents are short-term, highly liquid investments that are generally readily convertible into cash with a maturity of three months or less at the date acquired. 75 Table of Contents NovoCure Limited and subsidiaries Notes to consolidated financial statements U.S. dollars in thousands (except share and per share data) e. Short-term investments: The Company accounts for investments in debt securities in accordance with ASC 320, "Investments—Debt and Equity Securities." Management determines the appropriate classification of its investments in marketable debt securities at the time of purchase and reevaluates such determinations at each balance sheet date. Held-to-maturity debt securities is stated at amortized cost, which is adjusted for amortization of premiums and accretion of discounts to maturity and any credit losses. Such amortization, interest or credit losses are included in the consolidated statement of operations as financial income or expenses, as appropriate. Each reporting period, the Company evaluates whether declines in fair value below amortized cost are due to expected credit losses, as well as the Company’s ability and intent to hold the investment until a forecasted recovery occurs. As of December 31, 2025 and 2024, all securities are classified as held-to-maturity since the Company has the intent and ability to hold the securities to maturity and, accordingly, debt securities are stated at amortized cost. For the years ended December 31, 2025, 2024 and 2023, no credit losses have been identified. f. Restricted cash The Company has restricted cash used as security for the use of Company credit cards and cash management, presented in short-term assets. Additionally, the Company has pledged bank deposits to cover bank guarantees related to facility rental agreements, fleet lease agreements and customs payments presented in other long-term assets (see Note 12). g. Trade receivables: The Company’s trade receivables balance contains billed and unbilled commercial activities. The Company records an allowance for credit losses, if identified. The Company periodically reviews its customers’ credit risk and payment history. To date, the Company has not experienced any material credit losses related to counter-party risk. h. Inventories: Inventories are stated at the lower of cost or net realizable value. Cost is determined using the weighted average method. The Company regularly evaluates its ability to realize the value of inventory. If the inventories are deemed damaged, if actual demand for the Company’s devices deteriorates, or if market conditions are less favorable than those projected, inventory write-offs may be required. Inventory write-offs are included in cost of revenues (see Note 5). i. Property and equipment: Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets at the following rates: % Building 3 Land — Computers and laboratory equipment 15 - 33 Office furniture 6 - 33 Production equipment 20 Leasehold improvements Over the shorter of the term of the lease or its useful life Assets held within construction in progress are not depreciated. Construction in progress is related to the construction or development of property and equipment that is not yet ready for its intended use. The Company records a write-off provision for any excess, lost or damaged equipment when warranted based on an assessment of the equipment. Write-offs for equipment are included in the relevant profit and loss line item (see Note 6). 76 Table of Contents NovoCure Limited and subsidiaries Notes to consolidated financial statements U.S. dollars in thousands (except share and per share data) j. Field equipment: Field equipment is stated at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful life of the field equipment, which was determined to be 48 to 60 months. Field equipment is equipment being utilized under service agreements, and accounted for in accordance with ASC 842 on a monthly basis as an operating lease (see Note 2(x)). The Company records a write-off provision for any excess, lost or damaged equipment when warranted based on an assessment of the equipment. Write-offs for equipment are included in cost of revenues (see Note 7). k. Impairment of long-lived assets: The Company’s long-lived assets are reviewed for impairment in accordance with ASC 360-10, "Property, Plant and Equipment," whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Recoverability of an asset to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the asset. If such asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. Impairment losses of $ 3,131 , $ 0 and $ 0 , respectively, were recorded for the years ended December 31, 2025, 2024 and 2023. l. Other long-term assets: Restricted deposits, long-term lease deposits associated with office rent and vehicles under operating leases, prepaid and vendors down payments are presented in other long-term assets. m. Revenue recognition: The Company's Products are comprised of two main components: (1) an electric field generator and (2) arrays and related accessories. The Company retains title to the electric field generator, and the patient is provided replacement arrays and technical support for the device during the term of treatment. The electric field generator and arrays are always supplied and function together and are not sold on a standalone basis. The Company uses the portfolio approach to apply the standard to portfolios of contracts with similar characteristics. To recognize revenue under ASC 606, the Company applies the following five steps: 1. Identify the contract with a patient. A contract with a patient exists when (i) the Company enters into an enforceable contract with a patient that defines each party’s rights regarding delivery of and payment for a Product, (ii) the contract has commercial substance and (iii) the Company determines that collection of substantially all consideration for such Product is probable based on the payer’s intent and ability to pay the promised consideration. The evidence of a contract generally consists of a prescription, a patient service agreement and the verification of the assigned payer for the contract and intention to collect. 2. Identify the performance obligations in the contract. The Company's contracts include the lease of the device, the supply obligation of disposable arrays and technical support for the term of treatment. To the extent a contract includes multiple promised products and/or services, the Company must apply judgment to determine whether those products and/or services are capable of being distinct in the context of the contract. If these criteria are not met the promised products and/or services are accounted for as a combined performance obligation. In the Company’s case, the device, support, and disposables are provided as one inseparable package of monthly treatment for a single monthly fee. For more information, see Note 2(x). 3. Determine the transaction price . The transaction price is determined based on the consideration to which the Company will be entitled in exchange for providing a Product to the patient. To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing either the expected value method or the most likely amount method depending on the nature of the variable consideration. In determining the transaction price, the Company includes variable consideration if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. The Company reassesses variable consideration at each reporting period and, if necessary, these estimates are adjusted to reflect the anticipated amounts to be collected when those facts and circumstances become known. 77 Table of Contents NovoCure Limited and subsidiaries Notes to consolidated financial statements U.S. dollars in thousands (except share and per share data) The Company has agreements with many payers that define explicit discounts off the gross transaction price. In addition to the explicit discounts negotiated with each payer, the Company expects to receive, in aggregate for a given portfolio, less than the gross revenue net of explicit discounts. ASC 606 requires that the Company recognize this variable consideration as an implicit discount at the time the goods or services are provided. The implicit discount includes both an estimate of claims that will pay at an amount less than billed and an estimate of claims that will not pay within a given time horizon. The estimation of implicit discount adjustments to the transaction price are based on historical price concession experience within payors and expected future concession. If actual amounts of consideration ultimately received differ from the Company’s estimates, the Company adjusts these estimates, which would affect net revenue in the period such adjustments become known. 4. Allocate the transaction price to performance obligations in the contract. If a contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. As discussed above, there is a combined performance obligation under the Company’s contracts and, therefore, the monthly transaction price determined for the performance obligation will be recognized over time ratably over the monthly term of the treatment. Some of the Company's contracts include variable fees that are based on actual usage. For these contracts the Company generally allocates the variable fees using the variable consideration allocation exception. 5. Recognize revenue when or as the Company satisfies a performance obligation. The Company satisfies performance obligations over time. Revenue is recognized at the time the related performance obligation is satisfied by transferring a promised service to a patient. The patient consumes the benefits of treatment on a daily basis over the monthly term. As this criterion is met, the revenues will be recognized ratably over the monthly term. For more information, see Note 2(x). The Company elected the short-term contract practical expedient for the remaining performance obligations, as the Company's contracts have an original expected duration of less than one year. Revenues are presented net of indirect taxes. The Company has elected to apply the practical expedient for financing component for transactions in which the difference between the payment date and the revenue recognition timing is up to 12 months. Payment terms between the Company and its payors are typically up to twelve months, and vary by the type of payer, country of sale and the products or services offered. Deferred revenue represents billings to customers for which revenue has not yet been recognized. Net revenues in the years ended December 31, 2025, 2024 and 2023 also include amounts recognized pursuant to the Zai Agreement. For additional information, see Note 13. n. Charitable care: The Company provides treatment at no charge to patients who meet certain criteria under its charitable care policy. Because the Company does not pursue collection of amounts determined to qualify as charity, they are not reported as revenue. The Company's costs of care provided under charitable care were $ 5,449 , $ 4,389 and $ 2,692 for the years ended December 31, 2025, 2024 and 2023, respectively. These amounts were determined by applying charitable care as a percentage of gross billings to total cost of goods sold. o. Shipping and handling costs: The Company does not separately bill its customers for shipping and handling costs associated with shipping Products to its customers. These direct shipping and handling costs of $ 4,263 , $ 3,258 and $ 2,871 for the years ended December 31, 2025, 2024 and 2023, respectively, are included in Sales and Marketing costs. p. Accounting for share-based compensation: The Company accounts for share-based compensation in accordance with ASC 718, "Compensation—Stock Compensation." ASC 718 requires companies to estimate the fair value of share-based compensation awards on the date of grant using an option-pricing model. The value of the award is recognized as an expense over the requisite service periods in the Company’s consolidated statements of operations. The Company's policy is to account for forfeitures as they occur. 78 Table of Contents NovoCure Limited and subsidiaries Notes to consolidated financial statements U.S. dollars in thousands (except share and per share data) The Company recognizes compensation expense for awards using the accelerated method over the requisite service period of the award, which for restricted share units is two or three years and for option awards, which is two or four years . The Company recognizes compensation costs for the value of performance stock units ("PSU") over the performance period when the vesting conditions become probable in accordance with ASC 718. The Company has selected the Black-Scholes-Merton option-pricing model as the most appropriate fair value method for its option awards and Employee Share Purchase Plan ("ESPP"). The fair value of Restricted Share Units ("RSUs") and Performance Share Units ("PSUs ") without market conditions, is based on the closing market value of the underlying shares at the date of grant. For PSUs subject to market conditions, the Company uses a Monte Carlo simulation model, which utilizes multiple inputs to estimate payout level and the probability that market conditions will be achieved. The Black-Scholes-Merton and Monte Carlo models require a number of assumptions, of which the most significant are the expected share price volatility and the expected option term. The computation of expected volatility is based on the historical volatility the Company's shares. The expected term of options granted is calculated using the Company's historical and future exercise behavior. The Company has historically not paid dividends and has no foreseeable plans to pay dividends and, therefore, uses an expected dividend yield of zero in the option pricing model. The risk-free interest rate is based on the yield of U.S. treasury bonds with equivalent terms. q. Fair value of financial instruments: The carrying amounts of cash and cash equivalents, short-term investments, restricted cash, receivables and prepaid expenses, trade receivables, trade payables and other accounts payable and accrued expenses approximate their fair value due to the short-term maturity of such instruments. The Company accounts for certain assets and liabilities at fair value under ASC 820, "Fair Value Measurements and Disclosures." Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market. The Company categorizes each of its fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety. The three levels of inputs that may be used to measure fair value are as follows: Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets; Level 2 - Includes other inputs that are directly or indirectly observable in the marketplace, other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets with insufficient volume or infrequent transactions, or other inputs that are observable (model-derived valuations in which significant inputs are observable), or can be derived principally from or corroborated by observable market data; and Level 3 - Unobservable inputs which are supported by little or no market activity. The availability of observable inputs can vary from instrument to instrument and is affected by a wide variety of factors, including, for example, the type of instrument, the liquidity of markets and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment and the instrument is categorized as Level 3. r. Basic and diluted net loss per 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 considered outstanding during the period, in accordance with ASC 260-10. 79 Table of Contents NovoCure Limited and subsidiaries Notes to consolidated financial statements U.S. dollars in thousands (except share and per share data) s. Income taxes: The Company accounts for income taxes in accordance with ASC 740-10, "Income Taxes." ASC 740-10 prescribes the use of the liability method whereby deferred tax asset and liability account balances are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance to reduce deferred tax assets to their estimated realizable value, if needed. For additional information see Note 2aa below. The Company established reserves for uncertain tax positions based on the evaluation of whether or not the Company’s uncertain tax position is "more likely than not" to be sustained upon examination. The Company records interest and penalties pertaining to its uncertain tax positions in the financial statements as income tax expense. t. Concentration of 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 and therefore bear minimal risk. 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, except as described in Note 2y below. u. Retirement, pension and severance plans: The Company has a 401(k) retirement savings plan for its U.S. employees. Each eligible employee may elect to contribute a portion of the employee’s compensation to the plan. Company contributions to the plan are at the sole discretion of the Company's Board of Directors. Currently, the Company provides a matching contribution of 50 % of the employee's contributions, up to a maximum of three percent ( 3 %) of the employee's annual salary. The Company began making matching contributions as of January 1, 2019. For the years ended December 31, 2025, 2024 and 2023, the Company had made matching contributions in the amount of $ 2,379 and $ 2,206 and $ 2,375 , respectively, pursuant to the plan. The Company sponsors a defined benefit plan (the "Swiss Plan") for all its employees in Switzerland for retirement benefits, as well as benefits on death or long-term disability, whereby the employee and the Company contribute a portion of the employee's compensation to the plan. The Swiss Plan is part of a collective pension foundation “AXA Foundation for Occupational Benefits”. This is a semi-autonomous pension foundation, meaning that the underlying investment risk and the longevity are born by the pension foundation itself. Disability and death risks are reinsured with AXA insurance. Notwithstanding, the Company and its employees bear the risk of having to pay recovery contributions in a financial distress situation. The Company accounts for this risk in accordance with ASC 715, "Compensation – Retirement Benefits" (see Note 9). The pension expense for the years ended December 31, 2025, 2024 and 2023 was $ 3,878 , $ 3,857 and $ 2,672 , respectively. Israeli law generally requires payment of severance pay upon dismissal of an employee or upon termination of employment in certain other circumstances. The Company contributes to employee pension plans to fund its severance liabilities. According to Section 14 of Israel Severance Pay Law, the Company makes deposits on behalf of its employees with respect to the Company’s severance liability and therefore no obligation is provided for in the financial statements. Severance pay liabilities with respect to employees who are not subject to Section 14, are provided for in the financial statements based upon the number of years of service and the latest monthly salary and the related deposits are recorded as an asset based on the cash surrender value. Contributions pursuant to these obligations for the years ended December 31, 2025, 2024 and 2023 amounted to $ 1,992 , $ 1,679 and $ 1,735 , respectively. 80 Table of Contents NovoCure Limited and subsidiaries Notes to consolidated financial statements U.S. dollars in thousands (except share and per share data) v. Contingent liabilities: The Company accounts for its contingent liabilities in accordance with ASC 450, "Contingencies." A provision is recorded when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. With respect to legal matters, provisions are reviewed and adjusted to reflect the impact of negotiations, estimated settlements, legal rulings, advice of legal counsel and other information and events pertaining to a particular matter. w. Other comprehensive income (loss): The Company accounts for comprehensive income (loss) in accordance with ASC 220, "Comprehensive Income." ASC 220 establishes standards for the reporting and display of comprehensive income (loss) and its components. Comprehensive income (loss) generally represents all changes in shareholders' equity during the period except those resulting from investments by, or distributions to, shareholders. The accumulated other comprehensive income (loss), net of taxes, relates to a pension liability, unrealized gain (loss) from debt securities and foreign currency translation adjustments. x. Leases: 1. Lessee accounting: The Company determines if an arrangement is a lease and the classification of that lease at inception based on: (1) whether the contract involves the use of a distinct identified asset, (2) whether the Company obtains the right to substantially all the economic benefits from the use of the asset throughout the period, and (3) whether the Company has a right to direct the use of the asset. The Company elected to not recognize a lease liability or right-of-use ("ROU") asset for leases with a term of twelve months or less. The Company also elected the practical expedient to not separate lease and non-lease components for its leases. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make minimum lease payments arising from the lease. ROU assets are initially measured at amounts, which represents the discounted present value of the lease payments over the lease, plus any initial direct costs incurred. The ROU assets are reviewed for impairment. The lease liability is initially measured at lease commencement date based on the discounted present value of minimum lease payments over the lease term. The implicit rate within the operating leases are generally not determinable; therefore, the Company uses the Incremental Borrowing Rate ("IBR") based on the information available at commencement date in determining the present value of lease payments. The Company’s IBR is estimated to approximate the interest rate on similar terms and payments and in economic environments where the leased asset is located. Certain leases include options to extend or terminate the lease. An option to extend the lease is considered in connection with determining the ROU asset and lease liability when it is reasonably certain that the Company will exercise that option. An option to terminate is considered unless it is reasonably certain that the Company will not exercise the option. 2. Lessor accounting - Operating leases: ASC 842 provides lessors with an optional practical expedient, by class of underlying asset, not to separate non-lease components from the associated lease component and, instead, to account for those components as a single component if the non-lease components otherwise would be accounted for under the revenue guidance (ASC 606) and both of the following criteria are met: a. The timing and pattern of transfer of the lease component and the non-lease component(s) are the same; and b. The lease component would be classified as an operating lease if it were accounted for separately. The Company's product supply agreements include the right to use the device (lease component), the supply obligation of disposable arrays and technical support for the term of treatment (non-lease component). If the lease component is the predominant component, the Company accounts for all revenues under such lease as a single component in accordance with the lease accounting standard. Conversely, if the non-lease component is the predominant component, all revenues under such lease are accounted for in accordance with the revenue 81 Table of Contents NovoCure Limited and subsidiaries Notes to consolidated financial statements U.S. dollars in thousands (except share and per share data) recognition accounting standard. The Company's operating leases qualify for the single component accounting, and the non-lease component in each of the Company's leases is predominant. Therefore, The Company accounts for all revenues from its operating leases in accordance with the revenue recognition accounting standard. y. Derivatives and Hedging: The Company transacts in derivative financial instruments (forward exchange contracts). The transactions are designed to hedge the Company’s Euro foreign exchange transaction risk. Euro cash receivables are netted against Euro cash payables across countries before a forward contract is purchased with a maximum duration of 12 months. The Company does not enter into derivative transactions for trading purposes. Derivative instruments are recognized on the balance sheet at their fair value. In accordance with ASC 815, Derivatives and Hedging ("ASC Topic 815") derivative instruments that do not qualify for hedge accounting are recognized on the balance sheet at their fair value, with changes in the fair value recognized as a component of financial expenses, net in the statements of income. The cash flows associated with these derivatives are reflected as cash flows from operating activities in the consolidated statements of cash flows. z. Segment reporting: In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires public entities to disclose information about their reportable segments’ significant expenses and other segment items on an interim and annual basis. Public entities with a single reportable segment are required to apply the disclosure requirements in ASU 2023-07, as well as all existing segment disclosures and reconciliation requirements in ASC 280 on an interim and annual basis. aa. Recently Adopted Accounting Pronouncement 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 adopted ASU 2023-09 during the year ended December 31, 2025 and has applied the disclosure retrospectively for years ended December 31, 2024 and December 31, 2023 for comparative purposes. See Note 14 below. Recently Issued Accounting Pronouncements: 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. In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. This amendment introduces a practical expedient for the application of the current expected credit loss (“CECL”) model to current accounts receivable and contract assets. ASU 2025-05 is effective for fiscal years beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted. The Company is currently evaluating the timing of adoption and impact of this amendment on its consolidated financial statements and related disclosures. Note 3: Cash and 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 December 31, 2025 and 2024, the Company’s cash and cash equivalents and short-term investments were composed of: 82 Table of Contents NovoCure Limited and subsidiaries Notes to consolidated financial statements U.S. dollars in thousands (except share and per share data) December 31, 2025 Fair value level Adjusted cost basis Unrealized gains Unrealized losses Fair market value Recorded basis Cash and cash equivalents Short-term investments Cash $ 7,402 $ — $ — $ 7,402 $ 7,402 $ 7,402 $ — Money market funds Level 1 66,213 — — 66,213 66,213 66,213 — Certificate of deposits and term deposits Level 2 25,186 — — 25,186 25,186 10,013 15,173 HTM securities (1) U.S. Treasury bills Level 1 $ 54,096 $ 48 $ — $ 54,144 $ 54,096 $ — $ 54,096 Corporate debt securities Level 2 $ 294,777 $ 82 $ ( 205 ) $ 294,654 $ 294,777 $ 9,920 $ 284,857 $ 348,873 $ 130 $ ( 205 ) $ 348,798 $ 348,873 $ 9,920 $ 338,953 Total $ 447,674 $ 130 $ ( 205 ) $ 447,599 $ 447,674 $ 93,548 $ 354,126 December 31, 2024 Fair value level Adjusted cost basis Unrealized gains Unrealized losses Fair market value Recorded basis Cash and cash equivalents Short-term investments 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 Corporate debt securities Level 2 507,368 920 ( 119 ) 508,169 507,368 — 507,368 Total $ 625,986 $ 1,013 $ ( 120 ) $ 626,879 $ 625,986 $ — $ 625,986 $ 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. In accordance with ASC No. 820, 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 December 31, 2025 and 2024, all investments and equivalents 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. 83 Table of Contents NovoCure Limited and subsidiaries Notes to consolidated financial statements U.S. dollars in thousands (except share and per share data) Note 4: Receivables and prepaid expenses The following table sets forth the Company’s receivables and prepaid expenses: December 31, 2025 2024 Advances to and receivables from suppliers $ 25,912 $ 24,413 Government authorities 23,046 3,327 Prepaid expenses 9,657 7,217 Others 54 106 $ 58,669 $ 35,063 Note 5: Inventories Inventories are stated at the lower of cost or net realizable value. The weighted average methodology is applied to determine cost. The following table sets forth the Company’s inventories: December 31, 2025 2024 Raw materials $ 4,533 $ 4,004 Work in process 7,500 7,969 Finished goods 29,078 23,113 $ 41,111 $ 35,086 Inventory write-offs of $ 5,677 , $ 756 and $ 681 , respectively, were recorded for the years ended December 31, 2025, 2024 and 2023. Note 6: Property and equipment, net The following table sets forth the Company’s property and equipment, net: December 31, 2025 2024 Cost: Computers, peripheral equipment, software and laboratory equipment $ 44,464 $ 41,977 Office furniture 7,294 4,873 Production equipment 19,039 16,456 Land and building $ 34,953 $ 34,532 Leasehold improvements 13,727 12,132 Total cost $ 119,477 $ 109,970 Accumulated depreciation and amortization ( 41,871 ) ( 32,310 ) Depreciated cost $ 77,606 $ 77,660 The Company capitalized software costs according to FASB's ASC 350-40, "Accounting for the Costs of Computer Software Developed or Obtained for Internal Use. Amortization of capitalized software costs for the years ended December 31, 2025, 2024 and 2023 was $ 1,519 , $ 1,369 and $ 1,274 , respectively. Depreciation expense was $ 9,396 , $ 6,166 and $ 3,939 for the years ended December 31, 2025, 2024 and 2023, respectively. Write downs of $ 3,141 , $ 205 and $ 10 were identified for the years ended December 31, 2025, 2024 and 2023, respectively. 84 Table of Contents NovoCure Limited and subsidiaries Notes to consolidated financial statements U.S. dollars in thousands (except share and per share data) Note 7: Field equipment, net The following table sets forth the Company’s field equipment, net: December 31, 2025 2024 Field equipment $ 49,454 $ 40,915 Accumulated depreciation ( 27,388 ) ( 26,104 ) Field equipment, net $ 22,066 $ 14,811 Depreciation expense was $ 3,735 , $ 3,700 and $ 5,756 for the years ended December 31, 2025, 2024 and 2023, respectively. Write downs of $ 1,710 , $ 954 and $ 483 were identified for the years ended December 31, 2025, 2024 and 2023, respectively. Note 8: Trade payables and other payables, lease liabilities and accrued expenses a.Trade payables As of December 31, 2025 and 2024, trade payables include payer's overpayments in the amount of $ 46,041 and $ 40,575 , respectively. b.Other payables, lease liabilities and accrued expenses The following table sets forth the Company’s other payables and accrued expenses : December 31, 2025 2024 Employees and payroll accruals $ 64,364 $ 48,171 Deferred revenues 15,948 14,225 Lease liabilities 11,659 7,909 Government authorities 8,699 22,811 Other 327 32 $ 100,997 $ 93,148 Note 9: Employee benefit obligations The Company's liability in respect of the Swiss Plan (see Note 2(u)) is the projected benefit obligation calculated using the projected unit credit method. The projected benefit obligation as of December 31, 2025 represents the actuarial present value of the estimated future payments required to settle the obligation that is attributable to employee service rendered before that date. Swiss Plan assets are recorded at fair value. Pension expense is presented in the payroll expenses in the various functions in which the employees are engaged. Actuarial gains and losses arising from differences between the actual and the expected return on the Swiss Plan assets are recognized in accumulated other comprehensive income (loss) and amortized over the requisite service period. The Swiss Plan is part of a collective pension foundation of pooled investments managed by a top tier insurance company. The Company and the employees pay retirement contributions, which are defined as a percentage of the employees’ covered salaries.The basis for the determination of the interest on employee’s savings account is the return on plan assets, considering legal minimum requirements. The targeted allocation for these funds is as follows: 85 Table of Contents NovoCure Limited and subsidiaries Notes to consolidated financial statements U.S. dollars in thousands (except share and per share data) Asset Allocation by Category as of December 31, 2025: Asset allocation (%) Asset Category: Debt Securities 23 % Real Estate 24 % Equity Securities 40 % Others 13 % Total 100 % 86 Table of Contents NovoCure Limited and subsidiaries Notes to consolidated financial statements U.S. dollars in thousands (except share and per share data) The following table sets forth the Swiss Plan’s funded status and amounts recognized in the consolidated financial statements for the year ended December 31, 2025 and 2024: December 31, 2025 2024 Change in Benefit Obligation Projected benefit obligation at beginning of year $ 61,355 $ 51,057 Interest cost 646 703 Company service cost 4,887 4,202 Employee contributions 3,551 2,683 Benefits paid 30 2,772 Actuarial loss 10,548 ( 62 ) Projected benefit obligation at end of year $ 81,017 $ 61,355 Change in Plan Assets Fair value of plan assets at beginning of year $ 54,816 $ 43,250 Actual return on plan assets 14,058 2,120 Employer contributions 5,092 3,991 Employee contributions 3,551 2,683 Benefits paid 30 2,772 Fair value of plan assets at end of year $ 77,547 $ 54,816 Funded Status at End of year Excess of obligation over assets $ 3,470 $ 6,539 Change in Accrued Benefit Liability Accrued benefit liability at beginning of year $ ( 6,539 ) $ ( 7,807 ) Company contributions made during year 5,092 3,991 Net periodic benefit cost for year ( 4,806 ) ( 3,308 ) Net decrease (increase) in accumulated other comprehensive loss 2,783 585 Accrued benefit liability at end of year $ ( 3,470 ) $ ( 6,539 ) December 31, 2025 2024 Non-current plan assets $ 77,547 $ 54,816 Non-current liability 81,017 61,355 Accrued benefit liability at end of year $ ( 3,470 ) $ ( 6,539 ) Projected Benefit Payments Projected year 1 $ 1,950 $ 1,204 Projected year 2 2,310 1,540 Projected year 3 1,277 1,849 Projected year 4 1,319 966 Projected year 5 2,177 1,748 Projected years 6-10 34,993 24,374 The fair value of the plan assets is the estimated cash surrender value of the insurance contract at December 31, 2025. The level of inputs used to measure fair value was Level 2. 87 Table of Contents NovoCure Limited and subsidiaries Notes to consolidated financial statements U.S. dollars in thousands (except share and per share data) Year ended December 31, 2025 2024 Net Periodic Benefit Cost Service cost $ 4,887 $ 4,202 Interest cost (income) 646 703 Expected return on plan assets ( 1,740 ) ( 1,348 ) Amortization of actuarial (gain) loss 229 426 Amortization of prior service costs ( 144 ) ( 126 ) Total net periodic benefit cost $ 3,878 $ 3,857 Weighted average assumptions: Discount rate as of December 31 1.30 % 0.90 % Expected long-term rate of return on assets 3.10 % 2.60 % Rate of compensation increase 1.00 % 1.00 % Mortality and disability assumptions (*) BVG 2020 GT BVG 2020 GT (*) Mortality data used for actuarial calculation. Note 10: Long-term debt, net The following table sets forth the Company’s long-term debt, net: December 31, 2025 2024 0 % Convertible Senior Notes (a) $ — $ — Senior secured credit facility, net (b) 195,047 97,300 $ 195,047 $ 97,300 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 net proceeds from the offering were approximately $ 558,400 . 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". In November 2025, the Company repaid the remaining $ 560,945 of the outstanding Notes at maturity. The net carrying amount of the liability of the Convertible Notes as of December 31, 2025 and 2024 are as follows: December 31, 2025 2024 Principal amount $ — $ 560,945 Unamortized issuance costs — ( 2,785 ) Net carrying amount of liability component (1) $ — $ 558,160 Presented as: Short-term liability $ — $ 558,160 88 Table of Contents NovoCure Limited and subsidiaries Notes to consolidated financial statements U.S. dollars in thousands (except share and per share data) (1) An effective interest rate determines the fair value of the Notes, therefore they are categorized as Level 3 in accordance with ASC 820, "Fair Value Measurements and Disclosures." The estimated fair value of the Net carrying amount of liability component of the Notes as of December 31, 2025 and 2024 were $ 0 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. Amortization of debt issuance costs, included in finance expenses. Finance expense related to the Notes was as follows: Year ended December 31, 2025 2024 2023 Gain from redemption of Notes $ — $ ( 1,142 ) $ — Amortization of debt issuance costs 2,785 3,393 3,313 Total finance expenses (income) recognized $ 2,785 $ 2,251 $ 3,313 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 was required to draw $ 100.0 million on the Facility on or before September 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 had the option 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") were greater than $ 575.0 million and (ii) the Notes were extinguished in full and are no longer outstanding. Not later than March 31, 2026, the Borrower has the option 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 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-months 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, 89 Table of Contents NovoCure Limited and subsidiaries Notes to consolidated financial statements U.S. dollars in thousands (except share and per share data) 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 December 31, 2025 the Company had borrowed the Tranche A Loan and the Tranche B Loan in the aggregate principal amount of $ 200,000 . The Company did not give notice of its intent to borrow the Tranche C Loan. As a result, the Company no longer has the ability to borrow the Tranche C or Tranche D Loans. The net carrying amount of the liability of the Facility as of December 31, 2025 and 2024 is as follows: December 31, 2025 2024 Principal amount $ 200,000 $ 100,000 Unamortized issuance costs ( 4,953 ) ( 2,700 ) Net carrying amount of liability component (1) $ 195,047 $ 97,300 (1) An effective interest rate determines the fair value of the Facility, 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 Facility as of December 31, 2025 and 2024 were $ 215,538 and $ 112,836 , respectively. The net carrying amount of the liability is represented by the principal amount of the Facility, less total issuance costs plus any amortization of issuance costs. The total issuance costs upon issuance of the Facility were $ 6,177 and $ 3,078 as of December 31, 2025 and 2024 and are amortized to interest expense using the effective interest rate method over the contractual term of the Facility. For purposes of calculating the net carrying amount, the annual effective interest rate as of December 31, 2025 and 2024 were assumed to be 12.0 % and 12.5 %, respectively, over the remaining contractual term of the Facility. Finance expense related to the Facility was as follows: Year ended December 31, 2025 2024 2023 Interest $ 13,374 $ 7,693 $ — Amortization of debt issuance costs 846 378 — Total finance expenses (income) recognized $ 14,220 $ 8,071 $ — Note 11: Segment reporting The Company engages in the development, manufacture and commercialization of Tumor Treating Fields ("TTFields") as treatment for solid tumor cancers and has a single reportable segment, the TTFields Segment. The TTFields Segment derives revenues from monthly treatments rendered to patients with the Company's Products. The Company markets its Products in multiple countries around the globe. The Company operates as one operating segment. Operating segments are defined as components of an enterprise for which separate financial information is regularly evaluated by the Company's Chief Operating Decision Maker ("CODM"), which is the Company’s chief executive officer, in deciding how to allocate resources and assess performance. The Company’s CODM evaluates the Company’s financial information and resources and assesses the performance of these resources on a consolidated basis. There is no expense or asset information that are supplemental to those disclosed in these consolidated financial statements that are regularly provided to the CODM. The allocation of resources and assessment of performance of the operating segment is based on consolidated net income (loss) as shown in our consolidated statements of operations. The CODM considers net income in the annual forecasting process and reviews actual results when making decisions about allocating resources. Since the Company operates as one operating segment, financial segment information, including profit or loss and asset information, can be found in the consolidated financial statements. 90 Table of Contents NovoCure Limited and subsidiaries Notes to consolidated financial statements U.S. dollars in thousands (except share and per share data) Note 12: Commitments and contingent liabilities a. Operating leases The facilities of the Company are leased under various operating lease agreements for periods ending no later than 2044. As of December 31, 2025. The Company also has the option to extend the term of certain facility lease agreements and these are included in the calculation of right-of-use assets. The Company also leases motor vehicles under various operating leases, which expire on various dates, the latest of which is in 2030. Under ASC 842, all leases with durations greater than 12 months, including non-cancelable operating leases, are recognized on the balance sheet. The aggregated present value of lease payments is recorded as a long-term asset titled right-of-use assets. The corresponding lease liabilities are split between other payables and long-term lease liabilities, and as of December 31, 2025, are as follows: December 31, 2025 Future minimum lease payments: 2026 $ 12,120 2027 11,491 2028 8,893 2029 5,313 2030 5,019 Thereafter 19,874 Total future minimum lease payments $ 62,710 Less imputed interest ( 9,404 ) Net present value of future minimum lease payments $ 53,306 Current year end Short-term lease liabilities $ 11,659 Long-term lease liabilities 41,647 Net present value of future minimum lease payments $ 53,306 Weighted average of remaining operating lease term (years) 7.10 Weighted average of operating lease discount rate 5.10 % Lease and rental expense for the years ended December 31, 2025, 2024 and 2023 was $ 12,038 , $ 9,244 , and $ 8,196 , respectively. b. Bank guarantee and pledges As of December 31, 2025 and 2024 the Company pledged bank deposits of $ 5,114 and $ 4,909 , respectively, to cover bank guarantees in respect of its leases of operating facilities and obtained guarantees by the bank for the fulfillment of the Company’s lease commitments of $ 5,554 and $ 5,285 , respectively. c. Zai License and Collaboration Agreement On September 10, 2018, the Company entered into a License and Collaboration Agreement (the "Zai Agreement") with Zai Lab (Shanghai) Co., Ltd. ("Zai") to market the Company's Products in China, Hong Kong, Macau and Taiwan ("Greater China"). Under the Zai Agreement, the Company granted Zai exclusive rights to commercialize the Company's Products in the field of oncology in Greater China. The Zai Agreement also established a development 91 Table of Contents NovoCure Limited and subsidiaries Notes to consolidated financial statements U.S. dollars in thousands (except share and per share data) partnership for the Company's Products in multiple solid tumor indications. In partial consideration for the license grant to Zai for Greater China, the Company was entitled to a non-refundable, up-front license fee in the amount of $ 15,000 (the "License Fee"). The Zai Agreement also provides for certain development, regulatory and commercial milestone payments totaling up to $ 78,000 . Furthermore, pursuant to the Zai Agreement, Zai will pay the Company tiered royalties at percentage rates from 10 up to the mid-teens on the net sales of the licensed products in Greater China. Zai is purchasing licensed products for commercial use exclusively from the Company at the Company’s fully burdened manufacturing cost. d. Purchase Obligations As of December 31, 2025, the Company has $ 38,944 in purchase obligations with certain of its suppliers. Note 13: Revenue recognition a. Net revenues The Company’s net revenues by geographic region, based on the patient’s location are summarized as follows: Year ended December 31, 2025 2024 2023 United States $ 385,632 $ 391,801 $ 349,743 International markets: Germany 79,407 65,263 60,210 France 76,189 55,730 11,736 Japan 37,786 32,569 31,668 Other international markets 56,898 42,471 32,757 International markets - Total 250,280 196,033 136,371 Greater China (1) 19,441 17,386 23,224 Total net revenues $ 655,353 $ 605,220 $ 509,338 (1) For additional information, see c below. The company's net revenues by performance period are as follows: Year ended December 31, 2025 2024 2023 Net revenues recognized in the reporting period from performance obligations satisfied in: Reporting period $ 632,358 $ 568,819 $ 492,089 Previous periods 22,995 36,401 17,249 Total net revenues $ 655,353 $ 605,220 $ 509,338 b. Contract balances The following table provides information about trade receivables, unbilled receivables and contract liabilities from contracts with customers:: December 31, 2025 2024 Trade receivables $ 81,648 $ 68,501 Unbilled receivables $ 7,787 $ 5,725 Deferred revenues (short-term contract liabilities) $ ( 15,948 ) $ ( 14,225 ) 92 Table of Contents NovoCure Limited and subsidiaries Notes to consolidated financial statements U.S. dollars in thousands (except share and per share data) During the years ended December 31, 2025, 2024 and 2023, the Company recognized $ 14,225 , $ 16,224 and $ 18,028 , respectively, which were included in the deferred revenues (short-term contract liability) balance at January 1, 2025 , 2024 and 2023. c. Zai agreement: The Company recognizes revenue pursuant to the License Agreement with Zai (see Note 12) in accordance with ASC 606, "Revenue Recognition from Customers." The License Fee was deferred and recognized over the performance period commencing September 10, 2018 ("Zai Performance Period"). The potential development and regulatory milestones will be included in the transaction price when the Company concludes that achievement of the milestones is probable, and that recognition of revenue related to the milestones will not result in a significant reversal in amounts recognized in future periods, and as such have been excluded from the transaction price until such probability is achieved. Revenue from royalty payments are estimated and recognized in accordance with ASC 606. Revenues from sales of product or rendering services are recognized upon shipping the products or rendering the services and satisfying the performance obligation. During the year ended December 31, 2020, the Company triggered milestone payments of $ 10,000 in the aggregate, which, along with the License Fee, were deferred and recognized over the remainder of the Zai Performance Period on a straight-line basis. For the three years ended December 31, 2025, no additional milestones were included in the transaction price. Note 14: Income taxes a. Tax provision : The Company maintains its effective place of daily management and control in Switzerland and is a Swiss tax resident. As a result, the income tax disclosures have been presented in accordance with the Company’s country of tax residency. Income (loss) before income taxes is as follows: Year ended December 31, 2025 2024 2023 Swiss $ ( 205,450 ) $ ( 205,310 ) $ ( 281,685 ) Non-Swiss 69,200 74,148 89,945 Total income (loss) before income taxes $ ( 136,250 ) $ ( 131,162 ) $ ( 191,740 ) The provision (benefit) for income taxes from continuing operations is comprised of: Year ended December 31, 2025 2024 2023 Current: Swiss Federal $ ( 3,072 ) $ 2,762 $ 1,385 Cantonal (Zug) 516 1,100 778 Non-Swiss 2,533 33,603 13,140 Total current $ ( 23 ) $ 37,465 $ 15,303 Deferred: Swiss $ — — $ — Non-Swiss — — — Total deferred — — — Total income tax provision $ ( 23 ) $ 37,465 $ 15,303 93 Table of Contents NovoCure Limited and subsidiaries Notes to consolidated financial statements U.S. dollars in thousands (except share and per share data) b. Theoretical tax The Company's effective tax rate is affected by the tax rates in the various jurisdictions in which the Company operates. Under Swiss law, the Company is subject to income tax at the federal level at a statutory rate of 8.5 % as well as at the cantonal and communal levels, resulting in an aggregate corporate tax rate of 13.4 %. For purposes of comparability, the Company used the Swiss federal statutory rate for the 2025, 2024 and 2023 tax years when presenting the Company's reconciliation of the income tax provision. A reconciliation of the provision for income taxes compared with the amounts at the Swiss rate was: Year ended December 31, 2025 2024 2023 Amount Percent Amount Percent Amount Percent Swiss federal statutory rate $ ( 11,581 ) 8.5 % $ ( 11,149 ) 8.5 % $ ( 16,298 ) 8.5 % Swiss cantonal (Zug) and local income taxes, net of federal income tax effect 516 ( 0.38 ) 1,100 ( 0.84 ) 778 ( 0.41 ) Foreign Tax Effects: United States Change in valuation allowance ( 32,228 ) 23.65 ( 5,046 ) 3.85 ( 31,218 ) 16.28 Statutory tax rate difference 11,439 ( 8.4 ) 11,468 ( 8.74 ) 16,906 ( 8.82 ) State Income Taxes (1) 2,075 ( 1.52 ) 7,338 ( 5.59 ) 4,043 ( 2.11 ) Share based compensation 1,763 ( 1.29 ) 3,439 ( 2.62 ) 2,178 ( 1.14 ) Foreign-Derived Intangible Income ("FDII") 886 ( 0.65 ) — — — — Research and development credits — — 1,856 ( 1.42 ) 6,474 ( 3.38 ) Other 542 ( 0.4 ) ( 345 ) 0.26 ( 392 ) 0.2 Israel Change in valuation allowance 4,314 ( 3.17 ) 1,443 ( 1.1 ) 2,466 ( 1.29 ) Statutory tax rate difference 606 ( 0.44 ) 508 ( 0.39 ) 662 ( 0.35 ) Tax Effects of the Encouragement of Capital Investments Law — — 729 ( 0.56 ) — — Other 989 ( 0.73 ) ( 67 ) 0.05 1,076 ( 0.56 ) Share based compensation — — 671 ( 0.51 ) — — Luxembourg Statutory tax rate difference 798 ( 0.59 ) 1,621 ( 1.24 ) 1,421 ( 0.74 ) Change in valuation allowance 621 ( 0.46 ) 829 ( 0.63 ) ( 857 ) 0.45 Other ( 5 ) — 15 ( 0.01 ) 95 ( 0.05 ) France 663 ( 0.49 ) 650 0.5 210 ( 0.11 ) Other foreign jurisdictions 4,188 ( 3.07 ) 2,541 ( 1.94 ) 2,867 ( 1.5 ) 94 Table of Contents NovoCure Limited and subsidiaries Notes to consolidated financial statements U.S. dollars in thousands (except share and per share data) Effect of Changes in Tax Laws or Rates Enacted in the Current Period — — — — — — Effect of Cross-Border Tax Laws ( 32 ) 0.02 ( 30 ) 0.02 ( 37 ) 0.02 Tax Credits — — — — — — Changes in Valuation Allowances 14,654 ( 10.77 ) 20,483 ( 15.62 ) 24,812 ( 12.91 ) Nontaxable or Nondeductible Items — — — — — — Changes in Unrecognized Tax Benefits 1 — 1 — — — Other Adjustments ( 232 ) 0.17 ( 590 ) 0.45 117 ( 0.06 ) Effective Tax Rate $ ( 23 ) ( 0.02 ) % $ 37,465 ( 27.58 ) % $ 15,303 ( 7.98 ) % (1) Primarily California, Florida, Indiana, New Hampshire, Pennsylvania and Wisconsin. c. Deferred income tax Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows: December 31, 2025 2024 Deferred tax assets: Unamortized intangible assets (1) $ 1,581,633 $ 1,394,195 Net operating loss carryforwards $ 168,429 $ 127,881 Impact of revenue recognition $ 51,540 $ 68,347 Share based compensation $ 23,809 $ 35,470 Lease liabilities $ 9,860 $ 6,518 Capitalized research and development $ — $ 4,036 Research and development $ 2,047 $ 1,613 Other temporary differences $ 9,053 $ 7,823 Total gross deferred tax assets $ 1,846,371 $ 1,645,883 Less: valuation allowance ( 1,833,239 ) ( 1,636,833 ) Total deferred tax assets 13,132 9,050 Deferred tax liabilities: Right of use assets 8,874 6,287 Fixed assets 4,052 2,692 Other liabilities 206 71 Total gross deferred tax liabilities $ 13,132 $ 9,050 Net deferred taxes assets (liability) $ — $ — (1) The Company recorded an increase in the deferred tax asset related to unamortized intangible assets in the amount of $ 187,438 . As of December 31, 2025, the balance of this deferred tax asset was offset by a full valuation allowance. A valuation allowance is provided when it is more likely than not that the deferred tax assets will not be realized. The Company has established a full valuation allowance to offset the deferred tax assets at December 31, 2025 and 2024 due to the uncertainty of realizing future tax benefits. The net change in the total valuation allowance for the years ended December 31, 2025 and 2024 were 196,694 and 1,261,855 , respectively. 95 Table of Contents NovoCure Limited and subsidiaries Notes to consolidated financial statements U.S. dollars in thousands (except share and per share data) Swiss income taxes and non-Swiss withholding taxes associated with the repatriation of earnings or for other temporary differences related to investments in non-Swiss subsidiaries have not been provided for, as the Company intends to reinvest the earnings of such subsidiaries indefinitely. If these earnings were distributed to Switzerland in the form of dividends or otherwise, or if the shares of the relevant non-Swiss subsidiaries were sold or otherwise transferred, the Company may be subject to additional Swiss income taxes and non-Swiss withholding taxes. As of December 31, 2025, the amount of unrecognized deferred income tax liability related to these earnings is estimated to be approximately $ 1,300 . d. Carryforward loss: In Switzerland, the Company had $ 1,236,560 of net operating carryforwards (NOLs) available at the Federal level, of which $ 1,208,800 are also available at the cantonal and communal level. These NOLs expire from 2026 through 2032. Additionally, the Company had $ 27,377 of non-Swiss NOLs as of December 31, 2025, of which $ 2,531 carry forward indefinitely,and the remainder expire from 2026 through 2041. e. Uncertain tax benefits: A reconciliation of the beginning and ending balances of uncertain tax benefits is as follows: December 31, 2025 2024 2023 Balance at beginning of the year $ 18 $ 18 $ 76 Additions (reductions) for taxes positions related to prior years 1 — ( 58 ) Balance at the end of the year $ 19 $ 18 $ 18 The Company recognizes interest and penalties related to unrecognized tax benefits in tax expense. During the years ended December 31, 2025, 2024 and 2023, the Company accrued $ 1 , $ 0 and $ 2 , respectively, for interest and penalties expenses related to uncertain tax positions. The Company files income tax returns in Switzerland and various foreign jurisdictions. Currently, the Company is under examination by the tax authorities in Israel and Germany and is not under examination by any other tax authority. Additional tax years within the period from 2019 to 2024 remain subject to examination by the various tax authorities. f. Supplemental Cash Flow Information : The following table presents the income taxes paid (net of refunds received) for the years ended December 31, 2025, 2024 and 2023: December 31, 2025 2024 2023 Switzerland : Federal $ 1,087 $ — $ — Cantonal (Zug) $ 637 $ — $ — Foreign countries: United States $ 12,809 $ 16,453 $ 7,413 Luxembourg $ 6,953 $ — $ — Israel $ 5,470 $ 4,945 $ 4,289 Other foreign countries $ 3,717 $ 2,065 $ 1,963 Total income taxes paid (net of refunds received) $ 30,673 $ 23,463 $ 13,665 96 Table of Contents NovoCure Limited and subsidiaries Notes to consolidated financial statements U.S. dollars in thousands (except share and per share data) Note 15: Share capital Share capital is composed as follows: Issued and outstanding Number of shares December 31, 2025 2024 Ordinary shares no par value 112,492,667 108,516,819 Equity incentive plans: Stock option plan In September 2015, the Company adopted the 2015 Omnibus Incentive Plan (the "2015 Plan"). Under the 2015 Plan, the Company can issue various types of equity compensation awards such as restricted shares, performance shares, restricted stock units ("RSUs"), performance share units ("PSUs"), long-term cash award and other share-based awards. Options granted under the 2015 Plan generally have a vesting period of two or four years and expire ten years after the date of grant. RSUs granted under the 2015 Plan vest in equal installments over two or three years . PSUs granted under the 2015 Plan generally vest have a vesting period between three and six years , as performance targets are attained. Options, RSUs and PSUs granted under the 2015 Plan that are canceled before expiration become available for future grants. As of December 31, 2025, no ordinary shares were available for grant under the 2015 Plan (see below). In April 2024, the Company adopted the 2024 Omnibus Incentive Plan (the "2024 Plan"), which replaced the 2015 Plan, effective June 5, 2024 (the "Effective Date") following approval from the 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 December 31, 2025, 6,335,168 ordinary shares were available for grant under the 2024 Plan. Employee Stock Purchase Plan In September 2015, the Company adopted an ESPP 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 ESPP is intended to be an "employee stock purchase plan" within the meaning of Section 423 of the Code and the provisions of the ESPP will be construed in a manner consistent with the requirements of such section. The Company began its offerings under the ESPP on August 1, 2016. The Company issued 279,450 ordinary shares for the plan period from January 1, 2025 through December 31, 2025. The terms of the ESPP provide that on December 31 of each year, the number of shares available for purchase by eligible employees who participate in the ESPP automatically increases by 1 % of the Company’s outstanding ordinary shares outstanding, unless the Company determines that such an increase is not necessary. As of December 31, 2025, 6,228,393 ordinary shares are available for offering under the ESPP. 97 Table of Contents NovoCure Limited and subsidiaries Notes to consolidated financial statements U.S. dollars in thousands (except share and per share data) The following tables sets forth the parameters used in computation of the options and ESPP compensation to employees for the years ended December 31, 2025, 2024 and 2023: Year ended December 31, 2025 2024 2023 Stock Option Plans Expected term (years) 5.50 - 5.79 5.50 - 5.73 5.50 - 6.00 Expected volatility 75 %- 77 % 71 %- 73 % 63 %- 70 % Risk-free interest rate 4.01 %- 4.02 % 3.88 %- 4.43 % 3.48 %- 4.79 % Dividend yield 0.00 % 0.00 % 0.00 % ESPP Expected term (years) 0.50 0.50 0.50 Expected volatility 56 %- 89 % 73 %- 90 % 56 %- 122 % Risk-free interest rate 4.16 %- 4.20 % 5.13 %- 5.23 % 4.76 %- 5.38 % Dividend yield 0.00 % 0.00 % 0.00 % A summary of the status of the Company’s options to purchase ordinary shares as of December 31, 2025 and changes during the year ended on that date is presented below: Year ended December 31, 2025 Number of options Weighted average exercise price Aggregate intrinsic value Outstanding at beginning of year 11,315,468 $ 31.41 Granted 944,888 17.96 Exercised ( 429,019 ) 14.25 Forfeited and cancelled ( 1,003,984 ) 41.99 Outstanding at end of year 10,827,353 $ 29.93 $ 3,757 Exercisable options 7,023,057 $ 34.39 $ 3,757 A summary of the status of the Company’s RSUs and PSUs as of December 31, 2025 and changes during the year ended on that date is presented below: Year ended December 31, 2025 Number of RSUs/PSUs Weighted average grant date fair value price Aggregate intrinsic value Unvested at beginning of year 12,066,515 $ 27.19 Granted 5,602,761 18.44 Vested ( 3,267,379 ) 24.82 RSUs withheld for tax liabilities ( 11,868 ) 21.79 Forfeited and cancelled ( 1,255,375 ) 31.23 Unvested at end of year (1) 13,134,654 $ 23.67 $ 169,831 (1) Includes PSUs that have a mix of service, market and other milestone performance vesting conditions which are vested upon achievements of market and performance conditions which are not probable, as of December 31, 2025, in accordance with ASC 718 as follows: 98 Table of Contents NovoCure Limited and subsidiaries Notes to consolidated financial statements U.S. dollars in thousands (except share and per share data) December 31, 2025 Number of PSUs Fair value at grant date per PSU Total fair value at grant date 23,818 $ 12.53 $ 298 461,652 16.30 7,525 595,755 18.19 10,837 21,653 19.44 421 901,284 48.16 43,406 49,368 76.97 3,800 2,053,530 $ 66,287 These PSUs will be expensed over the performance period when the vesting conditions become probable in accordance with ASC 718. The total equity-based compensation expense related to all of the Company’s equity incentive plans recognized for the years ended December 31, 2025, 2024 and 2023, was comprised as follows: Year ended December 31, 2025 2024 2023 Cost of revenues $ 3,627 $ 6,873 $ 6,587 Research, development and clinical studies 25,538 32,716 31,827 Sales and marketing 27,121 43,097 35,968 General and administrative 48,546 77,349 41,226 Total share-based compensation expense $ 104,832 $ 160,035 $ 115,608 As of December 31, 2025, unamortized share-based compensation costs amounted to $ 73,849 and are expected to be recognized over a weighted average period of approximately 1.45 years. The weighted average grant date exercise price of the Company’s options granted during the years ended December 31, 2025, 2024 and 2023 were $ 17.96 , $ 15.91 and $ 55.65 per share, respectively. The weighted average grant date fair value of the Company’s options granted during the years ended December 31, 2025, 2024 and 2023 were $ 12.12 , $ 10.40 and $ 33.77 per share, respectively. The weighted average grant date fair value of the Company’s RSU granted during the years ended December 31, 2025, 2024 and 2023 were $ 18.44 , $ 15.43 and $ 57.60 per share, respectively. The weighted average grant date fair values of the Company’s options forfeited and cancelled during the years ended December 31, 2025, 2024 and 2023 were $ 23.69 , $ 29.01 and $ 36.54 , respectively. The fair values of the Company’s RSUs and PSUs vested during the years ended December 31, 2025, 2024 and 2023 were $ 81,096 , $ 66,933 and $ 83,968 , respectively. The aggregate intrinsic values for the options exercised during the years ended December 31, 2025, 2024 and 2023 were $ 3,992 , $ 3,041 and $ 49,679 , respectively. The aggregate intrinsic value is calculated as the difference between the per share exercise price and the deemed fair value of the Company’s ordinary shares for each share subject to an option multiplied by the number of shares subject to options at the date of exercise. 99 Table of Contents NovoCure Limited and subsidiaries Notes to consolidated financial statements U.S. dollars in thousands (except share and per share data) Options outstanding as of December 31, 2025 are as follows: Exercise price Number of options outstanding Weighted average remaining contractual term Number of options exercisable Weighted average remaining contractual term $ (years) (years) 0.00 - 10.00 278,503 1.12 278,503 1.12 10.01 - 20.00 6,183,256 6.09 2,857,472 3.34 20.01 - 30.00 1,497,482 2.32 1,396,358 1.87 30.01 - 40.00 288,977 4.44 234,531 3.71 40.01 - 60.00 882,345 3.56 882,345 3.56 60.01 - 100.00 1,440,125 5.91 1,117,183 5.62 100.01 - 160.00 247,403 5.24 247,403 5.24 160.01 - 220.00 9,262 5.41 9,262 5.41 10,827,353 5.14 7,023,057 3.43 Note 16: Financial (expenses) income, net The following table sets forth the Company’s total financial expenses, net: Year ended December 31, 2025 2024 2023 Financial expenses: Interest expense $ ( 13,406 ) $ ( 7,714 ) $ ( 6 ) Amortization of discount, issuance costs and Gain from redemption of Notes ( 3,631 ) ( 2,629 ) ( 3,313 ) Foreign currency translation losses ( 4,322 ) ( 717 ) ( 797 ) Bank charges and others ( 858 ) ( 603 ) ( 790 ) $ ( 22,217 ) $ ( 11,663 ) $ ( 4,906 ) Financial income: Amortization of investments premium $ 26,893 $ 28,273 $ 26,397 Interest income 12,874 22,724 19,639 $ 39,767 $ 50,997 $ 46,036 Total financial (expenses) income, net $ 17,550 $ 39,334 $ 41,130 Note 17: Basic and diluted net income (loss) per 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, convertible notes and the ESPP) considered outstanding during the period, in accordance with ASC 260-10, as determined under the treasury stock method. 100 Table of Contents NovoCure Limited and subsidiaries Notes to consolidated financial statements U.S. dollars in thousands (except share and per share data) The following table sets forth the computation of the Company’s basic and diluted net loss per ordinary share: Year ended December 31, 2025 2024 2023 Net income (loss) attributable to ordinary shares as reported $ ( 136,227 ) $ ( 168,627 ) $ ( 207,043 ) Net income (loss) used in computing basic net income (loss) per share $ ( 136,227 ) $ ( 168,627 ) $ ( 207,043 ) Adjustment needed in calculating diluted net income (loss) per share — — — Net income (loss) used in computing diluted net income (loss) per share $ ( 136,227 ) $ ( 168,627 ) $ ( 207,043 ) Weighted average number of ordinary shares used in computing basic and diluted net income (loss) per share 111,471,991 107,834,368 106,391,178 Potentially dilutive shares that were excluded from the computation of basic and diluted net income (loss) per share: Options 9,297,875 9,558,506 6,950,781 RSUs and PSUs 4,781,731 4,560,415 1,423,377 ESPP 208,854 222,451 161,627 Weighted anti-dilutive shares outstanding which were not included in the diluted calculation 14,288,460 14,341,372 8,535,785 Basic and diluted net income (loss) per ordinary share $ ( 1.22 ) $ ( 1.56 ) $ ( 1.95 ) Note 18: Supplemental information The Company operates as one reporting segment. The following table presents long-lived assets by location: December 31, 2025 2024 United States $ 65,669 $ 62,897 Israel 14,059 16,120 Switzerland 48,125 27,014 Others 19,146 13,560 Total long-lived assets $ 146,999 $ 119,591 Restructuring In November 2023, the Company announced a series of actions to strengthen and optimize its business operations to support near-term growth drivers and long-term value creation. The plan included a reduction in headcount of approximately 200 employees or 13 % of the Company's then current workforce. The Company incurred restructuring costs (including severance pay, garden leave payments, etc.) for the years ended December 31, 2025, 2024 and 2023, as follows: 101 Table of Contents NovoCure Limited and subsidiaries Notes to consolidated financial statements U.S. dollars in thousands (except share and per share data) Year ended December 31, 2025 2024 2023 Cost of revenues $ — $ 52 $ 262 Research, development and clinical studies — 275 2,070 Sales and marketing — 1,512 2,404 General and administrative — 164 1,495 Total restructuring cost $ — $ 2,003 $ 6,231 Restructuring costs paid during the period $ — $ 5,455 $ 2,753 These restructuring costs were offset by accrual reversals for the years ended December 31, 2025, 2024 and 2023 in the amount of $ 0 , $ 369 and $ 3,041 , respectively, which relate to the terminated employees' exits from the Company’s cash incentive plans. These restructuring costs were further offset by forfeited equity-based compensation expense reversals for the years ended December 31, 2025, 2024 and 2023 in the amount of $ 0 , $ 1,991 and $ 9,313 , respectively, which relate to the terminated employees' exits from the Company’s equity incentive plan. Note 19: Subsequent Event Optune Pax Approval On February 11, 2026, the U.S. Food and Drug Administration approved Optune Pax for for the treatment of adult patients with locally advanced pancreatic cancer concomitant with gemcitabine and nab-paclitaxel. As a result of this approval, the Company expects to expense approximately $ 43,406 related to the vesting of 901,284 PSUs granted in March 2020 to an executive officer that are not expected to be distributed. See Note 15 above. 102 Table of Contents ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.