# EDGAR Filing Document

**Accession Number:** 0001109345
**File Stem:** 0001178913-26-000504
**Filing Date:** 2026-2
**Character Count:** 646889
**Document Hash:** 8fceef9654e5f8d6d7288537bf1ab092
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001178913-26-000504.hdr.sgml**: 20260217

**ACCESSION NUMBER**: 0001178913-26-000504

**CONFORMED SUBMISSION TYPE**: 20-F

**PUBLIC DOCUMENT COUNT**: 113

**CONFORMED PERIOD OF REPORT**: 20251231

**FILED AS OF DATE**: 20260217

**DATE AS OF CHANGE**: 20260217

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** NOVA LTD.
- **CENTRAL INDEX KEY:** 0001109345
- **STANDARD INDUSTRIAL CLASSIFICATION:** OPTICAL INSTRUMENTS & LENSES [3827]
- **ORGANIZATION NAME:** 08 Industrial Applications and Services
- **EIN:** 000000000
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 20-F
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 000-30668
- **FILM NUMBER:** 26636308

**BUSINESS ADDRESS:**
- **STREET 1:** 5 DAVID FIKES STREET
- **CITY:** REHOVOT
- **STATE:** L3
- **ZIP:** 7610201
- **BUSINESS PHONE:** 972-73-229-5600

**MAIL ADDRESS:**
- **STREET 1:** 5 DAVID FIKES STREET
- **CITY:** REHOVOT
- **STATE:** L3
- **ZIP:** 7610201

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** NOVA MEASURING INSTRUMENTS LTD
- **DATE OF NAME CHANGE:** 20000315

?xml version='1.0' encoding='ASCII'? NOVA LTD. - 1109345 - 2026

**UNITED STATES**

### SECURITIES AND EXCHANGE COMMISSION
**Washington, D.C. 20549**

### Form 20-F
☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) or (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2025

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

#### Commission File Number 000-30668

### NOVA LTD.
(Exact name of Registrant as specified in its charter)

---

| | |
|:---|:---|
| **Nova Ltd.**<br> (Translation of Registrant's name into English)  | **Israel**<br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Jurisdiction of incorporation or organization)  |

---

#### 5 David Fikes St., Rehovot 7632805, Israel
(Address of principal executive offices)

#### Guy Kizner, +972-73-2295833, +972-8-9407776, Rehovot 7632805, Israel
(Name, Telephone, E-mail and/or Facsimile number and Address of the Registrant's Contact Person)

#### Securities registered or to be registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| **Title of each class** | **Trading Symbol(s)** | **Name of each exchange on which registered** |
| Ordinary Shares | NVMI | The Nasdaq Global Select Market |

---

Securities registered or to be registered pursuant to Section 12(g) of the Act:

None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

None

Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report: 31,780,111 ordinary shares, as of December 31, 2025.

------

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ☒ No ☐

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of "accelerated filer and large accelerated filer" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐

Emerging growth company ☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

Indicate by check mark whether the registrant has filed a report on the attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

Yes ☒ No ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive – based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP ☒

International Financing Reporting Standards as issued by the International Accounting Standards Board ☐

Other ☐

If "Other" has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow:

Item 17 ☐ Item 18 ☐

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

------

#### **TABLE OF CONTENTS**

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| | | |
|:---|:---|:---|
|  |  | **Page** |
| [PART I](#PARTI) | [PART I](#PARTI) | 1 |
| [Item 1. Identity of Directors, Senior Management and Advisors](#Item1) | [Item 1. Identity of Directors, Senior Management and Advisors](#Item1) | 1 |
| [Item 2. Offer Statistics and Expected Timetable](#Item2) | [Item 2. Offer Statistics and Expected Timetable](#Item2) | 1 |
| [Item 3. Key Information](#Item3) | [Item 3. Key Information](#Item3) | 1 |
| 3A. | Selected Financial Data | 1 |
| 3B. | Capitalization and Indebtedness | 1 |
| 3C. | Reasons for the Offer and Use of Proceeds | 1 |
| 3D. | Risk Factors | 1 |
| [Item 4. Information on the Company](#Item4) | [Item 4. Information on the Company](#Item4) | 39 |
| 4.A | History and Development of the Company | 39 |
| 4.B | Business Overview | 40 |
| 4.C | Organizational Structure | 53 |
| 4.D | Property, Plant and Equipment | 53 |
| [Item 4A. Unresolved Staff Comments](#Item4A) | [Item 4A. Unresolved Staff Comments](#Item4A) | 54 |
| [Item 5. Operating and Financial Review and Prospects](#Item5) | [Item 5. Operating and Financial Review and Prospects](#Item5) | 54 |
| 5.A | Operating Results | 60 |
| 5.B | Liquidity and Capital Resources | 62 |
| 5.C | Research and Development, Patents and Licenses, etc. | 63 |
| 5.D | Trend Information | 66 |
| 5.E | Critical Accounting Estimates | 66 |
| [Item 6. Directors, Senior Management and Employees](#Item6) | [Item 6. Directors, Senior Management and Employees](#Item6) | 68 |
| 6.A | Directors and Senior Management | 68 |
| 6.B | Compensation | 73 |
| 6.C | Board Practices | 77 |
| 6.D | Employees | 85 |
| 6.E | Share Ownership | 86 |
| 6.F | Disclosure of Registrant's Action to Recover Erroneously Awarded Compensation. | 87 |
| [Item 7. Major Shareholder and Related Party Transactions](#Item7) | [Item 7. Major Shareholder and Related Party Transactions](#Item7) | 88 |
| 7.A | Major Shareholders | 88 |
| 7.B | Related Party Transactions | 89 |
| 7.C | Interest of Experts and Counsel | 90 |
| [Item 8. Financial Information](#Item8) | [Item 8. Financial Information](#Item8) | 91 |
| 8.A | Consolidated Statements and Other Financial Information | 91 |
| 8.B | Significant Changes | 91 |

---

- i -

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---

| | | |
|:---|:---|:---|
| [Item 9. The Offer and Listing](#Item9) | [Item 9. The Offer and Listing](#Item9) | 92 |
| 9.A | Offer and Listing Details | 92 |
| 9.B | Plan of Distribution | 92 |
| 9.C | Markets | 92 |
| 9.D | Selling Shareholders | 92 |
| 9.E | Dilution | 92 |
| 9.F | Expenses of the Issue | 92 |
| [Item 10. Additional Information](#Item10) | [Item 10. Additional Information](#Item10) | 92 |
| 10.A | Share Capital | 92 |
| 10.B | Memorandum and Articles of Association | 92 |
| 10.C | Material Contracts | 92 |
| 10.D | Exchange Controls | 93 |
| 10.E | Taxation | 93 |
| 10.F | Dividends and Paying Agents | 112 |
| 10.G | Statements by Experts | 112 |
| 10.H | Documents on Display | 112 |
| 10.I | Subsidiary Information | 112 |
| 10.J | Annual Report to Security Holders | 112 |
| [Item 11. Quantitative and Qualitative Disclosures About Market Risk](#Item11) | [Item 11. Quantitative and Qualitative Disclosures About Market Risk](#Item11) | 113 |
| Impact of Currency Fluctuation | Impact of Currency Fluctuation | 113 |
| [Item 12. Description of Securities Other than Equity Securities](#Item12) | [Item 12. Description of Securities Other than Equity Securities](#Item12) | 113 |
| [PART II](#PARTII) | [PART II](#PARTII) | 114 |
| [Item 13. Defaults, Dividend Arrearages and Delinquencies](#Item13) | [Item 13. Defaults, Dividend Arrearages and Delinquencies](#Item13) | 114 |
| [Item 14. Material Modification to the Rights of Security Holders and Use of Proceeds](#Item14) | [Item 14. Material Modification to the Rights of Security Holders and Use of Proceeds](#Item14) | 114 |
| [Item 15. Controls and Procedures](#Item15) | [Item 15. Controls and Procedures](#Item15) | 114 |
| [Item 16 \[Reserved\]](#Item16Reserved) | [Item 16 \[Reserved\]](#Item16Reserved) | 115 |
| [Item 16A. Audit Committee Financial Expert](#Item16A) | [Item 16A. Audit Committee Financial Expert](#Item16A) | 115 |
| [Item 16B. Code of Ethics](#Item16B) | [Item 16B. Code of Ethics](#Item16B) | 115 |
| [Item 16C. Principal Accountant Fees and Services](#Item16C) | [Item 16C. Principal Accountant Fees and Services](#Item16C) | 116 |
| [Item 16D. Exemptions from the Listing Standards for Audit Committees](#Item16D) | [Item 16D. Exemptions from the Listing Standards for Audit Committees](#Item16D) | 116 |
| [Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers](#Item16E) | [Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers](#Item16E) | 117 |
| [Item 16F. Change In Registrant's Certifying Accountant](#Item16F) | [Item 16F. Change In Registrant's Certifying Accountant](#Item16F) | 117 |
| [Item 16G. Corporate Governance](#Item16G) | [Item 16G. Corporate Governance](#Item16G) | 117 |
| [Item 16H. Mine Safety Disclosure](#Item16H) | [Item 16H. Mine Safety Disclosure](#Item16H) | 117 |
| [Item 16I. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](#Item16I) | [Item 16I. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](#Item16I) | 117 |
| [Item 16J. Insider Trading Policies](#Item16J) | [Item 16J. Insider Trading Policies](#Item16J) | 118 |
| [Item 16K. Cybersecurity](#Item16K) | [Item 16K. Cybersecurity](#Item16K) | 118 |
| [PART III](#PARTIII) | [PART III](#PARTIII) | 119 |
| [Item 17. Financial Statements](#Item17) | [Item 17. Financial Statements](#Item17) | 119 |
| [Item 18. Financial Statements](#Item18) | [Item 18. Financial Statements](#Item18) | 119 |
| [Item 19. Exhibits](#Item19) | [Item 19. Exhibits](#Item19) | 119 |
| [SIGNATURES](#a_001) | [SIGNATURES](#a_001) | 121 |

---

- ii -

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INTRODUCTION

In this annual report (this "**Annual Report**"), references to "we," "us," "our," "our business," "the Company," "Nova" and similar references refer to Nova Ltd. and, where appropriate, its consolidated subsidiaries.

This annual report contains estimates, projections and other information concerning our industry and our business, as well as data regarding market research, estimates and forecasts prepared by our management. Information that is based on estimates, forecasts, projections, market research or similar methodologies is inherently subject to uncertainties, and actual events or circumstances may differ materially from events and circumstances that are assumed in this information. The industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of factors, including those discussed under the headings "Special Note Regarding Forward-Looking Statements" and Item 3.D. "Risk Factors" in this Annual Report.

FORWARD – LOOKING STATEMENTS AND RISK FACTORS SUMMARY

This Annual Report contains estimates and forward-looking statements, principally in the sections entitled Item 3.D. "Key Information—Risk Factors," Item 4. "Information on the Company," and Item 5. "Operating and Financial Review and Prospects." In some cases, these forward-looking statements can be identified by words or phrases such as "may," "might," "will," "could," "would," "should," "expect," "plan," "anticipate," "intend," "seek," "believe," "estimate," "predict," "potential," "continue," "contemplate," "possible" or similar words. Statements regarding our future results of operations and financial position, growth strategy and plans and objectives of management for future operations, including, among others, expansion in new and existing markets, are forward-looking statements.

Our estimates and forward-looking statements are mainly based on our current expectations and estimates of future events and trends which affect or may affect our business, operations and industry. Although we believe that these estimates and forward-looking statements are based upon reasonable assumptions, they are subject to numerous risks and uncertainties.

These forward-looking statements are subject to a number of known and unknown risks, uncertainties, other factors and assumptions, including the risks described in Item 3.D "Key Information—Risk Factors" and elsewhere in this Annual Report.

The below important factors and uncertainties, among others, could cause actual results to differ materially from those described in these forward-looking statements. The below is also a summary of the risk factors described in Item 3.D "Key Information – Risk Factors" of this Annual Report.

- iii -

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*<u>Risks Related to Economic and External Risks</u>*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Increased cybersecurity threats and more sophisticated computer crime
 could disrupt our business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We depend on international sales, which expose us to foreign political
 and economic risks.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We are subject to laws and regulations that could restrict our operations
 such as economic sanctions and export restrictions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Changes in global trade policies and other factors beyond our control
 may adversely impact our business, financial condition and results of operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Changes in the U.S. taxation of international business activities
 or the adoption of other tax reform policies could materially impact our business, results or operations and financial condition.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We may be affected by instability in the global economy and by financial
 turmoil.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Because we derive a significant portion of our revenues from sales
 in Asia, our sales could be hurt by instability of Asian economies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our business is subject to risks related with doing business in China.

*<u>Risks Related to Technology and Intellectual Property</u>*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Because of the technical nature of our business, our intellectual
 property is extremely important to our business, and our inability to protect our intellectual property could harm our competitive position.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• There has been litigation involving intellectual property rights
 in the semiconductor and related industries, and similar litigation could force us to divert resources to defend against such litigation
 or deter our customers from purchasing our systems.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We may incorporate open-source technology in some of our software
 and product, which may expose us to liability and have a material impact on our product development and sales.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We may use artificial intelligence ("AI") technologies
 which may expose us to liability and have a material impact on our product development.

- iv -

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*<u>Risks Related to our Industry</u>*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We operate in an extremely competitive market, and if we fail to
 compete effectively, our revenues and market share will decline.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• If we do not respond effectively and on a timely basis to rapid technological
 changes, our ability to attract and retain customers could be diminished, which would have an adverse effect on our sales and ability
 to remain competitive.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The ongoing consolidation in our industry may harm us if our competitors
 are able to offer a broader range of products and greater customer support than we can offer or if our main suppliers cease delivery of
 important component as a result of being acquired by a larger company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The markets we target are cyclical and it is difficult to predict
 the length and strength of any downturn or expansion period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our operations may be delayed or interrupted and our business could
 suffer if we violate environmental, safety and health, or ESH, regulations.

*<u>Risks Related to our Operations</u>*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We recently implemented a new ERP system, and challenges relating
 to the implementation and operation of our new system could negatively impact our business and operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Pricing and demand for our specific product lines could substantially
 reduce our sales.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We depend on a small number of large customers, and the loss of one
 or more of them could significantly lower our revenues.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our inability to significantly reduce spending during a protracted
 slowdown in the semiconductor industry could reduce our prospects of achieving continued profitability.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• There can be no assurance that revenues from future products or product
 enhancements will be sufficient to recover the development costs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• New product lines that we may introduce in the future may contain
 defects, which will require us to allocate time and financial resources to correct.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• If any of our systems fail to meet or exceed our internal quality
 specifications, we cannot ship them until such time as they have met such specifications.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our dependence on a single manufacturing facility per product line
 magnifies the risk of an interruption in our production capabilities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our lease agreements for our Manufacturing Facilities include provisions
 that exempt the landlord and others from liability for damages to our Manufacturing Facilities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Shipment changes or cancellation may render our backlog not a reliable
 indicator of actual sales and financial results.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We may not be able to successfully complete and integrate current
 and/or future acquisitions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We depend on continuous cooperation with Process Equipment Manufacturers
 ("PEMs") to enable sales of our systems which are integrated with the process equipment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Some of our commercial agreements with PEMs and customers may include
 exclusivity provisions and limitations on the use of certain intellectual property which could limit or prevent future business relationships
 with third parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We depend on a limited number of suppliers, and in some cases a sole
 supplier.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The disclosure rules regarding the use of conflict minerals may affect
 our relationships with suppliers and customers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our lengthy sales cycle increases our exposure to customer delays
 in orders, which may result in obsolete inventory and volatile quarterly revenues.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our inability to attract, recruit, retain highly skilled key personnel.

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*<u>Risks Related to Our Incorporation and Location in Israel</u>*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Conditions in Israel, including Israel's conflicts with
 certain parties in the region, as well as political and economic instability, may adversely affect our business, our results of operations
 and our ability to raise additional funds.

*<u>Risks Related to Our Indebtedness and Capital Structure</u>*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our convertible senior notes due 2030 may impact our financial results,
 dilute existing shareholders, create downward pressure on the price of our ordinary shares, and restrict our ability to take advantage
 of future opportunities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our capped call transactions may affect the value of our debt and
 ordinary shares.

*<u>Risks Related to Financial, Legal, Regulatory and Taxation Risks</u>*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Currency fluctuations could harm our profit margins.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We received certain research and development grants, which could
 impose restrictions on our ability to use technology developed under these programs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Certain shareholders may control the outcome of matters submitted
 to a vote of our shareholders, including the election of directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The market price of our ordinary shares may be affected by a limited
 trading volume and may fluctuate significantly.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We may be classified as a "passive foreign investment company"
 for U.S. income tax purposes, which could have significant and adverse tax consequences to U.S. shareholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The rights and responsibilities of our shareholders are governed
 by Israeli law and differ in some respects from the rights and responsibilities of shareholders under U.S. law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our shares are listed for trade on more than one stock exchange.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• As a foreign private issuer, we are subject to reporting and corporate governance requirements that differ
 from those applicable to U.S. domestic companies, and the loss of this status could result in significant additional costs and expenses.

You should not rely on forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Annual Report primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition and operating results. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors described in the section titled "Risk factors" and elsewhere in this Annual Report. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Annual Report. The results, events and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.

In addition, statements that "we believe" and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this Annual Report. While we believe that information provides a reasonable basis for these statements, that information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements.

The forward-looking statements made in this Annual Report relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Annual Report to reflect events or circumstances after the date of this Annual Report or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments.

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OUR FUNCTIONAL CURRENCY

Unless otherwise indicated, all amounts herein are expressed in United States dollars ("U.S. dollars", "dollars", "USD", "US$" or "$").

The currency of the primary economic environment in which we operate is the U.S. dollar, since substantially all our revenues to date have been denominated in U.S. dollars and over 50% of our expenses are in U.S. dollars or in New Israeli Shekels linked to the dollar. Transactions and balances denominated in dollars are presented at their original amounts. Non-dollar transactions and balances have been re-measured into dollars as required by the principles in ASC 830 Foreign Currency Matters. All exchange gains and losses from such re-measurement are included in the net financial income when they arise.

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#### PART I

#### Item 1. Identity of Directors, Senior Management and Advisors
Not applicable.

#### Item 2. Offer Statistics and Expected Timetable
Not applicable.

#### Item 3. Key Information
**3A.**&nbsp;&nbsp;&nbsp;&nbsp; **Selected Financial Data**

#### [Reserved]
**3B.**&nbsp;&nbsp;&nbsp;&nbsp; **Capitalization and Indebtedness**

Not applicable.

**3C.**&nbsp;&nbsp;&nbsp;&nbsp; **Reasons for the Offer and Use of Proceeds**

Not applicable.

**3D.**&nbsp;&nbsp;&nbsp;&nbsp; **Risk Factors**

You should carefully consider the risks described below before making an investment decision. Additional risks not presently known to us or that we currently deem immaterial may also impair our business operations. Our business, financial condition or results of operations could be materially and adversely affected by any of these risks. The trading price and value of our ordinary shares could decline due to any of these risks, and you may lose all or part of your investment. This Annual Report also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the risks faced by us described below and elsewhere in this Annual Report.

#### Economic and External Risks

#### Increased information technology security threats and more sophisticated computer crime could disrupt our business.
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Our global operations are linked by information systems, including telecommunications, the internet, our corporate intranet, network communications, email and various computer hardware and software applications. In light of information technology security threats, we have implemented network security measures and engaged the services of cybersecurity experts to implement security policies and tools which were reviewed and discussed by our audit committee and board of directors. In the current environment, there are numerous and evolving risks with regards to cybersecurity and privacy, including criminal hackers, hacktivists, state-sponsored intrusions, industrial espionage, employee malfeasance and human or technological error. High-profile security breaches at other companies and in government agencies have increased in recent years, and security industry experts and government officials have warned about the risks of hackers and cyberattacks targeting businesses such as ours. Computer hackers and others routinely attempt to breach the security of technology products, services and systems, and to fraudulently induce employees, customers, sub-contractors, agents, distributors or others to disclose information or unwittingly provide access to systems or data. In addition, some of our software and products utilize open-source technologies, which may also be used by computer hackers for the purpose of cyber-attacks. Since the beginning of the recent hostilities in Israel that began in October 2023, Israeli and Israeli associated companies have become more frequently the target of cyberattacks. As such, the risk of a cyberattack against our information technology systems and data security may become heightened. Furthermore, the increasingly growing capabilities of AI and its availability to public use and adopted, may be used to identify vulnerabilities in our systems craft sophisticated cyberattacks.

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Although we have invested in measures to reduce these risks, such as creating a cybersecurity risk management program and putting in place a cybersecurity incident response plan which includes an incident response plan, we can provide no assurance that our current IT systems are fully protected against third-party intrusions, viruses, hacker attacks, information or data theft or other similar threats. The cost and operational consequences of implementing, maintaining, and enhancing further data or system protection measures could increase significantly to overcome increasingly intense, complex, and sophisticated global cyber threats. Despite our best efforts, we are not fully insulated from data breaches and system disruptions and, accordingly, we have experienced and expect to continue to experience actual or attempted cyberattacks of our IT networks. Although none of these actual or attempted cyberattacks have had a material adverse effect on our operations or financial condition thus far, we cannot guarantee that any such incidents will not have a material adverse effect on our operations or financial condition in the future. Any material breaches of cybersecurity or media reports of perceived security vulnerabilities to our systems or those of the Company's third parties, even if no breach has been attempted or occurred, could cause us to experience reputational harm, loss of data, loss of customers and revenue, regulatory actions and scrutiny, sanctions or other statutory penalties, litigation, liability for failure to safeguard our customers' information, or financial losses that are either not insured against or not fully covered through any insurance maintained by us. Any of the foregoing may have a material adverse effect on our business, operating results and financial condition.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As such, our tools and servers may be vulnerable to computer viruses, break-ins and similar disruptions from unauthorized tampering with our computer systems and tools located at our facility, at cloud services or at customer sites, or could be subject to system failures or malfunctions for other reasons. Increased information technology security threats and more sophisticated computer crime pose a risk to the security of our systems and networks and the confidentiality, availability and integrity of our data or customer data or suppliers' data. Cybersecurity attacks could also include attacks targeting the security, integrity and/or reliability of the hardware and software installed in our products. System failures or malfunctioning could disrupt our operations and our ability to timely and accurately process and report key components of our financial results.

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#### We are dependent on international sales, which expose us to foreign political and economic risks that could impede our revenue stream.
Our principal customers are located in Taiwan, Japan, South Korea, China and the United States, and we produce our products in Israel, the United States and Germany. International operations expose us to a variety of risks that could seriously impact our financial condition and impede our revenue stream including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• instability in political or economic conditions, including but
 not limited to inflation, recession, foreign currency exchange restrictions and devaluations, restrictive governmental controls on the
 movement and repatriation of earnings and capital, and actual or anticipated military or political conflicts, particularly in emerging
 markets, including but not limited to, rising inflation and elevated U.S. budget deficits and overall debt levels, can put upward pressure
 on interest rates and could be among the factors that could lead to higher interest rates in the future. Higher interest rates could adversely
 affect our overall business or reduce our liquidity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• intergovernmental conflicts or actions, including but not limited
 to armed conflict, trade wars and acts of terrorism or war, including the current war between Russia and the Ukraine, as well as the growing
 tensions between Taiwan and China and the Chinese actions in the South China Sea.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• In October 2025, a ceasefire agreement was reached between Israel and Hamas, resulting in a cessation of
 active hostilities between these parties. However, the situation remains volatile, and there is still a risk of renewed escalation or
 spillover involving other parties in the region. As a result, we could experience disruptions in our business or business of our partners,
 customers, or the economy as a whole, any of which could adversely affect and could materially adversely impact our business, results
 of operations, and overall financial condition in future periods.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• interruptions to the Company's business with its largest customers, distributors and suppliers resulting
 from but not limited to, strikes, shortage in raw materials and subcomponents due to geopolitical situation and financial instability.
 For instance, trade restrictions, changes in tariffs and import and export license requirements could adversely affect our ability to
 sell our products in the countries adopting or changing those restrictions, tariffs or requirements. This could reduce our sales by a
 material amount.

All of these risks could result in increased costs or decreased revenues, either of which could have a materially adverse effect on our profitability.

#### We are subject to laws and regulations that could restrict our operations, including economic sanctions and export restrictions.
Our business is subject to certain laws and restrictions based on the items we export and countries with which we conduct business.

Specifically, starting 2018 and to date, the U.S. Department of Commerce, Bureau of Industry and Security (BIS) has taken actions to restrict exports to several Chinese-based semiconductor manufacturers by adding them to the U.S. Export Administration Regulations' (EAR) Entity List. These manufacturers have acquired and continue to acquire several of our metrology solutions. Due to the abovementioned export restrictions, our U.S. subsidiary is currently restricted from shipping tools or parts, or to provide any form of service to such customers, until it is granted an appropriate license by BIS.

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In addition, in 2020 the U.S. Department of Commerce introduced restrictions on exporting certain foreign-made items to Huawei and to customers who are suppliers to Huawei, which is a Chinese based electronics supplier.

In October 2022, the U.S. Department of Commerce introduced additional restrictions that have limited the ability of our U.S. subsidiary to serve a small portion of the available Chinese market. As part of these restrictions, in addition to the Entity List additions, the U.S. Department of Commerce has also restricted shipment of products used for certain advanced technology nodes, including products that use artificial intelligence and advanced computing products. Consequently, our U.S. subsidiary is required to obtain a license in order to ship to certain Chinese entities which are known to have or are known to plan to have, certain advanced-nodes manufacturing or development abilities (as those are defined in the EAR). These restrictions also apply to shipments of high-power advanced chips to China (as those are defined in the regulations), by any entity. These new restrictions also impose personal liability on any "U.S. Person" who has "knowledge" that any item shipped, transmitted or transferred will be used for certain advanced nodes and/or high-powered chips development or production, and who provides support for such transactions.

In October 2023, the U.S. Department of Commerce issued two additional rules further restricting China's ability to obtain advanced computing chips, develop and maintain supercomputers, and manufacture advanced semiconductors, and added several new Chinese entities to the Entity List. In November 2023, the U.S. Department of Commerce also partially suspended some of the licenses granted by it concerning certain Chinese customers as recipients.

In September 2024, the U.S. Department of Commerce issued an interim final rule further restricting certain end uses for semiconductor capital equipment. This interim final rule targets advanced technologies such as GAAFET (Gate-All-Around field effect transistor), advanced semiconductor manufacturing equipment and Quantum computers controls, which includes hardware, software, and related components. Pursuant to this, exporters will need to obtain licenses for the export outside of the US, reexport, or transfer (in-country) of certain items, all subject to the terms of the general license issues together with the interim final rule.

In December 2024, BIS issued a package of rules designed to further impair China's capability to produce advanced-node semiconductors with 'military applications', that can be used in the next generation of advanced weapon systems and in artificial intelligence (AI) and advanced computing. Such regulatory measures include, but are not limited to, new controls on semiconductor manufacturing equipment, new controls on software tools, new controls on high-bandwidth memory (HBM), and additions of 140 entities to the Entity List. The regulatory update also includes the establishment of two new Foreign Direct Product (FDP) rules and corresponding de minimis provisions, new software and technology controls, and a clarification to the EAR regarding existing controls on software keys.

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In September 2025, BIS issued the "Affiliates Rule," which expands end-user export controls to any foreign entity owned 50% or more, directly or indirectly, by one or more persons on the BIS Entity List or Military End User (MEU) List, as well as certain parties on the Specially Designated Nationals (SDN) List. However, this rule has been suspended for one year, effective November 10, 2025. The suspension is set to terminate on November 9, 2026.

In some cases, the abovementioned export restrictions might also be applicable to the items exported from countries other than the U.S., either by international arrangements made between countries, as updated from time to time, imposing export limitation and supervisory duties, or by limitations on the re-export of certain U.S. origin items.

Since the introduction of each of these restrictions, we have put in place processes to ensure compliance with applicable restrictions. While we continue to conduct detailed assessments of the new restrictions and monitor new sanctions and restrictions that could arise, any potential violations of such regulations, whether under U.S. or other jurisdictions, could have an adverse impact on our reputation, business, results of operations and financials.

New export control regulations have also been introduced in other jurisdictions, including certain European countries, including Germany and the Netherlands which are adopting or expected to adopt comparative controls to the U.S. EAR; China on items related to gallium and germanium, though the export ban is currently suspended until November 27, 2026; and Japan on advanced semiconductor-manufacturing equipment.

While certain export regulations issued in some jurisdictions currently do not have a direct major effect on us, these may have an adverse effect on our supply chain, as well as the semiconductor manufacturing sector in China by reducing the demand for metrology equipment from this sector and therefore indirectly affect our sales. In addition, our growing presence in Europe, through recent acquisitions, may increase our exposure to changes in the European export control regulations and updates to the Wassenaar List of Dual-Use Goods.

We are also subject to the Israeli export control regime, which mainly governs defense exports and export of dual-use items. Dual-use items are defined under the Israeli export control regime in accordance with the Wassenaar List of Dual-Use Goods and Technologies (the Wassenaar Control List), which is adopted into the Israeli law. Our products are not currently subject to control under Israeli law. However, the Wassenaar Control List is updated annually, and any changes in the classification of the components, materials, software or technology used in our products could impact exports from Israel, potentially leading to licensing requirements which may delay our export operations, create additional costs related to handling the licensing requests, and potentially limit our market, as sales and export of controlled items would be subject to the regulator's discretion.

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#### Changes in global trade policies and other factors beyond our control may adversely impact our business, financial condition and results of operations.
The international environment in which we operate is affected by inter-country trade agreements and tariffs. As a result of recent revisions in the U.S. administrative policy there are, and may be additional, changes to existing trade agreements, greater restrictions on free trade and significant increases in tariffs on goods imported into the United States. Therefore, there is current uncertainty about the future relationship between the United States and other countries with respect to trade policies, taxes, government regulations, and tariffs, and we cannot predict whether, and to what extent, U.S. trade policies will change in the future, including as a result of changes by the current U.S. presidential administration. In 2025, the global tariff landscape began to quickly change following the U.S. government announcing new or increased tariffs on various countries. While we continue to monitor the situation as it evolves, these additional tariffs or any future tariffs or retaliation by another government against such tariffs or policies have introduced significant uncertainty into the market. Future actions of the U.S. administration and that of foreign governments, including China, with respect to tariffs or international trade agreements and policies, remain currently unclear.

The escalation of a trade war, tariffs, retaliatory tariffs or other trade restrictions on products and materials either exported by us to China or raw materials imported by us from China may significantly impede our ability to provide our solutions and service our customers in China or other effected locations. Such developments may result in a decrease in demand for our products and technologies as well as delays in payments from our customers. Furthermore, other governmental action related to tariffs or international trade agreements, changes in U.S. social, political, regulatory and economic conditions or in laws and policies governing foreign trade, manufacturing, development and investment in the territories and countries, where our customers are located, could adversely affect our business, financial condition, operating results and cash flows.

#### We may be affected by instability in the global economy and by financial turmoil.
There is an inherent risk, based on the complex relationships among China, Japan, Korea, Taiwan, and the United States, that political, diplomatic and national security influences might lead to trade disputes, impacts and/or disruptions, in particular those affecting the semiconductor industry. This would adversely affect our business with China, Japan, Korea, and/or Taiwan and perhaps the entire Asia Pacific region or global economy. A significant trade dispute, impact and/or disruption in any area where we do business could have a materially adverse impact on our future revenue and profits. Instability in the global markets and in the geopolitical environment in many parts of the world, including current war between Russia and the Ukraine, as well as other disruptions may continue to put pressure on global economic conditions. In the event global economic and market conditions, or economic conditions in key markets, remain uncertain or deteriorate further, we may experience material impacts on our business, operating results, and financial condition.

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#### The Russia – Ukraine conflict could affect our business.
The ongoing war between Russia and Ukraine has impacted not only the global economy but the global energy markets as well, in particular the European energy market. This could result in increased operating expenses in Germany, in the expense of shipping materials to and from our various facilities, and wellbeing of our employees with respect to the energy crisis in Europe and the inability to heat buildings etc. Since the Russian invasion of Ukraine, the cost for liquefied natural gas has more than doubled, this could lead to further energy price increase, causing global market disruption and volatilities in supply chain. The high volatility of energy prices could have an indirect effect on our operations in Germany, and our business expansion in other regions, which may adversely affect our financial condition and operating results.

#### Current market conditions, including inflation and recessionary pressures could affect our growth and profitability.
The inflation, slower growth, changes to fiscal and monetary policy, tighter credit, higher interest rates, high unemployment, geopolitical issues increase in energy costs, unstable global conditions and changes in currency exchange rates continue to contribute to global economic instability. Furthermore, although certain central banks, including the U.S. Federal Reserve, have adjusted policy rates in recent periods, such rates remain subject to ongoing market and policy-driven fluctuations and could rise again in the future. These conditions, and their impact on the global macro-economic environment, can impact our business, operating results and financial condition.

**Because we derive a significant portion of our revenues from sales in Asia, our sales could be hurt by instability of Asian economies.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; A number of Asian countries have experienced political and economic instability. For instance, the growing tension between Taiwan and China, who have had a number of disputes, as have North and South Korea, and Japan has for a number of years experienced significant economic instability. Additionally, the Asia-Pacific region is susceptible to the occurrence of natural disasters, such as earthquakes, cyclones, tsunamis and flooding. We have subsidiaries in Taiwan, South Korea, China, Japan and Singapore and we have significant customers in Taiwan, South Korea and China. An outbreak of hostilities or other political upheaval, economic downturns or the occurrence of a natural disaster in these or other Asian countries would likely harm the operations of our customers in these countries, causing our sales to suffer.

#### Our business is subject to the risks associated with operating in China.
Our results of operations, financial conditions, and prospects are subject to a significant degree to economic, political and legal developments in China including government control over capital investments or changes in tax regulations that are applicable to us. China's economy differs from the economies of most developed countries in many respects, including with respect to the amount of government involvement, level of development, growth rate and control of foreign exchange, and allocation of resources. As one of our subsidiaries is located in China, our business is subject to the risks associated with doing business in China, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• trade protection measures, such as tariff increases, and import and
 export licensing and control requirements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• potentially negative consequences from changes in tax laws;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• difficulties associated with the Chinese legal system, including
 increased costs and uncertainties associated with enforcing contractual obligations in China;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• historically, lower protection of intellectual property rights;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes and volatility in currency exchange rates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• unexpected or unfavorable changes in regulatory requirements; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• local preference of emerging local competitors in China.

#### Our business could be disrupted by catastrophic events.
The occurrence of unforeseen or catastrophic events such as terrorist attacks, extreme terrestrial or solar weather events or other natural disasters, emergence of a pandemic, or other widespread health emergencies (or concerns over the possibility of such an emergency), could create economic and financial disruptions, and could lead to operational difficulties that could impair our ability to manage our business.

***Risks related to technology and intellectual property***

**Because of the technical nature of our business, our intellectual property is extremely important to our business, and our inability to protect our intellectual property could harm our competitive position.**

Our continued success depends upon our ability to protect our core technology and intellectual property. We therefore have an extensive program devoting resources to seeking patent protection for our inventions and discoveries that we believe will provide us with competitive advantages. Our patents, utility models and patent applications principally cover various aspects of optical measurement systems and methods, integrated process control implementation concepts, and optical, opto-mechanical and mechanical design. In addition, our patents and applications cover various aspects of X-ray based measurement systems and methods, including process control implementation concepts, X-ray energy sources, electron optics and detection, vacuum systems and equipment integration. Additionally, our chemical metrology equipment requires coverage of various elements and sub-systems performing various types of chemical analysis of the process chemicals and semiconductor wet process control – including electrodeposition, wet etch and clean and CMP sectors.

We cannot assure that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• pending patent applications will be approved; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any patents will be broad enough to protect our technology, will
 provide us with competitive advantages or will not be challenged or invalidated by third parties. We also cannot assure that others will
 not independently develop similar products, duplicate our products or, if patents are issued to us, design around these patents. Furthermore,
 because patents may afford less protection under foreign law than is available under U.S. law, we cannot assure that any foreign patents
 issued to us will adequately protect our proprietary rights.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In addition, a number of patents which relate to our main-stream products have already expired or are expected to expire in the coming years. Such expiration may add significant competition to our tools in this area, which may lead to a decrease in our incomes. In addition, not all our patents provide coverage in all territories we operate in, and thus in some territories there is less coverage on some product lines.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In addition to patent protection, we also rely upon trade secret protection, employee and third-party nondisclosure agreements and other intellectual property protection methods to protect our confidential and proprietary information. Despite these efforts, we cannot be certain that others will not otherwise gain access to our trade secrets or disclose our technology.

Additionally, as part of our long-term technological collaboration, we are engaged in joint development activities with some of our strategic customers and vendors as well as with research institutes. These activities impose some limitations on the joint intellectual property developed as part of these programs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Furthermore, we may be required to institute legal proceedings to protect our intellectual property. If such legal proceedings are resolved adversely to us, our competitive position and/or results of operations could be harmed. For additional information on our intellectual property, see "Item 4B. Business Overview — Intellectual Property" in this Annual Report.

**There has been significant litigation involving intellectual property rights in the semiconductor and related industries, and similar litigation involving our Company could force us to divert resources to defend against such litigation or deter our customers from purchasing our systems.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; We have been, and may in the future be, notified of allegations that we may be infringing intellectual property rights possessed by others. In addition, we may be required to commence legal proceedings against third parties, which may be infringing our intellectual property, in order to defend our intellectual property. In the future, protracted litigation and expense may be incurred to defend ourselves against alleged infringement of third-party rights or to defend our intellectual property against infringement by third parties. Adverse determinations in that type of litigation could:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• result in our loss of proprietary rights;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• subject us to significant liabilities, including triple damages in
 some instances;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• require us to seek licenses from third parties, which licenses may
 not be available on reasonable terms or at all; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• prevent us from selling our products.

Any litigation of this type, even if we are ultimately successful, could result in substantial cost and diversion of time and effort by our management, which by itself could have a negative impact on our profit margin, available funds, competitive position and ability to develop and market new and existing products. For additional information on our intellectual property, see "Item 4B. Business Overview — Intellectual Property" in this Annual Report.

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**We may incorporate open-source technology in some of our software and products, which may expose us to liability and have a material impact on our product development and sales.**

In order to leverage big data and distributed computing, some of our software and products utilize open-source technologies. These technologies may be subject to certain open-source licenses, including but not limited to the General Public License, which, when used or integrated in particular manners, impose certain requirements on the subsequent use of such technologies, and although scanned and reviewed may pose a potential risk to proprietary nature of products. In the event that we have or will in the future, use or integrate software that is subject to such open source licenses into or in connection with our products in such ways that will trigger certain requirements of these open source licenses, we may (i) be required to include certain notices and abide by other requirements in the absence of which we may be found in breach of the copyrights owned by the creators of such open source technologies; and/or (ii) be required to disclose our own source code or parts thereof to the public, which could enable our competitors to eliminate some or any technological advantage that our products may have over theirs. Any such requirement to disclose our source code or other confidential information related to our products, and the failure to abide by license requirement resulting in copyright infringement, could materially adversely affect our competitive position and impact our business results of operations and financial condition.

#### We may use AI technologies which may expose us to liability and have a material impact on our product development.
Artificial intelligence (AI) is driving more semiconductor businesses, specifically those in process control. Utilizing AI as part of process control is changing and will change the nature of the solutions and may change the balance between hardware capabilities and software or algorithms needs. AI is a rapidly evolving technology which requires further review and analysis to ensure that any line of code we generate by using these tools is accurate, complies with quality standards, does not infringe any legal or commercial terms, and is secured code. Furthermore, our competitors may be more successful in integrating AI technology into their products. While AI is creating efficiency in some aspects of our development, such as software coding and customer support, there can be no assurance AI will enhance our business operations. While we scan and review these technologies prior to use, when using third party AI technologies, that generate packages and lines of code, certain risks may arise, including, among others: (i) uncertainty regarding the accuracy and quality of the code and the potential generation of inaccurate, misleading, discriminatory, or unexpected content; (ii) enforcement of legal and commercial terms; (iii) security of the code potentially exposing us to cybersecurity risks such as defects, viruses, ransomware or malware; and (iv) potential claims of copyright infringement or other intellectual property misappropriation through the use of third-party AI tools in our products and services.

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***Risks related to our industry***

**We operate in an extremely competitive market, and if we fail to compete effectively, our revenues and market share will decline.**

Although the market for process control systems used in semiconductor manufacturing is currently concentrated and characterized by relatively few participants, the semiconductor capital equipment industry is intensely competitive. We compete mainly with Onto Innovation Inc., and KLA Corp., which manufacture and sell CD, thin films and chemical metrology and process control systems. In addition, we compete with process equipment manufacturers, such as ASML Holdings N.V., LAM Research, and Applied Materials Inc., which develop (or may acquire companies which develop) in-situ sensors and metrology products. Established companies, both domestic and foreign, compete with our product lines, and new competitors enter our market from time to time, including the recent emergence of local competitors in China. The recent acquisition of Sentronics and the expansion of our portfolio in the wafer level packaging and specialty markets, positions us in direct competition with companies such as Merck and Camtek. Some of our competitors have greater financial, engineering, manufacturing and marketing resources than we do. If a particular customer selects a competitor's capital equipment, we expect to experience difficulty in selling our solution to that customer for a significant period of time. A substantial investment is required by the customers to evaluate, test, select and integrate capital equipment into a production line. As a result, once a manufacturer has selected a particular vendor's capital equipment, we believe that the manufacturer generally relies upon that equipment for the specific production line application and frequently will attempt to consolidate its other capital equipment requirements with the same vendor. Accordingly, unless our systems offer performance or cost advantages that outweigh a customer's expense of switching to our systems, it will be difficult for us to achieve significant sales from that customer once it has selected another vendor's system for an application. We believe that our ability to compete successfully depends on a number of factors both within and outside of our control, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the contribution and value our solutions bring to our customers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our product innovation, quality and performance;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our global technical service and support;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the return on investment (ROI) of our equipment and its cost of ownership;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the breadth of our product line;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our success in developing and marketing new products; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the extendibility of our products.

If we fail to compete in a timely and cost-effective manner against current or future competitors, our revenues and market share will decline.

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**If we do not respond effectively and on a timely basis to rapid technological changes, our ability to attract and retain customers could be diminished, which would have an adverse effect on our sales and ability to remain competitive.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The semiconductor manufacturing industry is characterized by rapid technological changes, new product introductions and enhancements and evolving industry standards. Our ability to remain competitive and generate revenue will depend in part upon our ability to develop new and enhanced systems at competitive prices in a timely and cost-effective manner and to accurately predict technological transitions. Because new product development commitments must be made well in advance of sales, new product decisions must anticipate the future demand for products. If we fail to correctly anticipate future demand for products, our sales and competitive position will deteriorate. In addition, the development of new technologies, new product introductions or enhancements by our competitors could cause a decline in our sales or loss of market acceptance of our existing products.

**The ongoing consolidation in our industry may harm us if our competitors are able to offer a broader range of products and greater customer support than we can offer or if our main suppliers cease delivery of important component as a result of being acquired by a larger company.**

We believe that the semiconductor capital equipment market has undergone consolidation over the last few years. For example, ASML Holdings N.V. acquired Berliner Glas Group in 2020; KLA Corporation acquired ECI Technology in 2022; Nanometrics Inc. and Rudolph Technologies, Inc. merged in 2019 to create Onto Innovation Inc., which also recently acquired part of SemiLab Ltd. We believe that similar acquisitions and business combinations involving our competitors, our customers, and our suppliers and the PEMs may occur in the future. These acquisitions could adversely impact our competitive position by enabling our current and potential competitors to expand their product offerings and customer services, which could provide them an advantage in meeting customers' needs, particularly with those customers that seek to consolidate their capital equipment requirements with a smaller number of vendors. The greater resources, including financial, marketing, intellectual property and support resources, of competitors involved in these acquisitions could allow them to accelerate the development and commercialization of new competitive products and the marketing of existing competitive products to their larger installed bases. Accordingly, such business combinations and acquisitions by competitors and/or customers could jeopardize our competitive position. In addition, an acquisition of a major supplier by a larger company may lead to a cessation of delivery of components that are important to the delivery of our products and will require us to invest resources to find alternative sources.

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**The markets we target are cyclical and it is difficult to predict the length and strength of any downturn or expansion period.**

The semiconductor capital equipment market and industries, which are cyclical, experienced steep downturns and upturns in the last two decades. Although recent fluctuations have been milder, the capital equipment market can still experience downturns in some years, and we cannot predict when recovery or future declines will occur or how they will affect our business.

#### Our operations may be delayed or interrupted, and our business could suffer if we violate environmental, safety and health, or ESH regulations.
Some of our activities require the use of various gases, chemicals, hazardous materials and other substances such as solvents and sulfuric acid which may have an impact on the environment. We are subject to Environmental, Safety and Health ("ESH") regulations, and a failure to manage the use, storage, transportation, emission, discharge, recycling or disposal of raw materials or to comply with these ESH regulations, or a failure of any of the above by a supplier, manufacturer, or other third party in our value chain, could result in (i) regulatory penalties, fines and other legal liabilities, (ii) suspension of production or delays in operation and capacity expansion, (iii) a decrease in our sales, (iv) an increase in pollution cleaning fees and other operation costs, or (v) damage to our public image, any of which could harm our business. In addition, as ESH regulations are becoming more comprehensive and stringent, and may vary by jurisdiction, we may incur a greater amount of capital expenditures in technology innovation, materials substitution, and the hiring and retention of new or existing personnel, in order to comply with such regulations, which may adversely affect our results of operations.

#### Operational risks

#### We implemented a new ERP system, and challenges implementing our new system could negatively impact our business and operations.
In January 2026, following a multi-year implementation, we launched our new enterprise resource planning system ("ERP"). We depend heavily on our ERP to manage our business and report operating results. Although the system is operational, it requires ongoing maintenance, monitoring, and enhancements, and we may implement additional modules in the future. The transition introduced new procedures and various new controls over financial reporting, many of which are still being adjusted to best fit our needs. Inefficiencies may persist until the system and related processes stabilize.

Although our ERP system was launched and is operational, any deficiencies, malfunctions, or limitations in its design or functionality could adversely affect our ability to maintain accurate financial records, manage operations efficiently, serve our customers with effective and timely support and produce timely and accurate financial statements or comply with applicable regulations. System errors, integration challenges with other applications, cybersecurity vulnerabilities, or unexpected technical issues could disrupt our operations, increase costs, or impair our ability to appropriately forecast and report results.

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**Because substantially most of our current sales are dependent on few specific product lines, factors that adversely affect the pricing and demand for these product lines could substantially reduce our sales.**

We are currently dependent on few process control product lines. We expect these product lines to continue to account for a substantial portion of our revenues in the coming years. As a result, factors adversely affecting the pricing of, or demand for, these product lines, such as competition and technological change, could significantly reduce our sales.

#### We depend on a small number of large customers, and the loss of one or more of them could significantly lower our revenues.
Like our peers serving the semiconductor market, our customer base is highly concentrated among a limited number of large customers. We anticipate that our revenues will continue to depend on a limited number of major customers, although the companies considered to be our major customers and the percentage of our revenue represented by each major customer may vary from period to period. As a result of our customer concentration, our financial performance may fluctuate significantly from period to period based, among others, on exogenous circumstances related to our clients. For example, it is possible that any of our major customers could terminate its purchasing relationship with us or significantly reduce or delay the amount of orders for our products, purchase products from our competitors, or develop its own alternative solutions internally. The loss of any one of our major customers would adversely affect our revenues. Furthermore, if any of our customers become insolvent or have difficulties meeting their financial obligations to us for any reason, we may suffer losses. For more information regarding our sales by major customers as percentage of our total sales, see Note 16 to our consolidated financial statements contained elsewhere in this Annual Report.

#### Our inability to significantly reduce spending during a protracted slowdown in the semiconductor industry could reduce our prospects of achieving continued profitability.
Historically, we have derived all our revenues, and we expect to continue to derive practically all of our revenues, from sales of our products and related services to the semiconductor industry. Our business depends in large part upon capital expenditures by semiconductor manufacturers, which in turn depend upon the current and anticipated demand for semiconductors. The semiconductor industry has experienced severe and protracted cyclical downturns and upturns. Cyclical downturns, as those we have experienced in the past, including the slowdown in 2023, may cause material reductions in the demand for the products and services that we offer, and may result in a decline in our sales. In addition, our ability to significantly reduce expenses during such cyclical downturn may be limited because of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our continuing need to invest in research and development;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our continuing need to market our new products; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our extensive ongoing customer service and support requirements worldwide.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Furthermore, in recent years, we increased our leased facilities and related investments and our operating expenses. In the event of a global recession or certain other economic conditions forcing the Company to materially reduce its expenses, portions of such facilities may be rendered obsolete. As a result, we may have difficulty achieving continued profitability during a protracted slowdown.

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**There can be no assurance that revenues from future products or product enhancements will be sufficient to recover the development costs or to ensure the sale of inventory related to these products.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; We must continue to make significant investments in research and development in order to introduce new products and technologies, or to enhance the performance, features and functionality of our existing products, to keep pace with the competitive landscape and to satisfy customer demands. Substantial research and development costs are typically incurred before we confirm the technical feasibility and commercial viability of a new product, and not all development activities result in commercially viable products. There can be no assurance that revenues from future products or product enhancements will be sufficient to recover the development costs associated with such products or enhancements. In addition, we cannot be sure that these products or enhancements will receive market acceptance or that we will be able to sell these products at prices that are favorable to us. Our business will be seriously harmed if we are unable to sell our products at favorable prices or if the market in which we operate does not accept our products. In addition, in some cases, we accumulate inventories based on sales forecasts. If such sales forecasts do not materialize, we might need to write-off the related inventory, which will increase our losses.

**New product lines that we may introduce in the future may contain defects, which will require us to allocate time and financial resources to correct.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Our new product lines may contain defects when first introduced. If there are defects, we will need to divert the attention of our personnel from our ongoing product development efforts to address the detection and correction of the defects. We cannot provide assurances that we will not incur any costs or liabilities or experience any lags or delays in the future. Moreover, the occurrence of such defects, whether caused by our products or the products of another vendor, may result in significant customer relations problems and adversely affect our reputation and may impair the market acceptance of our products.

**If any of our systems fail to meet or exceed our internal quality specifications, we cannot ship them until such time as they have met such specifications. If we experience significant delays or are unable to ship our products to our customers as a result of our internal processes or for any other reason, our business and reputation may be adversely affected.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Our products are complex and require technical expertise to design and manufacture. Various problems occasionally arise during the manufacturing process that may cause delays and/or impair product quality. We actively monitor our manufacturing processes to ensure that our products meet our internal quality specifications. Any significant delays stemming from the failure of our products to meet or exceed our internal quality specifications, or for any other reasons, would delay our shipments. Shipment delays could be harmful to our business, revenues and reputation in the industry.

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#### Our dependence on a single manufacturing facility per product line magnifies the risk of an interruption in our production capabilities.
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; As of the date of this Annual Report, we have two main manufacturing facility for our Optical CD and Raman technology-related product lines, which are located in Weizmann Science Park, Rehovot and Nes Ziona, Israel, one main manufacturing facility for our XPS and secondary ion mass spectrometry ("SIMS") technology related product lines, which is located in Fremont, CA, one main manufacturing facility for our Chemical Metrology product lines, which is located in Bad Urach, Germany and one main manufacturing facility for our Optical Metrology for Advanced Packaging product lines, which is located in Mannheim, Germany (the "Manufacturing Facilities"). These Manufacturing Facilities include special clean manufacturing jigs and/or room environments, which are customized to our needs. In addition, most of our ongoing inventories, including our main warehouse and work in process, are located in these Manufacturing Facilities. Although we adopted measures to protect these Manufacturing Facilities and inventories, such as implementing a disaster recovery plan which includes potential usage of laboratory facilities in all major sites, any event affecting any of our Manufacturing Facilities or affecting our ability to work in our Manufacturing Facilities such as requirement of working from remote location, including natural disaster, labor stoppages or armed conflict, may disrupt or indefinitely discontinue our manufacturing capabilities and could significantly impair our ability to fulfill orders and generate revenues, thus negatively impacting our business.

#### Our lease agreements for our Manufacturing Facilities include provisions that exempt the landlord and others from liability for damages to our Manufacturing Facilities.
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Pursuant to the lease agreements for our Manufacturing Facilities, the landlord and anyone on its behalf, and additional tenants are exempt from any liability for direct or consequential damages to our Manufacturing Facilities, except in the event of willful misconduct. While we have obtained insurance policies against certain damages, the aforementioned exemption of liability could compromise our ability to recover the full amount of such damages, and consequently we may incur substantial costs upon the occurrence of such damages.

**Because shipment dates may be changed and some of our customers may cancel or delay orders with little or no penalty, and since we encounter difficulties in collecting cancellation fees from our customers, our backlog may not be a reliable indicator of actual sales and financial results.**

We schedule production of our systems based upon order backlog and customer forecasts. We include in backlog only those orders received from the customers in which a delivery date has been specified. In general, our ability to rely on our backlog for future forecasting and planning is limited because shipment dates may be changed, some customers may cancel or delay orders with little or no penalty, and our ability to collect cancellation fees from customers is not assured. Thus, our backlog may not be a reliable indicator of actual sales and financial results and this may affect the accuracy of our forecasts.

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**We may not be successful in our efforts to complete and integrate current and/or future acquisitions, which could disrupt our current business activities and adversely affect our results of operations or future growth.**

Any acquisition may involve many risks, including the risks of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• diverting management's attention and other resources from our
 ongoing business concerns;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• entering markets in which we have no direct prior experience;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• improperly evaluating new services, products and markets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• being unable to maintain uniform standards, controls, procedures
 and policies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• failing to comply with governmental requirements pertaining to acquisitions
 of local companies or assets by foreign entities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• being unable to integrate new technologies or personnel;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• incurring the expenses of any undisclosed or potential liabilities;
 and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the departure of key management and employees.

On January 30, 2025, we completed the acquisition of Sentronics Metrology GmbH ("Sentronics"). If we are unable to successfully integrate Sentronics or any of our future acquisitions, our ability to grow our business or to operate our business effectively could be reduced, and our business, financial condition and operating results could suffer. Even if we are successful in completing acquisitions, we cannot assure that we will be able to integrate the operations of the acquired business without encountering difficulty regarding different business strategies with respect to marketing and integration of personnel with disparate business backgrounds and corporate cultures. Further, in certain cases, mergers and acquisitions require special approvals, or are subject to scrutiny by the local authorities, and failing to comply with such requirements or to receive such approvals, may prevent or limit our ability to complete the acquisitions as well as expose us to legal proceedings prior or following the consummation of such acquisitions. In some cases, such proceedings, if initiated, may conclude in a requirement to divest portions of the acquired business. As of the date of this Annual Report, we are not aware of any pending proceedings as such in connection with the acquisition of Sentronics.

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**We depend on continuous cooperation with Process Equipment Manufacturers ("PEMs") to enable sales of our systems which are integrated with the process equipment, and the loss of PEMs as business partners could harm our business.**

We believe that sales of systems which are integrated with the process equipment will continue to be an important source of our products revenues. Sales of such integrated systems, which include Optical CD integrated metrology and chemical metrology, depend upon the ability of PEMs to sell semiconductor equipment products that are able to integrate with these metrology systems. If our PEMs are unable to sell such products, if they choose to focus their attention on products that do not integrate our systems, or if they choose to develop their own metrology solutions, our business could suffer. If we were to lose our PEMs as business partners for any reason, our inability to realize sales from such systems could significantly harm our business. In addition, we may not be able to develop or market such new systems, which could slow or prevent our growth.

**Some of our commercial agreements with PEMs and customers may include exclusivity provisions and limitations on the use of certain intellectual property. Such limitations may prevent us from engaging in certain business relationships with third parties, and may limit our ability to use certain elements of our intellectual property. As a result, our ability to introduce new products in relevant markets might be affected.**

Some of our commercial agreements with PEMs and customers may include exclusivity provisions, which prevent us from engaging in certain business relationships with third parties. In addition, some of our commercial agreements with PEMs also include limitations on the use of certain joint intellectual property. These exclusivity obligations and limitations are often used as a tool to promote the development and the penetration of innovative new solutions, and are usually limited in terms of scope and length. When considering whether to enter into any such exclusivity arrangements or accepting such limitations, we usually take into consideration the terms of the exclusivity (e.g., length and scope), the expected benefit to the Company, and the risks and limitations associated with such exclusivity or limiting undertakings. Exclusivity obligations or limitation of use relating to certain parts of our technology and products may affect our ability to commercialize our products, engage in potentially beneficial business relationships with third parties (including by means of a merger or acquisition), or introduce new products into relevant markets, which could slow or prevent our growth.

**We depend on a limited number of suppliers, and in some cases a sole supplier. Any disruption, delay or termination of these supply channels may adversely affect our ability to manufacture our products and to deliver them to our customers.**

We purchase components, subassemblies and services from a limited number of suppliers and occasionally from a single or a sole source. Disruption or termination of these sources could occur (due to several factors, including, but not limited to, supplier capacity limitations, low availability of raw materials, bankruptcy, work stoppages due to a pandemic, or other reasons, acts of war, terrorism, fire, earthquake, energy shortages, flooding or other natural disasters), and these disruptions could have at least a temporary adverse effect on our operations. Although we generally maintain an inventory of critical components used in the manufacture and assembly of our systems, such supplies may not be sufficient to avoid potential delays that could have an adverse effect on our business.

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In addition, while in some instances we may have an escrow agreement in place, the acquisition of a major supplier by a larger company may lead to a cease delivery of components that are important to the delivery of our products and will require us to invest resources to find alternative sources.

To date, we have not experienced any material disruption or termination of our supply sources where replacement material has not been found and qualified.

A prolonged inability on our part to obtain components included in our systems on a cost-effective basis could adversely impact our ability to deliver products on a timely basis, which could harm our sales and customer relationships.

#### The disclosure rules regarding the use of conflict minerals may affect our relationships with suppliers and customers.
The Securities and Exchange Commission, or SEC, requires certain disclosure by companies that use conflict minerals in their products, with substantial supply chain verification requirements in the event that the materials come from, or could have come from, the Democratic Republic of the Congo or adjoining countries. These rules and verification requirements may impose additional costs on us and on our suppliers, and limit the sources or increase the prices of materials used in our products. Among other things, this rule could affect sourcing at competitive prices and availability in sufficient quantities of certain minerals used in the manufacture of components that are incorporated into our products. In addition, the number of suppliers who provide conflict-free minerals may be limited, and there may be material costs associated with complying with the disclosure requirements, such as costs related to the process of determining the source of certain minerals used in our products, as well as costs of possible changes to products, processes, or sources of supply as a consequence of such verification activities. We may not be able to sufficiently verify the origins of the relevant minerals used in components manufactured by third parties through the procedures that we implement, and we may encounter challenges to satisfy those customers who require that all of the components of our products be certified as conflict-free, which could place us at a competitive disadvantage if we are unable to do so. While we have created processes and procedures designed to enable compliance with these rules, if in the future we are unable to certify that our products are conflict free, we may face challenges with our customers, which could place us at a competitive disadvantage and harm our reputation.

#### Attention to ESG matters and conservation measures may adversely impact our business or that of our manufacturers.
There has been an evolving public focus by investors, customers, environmental and social activists, the media, politicians, governmental authorities, nongovernmental organizations and other stakeholders on a variety of environmental, social, and governance ("ESG") matters. We experience pressure to make commitments relating to ESG matters that affect us, including the design and implementation of specific risk mitigation strategic initiatives relating to ESG.

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This emphasis on ESG matters has resulted and may result in the addition of new and varied laws and regulations, including reporting requirements. While, in some cases, such proposed regulations are currently litigated and on hold, if we are ultimately required to comply in whole or in part with these rules, or if nonuniform rules across jurisdictions are enacted, we may incur additional legal, accounting, and financial compliance expenses. Moreover, this could result in increased management time and attention to ensure we are compliant with the regulations and expectations.

In April 2025, we published our second Sustainability Insight Review, in which we provided details on our strategy and principles to practices associated with climate change, human capital and diversity, governance, sustainability, diversity of our board and other Company policies. If we fail, or are perceived to fail, to meet the ESG values, standards and metrics that we set for ourselves, or our articulated public benefit purposes, or if we fail to meet regulatory requirements for ESG disclosures, we may experience negative publicity and a loss of customers, employees, or suppliers, eroded stakeholder trust, an impact on our reputation, or be subject to regulatory fines or penalties or litigation, which could adversely affect our business, financial condition, and results of operations.

#### Our lengthy sales cycle increases our exposure to customer delays in orders, which may result in obsolete inventory and volatile quarterly revenues.
Sales of our systems depend, in significant part, upon our customers adding new manufacturing capacity or expanding existing manufacturing capacity, both of which involve a significant capital commitment. We may experience delays in finalizing sales while a customer evaluates and approves an initial purchase of our systems. Our sales cycle for new customers, products or applications, may take longer than twelve (12) months to complete. During this time, we may expend substantial funds and management effort, but fail to make any sales. Lengthy sales cycles subject us to a number of significant risks, including inventory obsolescence and fluctuations in operating results, over which we have limited control.

**Due to intense competition for highly skilled personnel, we may fail to attract, recruit, retain and develop qualified employees, which could materially and adversely impact our business, financial condition and results of operations.**

We compete in a market that involves rapidly changing technological and regulatory developments that require a wide-ranging set of expertise and intellectual capital. In order for us to successfully compete and grow, we must attract, recruit, retain and develop the necessary personnel who can provide the needed expertise across the entire spectrum of our intellectual capital needs. While we have a number of our key personnel who have substantial experience with our operations, we must also develop and exercise our personnel to provide succession plans capable of maintaining continuity in the midst of the inevitable unpredictability of human capital. Our principal research and development activities are conducted from our headquarters in Israel and our subsidiaries in the U.S and Germany, and we face significant competition for suitably skilled developers in these regions. The high-tech industry in Israel, the U.S. and other territories we operate in has experienced significant levels of employee attrition and is currently facing a severe shortage of skilled human capital. We may encounter higher attrition rates in the future depending on the economic growth of each territory. We may not succeed in recruiting additional experienced or professional personnel, retaining current personnel or effectively replacing current personnel who depart with qualified or effective successors. Many of the companies with which we compete for experienced personnel have greater resources than us.

Our effort to retain and develop personnel may also result in significant additional expenses, which could adversely affect our profitability. There can be no assurance that qualified employees will continue to be employed or that we will be able to attract and retain qualified personnel in the future. Failure to retain or attract qualified personnel could have a material adverse effect on our business, financial condition and results of operations.

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#### Risks Related to Our Incorporation and Location in Israel
**Conditions in Israel, including Israel's conflicts with certain parties in the region, as well as political and economic instability, may adversely affect our business, our results of operations and our ability to raise additional funds.**

We are incorporated under the laws of the State of Israel, and many of our employees, including certain management members, operate from our offices in Rehovot, Israel. In addition, most of our officers and directors are residents of Israel. Accordingly, our business and operations are directly affected by economic, political, geopolitical and military conditions in Israel.

Since the establishment of the State of Israel in 1948 and in recent years, armed conflicts between Israel and its neighboring countries and terrorist organizations active in the region have involved missile strikes, hostile infiltrations, terrorism against civilian targets in various parts of Israel, and recently abduction of soldiers and citizens.

Following the October 7, 2023 attacks by Hamas terrorists in Israel's southern border, Israel declared war against Hamas and since then, Israel has been involved in military conflicts with Hamas, Hezbollah, a terrorist organization based in Lebanon, and Iran, both directly and through proxies such as the Houthi movement in Yemen, armed groups in Iraq and other terrorist organizations. Additionally, following the fall of the Assad regime in Syria, Israel has conducted limited military operations targeting certain Syrian military assets, Iranian military assets and infrastructure linked to Hezbollah and other Iran-supported groups. Although certain ceasefire agreements have been reached with Hamas and Lebanon (with respect to Hezbollah), and some Iranian proxies have declared a halt to their attacks, there is no assurance that these agreements will be upheld. In October 2025, a ceasefire agreement was reached between Israel and Hamas, leading to a cessation or direct conflict between these parties. However, the situation remains volatile, with the potential for renewed escalation, particularly with escalated tensions between the U.S., Iran and Israel. While there are currently attempts for diplomatic solution, there can be no assurance that such solution will be reached and that there will not be further escalations to the situation. The intensity and duration of these conflicts, as well as their economic implications for the Company and Israel's economy, remain difficult to predict. These events may have wider macroeconomic implications, including deterioration of certain indicators of Israel's economic standing, for instance, a downgrade in Israel's credit rating by rating agencies such as by Moody's, S&P Global, and Fitch.

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Certain of our employees and consultants in Israel have been called, and additional employees may be called, for reserve duty service in the recent or future wars or other armed conflicts. Such employees may be absent for an extended period of time. As a result, our operations may be disrupted by such absences, which disruption may materially and adversely affect our business and results of operations. In addition, military reservists in Israel are expected to perform long reserve duty service in the coming years, which could further impact our operations.

The global perception of Israel and Israeli companies, influenced by actions by international judicial bodies, may lead to increased sanctions and other negative measures against Israel, as well as Israeli companies and academic institutions. There is also a growing movement among countries, activists, and organizations to boycott Israeli goods, services and academic research or restrict business with Israel, which could affect business operations. If these efforts become widespread, along with any future rulings from international tribunals against Israel, they could negatively impact our business operations.

Further, prior to the October 2023 war, the Israeli government pursued changes to Israel's judicial system and has recently renewed its efforts to effect such changes. In response to the foregoing developments, certain individuals, organizations, and institutions, both within and outside of Israel, voiced concerns that such proposed changes, if adopted, may negatively impact the business environment in Israel. Such proposed changes may also lead to political instability or civil unrest. If such changes to Israel's judicial system are pursued by the government and approved by the parliament, this may have an adverse effect on our business, results of operations, and ability to raise additional funds, if deemed necessary by our management and board of directors.

#### Risks Related to Our Indebtedness and Capital Structure
**Our convertible senior notes due 2030 ("2030 Convertible Senior Notes") may impact our financial results, result in the dilution of existing shareholders, create downward pressure on the price of our ordinary shares, and restrict our ability to take advantage of future opportunities.**

On September 5, 2025, we closed an offering of $750 million aggregate principal amount of 0% Convertible Senior Notes due 2030 in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. The 2030 Convertible Senior Notes affect our earnings per diluted share figures, as procedures under the Accounting Standards Update ("ASU") 2020-06 require that we include in our calculation of earnings per diluted share the number of ordinary shares into which the 2030 Convertible Senior Notes are convertible. See also Note 11 to our consolidated financial statements contained elsewhere in this Annual Report.

The 2030 Convertible Senior Notes may be converted, under the conditions of the indenture governing the 2030 Convertible Senior Notes (the "Indenture"), during the periods and subject to the conditions specified in the Indenture, into cash, our ordinary shares, or a or a combination thereof, at our election. If our ordinary shares are issued to the holders of the 2030 Convertible Senior Notes upon conversion, there may be dilution to our shareholders' equity and the market price of our ordinary shares may decrease due to the additional selling pressure in the market.

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Furthermore, the Indenture prohibits us from engaging in certain mergers or acquisitions unless, among other things, the surviving entity assumes our obligations under the 2030 Convertible Senior Notes. In addition, if a takeover constitutes a "fundamental change" (as defined in the Indenture), then noteholders will have the right to require us to repurchase their 2030 Convertible Senior Notes for cash, and if a takeover constitutes a "make-whole fundamental change" (as defined in the Indenture), then we may be required to temporarily increase the conversion rate of the 2030 Convertible Senior Notes. These and other provisions in the indenture could deter or prevent a third party from acquiring us even when the acquisition may be favorable.

We currently anticipate that we will be able to rely on and to implement certain clarifications from the applicable Tax Authorities, with respect to the administration of our Israeli withholding tax obligations in relation to consideration to be paid to the holders of the Convertible Senior Notes upon their future conversion and settlement as well as other related tax aspects. In addition, on November 19, 2025, we applied for a tax ruling from the ITA in order to obtain clarity with respect to the Israeli withholding tax treatment in connection with the Convertible Senior Notes. Unexpected failure to ultimately obtain such anticipated clarifications from the Israeli Tax Authorities could potentially result in increased Israeli withholding tax gross-up costs.

**We may not have the ability to raise the funds necessary to settle conversions of the 2030 Convertible Senior Notes, if we are obligated to settle such conversions, in whole or in part, in cash, repurchase the 2030 Convertible Senior Notes upon a fundamental change or repay the 2030 Convertible Senior Notes in cash at their maturity, and our future debt may contain limitations on our ability to pay cash upon conversion or repurchase of the 2030 Convertible Senior Notes.**

Holders of the 2030 Convertible Senior Notes have the right, subject to and under the terms of the Indenture to require us to repurchase all or a portion of their 2030 Convertible Senior Notes upon the occurrence of a "fundamental change" before the applicable maturity date, at a repurchase price equal to 100% of the principal amount of such 2030 Convertible Senior Notes to be repurchased, plus accrued and unpaid "special interest" (as defined in the Indenture), if any. We may not have enough available cash or be able to obtain financing at the time we are required to make such repurchases of the 2030 Convertible Senior Notes and/or repay the 2030 Convertible Senior Notes upon maturity and/or settle conversions of the 2030 Convertible Senior Notes (should we elect to settle such conversions, in whole or in part, in cash or should we be required to settle such conversions, in whole or in part, in cash, if in the future we irrevocably elect to settle the conversions, in whole or in part, in cash).

Our ability to repurchase or to pay cash upon conversion of the 2030 Convertible Senior Notes may be limited by law, regulatory authority or agreements governing our future indebtedness. Our failure to repurchase the 2030 Convertible Senior Notes at a time when the repurchase is required by the indenture or to pay cash upon conversion of the 2030 Convertible Senior Notes when required or at maturity as required by the indenture would constitute a default under the indenture. A default under the indenture or the fundamental change itself could also lead to a default under agreements governing our future indebtedness. If the payment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness and repurchase the 2030 Convertible Senior Notes or to pay cash upon conversion of the 2030 Convertible Senior Notes or at maturity.

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#### Our capped call transactions may affect the value of our debt and ordinary shares.
In connection with the pricing of the 2030 Convertible Senior Notes, we entered into privately-negotiated capped call transactions ("Capped Calls") with certain financial institutions. The Capped Calls are expected generally to reduce the potential dilution to our ordinary shares upon any conversion of the 2030 Convertible Senior Notes and/or offset any cash payments we are required to make in excess of the principal amount of converted 2030 Convertible Senior Notes, as the case may be, with such reduction and/or offset subject to a cap.

The Capped Call counterparties and/or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to our ordinary shares and/or purchasing or selling our ordinary shares or other securities of ours in secondary market transactions prior to the maturity of the 2030 Convertible Senior Notes (and are likely to do so following any conversion of the notes, any repurchase of the notes by us on any fundamental change repurchase date, any redemption date or any other date on which the notes are retired by us, in each case, if we exercise the relevant election under the Capped Calls and in connection with any negotiated unwind or modification of the Capped Calls). This activity could cause or avoid an increase or a decrease in the market price of our ordinary shares or the 2030 Convertible Senior Notes.

The potential effect, if any, of these transactions and activities on the trading price of our ordinary shares or the 2030 Convertible Senior Notes will depend in part on market conditions. Any of these activities could adversely affect the trading price of our ordinary shares or the 2030 Convertible Senior Notes.

#### Financial, legal, regulatory and taxation risks
**Because most of our revenues are generated in U.S. dollars, but a significant portion of our expenses is incurred in currencies other than U.S. dollars, and mainly New Israeli Shekels and Euro, our profit margin may be seriously harmed by currency fluctuations.**

We generate most of our revenues in U.S. dollars but incur a significant portion of our expenses in currencies other than U.S. dollar, and mainly New Israeli Shekel (commonly referred to as NIS) and Euro. In accordance with ASC 842 of lease accounting standard, we are required to present a significant NIS linked liability related to our operational leases in Israel. In addition, the operations of our German subsidiaries Nova Measuring Instruments GmbH and Sentronics Metrology GmbH are mainly Euro based. As a result, we are exposed to risk of devaluation of the U.S. dollar in relation to the NIS, Euro and other currencies. In such event, the dollar cost of our operations in countries other than the U.S. will increase and our dollar measured results of operations will be adversely affected. During 2025, the U.S. dollar devaluated against the NIS by 12.5%, after being revaluated by approximately 17.3% in the previous three years, and devaluated against the Euro by 11.3%, after being revaluated by approximately 8.7% in the previous three years. We cannot predict the future trends in the rate of devaluation or revaluation of the U.S. dollar against the NIS and the Euro, and our cost of operations could be adversely affected by such trends.

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**We are subject to various regulations and standards relating to data privacy and security. Failure to comply with any applicable privacy, security, data protection laws, regulations, standards or other requirement could have an adverse effect on our business prospects, results of operations, and financial condition.**

The regulatory framework for privacy and security issues worldwide is rapidly evolving and is likely to remain uncertain for the foreseeable future. In particular, in the European Union, the General Data Protection Regulation (the "GDPR") imposes more stringent data protection requirements and provides for greater penalties for noncompliance. For example, we collect, use, maintain and otherwise process certain personal data about candidates and employees. Our ability to collect, use, maintain or otherwise process personal data has been, and could be further, restricted by existing and new laws and regulations relating to privacy and data collection and protection, including the GDPR.

Additionally, organizations transferring personal data across-borders need to implement a lawful transfer mechanism, for example by executing Standard Contractual Clauses or registering with the Data Privacy Framework, and to perform a data transfer impact assessment to evaluate the legal regime applicable in the destination country, in particular applicable surveillance laws and rights of individuals, and that additional measures and/or contractual provisions may need to be put in place. However, the nature of these additional measures is currently uncertain.

We are also subject to evolving EEA privacy laws on cookies and tracking technologies, including the Privacy and Electronic Communications (EC Directive) Regulations 2003, "ePrivacy Directive". Informed and freely given consent is required for the placement of non- essential cookies and similar technologies on websites available in the EEA. The GDPR also imposes conditions on obtaining valid consent for cookies collecting personal data, such as a prohibition on pre-checked consents and a requirement to ensure separate consents are sought for each type of cookie or similar technology. Recent European court and regulatory decisions are driving increased attention to cookies and tracking technologies, which could increase costs and subject us to additional liabilities.

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Similarly, there have been laws and regulations adopted throughout the United States and Israel that impose obligations in areas such as privacy, in particular protection of personal data and implementing adequate cybersecurity measures to protect such data. One of the most prominent current privacy state laws is the California Consumer Privacy Act (CCPA) as amended by the California Privacy Rights Act (CPRA). Additionally, the U.S. has recently seen an increase in claims and litigation based on the California Invasion of Privacy Act (CIPA) and the Electronic Communications Privacy Act (ECPA) in regard to tracking tools such as cookies and similar technologies. This trend exposes companies to potential statutory damages, class action lawsuits, and reputational harm. Additional U.S. states have implemented, or are in the process of implementing, similar new laws or regulations that regulate privacy rights and obligations. More generally, some observers have noted that these new state privacy laws could mark the beginning of a trend toward more stringent United States federal privacy legislation, which could increase our potential liability and adversely affect our business.

The Cyberspace Administration of China created uncertainty by publishing the Personal Information Protection Law, which came into force on June 1, 2023. For the outbound data transfer before the effective date, the law included a rectification period of six months ending on December 1, 2023 (inclusive). This law imposes more stringent data protection requirements, restricts cross-border data transfers, and imposes significant fines for non-compliant conduct.

In addition, we are subject to the Israeli Privacy Protection Law, 1981 (the "PPL") and its regulations, as well as the guidelines of the Israeli Privacy Protection Authority.

There have also been privacy bills enacted in other countries around the world which have introduced new or expanded privacy, security, cyber-security and artificial intelligence requirements and we expect that legislation will continue to evolve in the coming years. For example, the rising adoption of AI and Generative AI in daily operations and products poses additional and new risks, including, without limitation, data privacy and security risks, intellectual property infringement, ownership issues and/or confidentiality issues. Threats include potential data leaks, social engineering attacks, and decision-making based on manipulated information. Growing regulatory requirements for information security and data protection add to the challenge. Moreover, attackers leverage AI as both a tool and exploit vulnerabilities in AI systems. Therefore, it is difficult to determine whether and how such existing laws and regulations will apply to and impact the internet and our business.

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In December 2023, new laws regulating artificial intelligence have been enacted in China. The European Union's Artificial Intelligence Act (the "EU AI Act") was published in the EU Official Journal on July 12, 2024, and is the first comprehensive horizontal legal framework for the regulation of AI across the EU. The EU AI Act entered into force on August 1, 2024. While the majority of its obligations are expected to take effect by 2026, provisions regulating prohibited AI practices and AI literacy came into effect on February 2, 2025, and provisions pertaining to General Purpose AI Models on August 2, 2025. The fines under the EU AI Act range from (i) the higher of €35,000,000 or up to 7 percent of a company's total worldwide annual turnover for non-compliance with prohibited AI practices, to (ii) the higher of €7,500,000 or up to 1 percent of a company's total worldwide annual turnover for the supply of incorrect, incomplete, or misleading information to notified bodies and national competent authorities. Once gradually applicable, the EU AI Act will have a material impact on the way artificial intelligence is regulated in the EU, including requirements around transparency, conformity assessments and monitoring, risk assessments, human oversight, security, accuracy, and general purpose artificial intelligence models. Further, the cost to comply with such laws or regulations could be significant and could increase our operating expenses, require technical changes, development and implementations, which could adversely affect our business, financial condition and results of operations. The European Commission's Digital Omnibus Proposal, published in November 2025, includes proposed amendments to certain EU laws and regulations, including (among others) the EU AI Act and the GDPR. However, the proposal remains at an early stage of the EU legislative process. California also recently enacted new laws that further regulate use of AI technologies and provide consumers with additional protections around companies' use of AI technologies, such as requiring companies to disclose certain uses of Generative AI. Such additional regulations may impact our ability to develop, use, procure and commercialize AI technologies in the future.

The EU Data Act, adopted on November 27, 2023, establishes rules for data sharing (personal data and non-personal data) and reuse in the European Union, with most obligations having taken effect in September 2025. Amongst others, the EU Data Act sets general conditions for data sharing between businesses and imposes measures to boost fairness and competition in the European cloud market. Additionally, the EU Data Act safeguards companies from unfair contractual terms related to data sharing imposed by dominant market players. Compliance may require us to implement new data management protocols, technological development and changes of our semiconductors and review contractual practices, potentially increasing operational costs.

Any inability to adequately address privacy and security concerns or comply with applicable privacy and data security laws, rules and regulations could have an adverse effect on our business prospects, results of operations and/or financial position.

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**We participate in government programs under which we receive research and development grants. Some of these programs imposes restrictions on our ability to use the technologies developed under these programs. The reduction or termination of these programs would increase our costs.**

We participate in Israel Innovation Authority, or IIA royalty free grant programs. In addition, through the years, we participated in consortia which are either solely managed and funded by the IIA, or by the EU commission or jointly funded by the EU commission and the National Innovation Authorities of the participating companies, i.e. The Israel Innovation Authority can jointly fund Nova Ltd. participation and the BMBF (The German National Innovation Authority) can jointly fund Nova Measuring Instruments GmbH. To maintain our eligibility for these programs, we must continue to meet certain conditions.

Some of these programs also restrict our ability to manufacture particular products and transfer particular technology, which were developed as part of the local Innovation Authority funding agent (i.e., the IIA in Israel and the BMBF in Germany) programs, outside of the country in which these were manufactured. The restrictions associated with these programs may require obtaining approval of the research and development committee nominated by the IIA or BMBF for certain actions and transactions and pay additional payments to the IIA or BMBF. Approval to manufacture products, which their development was partially funded by the local Innovation Authority funding agent, the country they are manufactured in or consent to the transfer of technology, if requested, might not be granted and if granted, may increase our financial liabilities to the respected Innovation Authority. In addition, if we fail to comply with certain restrictions associated with formerly received funding from IIA or BMBF, we may be subject to criminal charges.

We may be further exposed to risks related to the receipt of funding from other governments or governmental agencies in connection with strategic development programs, under which we receive funding. Under such strategic development programs, governments and governmental agencies typically have the right to terminate the program's funding at any time. In addition, a project may be terminated by a mutual agreement, if the parties determine that the project's goals or milestones are not being achieved. As a result, there is no assurance that these sources of external funding will continue to be available to us in the future. Moreover, under the terms of certain governmental funding programs in which we receive funding, the applicable granting agency has the right to audit the costs that we incur, directly and indirectly, in connection with such programs. Any such audit could result in modifications to, or even termination of, the applicable governmental funding program. Any adverse finding resulting from any such audit could lead to penalties (financial or otherwise), termination of funding programs, suspension of payments or other adverse consequences to our ability to receive governmental funding. In addition, obligations related to grants received from the IIA grants bear an annual interest which are linked to the U.S. dollar. Pursuant to the latest IIA regulations, grants received until January 1, 1999, bear no interest. Grants received before June 30, 2017, bear an annual interest rate that applied at the time of the approval of the applicable IIA file, and that interest rate will apply to all of the funding received under that IIA approval. Grants received from the IIA after June 30, 2017, bear an annual interest rate based on the 12-month London Interbank Offered Rate, or LIBOR, until December 31, 2023, and as of January 1, 2024, bear an annual interest rate based on the 12-month Secured Overnight Financing Rate, or the SOFR, or at an alternative rate published by the Bank of Israel, with the addition of 0.72%. Grants approved after January 1, 2024, will bear the higher of (i) the 12 months SOFR interest rate, plus 1%, or (ii) a fixed annual interest rate of 4%.

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**The application of tax laws is subject to interpretation and if tax authorities challenge our methodologies or our analysis of our tax rates it could result in an increase to our worldwide effective tax rate and cause us to change the way we operate our business.**

The application of the tax laws of various jurisdictions to our international business activities (as well as to entities which we acquired) is subject to interpretation and also depends on our ability to operate our business in a manner consistent with our corporate structure and intercompany arrangements. The tax authorities of the jurisdictions in which we (and entities we acquired) operate may challenge our methodologies for valuing developed technology or intercompany arrangements, including the transfer pricing, or determine that the manner in which we (and the entities we acquired) operate the business does not achieve the expected tax consequences, which could result in tax and penalty payments and in an increase of our worldwide effective tax rate, and could adversely affect our financial position and results of operations.

A certain degree of judgment is required in evaluating our tax positions and determining our provision for income taxes. In the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. For example, our effective tax rates could be adversely affected by earnings being lower than anticipated in countries where we have lower statutory rates and higher than anticipated in countries where we have higher statutory rates, by changes in foreign currency exchange rates or by changes in the relevant tax, accounting and other laws, regulations, principles and interpretations. As we operate in numerous taxing jurisdictions, the application of tax laws can be subject to diverging and sometimes conflicting interpretations by tax authorities of these jurisdictions. It is not uncommon for tax authorities in different countries to have conflicting views. In addition, tax laws are dynamic and subject to change as new laws are passed and new interpretations of the law are issued or applied. For example, the work being carried out by the OECD on base erosion and profit shifting as a response to increasing globalization of trade could result in changes in tax treaties or the introduction of new legislation that could impose an additional tax on businesses. As a result of changes to laws or interpretations, our tax positions could be challenged, and our income tax expenses could increase in the future.

For instance, if tax authorities in any of the countries in which we operate were to successfully challenge our transfer prices, they could require us to reallocate our income to reflect transfer pricing adjustments, which could result in an increased tax liability to us. In addition, if the country from which the income was reallocated did not agree with the reallocation asserted by the first country (including in the process of Mutual Agreement Procedure or otherwise), we could become subject to tax on the same income in both countries, resulting in double taxation. If tax authorities were to allocate income to a higher tax jurisdiction, subject our income to double taxation or assess interest and penalties, it could increase our tax liability, which could adversely affect our financial position and results of operations.

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**The enactment of legislation implementing changes in taxation of international business activities, the adoption of other corporate tax reform policies, or changes in tax legislation or policies could impact our future financial position and results of operations.**

There can be no assurance that our effective tax rate for the year ended December 31, 2025 will not change over time as a result of changes in corporate income tax rates or other changes in the tax laws the jurisdictions in which we operate. Any changes in tax laws could have an adverse impact on our financial results. Corporate tax reform, base-erosion efforts and tax transparency continue to be high priorities in many tax jurisdictions where we have business operations. As a result, policies regarding corporate income and other taxes in numerous jurisdictions are under heightened scrutiny and tax reform legislation is being proposed or enacted in a number of jurisdictions. For example, the Inflation Reduction Act of 2022 signed into law in the United States on August 16, 2022 among other changes, introduced a 15% corporate minimum tax on certain corporations. In addition, in July 2025, Public Law No: 119-21, known as the "One Big Beautiful Bill Act" (the OBBBA), was signed into law. The OBBBA made certain changes to U.S. federal income tax laws, which could have implications for us and also for investors. In particular, the OBBBA has modified the rules applicable to Foreign Derived Deduction Eligible Income (FDDEI) (formerly Foreign Derived Intangible Income), decreasing the percentage of FDDEI not subject to tax in the U.S. from 37.5% to 33.34%. The change in FDDEI percentage can have a material and adverse impact to our effective tax rate beginning in 2026. In addition, there have been proposals to impose retaliatory measures with respect to jurisdictions that have, or are likely to, put in place tax rules that are extraterritorial or disproportionately affect American companies. Such proposals have since been withdrawn as the G7 agreed to exempt U.S. companies from certain Organization for Economic Cooperation and Development (OECD) Pillar Two global minimum tax provisions (discussed in more detail below), creating a "side-by-side" system, which is described in the Side-by-Side Package released on January 5, 2026. However, the interaction of the U.S. tax rules with such side-by-side system remains unclear. We are currently unable to predict whether any changes in U.S. federal tax laws will occur in response and, if so, the ultimate impact on our business.

In addition, there is growing pressure in many jurisdictions and from multinational organizations such as the OECD and the EU to amend existing international taxation rules in order to align the tax regimes with current global business practices. Specifically, in October 2015, the OECD published its final package of measures for reform of the international tax rules as a product of its Base Erosion and Profit Shifting (BEPS) initiative, which was endorsed by the G20 finance ministers. Many of the initiatives in the BEPS package required and resulted in specific amendments to the domestic tax legislation of various jurisdictions and to existing tax treaties. We continuously monitor these developments. Although many of the BEPS measures have already been implemented or are currently being implemented globally (including, in certain cases, through adoption of the OECD's "multilateral convention" (to which Israel is also a party) to effect changes to tax treaties which entered into force on July 1, 2018 and through the European Union's "Anti Tax Avoidance" Directives), it is still difficult in some cases to assess to what extent these changes our tax liabilities in the jurisdictions in which we conduct our business or to what extent they may impact the way in which we conduct our business or our effective tax rate due to the unpredictability and interdependency of these potential changes. In January 2019 the OECD announced further work in continuation of the BEPS project, focusing on two "pillars". On October 8, 2021, 136 countries approved a statement known as the OECD BEPS Inclusive Framework, which builds upon the OECD's continuation of the BEPS project. The first pillar is focused on the allocation of taxing rights between countries for in-scope large multinational enterprises (with revenue in excess of Euro 20 billion and profitability of at least 10%) that sell goods and services into countries with little or no local physical presence. The second pillar is focused on developing a global minimum tax rate of at least 15 percent applicable to in-scope multinational enterprises (with revenue in excess of Euro 750 million). Israel is one of the 136 jurisdictions that has agreed in principle to the adoption of the global minimum tax rate. Given these developments, it is generally expected that tax authorities in various jurisdictions in which we operate may increase their audit activity and may seek to challenge some of the tax positions we have adopted. It is difficult to assess if and to what extent such challenges, if raised, might impact our effective tax rate. On December 15, 2022, Council of the EU unanimously adopted the EU Directive on Global Minimum Tax. Subsequently, various EU member states enacted the Pillar II mechanism such that it shall become effective by December 31, 2024 or after that date.

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In line with the above-mentioned global developments in international taxation, the state of Israel has recently enacted the Law for the Taxation of Multinational Enterprise Groups – 2025, entered into force as of January 1, 2026, implementing key aspects of the OECD's Pillar II framework. In particular, the proposed legislation introduces a domestic minimum top-up tax (Qualified Domestic Minimum Top-Up Tax, or QDMTT) generally applicable to Israeli entities that are part of multinational enterprise groups with consolidated annual revenues of at least EUR 750 million, with the objective of ensuring a minimum effective tax rate of 15% on profits attributable to activities in Israel and preventing the allocation of taxing rights to foreign jurisdictions under the Income Inclusion Rule or the Undertaxed Profits Rule under the Pillar II framework.

It is noted that, the Israeli Ministry of Finance has recently published a draft legislation as part of the 2026 Economic Plan, proposing a revised incentive regime for research and development activities in Israel, structured primarily as refundable or credit-based tax incentives designed to qualify under the OECD's "qualified" incentive criteria in a Pillar II environment.

#### Changes in certain tax benefits under the Israeli Capital Investment Encouragement Law may increase our ETR.
Starting 2017, we made an election to receive Tax benefits under Israeli "Economic Efficiency Law" as a "Preferred Technological Enterprise". While we believe that we meet the statutory conditions to entitle us to such benefits there can be no assurance that the tax authorities in Israel will concur to our position in general or with respect to certain portions of our income and may impact all or specific year (which are open for an audit). Should it be determined that we have not, or do not meet such conditions, the benefits received would be cancelled. We would also be required to pay increased taxes or refund any benefits previously received, adjusted to the Israeli consumer price index and interest, or other monetary penalty.

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For additional information regarding Approved and Benefited Enterprise, Preferred Enterprise and Preferred Technological Enterprise see, "Item 10E. Taxation – Israeli Taxation" in this Annual Report.

As noted above, the Israeli government may reduce or eliminate the above-mentioned benefits in the future, inter-alia, in light of or as a response to the OECD or the "two Pillars" initiatives. The termination or reduction of these grants or tax benefits could harm our financial condition and results of operations, and result in significantly higher tax payment. In addition, if we increase our activities outside Israel due to, for example, future acquisitions or outsourcing of manufacturing or development activities, these activities generally will not be eligible for inclusion in Israeli grants or tax benefit programs. Accordingly, our effective corporate tax rate could increase significantly in the future.

#### We experience quarterly fluctuations in our operating results, which may adversely impact our share price.
Our quarterly operating results within a specific year can fluctuate significantly. A principal reason is that we derive a substantial portion of our revenue from the sale of a relatively small number of systems to a relatively small number of customers. As a result, our revenues and results of operations for any given quarter may decrease due to factors relating to the timing of orders, the timing of shipments of systems, and the timing of recognizing these revenues. Furthermore, our quarterly results are affected by the cyclical nature of the semiconductor capital equipment market and industries.

We also have a limited ability to predict revenues for future quarterly periods and, as a result, face risks of revenue shortfalls. If the number of systems we actually ship, and thus the amount of revenues we are able to record in any particular quarter, is below our expectations, the adverse effect may be magnified by our inability to adjust spending quickly enough to compensate for the revenue shortfall.

**Some of our contracts and arrangements potentially subject us to the risk of significant or non-limited liability.**

We produce highly complex optical, mechanical and electronic components and, accordingly, there is a risk that defects may occur in any of our products. Such defects can give rise to significant costs, including expenses relating to recalling products, replacing defective items, writing down defective inventory and loss of potential sales. In addition, the occurrence of such defects may give rise to product liability and warranty claims, including liability for damages caused by such defects.

In our commercial relationship with customers, we attempt to negotiate waivers of consequential and indirect damages arising from damages for loss of use, loss of product, loss of revenue and loss of profit caused by our products. However, some contracts and arrangements we are bound by, expose us to product liability claims resulting in personal injury or death, up to an unlimited amount, and the incurrence of the risk of material penalties for consequential or liquidated damages. Additionally, under such contracts and arrangements, we may be named in product liability claims even if there is no evidence that our products caused the damage in question, and such claims could result in significant costs and expenses relating to attorneys' fees and damages.

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In addition, such contracts and arrangements may include non-limited liability provisions for infringement of a third party's intellectual property rights in connection with our products.

Although we have not incurred in the past any material penalties for consequential or liquidated damages, we may incur such penalties in the future. Such penalties for consequential or liquidated damages may be significant (and so is the legal process conducted in connection with such penalties) and could negatively affect our financial condition or results of operations.

**A large number of our ordinary shares continue to be owned by a relatively small number of shareholders, whose future sales of our shares, if substantial, may depress our share price.**

If our principal shareholders sell substantial amounts of our ordinary shares, including shares issued upon the exercise of outstanding options or warrants, the market price of our ordinary shares may fall. For additional information on our major shareholders, see "Item 7A – Major Shareholders" in this Annual Report.

#### Certain shareholders may control the outcome of matters submitted to a vote of our shareholders, including the election of directors.
To the best of our knowledge, approximately 42% of our outstanding ordinary shares are cumulatively held by six of our shareholders. As a result, and although we are currently not aware of any voting agreement between such shareholders, if these shareholders voted together or in the same manner, they would have the ability to control the outcome of corporate actions requiring an ordinary majority vote of shareholders as set in the Company's Amended and Restated Articles of Association. Even if these shareholders do not vote together, each one of them may have the ability to influence the outcome of corporate actions requiring the vote of shareholders as set in the Company's Amended and Restated Articles of Association. For additional information on our major shareholders, see "Item 7A – Major Shareholders" in this Annual Report.

#### The market price of our ordinary shares may be affected by a limited trading volume and may fluctuate significantly.
In the past, there has been a limited public market for our ordinary shares and there can be no assurance that an active trading market for our ordinary shares will continue. An absence of an active trading market could adversely affect our shareholders' ability to sell our ordinary shares in short time periods. Our ordinary shares have experienced, and are likely to experience in the future, significant price and volume fluctuations, which could adversely affect the market price of our ordinary shares without regard to our operating performance. Financial forecasts and announcement of major players in the industry may have an effect on our share price.

In addition, the price of our ordinary shares could also be affected by possible sales of our ordinary shares by investors who view our convertible senior notes as a more attractive means of equity participation in our company, and by hedging and arbitrage trading activity that such investors may engage in.

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**We manage our available cash through various bank institutions and invest large portions of our cash reserves in bank deposits. The bankruptcy of one of the banks in which or through which we hold or invest our cash reserves, might prevent us to access that cash for an uncertain period of time.**

We manage our available cash through various bank institutions and invest large portions of our cash reserves in bank deposits. As of December 31, 2025, a large portion of our cash reserves were invested in bank institutions, of which approximately 22% (from total cash reserves and investment portfolio) was invested in one bank institution in Israel. The bankruptcy of one of the bank institutions in which we hold our cash reserves or through which we invest our cash reserves, might prevent us to access that cash for an uncertain period of time.

#### Our investment portfolio may be adversely affected by market conditions and interest rates.
We maintain substantial balances of liquid investments, for purposes of financing our operations and acquisitions. Our marketable securities totaled $907 million as of December 31, 2025. The performance of the capital markets affects the values of funds that are held in marketable securities. These assets are subject to market fluctuations and various developments, including, without limitation, rating agency downgrades that may impair their value. We generally buy and hold our portfolio positions, while minimizing credit risk by setting limits for minimum credit rating and maximum concentration per issuer. Our investments consist primarily of government and corporate debentures, which are primarily fixed-income securities.

Although we believe that we generally adhere to conservative investment guidelines, the continuing turmoil in the financial markets may result in impairments of the carrying value of our investment assets. In addition, as our investment portfolio is invested primarily in fixed-income securities it is affected by changes in interest rates. Interest rates are highly sensitive to many factors, including governmental monetary policies and domestic and international economic and political conditions. Any significant decline in our financial income or the value of our investments as a result of the changes in interest rates and interest rate expectations of the financial markets, deterioration in the credit rating of the securities in which we have invested, or general market conditions, could have an adverse effect on our results of operations and financial condition. We classify our investments as available-for-sale. Changes in the fair value of investments classified as available-for-sale are not recognized as income during the period, but rather are recognized as other comprehensive income, or OCI, which is a separate component of equity until realized. Realized losses in our investments portfolio may adversely affect our financial position and results.

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#### We may fail to maintain effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002.
The Sarbanes-Oxley Act of 2002 imposes certain duties on us and our executives and directors. Section 404 of the Sarbanes-Oxley Act of 2002 requires (i) management's annual review and evaluation of our internal control over financial reporting and (ii) an attestation report issued by an independent registered public accounting firm on our internal control over financial reporting, in connection with the filing of our Annual Report on Form 20-F for each fiscal year. We have documented and tested our internal control systems and procedures in order for us to comply with the requirements of Section 404. While our assessment of our internal control over financial reporting resulted in our conclusion that as of December 31, 2025, our internal control over financial reporting was effective, we cannot predict the outcome of our testing in future periods. If we fail to maintain the adequacy of our internal controls, we may not be able to ensure that we can conclude on an ongoing basis that we have effective internal controls over financial reporting. Failure to maintain effective internal control over financial reporting could result in investigation or sanctions by regulatory authorities, and could have a material adverse effect on our operating results, investor confidence in our reported financial information, and the market price of our ordinary shares.

We may face risks associated with third-party distributors and agents, which could adversely affect our financial results or operations.<br>

Although most of our sales are direct, we use third-party distributors and agents in some instances. The use of these distributors and agents exposes us to various risks, such as challenges in enforcing contracts, difficulties in collecting accounts receivable, extended collection periods, and ensuring that our agents and distributors comply with applicable laws including export control, sanctions, anti-corruption regulations, or with our business practices. If we are required to replace or terminate an agent or distributor, we may experience delays, reduced market access, or other commercial disruptions. Such events could adversely affect our business, financial condition, and results of operations.

**Provisions of our Amended and Restated Articles of Association and Israeli law may delay, prevent or make difficult an acquisition of Nova, which could prevent a change of control and negatively affect the price of our ordinary shares.**

Israeli corporate law regulates mergers, requires tender offers for acquisitions of shares above specified thresholds, for special approvals for transactions involving directors, officers or significant shareholders and regulates other matters that may be relevant to these types of transactions. Furthermore, Israeli tax considerations may make potential transactions unappealing to us or to some of our shareholders. See Exhibit 2.1 to this Annual Report for a more detailed discussion regarding some anti-takeover effects of Israeli law.

These provisions of Israeli law may delay, prevent or make difficult an acquisition of Nova, which could prevent a change of control and therefore depress the price of our shares.

**The rights and responsibilities of our shareholders are governed by Israeli law and differ in some respects from the rights and responsibilities of shareholders under U.S. law.**

We are incorporated under Israeli law. The rights and responsibilities of holders of our ordinary shares are governed by our Amended and Restated Articles of Association and by the Israeli Companies Law, 1999 (the "Companies Law") and the regulations promulgated thereunder. These rights and responsibilities differ in some respects from the rights and responsibilities of shareholders in typical U.S. corporations. In particular, pursuant to the Companies Law each shareholder of an Israeli company has to act in good faith in exercising his or her rights and fulfilling his or her obligations toward the company and other shareholders and to refrain from abusing his or her power in the company, including, among other things, in voting at the general meeting of shareholders and class meetings, on amendments to a company's articles of association, increases in a company's authorized share capital, mergers, and transactions requiring shareholders' approval under the Companies Law. In addition, a controlling shareholder of an Israeli company or a shareholder who knows that it possesses the power to determine the outcome of a shareholder vote or who has the power to appoint or prevent the appointment of a director or officer in the company, or has other powers toward the company, has a duty of fairness toward the company. However, Israeli law does not define the substance of this duty of fairness. Because Israeli corporate law has undergone extensive revision in recent years, there is little case law available to assist in understanding the implications of these provisions that govern shareholder behavior.

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**Any shareholder with a cause of action against us as a result of buying, selling or holding our ordinary shares may have difficulty asserting a claim under U.S. securities laws or enforcing a U.S. judgment against us or our officers, directors or Israeli auditors.**

We are organized under the laws of the State of Israel, and we maintain most of our operations in Israel. Most of our officers and directors as well as our Israeli auditors reside outside of the United States and a substantial portion of our assets and the assets of these persons are located outside the United States. Therefore, if you wish to enforce a judgment obtained in the United States against us, or our officers, directors and auditors, you will probably have to file a claim in an Israeli court. Additionally, you might not be able to bring civil actions under U.S. securities laws if you file a lawsuit in Israel. We have been advised by our Israeli counsel that Israeli courts generally enforce a final executory judgment of a U.S. court for liquidated amounts in civil matters after a hearing in Israel. If a foreign judgment is enforced by an Israeli court, it will be payable in Israeli currency. However, payment in the local currency of the country where the foreign judgment was given will be acceptable, subject to applicable foreign currency restrictions.

#### Our shares are listed for trade on more than one stock exchange, and this may result in price variations.
Our ordinary shares are listed for trading on the Nasdaq Global Select Market and on the Tel Aviv Stock Exchange Ltd., or TASE. This may result in price variations. Our ordinary shares are traded on these markets in different currencies, U.S. dollars on the Nasdaq Global Select Market and New Israeli Shekels on the TASE. These markets have different opening times and close on different days. Different trading times and differences in exchange rates, among other factors, may result in our shares being traded at a price differential on these two markets. In addition, market influences in one market may influence the price at which our shares are traded on the other.

**Our business could be negatively affected as a result of actions of activist shareholders, and such activism could impact the trading value of our securities.**

In recent years, certain Israeli issuers listed on United States exchanges have been faced with governance-related demands from activist shareholders, as well as unsolicited tender offers and proxy contests. Although as a foreign private issuer we are currently not subject to U.S. proxy rules, responding to these types of actions by activist shareholders could be costly and time-consuming, disrupting our operations and diverting the attention of management and our employees. Such activities could interfere with our ability to execute our strategic plan. In addition, a proxy contest for the election of directors at our annual meeting would require us to incur significant legal fees and proxy solicitation expenses and require significant time and attention by management and our board of directors. The perceived uncertainties due to these potential actions of activist shareholders also could affect the market price and volatility of our securities.

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**We may be classified as a "passive foreign investment company" for U.S. income tax purposes, which could have significant and adverse tax consequences to U.S. shareholders.**

Generally, if for any taxable year 75% or more of our gross income consists of specified types of passive income, or, on average, at least 50% of our assets are held for the production of, or produce, passive income, we may be characterized as a passive foreign investment company (a "PFIC") for U.S. federal income tax purposes. Classification of Nova as a PFIC could result in adverse U.S. tax consequences to our U.S. shareholders, such as ineligibility for any preferential tax rates on capital gains or on dividends, interest charges on certain taxes treated as deferred, and additional reporting requirements under U.S. federal income tax laws and regulations. If we are a PFIC, it may be possible for U.S. holders of our ordinary shares to mitigate certain of these consequences by making an election to treat us as a "qualified electing fund" under Section 1295 of the Internal Revenue Code of 1986, as amended (the "Code") or a "mark-to-market election" under Section 1296 of the Code. U.S. shareholders should consult with their own U.S. tax advisors with respect to the U.S. tax consequences of investing in our ordinary shares.

We believe that for our 2025 taxable year we were not a PFIC. Nonetheless, because the determination of whether we are, or will be, a PFIC for a taxable year depends on the application of complex U.S. federal income tax rules, which are subject to various interpretations, there is a risk that we were a PFIC in 2025. Absent one of the elections referenced above, if we are a PFIC for any taxable year during which a U.S. holder holds our ordinary shares, we generally will continue to be treated as a PFIC with respect to such U.S. holder in all succeeding years regardless of whether we cease to meet the PFIC tests in one or more subsequent years. Currently we expect that we will not be a PFIC in 2026 or subsequent years. However, PFIC status is determined based on our assets and income over the course of each taxable year, and is dependent on a number of factors, including the value of our assets, the trading price of our ordinary shares and the amount and type of our gross income. Therefore, there can be no assurances that we will not become a PFIC for the 2026 taxable year, or any future year, or that the Internal Revenue Service ("IRS") will not challenge any determination made by us concerning our PFIC status. For a discussion on how we might be characterized as a PFIC and related tax consequences, please see the section of this Annual Report entitled "Taxation - U.S. Taxation – Passive Foreign Investment Companies." Investors should consult their own tax advisors regarding all aspects of the application of the PFIC rules to our ordinary shares.

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**As a foreign private issuer, we are subject to reporting and corporate governance requirements that differ from those applicable to U.S. domestic companies, and the loss of this status could result in significant additional costs and expenses.**

We currently qualify as a foreign private issuer and report under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as a non-U.S. company. As a result of our foreign private issuer status, our shareholders are subject to different risks and may not receive the same protections afforded to shareholders of U.S. domestic public companies. In particular, we are exempt from, or subject to less stringent and less frequent, certain Exchange Act reporting and disclosure requirements applicable to U.S. domestic issuers, including U.S. proxy rules, short-swing profit liability under Section 16 of the Exchange Act, and the requirement to file quarterly reports on Form 10-Q, although we intend to furnish quarterly information on Form 6-K; however, following a recent amendment to Section 16(a) of the Exchange Act, our directors and certain officers (as such term is defined under Rule 16a-1(f) of the Exchange Act) will no longer be exempt from the reporting requirements under Section 16(a), effective March 18, 2026. We are also not subject to the requirements of Regulation FD (Fair Disclosure) promulgated under the Exchange Act, which generally requires U.S. domestic companies to disclose material information to all investors simultaneously, although we voluntary comply with these rules. In addition, foreign private issuers are permitted a longer period to file annual reports on Form 20-F than U.S. domestic issuers filing on Form 10-K. As a foreign private issuer that follows certain home country corporate governance practices, we may also rely on exemptions from certain Nasdaq corporate governance requirements, which could result in our shareholders not having the same protection as shareholders of companies subject to all Nasdaq corporate governance rules.

We may, however, lose our foreign private issuer status in the future, which could result in significant additional costs and expenses. The determination of foreign private issuer status is made annually on the last business day of an issuer's most recently completed second fiscal quarter, and accordingly, we will re-evaluate our qualification as a foreign private issuer on June 30, 2026. In June 2025, the SEC issued a concept release soliciting public comment on potential changes to the definition of a foreign private issuer. This release is the first review of the foreign private issuer framework since 2008, and the SEC is considering revisions that could significantly impact which foreign companies qualify for the more-relaxed U.S. reporting requirements afforded to foreign private issuers. The concept release outlines several potential approaches to revising the foreign private issuer definition, including updating existing eligibility criteria, adding foreign trading volume requirements, and incorporating an assessment of foreign regulation. If we no longer qualify as a foreign private issuer, whether due to revisions in the definition of a foreign private issuer or for any other reason, we will be required to file with the SEC periodic reports and registration statements on U.S. domestic issuer forms, which are more detailed and extensive than the forms available to a foreign private issuer. We will also have to comply with U.S. federal proxy rules, and our officers, directors and principal shareholders will become subject to the short-swing profit disclosure and recovery provisions of Section 16 of the Exchange Act. In addition, we will lose our ability to rely upon exemptions from certain corporate governance rules of Nasdaq. If this were to occur, we would incur significant additional legal, accounting, and other expenses.

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#### Item 4. Information on the Company

#### 4.A&nbsp;&nbsp;&nbsp;&nbsp; History and Development of the Company
Nova Ltd. was incorporated in May 1993 under the laws of the State of Israel. We commenced operations in October 1993 to design, develop and produce integrated process control systems for use in the manufacture of semiconductors, also known as integrated circuits or chips.

In April 2000, we conducted an initial public offering and our shares were listed for trading on the Nasdaq Stock Exchange.

In June 2002, we listed our shares on the TASE, pursuant to legislation which enables Israeli companies whose shares are traded on certain stock exchanges outside of Israel to be registered on the TASE, while reporting, in substance, in accordance with the provision of the relevant foreign securities law applicable to the Company.

Until 2008, most of our products were sold to PEMs such as Applied Materials, Inc. and Ebara Corp., which later sold these products to semiconductor manufacturers. Since then, we have changed our business model, selling substantially all of our products directly to semiconductor manufacturers. Through this process, which has also enabled us to introduce to these customers additional products and features, we have improved our products gross margins and net profitability.

In April 2015, we acquired ReVera Inc., a privately held company headquartered in Santa Clara, California, which develops, manufactures and sells stand-alone metrology tools for measurements of thin-films and composition applications in the semiconductor industry, and on December 31, 2017, we merged ReVera into its parent company, Nova Measuring Instruments, Inc.

On July 25, 2021, we changed the legal name of the Company from Nova Measuring Instruments Ltd. to Nova Ltd. to match the Company's long-term strategy. The Company retained its NVMI ticker symbol and its Process Insight® tagline.

In January 2022, we acquired ancosys GmbH, a privately held company with headquarters in Pliezhausen, Germany which is a leading provider of chemical analysis and metrology solutions for advanced semiconductor manufacturing, supporting both frontend and backend semiconductor manufacturing. On June 26, 2023, ancosys GmbH merged into its parent company, Nova Measuring Instruments GmbH.

In January 2025, we acquired Sentronics Metrology GmbH, a privately held company with headquarters in Mannheim, Germany which is a global provider of wafer metrology tools for the backend semiconductor fabrication. The addition of Sentronics' modular dimensional metrology technology to Nova's dimensional metrology portfolio will enable Nova to diversify its offering in the growing field of advanced wafer level packaging and specialty devices.

At the end of 2025, we had seven direct fully owned subsidiaries, in the U.S., Taiwan, Korea, China, Japan, Singapore and Germany and a wholly owned subsidiary of Nova Measuring Instruments GmbH.

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Our headquarter office is located in Israel at 5 David Fikes St., 10<sup>th</sup> Floor, Rehovot.

Our website address is <u>www.novami.com</u>, and our telephone number is +972-73-229-5600. We use our website as a means of disclosing material non-public information. Such disclosures will be included on our website in the "Investors" sections. Accordingly, investors should monitor such sections of our website, in addition to following our press releases and SEC filings. Information contained on, or that can be accessed through, our website does not constitute a part of this Annual Report and is not incorporated by reference herein. We have included our website address in this Annual Report solely for informational purposes. Our SEC filings are available to you on the SEC's website at http://www.sec.gov. This site contains reports and other information regarding issuers that file electronically with the SEC. The information on that website is not part of this Annual Report and is not incorporated by reference herein.

Our agent for service of process in the United States is Nova Measuring Instruments Inc., which maintains its principal offices at 3342 Gateway Blvd, Fremont, CA 94538. Its telephone number is 1-408-510-7400.

**4. B**&nbsp;&nbsp;&nbsp;&nbsp; **Business Overview**

#### Our Company
Nova is a leading innovator and key provider of metrology solutions for advanced process control used in semiconductor manufacturing. Nova delivers continuous innovation by providing high-performance metrology solutions for effective process control throughout the semiconductor fabrication process. We bring pioneering metrology solutions to semiconductors process control, by industrializing lab and research-grade technologies and developing emerging metrology solutions. Nova's product portfolio, deployed at the world's largest integrated-circuit manufacturers, combines high-precision hardware and cutting-edge software, and provides its customers with deep insight into the development and production of the most advanced semiconductor devices. Nova's capability to deliver innovative Optical, X-ray, SIMS and Chemical analysis technology solutions enables its customers to improve performance, enhance product yields and accelerate time to market.

Nova delivers a comprehensive suite of metrology solutions spanning optical, materials, and chemical technologies. These technology areas collectively support both dimensional and materials characterization, as well as chemical process control, enabling advanced process insight across semiconductor manufacturing.

In January 2025, through the acquisition of Sentronics, we expanded our optical technology base to wafer metrology tools for backend semiconductor fabrication. The addition of Sentronics' modular dimensional metrology technology to Nova's dimensional metrology portfolio is meant to enable Nova to enter the growing field of advanced wafer level packaging and specialty devices.

The corporate units, such as marketing, next generation technology, human resources, finance and global business group, support all divisions.

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#### Our Market
*Semiconductor Industry and the Metrology Market*

The semiconductor manufacturing process is divided into front-end and back-end. The front-end process starts with a flat silicon disc known as a silicon wafer upon which integrated circuits are constructed. To construct the integrated circuits, a series of layers of thin films that act as conductors, semiconductors or insulators are applied. During the manufacturing process, these film layers are subjected to processes which remove and add portions of the film, create circuit patterns and perform other functions. The back-end process, known as packaging, begins after the integrated circuits are completed on the wafer. The wafer is diced into individual chips, which are then mounted on a substrate and connected to external leads through techniques such as wire bonding or flip-chip. Recently introduced advanced packaging technologies incorporate processes such as hybrid bonding for high-density interconnects, chiplet integration for modular design flexibility, and 3D chip stacking to achieve greater performance and bandwidth in a smaller footprint. Finally, the chips are encapsulated to protect them from physical damage and environmental factors, while ensuring efficient heat dissipation and electrical performance before final testing and shipment.

The semiconductor manufacturing process requires numerous precise steps and strict control of equipment performance and process sequences. Tight process control can be achieved through monitoring silicon wafers and measuring relevant parameters before, during or after each process step, with metrology tools.

The demand for our metrology systems is driven by capital equipment spending of the semiconductor manufacturers, which is in turn driven by the worldwide demand for semiconductor components embedded in technology devices. Industry data indicates worldwide demand for semiconductors will continue to grow, driven by the growing adoption of AI, networks and data centers constructed to support the influx of data, and additional growth engines such as internet of things ("IoT") applications, advanced network infrastructure, automotive, and green energy solutions.

The growing investment in advanced technology nodes introduces growing complexity and new challenges into the semiconductor manufacturing process, as manufacturers are continuously pushed to improve performance and cost to gain competitive advantage. In a climate of constant growth, suppliers and manufacturers are asked to constantly come up with new products with greater functionality, lower power consumption, faster connectivity and better performance at lower prices. As a result, many new complex materials, advanced structures, packaging schemes and processes are being introduced into the semiconductor manufacturing ecosystem. An environment of growing complexity in chip design and manufacturing set favorable business conditions for process control demand.

Over the past several years we have seen growing demand for trailing node capacity, driven by the growing need for IoT and sensors that do not require leading edge technologies. This trend is expected to continue in coming years and to increase the demand for metrology and process control solutions.

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In addition, we are seeing a rapid growth in investments in advanced packaging production lines, driven by the heightened need for high-performance, high-intensity devices to support the increase in computing power required by AI-related applications. New architectures are emerging in the advanced packaging space, designed to enable a swift leap in performance rather than wait for the next generation of chip architecture.

*The Semiconductor Manufacturing Process*

Semiconductors devices typically consist of transistors, memory cells or other components connected by an intricate system of circuitry on silicon wafers. Integrated circuit manufacturing involves many individual steps, some of which are repeated several times, through which numerous copies of an integrated circuit are formed on a single silicon wafer. Because semiconductor specifications are extremely tight, and integrated circuits are becoming more complex, the process steps are constantly monitored, and critical parameters are measured at each step using metrology equipment. Key process steps, such as Deposition, Photolithography, Etch, ion implementation, Electro-Chemical Plating, and Chemical-Mechanical Planarization, rely on metrology systems to monitor film thickness, uniformity, critical dimensions, material and chemical characteristics to ensure the correct result has been achieved.

The measurements taken by metrology systems during the manufacturing process help ensure process uniformity and help semiconductor manufacturers avoid costly rework and misprocessing, therefore increasing efficiency, yield and time to market.

*The Need for Effective Process Control and Metrology Tools*

Several technical and operational trends within the semiconductor manufacturing industry are strengthening the need for more effective process control and metrology solutions. These trends include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Smaller IC Devices. The development of advanced smaller
 features means a larger numbers of integrated circuits per wafer. As feature geometries decrease, the manufacturing process tolerances
 decreases as well, and manufacturing yield becomes increasingly sensitive to processing deviations and defects. In addition, the increased
 complexity means higher chance of error during manufacturing, leading to additional inline monitoring and metrology steps.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Transition to 3D Devices. The transition to ever more complex
 3D Integration technology, in order to improve performance, requires complex fabrication and as a result more sophisticated metrology
 solutions to be capable of measuring critical dimensions and materials properties in these 3D structures.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Faster Time to Market. The accelerating rate of obsolescence
 of technology and the faster ramp to yield required by customers makes early achievement of high manufacturing yields a critical component
 of profitability and metrology has a critical role in achieving these demanding results.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Materials Engineering. In order to overcome limitations
 in the continued shrink of transistor dimensions, which are used to improve performance, leading manufacturers are introducing new novel
 materials to IC production. Introduction of new materials requires new processing and metrology solutions in the atom level and thus represents
 a challenging development for the semiconductor manufacturing industry. It also represents a growing demand for tighter materials control
 and therefore increasing demand for Materials Metrology solutions to control parameters such as composition, stress, ultra-thickness,
 crystallization and more.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Chemical Process Control. The strive for high yields
 in new and complex IC devices and advanced packaging architectures, growing costs of materials and chemicals, and tighter sustainability
 and environmental regulations are driving up the costs of operations and increasing the need for manufacturers to carry out chemical process
 control on more elements and with increasing intensity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• New Manufacturing Steps. Multiple Lithography technologies
 including multi-patterning and E-Beam are increasing the number of Etch and CMP process steps and EUV poses unique metrology challenges.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Foundry Model. The rising investment needed for leading
 edge semiconductor process development and production, as well as the proliferation of different types of devices, lead to manufacturing
 increasingly being outsourced to foundries. A foundry typically runs several different processes and makes numerous different semiconductor
 product types in one facility. Since Foundries are running multiple products at the same time, the need for process control and metrology
 is increasing in order to qualify multiple devices on the same wafer at the same high process quality.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Advanced Memory Technology (SSD). Memory manufacturers are going through technology evolution and build vertical
 devices to manage layers of NAND Memory (3D NAND). Such a complex device that can hold up to hundreds of thin high aspect ratio vertical
 layers requires significant changes in the manufacturing process. These changes require also many more steps to control through different
 Metrology solutions and increase the overall process control intensity for these High Aspect Ratio evolving structures.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• DRAM and High Bandwidth Memory (HBM). The transition to advanced memory architectures such as DDR5 and HBM
 introduces significant complexity in design and manufacturing. These technologies require extremely fine geometries, ultra-thin layers,
 and precise alignment of multiple dies to achieve high bandwidth and low latency. Stacking memory dies in HBM and integrating them with
 logic through through-silicon vias (TSVs) and hybrid bonding dramatically increases process steps and tightens tolerances. This evolution
 introduced new metrology challenges, including accurate measurement of TSV depth, bonding quality, and layer-to-layer alignment and more.
 As these architectures scale for AI, HPC, and data center applications, process control intensity rises sharply, expanding the need for
 advanced metrology solutions to ensure reliability and performance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Advanced Packaging. The evolution in packaging to high-end performance packaging technologies such as flip
 chip, fan out, 2.5D and 3D packaging as well as hybrid bonding, is driven by the need for enhanced performance with higher I/O density,
 smaller pitch and a growing variety of complex packaging schemes. The advanced packaging business growth is propelled by AI and HPC-related
 applications. Capital investment for High-End Performance Packaging represents a significant part of the total packaging CAPEX and is
 shifting from OSATs to Integrated Device Manufacturers and Foundries as the production and process control requirements are becoming similar
 to Front-End Fabs. These trends expand the TAM for process control and metrology solutions and Nova has a set of solutions targeting this
 growing market.

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In order to address the continuous increasing costs and challenges associated with these trends, semiconductor manufacturers must improve manufacturing procedures, production yields and time to market. Beyond improving the technology, introducing new process steps and innovative fabrication capabilities, Semiconductors manufacturers must tighten the control over the process and therefore must increase the Metrology intensity as well as introduce new innovative Metrology solutions. These new solutions will allow manufactures to overcome new challenges in dimensions, materials and chemical engineering.

*The Semiconductor Market – Update*

According to Gartner forecasts, semiconductor revenues are expected to grow by 33% in 2026, following a growth of 21% in 2025. WFE (Wafer Fab Equipment) is expected to grow by 12% in 2026, following a growth of 11% in 2025 (Gartner Forecast Semiconductor Wafer Fab Equipment, Worldwide, Q425 Update, published December 2025).

According to research reports, future demand drivers for semiconductors include AI, smart sensors, internet-of-things industrial devices, green energy, automotive, data center and cloud infrastructure, and other electronic equipment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Products & Technologies**

Our product portfolio includes a complete set of metrology platforms suited for dimensional, films, materials and chemical metrology measurements for process control across multiple semiconductor manufacturing process steps including lithography, Etch, CMP, deposition, electrochemical plating, ion implementation and advanced packaging. Our offering is comprised of several key product lines, spanning multiple technologies and addressing key challenges in semiconductor process control, from R&D to High-Volume-Manufacturing.

Our strategy to offer holistic and diversified portfolio supports the industry's frequent transitions, establishing the advantages and unique value we bring to our customers. With the introduction of new technologies and products, we cover a wider variety of applications, which increase our served and available markets and footprint in the semiconductor manufacturing market.

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| | | | |
|:---|:---|:---|:---|
| **Technology** | **Product Line** | **Key applications** | **Product families** |
| • Broadband Spectrophotometry<br> • Scatterometry<br> • Spectral Reflectometry<br> • Imaging and Image Processing | Dimensional Optical CD Integrated Metrology | Critical Dimensions<br> Thin films<br> Wafer topography | Nova i Platform |
| • Broadband Spectrophotometry<br> • Scatterometry<br> • Spectral Reflectometry<br> • Imaging and Image Processing | Dimensional Optical CD Stand-Alone Metrology | Critical Dimensions<br> Thin films<br> Wafer topography | Nova T-platform<br> Nova MMSR<br> Nova VeloCD |
| • Spectral Interferometry | Dimensional Optical CD Stand-Alone Metrology | Critical Dimensions<br> Thin films<br> Wafer topography | Nova Prism |
| •&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Spectral Coherence Interferometry<br> •&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Spectral Reflectometry<br> •&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; White Light Interferometry | Dimensional Optical CD Stand-Alone Metrology | Film/wafers Thickness<br> Wafer Topography<br> Roughness<br> Critical dimensions | Nova SemDex |
| •&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Spectral Coherence Interferometry<br> •&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Spectral Reflectometry<br> •&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; White Light Interferometry | Dimensional Optical CD Stand-Alone Metrology | Film/wafers Thickness<br> Wafer Topography<br> Roughness<br> Critical dimensions | Nova WMC |
| • X-Ray Photoelectron Spectroscopy<br> • X-Ray Fluorescence | X-Ray<br> Materials<br> Metrology | Thin film<br> Composition<br>| Nova VeraFlex |
| • Secondary Ion Mass Spectrometry | SIMS Materials<br> Metrology | Composition depth-profiling | Nova Metrion |
| • Raman Spectroscopy | Optical Materials Metrology | Strain<br> Crystallinity<br> Composition<br> Strength/Stress<br>| Nova Elipson |
| • Titration – various types<br> • CVS, CPVS, PCGA<br> • Spectrophotometry<br> • HPLC<br> • Dynamic Surface Tension<br> • pH, conductivity, density | Chemical Process Control – Analysis and Replenishment | Electroplating process applications in interconnect, advanced packaging | Nova Ancolyzer<br> Nova AncoScene |
| • Solid dosing<br>| Metal Replenishment<br>| Powder dosing specialty metal oxide materials for electroplating applications | Nova DMR |
| • Computational Modeling for Metrology Platforms | Physical modeling (Modeling Software Solutions), Mathematical modeling algorithms (Software solutions), and a combination of the two. |  | Nova MARS |
| • AI adjacent and Machine Learning<br> • Advanced Algorithms | Physical modeling (Modeling Software Solutions), Mathematical modeling algorithms (Software solutions), and a combination of the two. |  | Nova FIT for Films CD Metrology<br> Nova FIT for Material Metrology |
| • Big Data Analytics<br> • High Power Computing | Fleet Management (Software solutions) |  | Nova FM<br> Nova HPC<br> QED |

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Following the acquisition of Sentronics in January 2025, we expanded our technology offering. Sentronics develops flexible and modular metrology tools equipped with multiple metrology sensors for a variety of critical dimension applications, including thickness, roughness, and topography. The addition of Sentronics' modular dimensional metrology technology to Nova's dimensional metrology portfolio will enable Nova to diversify its offering in the growing field of advanced wafer level packaging and specialty devices.

#### About the product lines
Our product portfolio is composed of 4 major metrology categories:

Integrated, Standalone (dimensional and materials), Chemical and Software.

1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Dimensional Integrated Metrology

**Nova's integrated metrology (IM) -** Integrated platforms that enable advanced process control (APC) required for the most advanced logic and memory technology nodes. Nova's IM market portfolio offers fast metrology with high productivity, targeting manufacturing of advanced logic, advanced memory and advanced packaging technologies. Integrated metrology systems are directly integrated with manufacturing process equipment and provide semiconductor manufacturers with effective and efficient process control by measuring wafers within the process environment. This family of products allows wafer to wafer, within-wafer and within-die variation control. Enriched with Nova's advanced modeling, machine learning and algorithmic solutions, Nova's integrated metrology provides enhancements in metrology accuracy, precision, and tool matching.

*2.1-Dimensional Standalone Metrology*

**Nova's stand-alone metrology portfolio** is comprised of multiple product lines utilized to characterize critical dimensions such as width, shape and profile with high precision and accuracy. The expression "stand-alone metrology" generically describes free standing metrology equipment, located in line, i.e., next to the processing equipment measuring wafer samples in a station of its own.

Nova's stand-alone platforms are targeted for critical dimensions (CD), topography, thin-film, roughness and film thickness measurements at the most advanced process steps in logic, memory and advanced packaging technology nodes including backend wafer-level packaging, TSV, PCB and IC-Substrate. Nova's unique channels of information enables high metrology performance combined with high productivity. When incorporating Nova's advanced suites of software, modeling and machine learning solutions, the Optical CD stand-alone platforms provide cutting-edge performance for the most complex layer stacks and 3D structures.

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**Nova Prism** utilizes a combination of the exclusive SI technology with advanced modeling and machine-learning capabilities, and to reveal unique information and address complex challenges in optical critical dimensions.

**Nova WMC** is designed to support 2.5D and 3D Advanced Packaging processes. Through the highly versatile modularity of its advanced metrology, handling, and loading systems.

The full stand alone portfolio also includes the Nova VeloCD, Nova MMSR, Nova SemDex and the Nova T-series.

2.2 Materials Standalone metrology

Materials are considered the next frontier in advancing integrated circuits beyond dimensional and architectural scaling. The growing usage of complex and novel materials has increased the demand for metrology solutions that measure materials properties, In Line and In Die, and to precisely characterize and control materials composition, thickness, stress and more. Nova's materials metrology portfolio utilizes powerful technologies and includes three platforms:

**Nova's VeraFlex** combines enhanced XPS (X-Ray photoelectron spectroscopy) capability with an optional unique low energy XRF (X-Ray fluorescence) channel to determine the elemental composition and thickness of thin films.

**Nova Metrion** targets process control of 3D logic and memory semiconductor devices and by applying inline SIMS enables advanced materials profile measurements including depth profiling of compositional information

**Nova Elipson** utilizes Raman spectroscopy, a vibrational technique, to detect multiple material properties such as strain, crystallinity, phase, grain size and composition.

As part of Nova's strategic plan, the Company intends to increase its focus on the evolving materials engineering market.

3. Chemical Metrology

Nova offers a market-leading portfolio of advanced, open and flexible chemical metrology platforms for backend wafer-level packaging, TSV, front-end dual-damascene, and PCB and IC-Substrate process steps. Our portfolio is intended to help manufacturers ensure high-quality electroplating processes by carrying out chemical analysis and replenishment in real time.

The growing number of interconnect steps that require plating at the front-end of the process as well as the substantial increase in the number of organic alloys and compounds used in advanced packaging are driving the need for advanced chemical metrology solutions. Furthermore, higher material costs, and tighter environmental regulations are driving up the cost of operations and increasing the need to perform chemical process control on more elements and with increasing intensity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Nova AncoScene – a platform for damascene copper and cobalt
 plating interconnects applications offering a fully automated analysis of bath components, overall plating performance, excursions, trends
 alarms and warnings, and overall process control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Nova Ancolyzer –a fully automated online platform for advanced
 packaging processes, that supports a wide variety of analytical techniques and is configured to specific process analysis and replenishment
 requirements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Nova DMR offers economical replenishment of metals in a plating bath
 to significantly extend the bath chemicals' lifetime and improve the plater utilization. The solution additionally enables manufacturers
 to reduce the use of hazardous materials, and in turn, aims to enable better compliance with environmental regulations. The platform integrates
 with Nova Ancolyzer and can connect directly to any process tool.

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4. Modeling and Software

Nova's platforms are combined with suites of advanced algorithms and software modeling solutions that combine top notch algorithms in the field of AI and machine learning.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Dimensional metrology: Nova's suite of software modeling products is comprised of Nova MARS physical
 and geometrical modeling and the Nova FIT, machine learning and modeling solutions. These solutions are supported by Nova HPC, a computational
 management layer, which also serves as the foundation for Nova's Centralized Fleet Management and Control. This comprehensive software
 modeling portfolio provides customers with a complete modeling and application development solution designed for complex 3D and HAR structures
 in the most advanced logic, memory and packaging technology nodes:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Materials Metrology: Nova FIT acts as a server-based solution, when used in conjunction with the Nova VeraFlex,
 to enable higher measurement throughput and higher precision for certain use cases.

#### Our Customers, Sales and Marketing

We serve all leading manufacturers in the logic, foundry, memory and packaging sectors of the integrated circuit manufacturing industry. Our customers are located across Asia, Europe and North America.

For the distribution of our total revenues, from products and services, by geographic areas, see Note 16B to our consolidated financial statements.

The semiconductor industry is characterized by a growing consolidation of larger companies. As a result, a significant portion of our sales are concentrated among a relatively small number of customers. The following table indicates the percentage of our total revenues derived from sales to our five largest customers and the range of these revenues from these customers for the periods indicated.

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| | | | |
|:---|:---|:---|:---|
|  | 2023 | 2024 | 2025 |
| Total revenues from five largest customers | 52% | 53% | 51% |
| Range of revenues from five largest customers | 5-19% | 6-18% | 6-23% |

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#### Competition
The industries in which Nova operates are highly competitive and characterized by rapid technological change. Nova's ability to compete generally depends on its ability to develop and introduce competitive solutions, commercialize its technology in a timely manner, continuously improve its products, and develop new products that meet the evolving customer requirements. Significant competitive factors include technical capability and differentiation, productivity, cost-effectiveness and the ability to support a global customer base. The importance of these factors varies according to customers' needs, including product mix and respective product requirements, applications, and the timing and circumstances of purchasing decisions. Substantial competition exists in all areas of Nova's business.

Competitors range from small companies that compete in a single region, which may benefit from policies and regulations that favor domestic companies, to global, diversified companies. Nova's ability to compete requires a high level of investment in R&D, marketing and sales, and global customer support activities.

#### Research and Development
We have assembled a core team of experienced scientists and engineers who are highly skilled in their particular field or discipline. Our research and development core competencies, technologies and disciplines are in scatterometry, thin film metrology, XPS, interferometry, Raman Spectroscopy metrology, SIMS metrology, chemical metrology techniques and semiconductor process control, and include multidisciplinary measurement instruments, complex system engineering, algorithms, physical modeling, optical design, interpretation software, machine learning, image acquisition, pattern recognition, X-ray energy sources, electron optics and detection, multiple types of electrochemical, and spectroscopic analysis methods, applied to characterize individual and complex multi-component mixes, vacuum systems and equipment integration. Our research and development staff consists of about 682 highly skilled members, approximately 163 of whom hold Ph.D.'s. In addition, we rely on independent subcontractors and consultants in various fields. Since June 2003, our research and development operations in Israel are certified for ISO 9001 quality standard (Current ISO 9001:2015 version), additionally certified in Germany and the U.S. as of 2020 and 2021, respectively.

The metrology and process control market is characterized by continuous technological development and product innovations. We believe that the rapid and ongoing development of new products and enhancements to our existing product lines is critical to our success. Accordingly, we devote a significant portion of our technical, management and financial resources to developing innovative products, new applications and emerging innovative technologies.

Our vision is to continue to be an innovative leader in the semiconductor process control market, through increasing our leadership in the Dimensional, Materials and Chemical metrology solutions.

Our research and development efforts, designed to support this vision, are structured through different and separate development projects, which are initiated following a detailed project plan, marketing justification, technical feasibility, and risk analysis. The main projects are monitored throughout their life cycle in a structured process, including design reviews and project management reviews.

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In the frame of our research and development activities we participate from time to time in development consortia arrangements, which also help us to support our customers in the transition to advance technology nodes. These consortia are joint collaboration programs with other semiconductors companies and are supported and funded by the IIA and/or European Joint Research and/or the German BMBF. It should be noted, that in order to maintain our eligibility for these programs, we must continue to meet certain conditions. These programs might restrict our ability to manufacture particular products and transfer particular technology, which were funded by the IIA or BMBF. For additional information, see "Item 5C - Grants from the Israel Innovation Authority & European programs" in this Annual Report.

As part of our long-term technological collaboration, we are also engaged with joint development activities with some of our strategic vendors or customers, as well as with research institutes and other semiconductor companies. These activities sometimes impose limitations on the joint intellectual property developed as part of these programs.

#### Patents and Other Proprietary Rights
Our continued success depends upon our ability to protect our core technology and intellectual property. We therefore have an extensive program devoting resources to seeking patent protection for our inventions and discoveries that we believe will provide us with competitive advantages. Our patents and applications principally cover various aspects of optical measurement systems and methods, integrated process control implementation concepts, and optical, opto-mechanical and mechanical design. In addition, our patents and applications cover various aspects of X-ray based measurement systems and methods, including process control implementation concepts, X-ray energy sources, electron optics and detection, vacuum systems and equipment integration. Our patents and applications portfolio also include aspects of Chemical metrology. To protect our proprietary rights, we also rely on a combination of copyrights, trademarks, trade secret laws, contractual provisions (e.g. confidentiality agreements) and licenses. Our copyrights include software copyrights. We constantly seek to control access to, and distribution of our proprietary information, such as our proprietary algorithms. We enter into confidentiality and proprietary rights agreements with our employees, consultants and business partners, and we control access to and distribution of our proprietary information.

Our in-house know-how is an important element of our intellectual property. The development and management of our products require sophisticated coordination among many specialized employees. We believe that duplication of this coordination by competitors or individuals seeking to copy our products would be difficult. The risk of a competitor effectively replicating the functionality of our products is further mitigated by the fact that most of the core technology operating on our systems is not exposed to a user or to our competitors. To protect our technology, we implement multiple layers of security.

------

Despite our efforts to protect our proprietary rights, competitors may be able to develop similar technology independently or design around our patents and, despite our efforts, our trade secrets may be disclosed to others. Furthermore, the laws of countries other than the U.S. may not protect our intellectual property to the same extent as the laws in the U.S. We also cannot assure that: (i) our pending patent applications will be approved; (ii) any patents granted will be broad enough to protect our technology or provide us with competitive advantages or will not be successfully challenged or invalidated by third parties; or (iii) that the patents of others will not have an adverse effect on our ability to do business. We may also have to commence legal proceedings against third parties to protect our intellectual property.

From time to time, we receive communications from others asserting that our products infringe or may infringe their intellectual property rights. Typically, our in-house patent counsel investigates these matters and, where appropriate, retains outside counsel to provide assistance. We are not presently involved in any material legal proceedings in which a third party has asserted that we have violated their intellectual property rights. If, however, we become involved in any such litigation and its outcome is adverse to us, it may result in a loss of proprietary rights, subject us to significant liabilities, including triple damages in some instances, require us to seek licenses from third parties which may not be available on reasonable terms or at all, or prevent us from selling our products. Furthermore, any litigation relating to intellectual property, even if we are ultimately successful, could result in substantial costs and diversion of time and effort by our management. This in and of itself could have a negative impact on us. While we believe that we would be successful in any litigation seeking to enforce our patent rights, the ultimate outcome of any litigation or other legal proceedings cannot be predicted.

#### Manufacturing
We have two manufacturing facilities for our Optical based product lines (including the Raman technology), which are located in Rehovot and Nes Ziona, Israel, one manufacturing facility for our X-ray and SIMS based product lines, which is located in Fremont, CA, U.S., one main manufacturing facility for our Chemical Analysis and Metrology technology related product lines, which is located in Bad Urach, Germany and one manufacturing facility for our Optical Metrology technology for Advanced Packaging product lines, which is located in Mannheim, Germany.

In 2025, we expanded our production and development capabilities with a new manufacturing facility in Mannheim, Germany, that supports the Company's newly introduced technologies and continuous growth.

During the first half of 2026, we expect to complete the expansion of our cleanroom in Fremont, CA, U.S., doubling the amount of production bays.

Our principal manufacturing activities include assembly, integration, final testing and calibration. Our production activities are conducted in our manufacturing and repair center facilities in Israel, Germany and in California. We rely and expect to continue to rely on subcontractors and contract manufacturing suppliers to fabricate components, build subassemblies and perform other non-core activities in a cost-effective manner. While we use standard components and subassemblies wherever possible, most mechanical parts, metal fabrications, optical components and other critical components used in our products are engineered and manufactured to our specifications. A small portion of these components and subassemblies are obtained from a limited group of suppliers, and occasionally from a single or sole source supplier.

------

In order to leverage the relatively high volume of systems we manufacture, and in order to decrease production costs, we continue to focus our internal manufacturing activities on processes that add significant value or require unique technology or specialized knowledge and outsource others. Our sites, in Israel, Fremont, CA, Bad Urach, Germany, and Mannheim, Germany are certified by the ISO 9001:2015 quality mark by an international certification institute. Additionally, we received the formal certification of ISO 14001 and ISO 45001 for our sites in Israel, Fremont, CA and Bad Urach, Germany each of which are being annually recertified for these standards.

#### Environmental, Social and Governance (ESG)

#### Nova Sustainability 2025 Status
On April 28, 2025, we published our second Sustainability Insight Review, as was published on our website (the "**Sustainability Plan**"). We aim to continue improving our Sustainability Plan, which we plan to review and update every two years. Our focus remains on the wellbeing of our employees and their families.

As part of the Sustainability Plan, we established a management level ESG Steering Committee, led by our CEO, which oversees the ESG policies, strategy and implementation to monitor our long-term and annual guidelines and results related to ESG matters. This committee serves as a supplement to the responsibilities of our Chief Human Resources Officer, which among other matters, is responsible for developing strategies and initiatives to achieve our ESG goals as detailed in our Sustainability Plan. All as part of our vision to become a more active influencer in creating a sustainable and equitable future to grow Nova's presence in Israel and abroad. Our Sustainability Plan was composed in accordance with the Global Reporting Initiative (GRI), the Sustainability Accounting Standards Board (SASB) guidelines, and the United Nations Sustainable Development Goals (SDGs). It is built on four pillars that we aim to interlace across our daily operations and culture: (i) Governance – elevating ethical and corporate governance methods; (ii) People and Social Impact – with a focus on both the individual and the surrounding communities; (iii) Innovative Approach – connecting technical roadmap to unique culture for long-term impact; and (iv) Environment and Supply Chain – managing efficiently footprint, energy and sustainable supply chain.

&nbsp;&nbsp;&nbsp;&nbsp; For more information on our Sustainability Plan – please visit our website where you can access the full report. Information contained on, or that can be accessed through, our website does not constitute a part of this Annual Report and is not incorporated by reference herein.

#### Capital Expenditures
Our capital expenditures are primarily for network infrastructure, computer hardware and software, construction and leasehold improvements of our facilities, expansion of clean room facilities and demonstration and development tools. None of these assets are held as collateral or guarantee other obligations. For additional information on our capital expenditures, see "Item 5B. Liquidity and Capital Resources" in this Annual Report.

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#### Government Regulation
**For information relating to the impact of certain government regulations on our business, see "Item 5.C – Grants from the Israel Innovation Authority" on this Annual Report.**

#### 4.C&nbsp;&nbsp;&nbsp;&nbsp; Organizational Structure

#### Our Subsidiaries
Our subsidiaries as of the end of 2025 and the countries of their incorporation are as follows. All of our subsidiaries are wholly owned by the Company:

---

| | |
|:---|:---|
| **<u>Name of Subsidiary</u>** | **<u>Place of Incorporation</u>** |
| Nova Measuring Instruments, Inc. | Delaware, U.S. |
| Nova Measuring Instruments K.K. | Japan |
| Nova Measuring Instruments Taiwan Ltd. | Taiwan |
| Nova Measuring Instruments Korea Ltd. | Korea |
| Nova Measuring Instruments GmbH | Germany |
| Nova Measuring Instruments (Shanghai) Co., Ltd. | China |
| Nova Measuring Instruments Singapore Pte Ltd | Singapore |
| Sentronics Metrology GmbH\* | Germany |

---

\*A wholly owned subsidiary of Nova Measuring Instruments GmbH.

**4. D**&nbsp;&nbsp;&nbsp;&nbsp; **Property, Plant and Equipment**

---

| | | | |
|:---|:---|:---|:---|
| **Location** | **Purpose of use** | **Approximate**<br> **SQM** | **Expiration date** |
| Israel<br> Rehovot and Ness Ziona<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Offices, manufacturing and laboratories<br>| 18000<br>| Rehovot 15,200 sqm - August 2029 with an option to extend the lease period by two periods of five years each, subject to customary conditions. Ness Ziona 2800 sqm lease is expected to end in July 2029 |
| US<br> Fremont California<br>| Offices, manufacturing and laboratories | 10800 | August 2034 with an option to extend for an additional five years, subject to customary conditions. |
| Germany<br> Bad Urach | Offices, manufacturing and laboratories | 6500 | The facility is owned by the Company and as of January 2025, has fully replaced the Pliezhausen facility. |
| Germany<br> Mannheim | Offices, manufacturing and laboratories | 6150 | The facility is owned by the Company. |
| Taiwan<br> Hsinchu | Offices and laboratories | 2000 | Ranging between 2026 and 2031. |
| US, China, Korea, Taiwan, Japan, Singapore | Offices and laboratories | Less than 2,000 each | Ranging between 2025 and 2030. |

---

We believe that our facilities and equipment are in good operating condition and adequate for their present usage.

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#### Item 4A. Unresolved Staff Comments
None.

#### Item 5. Operating and Financial Review and Prospects
Information in this Operating Review and Financial Prospects Section should be read in conjunction with our consolidated financial statements and notes thereto which are included elsewhere in this Annual Report.

#### Executive Overview
Nova is a leading innovator and key provider of metrology and process control solutions used in semiconductor manufacturing. We deliver continuous innovation by providing state-of-the-art high-performance metrology solutions for effective process control throughout the semiconductor fabrication lifecycle. We industrialize laboratory and research-grade technologies to develop differentiated inline metrology solutions that are deployed by a broad range of customers, including the world's largest integrated circuit manufacturers. Our portfolio combines high-precision hardware and cutting-edge software for deep insight into the development and production of the most advanced semiconductor devices. Our solutions enable our customers to improve device performance, enhance yields and accelerate time to market. We sell our solutions mainly to semiconductor manufacturers, and in some cases to semiconductor process equipment manufacturers.

Our business is greatly affected by the level of spending on capital equipment by semiconductor manufacturers. In addition, demand for our products and services is affected by the timing of new IC capacity expansion and ramping up of new technology nodes, by the timing of releasing new products by us and our competitors, market acceptance of our new or enhanced products and changes or improvements in semiconductor design or manufacturing processes.

In the past five years (2020-2025), we achieved a positive Compound Annual Growth Rate (CAGR) of products revenues of approximately 27.5%, while Gartner Inc. estimates that the Process Control sector has achieved a CAGR of approximately 16.0% (Gartner Q4-2025 forecast, published in December 2025). During these years, we successfully diversified our technology to include Material and Chemical metrology capabilities, on top of our Dimensional metrology solutions. We also added advanced machine learning algorithms on top of our physical modeling, and we advanced our traditional tool set to include advanced capabilities in both hardware and software. We also diversified our revenue mix across semiconductor sectors, customers and geographies. During these years, we were also able to increase our total available market through development of new technologies used for Materials, Dimensional and chemical metrology, addressing emerging applications in Logic/Foundry, Memory and Packaging across mature and advanced technology nodes.

------

In 2025, product sales accounted for approximately 80% of our total revenues, and services accounted for approximately 20%.

As of the end of 2025, we had cash reserves, net of convertible senior notes, of approximately $914 million, and working capital of approximately $1,186 million, which consist of current assets net of current liabilities.

Our service organization is operating on a profit-and-loss basis, and the objectives of our service organization are defined and measured by customer satisfaction, quality support parameters, and profit and loss criteria. The service organization provides support to all products we sell, during both the warranty period and the post warranty period. Service revenues are mostly driven by extended warranty, time and material requests, service contracts and proactive sales to the install base to improve productivity and metrology performance.

#### Significant Events in 2025 and Outlook for 2026
**During 2025, we demonstrated several significant achievements**:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Record product and service sales results.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Record profitability and earnings per share

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Diversified customers mix, across multiple territories.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Further expansion into advanced packaging with new and existing products.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Further market adoption of Nova's advanced portfolio:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Materials, chemical and dimensional metrology solutions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Hardware and software coupling.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Machine learning and AI capabilities to complement physical modeling.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Holistic offering, including Integrated and Standalone metrology.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Continued proliferation of Nova's advanced solutions across
 the board

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Record sales of each of our product lines: optical integrated and
 stand alone systems, materials metrology systems and chemical metrology systems.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Record sales of materials and chemical metrology solutions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Continued investments in research and development programs aimed
 to generate new organic growth engines for process control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Deepening collaboration with research institutes and customers' development
 centers, utilizing a variety of our products, leading to our positioning as a long-term technology development and high-volume manufacturing
 partner.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• ESG (Environment, Social and Governance) – In 2025 we worked
 to update our Sustainability Plan. We are determined as a company to play a vital role in creating a world that values equality, safety
 and environmental health for the benefit of future generations to come. We remain committed to proactively invest in embedding social
 responsibility and sustainability as part of our culture and business management to support our values.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The acquisition of Sentronics, a privately held company headquartered
 in Germany, closed on January 30, 2025. Sentronics is a global provider of wafer metrology tools for backend semiconductor fabrication.
 Sentronics develops flexible and modular metrology tools equipped with multiple metrology sensors for a variety of critical dimension
 applications, including thickness, roughness, and topography.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• On September 5, 2025, we closed an offering of $750 million aggregate
 principal amount of 0% Convertible Senior Notes due 2030 in a private offering to qualified institutional buyers pursuant to Rule 144A
 under the Securities Act of 1933, as amended. The funds raised will be utilized for further investment in the company's growth and
 resiliency in order to enhance shareholders' value.

**In 2026, we plan to focus on the following:**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Investing in organizational development to
 enhance our human capital and the strength of our global teams based on our values and culture.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Continue to strengthen our competitive market
 position, through unique innovation and technological leadership and to meet future industry challenges.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Continue executing our well-defined strategy to reach $1B USD in
 revenues by 2027. The strategy defines the Company's growth path in revenue, customers, technology and financial performance.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Expand our total available markets by addressing new emerging metrology
 applications and markets sectors, through solutions delivery to the challenging buildup of advanced Logic technology nodes, memory scaled
 3D-NAND nodes, DRAM scaled devices and advanced packaging schemes at leading edge customers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Continue delivering metrology systems for mature technology nodes
 and traditional packaging, to support new applications ramp up and expansions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Continue the collaborations and joint research programs with leading
 semiconductor manufacturers and relevant leading research institutes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Continue innovation and diversification of our products through new
 product introductions to extend the Company's market leadership and total available market.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Create synergy between our product lines towards a combined offering
 for advanced applications, which require dimensional, material and chemical metrology.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Grow our production facilities and offices footprint to meet semiconductor
 demand and our strategic plans and continue to develop modern and streamlined core business processes through new ERP and Service CRM
 infrastructure.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Build an extensive roadmap for Sentronics products to broaden our
 portfolio and cater to additional applications.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Create synergy between Nova and Sentronics' technologies towards a combined and enhanced offering
 for advanced packaging applications.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Successfully completing the go-live and stabilization of
 our new ERP system.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Continue looking for investment opportunities to broaden our portfolio
 and enrich our brand.

The major challenges we could face in fulfilling our plans include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Meeting strategic, development, operational and delivery targets
 considering the uncertainties around the macro-economic, geopolitical and trade restriction issues across the globe.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• On time delivery of the required solutions to meet the current and
 future needs of our existing and new customers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Correctly understanding the market trends and competitive landscape
 to ensure our products retain proper differentiation to win customer confidence.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Creating aggressive, innovative and competitive roadmap deliverables
 at reasonable costs to properly control expenses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Identifying the metrology evolution roadmap for future industry needs
 to meet process control requirements and lead the market.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Achieving long-term growth targets while supporting extensive growth
 in all our activities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Building a solid global infrastructure and production capacity to
 accommodate further growth.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Challenges implementing our new ERP system.

In order to address the risks above we implemented a global plan to secure our employees' safety, guarantee supply chain resiliency, assure business continuity and continuous support to our customers.

We collaborate with key customers, equipment manufacturers, and research institutes to stay informed about their metrology and process control requirements. This helps us align our roadmap to their needs and address any technical or roadmap risks and challenges.

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It is our belief that we have been able to consistently improve our market position because of a combination of factors:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Optical metrology has become an enabler for the industry over the
 last few years.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Materials metrology has been widely adopted by leading memory and
 logic/foundry customers. We expect further adoption in the next few years.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The growing adoption of our metrology portfolio in the advanced packaging
 market.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The growing need for chemical process control and replenishment solutions,
 driven by ESG and environment sustainability trends for reduction in chemical materials waste.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our unique metrology portfolio, combining optical, X-Ray and chemical
 metrology for both dimensions and materials. This provides the most advanced portfolio, combining the best innovative metrology capabilities
 with the best reliability and return on investment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The ability to provide a unique and differentiated technology portfolio
 sets us apart from the competition and adds a competitive edge to our offering.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our solutions are well accepted by leading customers that allow us
 to gain more market share with additional process steps and new applications.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our ability to closely team with our customers allows us to predict
 the industry evolution and process control challenges and by that introduce innovative metrology roadmap to solve industry needs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our diversified portfolio, which is a result of continuous investment
 in research and development, is becoming more attractive to our customers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Extending our solutions' base to include hardware and software
 elements in a coupled offering.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Successful track record in completing and integrating inorganic products,
 as a result of M&A, which allows us to diversify our product offering to expand our addressable markets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Well controlled and efficient operating model to support our profitable
 growth and operational resiliency.

We anticipate ongoing growth in the adoption of our solutions as the semiconductor manufacturing process becomes increasingly complex and the industry evolves. We believe that our target market is growing as we expand our offering to more stages of the semiconductor manufacturing process and develop innovative new metrology solutions. As the semiconductor production process becomes increasingly challenging, we believe that the need for our diverse portfolio of technologies for dimensional, materials and chemical metrology will continue to grow in the coming years.

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**5. A**&nbsp;&nbsp;&nbsp;&nbsp; **Operating Results**

*Overview*

A substantial portion of our revenues is generated from a small number of customers, and we anticipate that our revenues will continue to depend on a limited number of major customers.

For the distribution of our total revenues, from products and services, by geographic areas, see Note 16 to our consolidated financial statements.

The sale cycle of our systems is long and the rate and timing of customer orders may vary significantly from month to month as a function of the specific timing of fab expansions. We schedule production of our systems based upon order backlog and customer forecasts.

Our revenues increased by 31% in 2025 following an increase of 30% in 2024 following a decrease of 9% in 2023.

The following table shows the relationship, expressed as a percentage, of the listed items from our consolidated income statements to our total revenues for the periods indicated:

*Percentage of Total Revenues Year ended December 31:*

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| | | | |
|:---|:---|:---|:---|
|  | **2023** | **2024** | **2025** |
| Revenues from product sales | 78% | 80% | 80% |
| Revenues from services | 22% | 20% | 20% |
| Total revenues | 100% | 100% | 100% |
| Cost of products sale | 32% | 31% | 32% |
| Cost of services | 12% | 11% | 11% |
| Total cost of revenues | 43% | 42% | 43% |
| Gross profit | 57% | 58% | 57% |
| Operating expenses: |  |  |  |
| Research and development expenses, net | 17% | 16% | 16% |
| Sales and marketing expenses | 10% | 10% | 9% |
| General and administrative expenses | 4% | 4% | 3% |
| Total operating expenses | 31% | 30% | 29% |
| Operating profit | 26% | 28% | 29% |
| Financial income (expense), net | 4% | 4% | 6% |
| Income before income taxes | 30% | 32% | 34% |
| Income tax expenses | 4% | 5% | 5% |
| Net income | 26% | 27% | 29% |

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#### Comparison of Years Ended December 31, 2025 and 2024
*Revenues.* Our revenues in 2025 increased by $208.2 million, or 31%, compared to 2024. Revenues attributable to product sales were $705.6 million, an increase of $167.2 million, or 31%, compared to 2024. Revenues attributable to services were $175.0 million, an increase of $40.9 million, or 31%, compared to 2024. The increase in product revenues in 2025 was attributed to higher demand for our products across all main product lines and to the acquisition of Sentronics. The increase in services revenue in 2025 was primarily driven by the growth of our installed systems base.

*Cost of Revenues and Gross Profit*. Cost of revenues consists of labor, material and overhead costs of manufacturing our systems, royalties, amortization of intangible assets and the costs associated with our worldwide service and support infrastructure. It also consists of inventory write-offs and provisions for estimated future warranty costs for systems we have sold. Our cost of revenues attributable to product sales in 2025 was $282.1 million compared to $210.6 million in 2024 in line with the increase in product revenue. Our gross margin attributable to product revenues in 2025 was 60%, compared to 61% in 2024. The decline in product gross margins in 2025 was primarily driven by a shift in the product and customer volumes mix. Our cost of services in 2025 was $93.3 million, compared to $74.7 million in 2024. Gross margin attributable to service revenues in 2025 was 47%, compared to 44% in 2024 in line with the increase in service revenue. The increase in service gross margin in 2025 was primarily due to economies of scale resulting from higher service revenue volumes.

*Research and Development Expenses, net*. Consist primarily of salaries and related expenses and also include consulting fees, subcontracting costs, related materials and overhead expenses, after offsetting grants received or receivable from governmental funding of research and development activities. Our net research and development expenses in 2025 were $143.4 million, an increase of $33.1 million, or 30%, compared to 2024, after offsetting grants received of $2.4 million in 2025 and $2.2 million in 2024. Research and development expenses excluding grants received or receivable in 2025 were $145.8 million, compared to $112.4 million in 2024. The increase in 2025 is mainly related to higher investment in existing and new products and technologies, higher personnel costs and the addition of Sentronics. In 2025, net research and development expenses represented 16% of our revenues similar to 2024.

*Sales and Marketing Expenses*. Sales and marketing expenses are mainly comprised of salaries and related costs for sales and marketing personnel, travel related expenses, overhead and commissions to our representatives and sales personnel. Our sales and marketing expenses in 2025 were $82.2 million, an increase of $17.1 million, or 26%, compared to 2024. The increase is due to the increase in revenues. Sales and marketing expenses represented 9.3% of our revenues in 2025 compared to 9.7% in 2024.

*General and Administrative Expenses*. General and administrative expenses are comprised of salaries and related expenses and other non-personnel related expenses such as legal expenses. Our general and administrative expenses in 2025 were $26.1 million, an increase of $1.9 million, or 8%, compared to 2024. The increase in general and administrative expenses in 2025 was primarily driven by higher personnel costs and related overhead, including post-merger integration costs and to the addition of Sentronics expenses. In 2025, general and administration expenses represented 3.0% of our revenues, compared to 3.6% in 2024.

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*Financial income, net*. Financial income, net is comprised of interest income, financial expenses related to the 2030 Convertible Senior Notes offering which we completed in September 2025, exchange rate impact and bank charges. In 2025, we recorded $49.8 million of net financial income compared to $28.7 million in 2024. The increase in financial income in 2025 was mainly attributed to higher interest income and exchange rate impact in 2025.

*Income Tax Expenses*. Income tax expenses are comprised of current tax expenses and deferred tax expenses/income. In 2025, we recorded $44.1 million income tax expenses compared to $32.5 million in 2024. The increase is due the increase in profitability. 2025 tax expenses reflecting effective tax rate of 15% same as 2024

Comparison of Years Ended December 31, 2024 and 2023 is incorporated by reference to the Company's Annual Report on Form 20-F filed with the Securities and Exchange Commission on February 20, 2025.

**5. B**&nbsp;&nbsp;&nbsp;&nbsp; **Liquidity and Capital Resources**

As of December 31, 2025, we had working capital of approximately $1,186 million, compared to working capital of approximately $514 million as of December 31, 2024. The increase in our working capital in 2025 was mainly attributed to the increase in cash and cash equivalents, short-term deposits and marketable securities and due to the decrease in the 2025 convertible senior notes fully converted by end of 2025.

Cash and cash equivalents, short-term and long-term deposits and marketable securities as of December 31, 2025 were $1,646 million compared to $820 million as of December 31, 2024, and increased mainly due to the 2030 Convertible Senior Notes offering and our fluent operating cash flow, partially offset by Sentronics acquisition, share repurchase and the purchase of the capped calls.

Trade accounts receivable increased from $139 million as of December 31, 2024 to $152 million as of December 31, 2025.

Inventories increased from $157 million as of December 31, 2024 to $184 million as of December 31, 2025. The increase in inventory was driven by higher business activity. Operating activities in 2025 generated positive cash flow from operating activities of $245 million compared to a positive cash flow from operating activities of $235 million in 2024.

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The following table describes our investments in capital expenditures during the last three years (US dollars, in thousands):

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **2023** | **2023** | **2024** | **2024** | **2025** | **2025** |
|  | **Domestic** | **Abroad** | **Domestic** | **Abroad** | **Domestic** | **Abroad** |
| Electronic equipment | 2086 | 2867 | 1313 | 3077 | 3228 | 8404 |
| Office furniture and equipment | 360 | 499 | 29 | 202 | 95 | 2323 |
| Leasehold improvements | 2994 | 2457 | 91 | 843 | 670 | 6092 |
| Land and buildings | - | 5925 | - | 11660 | - | 6886 |
| **Total** | **5440** | **11748** | **1433** | **15782** | **3993** | **23705** |

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In 2025, the gross investment in capital expenditures, including inventory items moved to capital and investment in the new ERP, was approximately $33 million, and was financed from our operating cash flow. In 2026, we expect our gross capital spending to remain at a similar level, primarily driven by ongoing investments in facilities and infrastructure.

Our principal liquidity requirement is expected to be for working capital and capital expenditures as well as additional acquisitions and investment in the new ERP. We believe that our current cash reserves will be adequate to fund our planned activities for at least the next twelve months. Our long-term capital requirements will be affected by many factors, including the success of our current products, our ability to enhance our current products and our ability to develop and introduce new products that will be accepted by the semiconductor industry. We plan to finance our long-term capital needs with our cash reserves together with positive cash flow from operations, if any. If these funds are insufficient to finance our future business activities, which may include acquisitions, we would have to raise additional funds through the issuance of additional equity or debt securities, through borrowing or through other means. We cannot assure that additional financing will be available on acceptable terms.

Presently, our long-term debt is comprised from Convertible Senior Notes.

We do not have a readily available source of other short-term or long-term debt financing such as a line of credit.

With regard to usage of hedging financial instruments and the impact of inflation and currency fluctuations, see "Item 11. Quantitative and Qualitative Disclosures about Market Risk" in this Annual Report.

**5. C**&nbsp;&nbsp;&nbsp;&nbsp; **Research and Development, Patents and Licenses, etc.**

For information regarding our research and development activities, see "Item 4B – Research and Development" in this Annual Report.

#### Grants from the Israeli Innovation Authority & European Programs
*IIA sponsoring for generic research and development projects of large Israeli companies*

We participate in a generic research and development programs sponsored by the IIA, available for Israeli companies that meet specific criteria's set forth by the IIA. Companies eligible to participate in these programs receive IIA funding intended to focus on long-term creation of know-how and technological infrastructure, used for the development or production of future innovative products. These programs do not require payments of royalties to the IIA, but all other restrictions under the Innovation Law, such as local manufacturing obligations and know-how transfer limitations, as further detailed hereunder, are applicable to the know how developed by us with the funding received in such programs.

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*Joint programs of the European Research Area and the IIA (for Nova Ltd.) or BMBF (for Nova Measuring Instruments GmbH)*

We participate in European consortia, which are joint programs governed by the Electronic Component Systems (ECSEL), Key Digital Technologies (KDT), which starting from 2023 is re-named to European CHIPACTS, for European Leadership Joint Undertaking (the "JU") as part of the Horizon 2020 & Horizon Europe, respectively, which form cooperations between the participating companies.

Some of the obligations and undertakings specified hereunder in connection with IIA or BMBF activities (such as the restrictions under the Innovation Law and obligation to grant certain access rights to our technology and intellectual property rights) apply with respect to some of these joint projects. In addition, the participation in an EU Consortia includes specific obligations, such as the following: The budgeted grant will be paid to the company pursuant to certain rules regarding 'eligible costs'; Obligations to properly implement the activities assigned under the specific EU Consortia project grant agreement; Restrictions in contributions of third parties (by service or otherwise); Obligations to keep information up to date and to inform about events and circumstances likely to affect the consortium activity; Obligations related to records keeping, investigations and audits by the JU in order to verify the proper implementation of the specific EU Consortium project and compliance with the obligations under the terms of the program, including assessing deliverables and reports during a period of up to two years following the receipt by the company of the full grant payment; Obligations related to Intellectual property allocation generated by an EU Consortium, background intellectual property designation prior to the commencement of the EU Consortium's project and the provision of access rights to results obtained as part of the EU Consortium. Breach of such obligations may result in the reduction of the aggregate expected grant amount or claiming back previously received grants. In addition, the company may be subject to administrative and financial penalties such as temporary exclusion from all JU European Consortia and fines of up to 10% of the maximum expected grant, as well as to contractual liabilities.

*European Research Area program*

We also participate in European consortia which are not part of the JU (Joint Undertaking) program, thus, these programs are funded only by the European commission with no national funding from the Israel Innovation Authority. The restrictions under the Israeli Innovation Law do not apply to the project under these programs.

*Past royalty bearing programs and royalties arrangements*

Some of our previous research and development efforts were financed in part through royalty-bearing grants. We were obligated to pay royalties from sales of products funded with these grants. This obligation included different annual interest rates ranging up to 5%. In August 2016, we entered into a royalty buyout arrangement (the "Arrangement") with the IIA. As part of the Arrangement, we paid approximately $12.9 million to the IIA in September 2016. The contingent net royalty liability to the IIA at the time we executed the Arrangement was approximately $24 million. As a result of the foregoing payment, we are released from any future royalty payments on these previous funds received from the IIA. However, to the extent that we will be able to commercialize products that were developed as part of IIA programs and were declared as "failed" at the time of the Arrangement, we will be required to pay royalties to the IIA from income generated from such commercialization. Currently, we do not anticipate that such failed projects will generate revenues in the future. We note that the Arrangement does not release the Company from other obligations towards the IIA as further detailed herein. In addition, in the future, we may, alone or together with third parties, participate in research and development programs, which may bear royalty obligations (depending on the specific terms of the applicable program).

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*Pertinent obligations under the Israeli Encouragement of Research, Development and Technological Innovation in the Industry Law 1984*

Under the Encouragement of Research, Development and Technological Innovation in the Industry Law 1984 and the provisions of the applicable regulations, rules, procedures and benefit tracks, together the Innovation Law, a qualifying research and development program is typically eligible for grants of up to 55% of the program's pre-approved research and development expenses. The program must be approved by a committee of the IIA. The recipient of the grants is required to return the grants by the payment of royalties on the revenues generated from the sale of products (and related services) developed (in whole or in part) under IIA program up to the total amount of the grants received from IIA, linked to the U.S. dollar and bearing annual interest (as determined in the Innovation Law). Following the full payment of such royalties and interest, there is generally no further liability for royalty payment for our currently developed and sold products. Nonetheless, the restrictions under the Innovation Law (as generally specified below) will continue to apply even after our company has repaid the grants, including accrued interest, in full.

The main pertinent obligations under the Innovation Law are as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Local Manufacturing Obligation*.
 The terms of the grants under the Innovation Law require that we manufacture the products developed with these grants in Israel. Under
 the regulations promulgated under the Innovation Law, the products may be manufactured outside Israel by us or by another entity only
 if prior approval is received from the IIA (such approval is not required for the transfer of less than 10% of the manufacturing capacity
 in the aggregate, as declared to be manufactured out of Israel in the applications for funding, in which case a notice should be provided
 to the IIA). This approval may be given only if we abide by all the provisions of the Innovation Law and related regulations. Ordinarily,
 as a condition to obtaining approval to manufacture outside Israel, we would be required to pay royalties at an increased rate (usually
 1% in addition to the standard rate and increased royalties cap between 120% and 300% of the grants, depending on the manufacturing volume
 that is performed outside Israel).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Know-How transfer limitation*.
 The Innovation Law restricts the ability to transfer know-how funded by the IIA outside of Israel, including by way of a license to a
 non-Israeli entity. Transfer of IIA funded know-how outside of Israel requires prior approval of the IIA. The IIA approval to transfer
 know-how created, in whole or in part, in connection with an IIA-funded project to third party outside Israel is subject to payment of
 a redemption fee to the IIA calculated according to a formula provided under the Innovation Law that is based, in general, on the ratio
 between the aggregate IIA grants to the company's aggregate investments in the project that was funded by these IIA grants, multiplied
 by the transaction consideration, taking into account depreciation mechanism, and less royalties already paid to the IIA. The regulations
 promulgated under the Innovation Law establish a maximum payment of the redemption fee paid to the IIA under the above mentioned formulas
 and differentiates between two situations: (i) in the event that the company sells its IIA funded know-how, in whole or in part, or is
 sold as part of an M&A transaction, and subsequently ceases to conduct business in Israel, the maximum redemption fee under the above
 mentioned formulas will be no more than six times the total grants received (plus accrued interest) for development of the know-how being
 transferred, or the entire amount received from the IIA, as applicable; (ii) in the event that following the transactions described above
 (i.e., asset sale of IIA funded know-how or transfer as part of an M&A transaction) the company undertakes to continue its R&D
 activity in Israel (for at least three years following such transfer and maintain at least 75% of its R&D staff employees it had for
 the six months before the know-how was transferred, while keeping the same scope of employment for such R&D staff), then the company
 is eligible for a reduced cap of the redemption fee of no more than three times the amounts received (plus accrued interest) for the applicable
 know-how being transferred, or the entire amount received from the IIA, as applicable. No assurance can be given that approval of any
 such transfer, if requested, will be granted and what will be the amount of the redemption fee payable.

Approval of the transfer of IIA funded technology to another Israeli company requires a pre-approval by IIA and may be granted only if the recipient undertakes to fulfil all the liabilities to IIA and undertakes abides by all the provisions of the Innovation law and related regulations, including the restrictions on the transfer of know-how and manufacturing rights outside of Israel and the obligation to pay royalties. In light of the Arrangement (as further discussed below), in certain circumstances, under such sale transactions (i.e., the transfer of IIA funded technology or portion thereof to another Israeli company), we might be obligated to pay royalties to the IIA from any income derived from such a sale transaction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Licensing arrangements*.
 Under the terms of the Innovation Law, licensing know how developed under the IIA programs outside of Israel, requires prior consent of
 IIA and payment of license fees to IIA, calculated in accordance with the licensing rules promulgated under the Innovation Law. The payment
 of the license fees does not discharge the company from the obligation to pay royalties or other payments due to IIA in accordance with
 Innovation Law.

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These restrictions may impair our ability to enter into agreements for those products or technologies which were developed with assistance of the IIA grants without the approval of the IIA. We cannot be certain that any approval of the IIA will be obtained on terms that are acceptable to us, or at all. Furthermore, in the event that we undertake a transaction involving the transfer to a non-Israeli entity of know-how developed with IIA funding pursuant to a merger or similar transaction, the consideration available to our shareholders may be reduced by the amounts we are required to pay to the IIA. Any approval, if given, will generally be subject to additional financial obligations. Failure to comply with the requirements under the Innovation Law may subject us to mandatory repayment of grants received by us (together with interest and penalties), as well as may expose us to criminal proceedings. In addition, IIA may from time-to-time audit sales of products which it claims incorporate technology funded via IIA programs and this may lead to additional royalties being payable on additional products.

**5. D**&nbsp;&nbsp;&nbsp;&nbsp; **Trend Information**

For information regarding the most significant recent trends in our market, see "Item 4B– Our Market – The Semiconductor Market – Update" in this Annual Report.

**5. E**&nbsp;&nbsp;&nbsp;&nbsp; **Critical Accounting Estimates**

We have provided a summary of our significant accounting policies, estimates and judgments in Note 2 to our consolidated financial statements, which are included elsewhere in this Annual Report. The following critical accounting discussion pertains to accounting estimates management believes are most critical to the portrayal of our historical financial condition and results of operations and that require significant, difficult, subjective or complex judgments. Other companies in similar businesses may use different estimation policies and methodologies, which may impact the comparability of our financial condition, results of operations and cash flows to those of other companies.

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Our management evaluates its estimates on an ongoing basis, including those related to, but not limited to revenue recognition, allowance for credit losses related to marketable securities, inventory write-offs, business combination, fair value and useful lives of intangible assets, and income taxes and tax uncertainties. These estimates are based on management's knowledge about current events and expectations about actions the Company may undertake in the future. Actual results could differ from those estimates.

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*Revenue Recognition*

Under ASC 606, the company derives revenue from the sales of advanced process control systems, spare parts, labor hours (mainly systems installation) and service contracts.

Contracts with customers may include multiple performance obligations. For such arrangements, the Company allocates revenue to each performance obligation based on its relative Standalone Selling Price ("SSP"). Judgment is required to determine the SSP for each distinct performance obligation. The Company uses a range of amounts to estimate SSP when it sells each of the products and services separately and needs to determine whether there is a discount to be allocated based on the relative SSP of the various products and services.

The Company enters into revenue arrangements that include products and services which are generally distinct and accounted for as separate performance obligations. The Company determines whether arrangements are distinct based on whether the customer can benefit from the product or service on its own or together with other resources that are readily available and whether the Company's commitment to transfer the product or service to the customer is separately identifiable from other obligations in the contract.

*Inventories*

Inventories are stated at the lower of cost or net realizable value. Inventory write-downs are provided to cover risks arising from slow-moving items, technological obsolescence, excess inventories, discontinued products, and for market prices lower than cost, if any. We periodically evaluate the quantities on hand relative to historical and projected sales volume (which is determined based on an assumption of future demand and market conditions), the age of the inventory and the expected consumption of service spare parts. At the point of the loss recognition, a new lower cost basis for that inventory is established. Any adjustments to reduce the cost of inventories to their net realizable value are recognized in earnings in the current period.

*Business Combination*

The results of an acquired business in a business combination are included in the Company's consolidated financial statements from the date of acquisition according to the guidance of ASC Topic 805, "Business Combinations." The Company allocates the purchase price, which is the sum of the consideration provided and may consist of cash, equity or a combination of the two, to the identifiable assets and liabilities of the acquired business at their fair values as of the acquisition date. The excess of the purchase price over the amount allocated to the identifiable assets and liabilities, if any, is recorded as goodwill.

We allocate the purchase price to the tangible and intangible assets acquired and liabilities assumed, based on their estimated fair values. These valuations require management to make significant estimations and assumptions, especially with respect to intangible assets. Critical estimates in valuing intangible assets include future expected cash flows from technology acquired, backlog and customer relationships. Management's estimates of fair value are based on assumptions believed to be reasonable, but which are inherently uncertain and unpredictable.

Intangible assets are comprised of acquired technology and customer relations**.**

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*Accounting for income tax*

We are subject to income taxes in Israel, the United States and numerous foreign jurisdictions. Judgment is required in evaluating our uncertain tax positions and determining our taxes. Although we believe our reserves are reasonable, no assurance can be given that the final tax outcome of these matters will not be different from that which is reflected in our historical income tax provisions and accruals. We adjust these reserves in light of changing facts and circumstances, such as the closing of a tax audit or the refinement of an estimate. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences will affect the provision for income taxes in the period in which such determination is made.

Judgment is also required in determining any valuation allowance recorded against deferred tax assets. In assessing the need for a valuation allowance, we consider all available evidence, including past operating results, estimates of future taxable income, and the feasibility of tax planning strategies. In the event that we change our determination as to the amount of deferred tax assets that can be realized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in which such determination is made.

For a discussion of other significant accounting policies used in the preparation of our financial statements and recent accounting pronouncements, see Note 2 to our consolidated financial statements contained elsewhere in this Annual Report.

#### Item 6. Directors, Senior Management and Employees
**6. A**Directors and Senior Management

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The following is the list of senior management and directors as of February 5, 2026:

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| | | |
|:---|:---|:---|
| **<u>Name</u>** | **<u>Age</u>** | **<u>Position</u>** |
| Eitan Oppenhaim (4) | 60 | Chairman of the Board of Directors |
| Avi Cohen (1)(2) (4) | 72 | Director |
| Raanan Cohen (2)(3) | 70 | Director |
| Zehava Simon (1)(2)(3)(4) | 67 | Director |
| Sarit Sagiv (1)(2) | 57 | Director |
| Yaniv Garty (3)(4) | 58 | Director |
| Rami Hadar (4) | 63 | Director |
| Gabriel Waisman | 55 | President & CEO |
| Guy Kizner&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;  | 42 | Chief Financial Officer |
| Shay Wolfling&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;  | 54 | Chief Technology Officer |
| Adrian S. Wilson | 54 | President of US subsidiary & General Manager Material Metrology Division |
| Effi Aboody  | 55 | Corporate VP and General Manager Dimensional Metrology Division |
| Thomas Schütt | 54 | General Manager Chemical Metrology Division |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Member of the audit committee

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Member of the compensation committee

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Member of the nominating governance and sustainability committee

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Member of the strategy and M&A committee

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Mr. Eitan Oppenhaim was named chairman of our board of directors on March 31, 2023, after serving as member of our board of directors from October 2019. Mr. Oppenhaim served as the President and Chief Executive Officer of the Company from July 31, 2013, until March 31, 2023, and has previously served as the Executive Vice President Global Business Group, since November 2010. As of November 2025, Mr. Oppenhaim serves as a director of TAT Technologies (Nasdaq: TATT). From 2009 until 2010, Mr. Oppenhaim served as Vice President and Europe General Manager of Alvarion Ltd., a public company traded on Nasdaq. During the years 2007 through 2009, Mr. Oppenhaim served as Vice President of sales and marketing of OptimalTest Ltd. Prior to that, from 2002 until 2006, Mr. Oppenhaim served as Vice President – Business Manager of the Flat Panel Displays division of Orbotech Ltd., a public company traded on Nasdaq. From 2001 until 2002, Mr. Oppenhaim served as Managing Director of Asia Pacific at TTI Telecom International, a leading provider of assurance, analytics and optimization solutions to communications service providers (CSP) worldwide. Prior to that, from 1994 until 2001, Mr. Oppenhaim held several key executive positions at Comverse Network Systems Ltd., a public company traded on Nasdaq. Mr. Oppenhaim holds a BA in Economics from the Haifa University, Israel and an MBA from Ben-Gurion University, Beer-Sheva, Israel.

*Mr. Avi Cohen* has served as a director of the Company since 2008 and during the period between December 2022 and March 2023 he also served as the interim chairperson of our board of directors while Dr. Michael Brunstein was absent for health-related reasons. Additionally, Mr. Cohen serves as Chairman of ZOOZ Power Ltd. (TASE: ZOOZ) and as a director of Cognyte Software Ltd. (Nasdaq: CGNT) as well as on the board of directors of Cortica Ltd., and Sight Diagnostics. From July 2016 to September 2017 Mr. Cohen served as the CEO of MX1, a global media service provider founded in July 2016 post acquisition of RR Media (Nasdaq: RRM) by SES S.A. and merger between RR Media, and SES Platform Services GmbH. From July 2012 until the merger, Mr. Cohen served as the CEO of RR Media. Prior to that, until March 2012, Mr. Cohen served as President and CEO of Orbit Technologies (TASE: ORBI). From September 2006 until December 2008, Mr. Cohen served as chief operating officer and deputy to the CEO of ECI Telecom Ltd. Prior to joining ECI, Mr. Cohen served in a variety of executive management positions at KLA (Nasdaq: KLAC) and was group vice president and member of the executive management committee starting 2003. Prior to joining KLA, Mr. Cohen also spent three years as managing director of Octel Communications, Israel, after serving as CEO of Allegro Intelligent Systems, which he founded and which was acquired by Octel. Mr. Cohen holds a B.Sc. and a M.Sc. in electrical engineering and applied physics from Case Western Reserve University, U.S.

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*Mr. Raanan Cohen* was appointed as a director of the Company by our board of directors in February 2014. Prior to that and until December 2012, Mr. Cohen served as the President and Chief Executive Officer of Orbotech Ltd., a public company traded on Nasdaq. Mr. Cohen also served in a range of other executive positions at Orbotech Ltd, including Co-President for Business and Strategy, EVP and President of the Printed Circuit Board (PCB) Division, Vice President for the PCB-AOI product line and President and chief executive officer of Orbotech, Inc. Prior to its merger with Orbotech in 1991, Mr. Cohen held various positions at Orbot, another manufacturer of AOI systems. Prior to joining Orbot in 1984, he worked at Telrad Networks Ltd. Mr. Cohen serves as director of Eyecuracy Ltd., and of Claro Ltd., both private companies, served as the Chief Executive Officer of EyeWay Vision Ltd., a private company until November 2024, and has served as a director of Gezuntech therapeutics, a private company until January 2025. Mr. Cohen holds a B.Sc. from the Hebrew University of Jerusalem, Israel.

*Ms. Zehava Simon* was elected as the Company's external director in accordance with the provisions of the Companies Law in June 2014 and reelected in June 2017. Effective as of May 2018, and our adoption of the exemption under the Regulation (as defined below), Ms. Simon is no longer classified as an external director under the Companies Law. Ms. Simon served as a Vice President of BMC Software from 2000 until 2013 and in her last position (as of 2011) acted as Vice President of Corporate Development. From 2002 to 2011, Ms. Simon served as Vice President and General Manager of BMC Software in Israel. In this role, she was responsible for directing operations in Israel and India as well as offshore sites. Prior to that, Ms. Simon held various positions at Intel Israel., which she joined in 1982, including leading of Finance & Operations and Business Development for Intel in Israel. Ms. Simon is currently a board member of Audiocodes Ltd., a public company traded on Nasdaq and TASE, Nice Ltd., a public company traded on Nasdaq and TASE. Ms. Simon is a former member of the board of directors of Insightec Ltd. (2005-2012), M-Systems Ltd., a Nasdaq listed company which was acquired in 2006 by SanDisk Corp., a public company traded on Nasdaq as well (2005-2006) and Tower Semiconductor Ltd., a public company traded on TASE and Nasdaq (1999-2004). Ms. Simon holds a B.A. in Social Sciences from the Hebrew University of Jerusalem, Israel, a law degree (LL.B.) from Reichman University (formerly, the Interdisciplinary Center in Herzliya, Israel) and an M.A. in Business and Management from Boston University, U.S.

*Ms. Sarit Sagiv* was appointed to serve as a director of the Company by our board of directors in August 2021. Ms. Sagiv serves as a member of the Investments Committee of Phoenix Insurance and as a member of the board of directors of OPC Energy Ltd., a public company traded on TASE. Ms. Sagiv served as General Manager of the Global Business division at Amdocs (Nasdaq: DOX) between 2016 and 2020. Prior to this role, Ms. Sagiv served as the Chief Financial Officer of Nice Ltd. (Nasdaq and TASE: NICE), with responsibility for the finance, legal, operations and IT areas, and before that as the Chief Financial Officer of Retalix Ltd. (Nasdaq and TASE: RTLX). Ms. Sagiv also held various other Chief Financial Officer and senior financial positions. Ms. Sagiv is a certified public accountant. She holds a B.A. in Accounting and Economics and an MBA, both from Tel-Aviv University, Israel and an M.A. in Law from Bar Ilan University, Israel.

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*Mr. Yaniv Garty* was appointed to serve as a director of the Company by our board of directors as of April 2, 2023. From January 2017 to February 2023, Mr. Garty was a Vice President at Intel, a public company traded on the Nasdaq, and the General Manager of Intel Israel – Israel's largest Hi-Tech employer and Intel's largest operation outside the U.S. Before returning to Israel from the Bay Area, Mr. Garty held multiple positions within Intel since its acquisition of Envara Inc. in 2004. He initially served as Chief Operating Officer of Intel's Broadband Wireless Division (WiMAX/4G and WLAN solutions), and from 2011 to 2018 as the General Manager of the Wireless Connectivity Solutions business unit, a worldwide organization responsible for delivering wireless connectivity technologies and products. Prior to Intel's acquisition of Envara, Mr. Garty had multiple engineering, business, and managerial positions in different companies, including Serconet Networks, Optibase, and Orckit Communications. Prior to this, Mr. Garty served as a R&D Engineer with the Ministry of Defense of Israel. Mr. Garty serves as a director of the board of Strauss Group, a publicly traded company (TASE: STRS) as of September 2024. Additionally, Mr. Garty serves as the Chairman of the America-Israel Chamber of Commerce since January 2018, a voluntary organization of more than 230 Israeli and multinational companies. Mr. Garty holds a B.Sc. in electrical engineering and an MBA, both from Tel Aviv University, Israel.

Mr. Rami Hadar was appointed to serve as a director of the Company by our board of directors as of December 24, 2025. Mr. Hadar serves as a director on the board of directors and as chairman of the compensation committee of Ceragon Networks Ltd. (Nasdaq: CRNT) since 2021. Additionally, Mr. Hadar serves as a managing partner in Claridge Israel, a high-tech growth fund since 2017. Amongst his responsibilities are identifying potential investment targets, leading extensive due diligence processes and acting as a proactive board member to help management teams scale and create shareholder value. Prior to joining Claridge, from 2006 to 2014, Mr. Hadar served as CEO and board member of Allot Communications (Nasdaq: ALLT). Under his leadership, Allot transitioned from a private company into a fast-growing, public company with over $100M of sales and high profitability. Prior to his roles in Allot, Mr. Hadar co-founded and served as CEO of CTP Systems (micro cellular networks) until its acquisition by DSP Communications (Nasdaq: DSPC). Additionally, Mr. Hadar serves on the board of directors of AlgoSec Inc., a private company, since 2017 and D-Fend Solutions, a private company since 2019. Mr. Hadar holds a B.Sc. in Electrical Engineering from the Technion Institute of Technology, Israel.

*Mr. Gabriel Waisman* was appointed by our board of directors as the Company's President & Chief Executive Officer, effective as of March 31, 2023. Mr. Waisman previously served as the Company's Chief Business Officer (CBO) since 2016, responsible for customer facing groups, including global sales, marketing, customer support and applications. Mr. Waisman has over 17 years of managerial expertise in a global geographically dispersed environment, and extensive experience pioneering multidisciplinary technologies, particularly within the Electronics and Telecom sectors. Prior to joining Nova, Mr. Waisman served as President of both Orbotech Pacific (Orbotech Ltd Hong Kong) and Orbotech West (Orbotech Inc., USA) where he was responsible for Sales & Marketing, Finance and Operations, and Customer Support. Prior to this, Mr. Waisman served in various managerial positions at Alvarion, starting as Strategic Marketing Director, EMEA, and moving on to Vice President of Strategic Accounts, General Manager of Western Europe, followed by Managing Director, Asia-Pacific. Mr. Waisman has also served as EMEA Regional Sales & Marketing Director (Broadband Division) at Comverse. He holds a B.Sc. in Electronic Engineering from the Technion Institute of Technology in Israel and an MBA in Business Administration from the Tel-Aviv University, Israel.

------

*Mr. Guy Kizner* has served as the Chief Financial Officer since July 1, 2024. Mr. Kizner joined Nova in 2010 and served in several key financial positions such as Director of Financial Planning & Analysis and Vice President of Corporate Finance. Prior to joining Nova, Mr. Kizner held various finance roles at Delek Group (TASE: DLEKG) and Israel Aerospace Industries, broadening his expertise in the financial sector. Mr. Kizner holds a B.A. in Accounting from Bar Ilan University, Israel, a B.A. in Economics and an MBA from the College of Management Academic Studies, Israel.

*Dr. Shay Wolfling* joined Nova in 2011, as Chief Technology Officer. Prior to joining Nova, Dr. Wolfling was an R&D manager at KLA-Tencor-Belgium (formerly ICOS Vision Systems, a public traded company acquired by KLA in 2008), where he led multidisciplinary metrology & inspection development projects. From 2000 until its technology acquisition by ICOS in 2005, Dr. Wolfling was a founder and Vice President of Research and Development of Nano-Or-Technologies, a start-up company with a proprietary technology for 3D optical measurements. Dr. Wolfling helped Nano-Or develop from the idea stage to initial product sales. Prior to founding Nano-Or, Dr. Wolfling was a project manager in Y-Beam-Technologies, a start-up offering laser-based skin treatments. Dr. Wolfling has several patents under his name in the field of optical measurements. Dr. Wolfling holds a B.Sc. in physics and mathematics from the Hebrew University of Jerusalem, Israel, a second degree in physics from Tel-Aviv University, Israel and a Ph.D. in physics from the Hebrew University of Jerusalem, Israel.

*Mr. Adrian S. Wilson* joined Nova in January 2018 as General Manager Material Metrology Division and President of our U.S. subsidiary, Nova Measuring Instruments, Inc. Mr. Wilson has over 30 years of Semiconductor capital equipment and materials experience. Mr. Wilson joins us from Nanometrics Inc., where he held the position of Vice President & General Manager of Advanced Imaging and Analytics Business Unit. Prior to Nanometrics Inc., he held the position of Managing Director of Element Six Technologies Ltd., the non-abrasive arm of the synthetic diamond group of DeBeers, focused on thermal management and optical components for the semiconductor industry. Mr. Wilson has experience in leading both start-ups and divisions within large public multi-national companies, including KLA, FormFactor Inc. and Phoenix X-ray Systems & Services Inc., a capital equipment start-up. Mr. Wilson holds a bachelor's degree in Electronics Engineering, post Grad in Marketing Management and an MBA in Technology Management. Mr. Wilson's accreditations include Fellow of the Chartered Institute of Marketing (UK) and Fellow of the Institute of Directors (UK).

*Mr. Effi Aboody* has served as our Corporate VP and General Manager Dimensional Metrology Division since September 2019. Mr. Aboody joined Nova in 2016 as Vice President and Head of the Global Applications team. Mr. Aboody started his career at Intel Corporation Ltd in 1996 as an Integration engineer, working in Portland and California R&D centers, in both logic and memory devices, followed by several managerial positions including Process Integration, Sort testing manager and Yield manager. In 2008, Mr. Aboody served as Yield and Integration Departments at Numonyx Ltd focusing on NOR flash memory process and reliability. In 2011, Mr. Aboody managed the Engineering and Yield Departments at Micron Technology Ltd Fab12. In 2013, Mr. Aboody returned to Intel Corporation to manage the Fab28 Yield Organization, responsible for CPU and SoC outgoing yield performance, defects and Labs. Mr. Aboody holds an Executive MBA from Tel-Aviv University, Israel and a B.Sc. in Materials Engineering from Ben-Gurion University of the Negev, Israel.

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*Dr. Thomas Schütt* was appointed General Manager of our Chemical Metrology Division and Managing Director of our German subsidiary in April 2023. Before joining Nova, Dr. Schütt held various leading positions in the wafer technology and application field of Siltronic AG, a leading German manufacturer of silicon wafers for the semiconductor industry. From 2009 until 2013, Dr. Schütt served as a global account manager of Siltronic US, and from 2013 to 2019 he was leading the Taiwan and China business as the VP Sales and Managing Director of Siltronic Taiwan and China. In his last role he served as Corp. VP Application Technology International of Siltronic AG from 2019 to 2023. Since April 2025, Dr. Schütt is, in addition to his role as GM for the Chemical Metrology division, also serving as General Manager of Sentronics, a Nova company. Dr. Schütt holds a Ph.D. in Chemistry from the Ludwig-Maximilian University Munich, Germany.

#### Voting Agreement
We are not aware of any voting agreement currently in effect.

**6. B**&nbsp;&nbsp;&nbsp;&nbsp; **Compensation**

The aggregate compensation expensed, including share-based compensation and other compensation expensed by us, to our board and senior management members listed in Item 6.A in this Annual Report, with respect to the year ended December 31, 2025 (consisting of 13 persons) was approximately $13 million. This amount includes approximately $0.4 million set aside or accrued to provide pension, severance, retirement, or similar benefits and amounts expensed by the Company for automobiles made available to its executive officers).

Disclosure regarding the compensation of our senior executives on an individual basis will be disclosed in our proxy statement in connection with the 2026 annual general meeting of shareholders in accordance with Israeli regulations.

Terms of employment of Mr. Gabriel Waisman, as were approved by our shareholders at the 2024 annual general meeting of shareholders, and amended by our shareholders at the 2025 annual general meeting of shareholders are as follows:

*General*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) a monthly base salary of NIS 120,000 (approximately, $32,600), effective as of June 1, 2024 through June 2025 following which, the monthly base salary was increased to NIS 131,500 (approximately $36,000); (ii) an annual bonus of up to twelve (12) monthly base salaries for 100% achievement (with additional payment of up to twelve (12) monthly salaries in the case of overachievement), subject to objectives which are annually predetermined by our board of directors and the compensation committee, in accordance with our compensation policy; (iii) in the event of termination of employment (other than for cause), Mr. Waisman will be entitled to a six months advance notice, during which he will be entitled to all of his compensation components, including the continued vesting of his equity awards. In the event of termination of employment not for cause, the annual bonus will be prorated (subject to certain adjustments); (iv) customary social benefits such as pension fund or management insurance, education fund, vacation pay, sick leave and convalescence pay; (v) subject to required approvals under applicable law, a directors and officers' insurance, including a "run-off" insurance policy; and (vi) monthly travel expenses or a Company car (deducted out of the gross salary), cellular phone, a land line phone, toll road expenses, a laptop computer, annual medical check-up and other expense reimbursements pursuant to the Company general policies as applicable from time to time.

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*Equity-Based Compensation*

On June 1, 2023, per the approval at the 2023 annual general meeting of shareholders, Mr. Waisman was granted a total of 12,000 restricted share units that vest over a period of four (4) years, in equal annual installments, unless such restricted share units have been cancelled in accordance with the terms and conditions of the share incentive plan of the Company or the employment terms of Mr. Waisman. In addition, Mr. Waisman was granted with 12,000 performance-based restricted units that vest over a period of four (4) years, in four equal annual installments, provided that the Company meets or exceeds the non-GAAP operating profit as set forth in the Company's budget as approved by the board of directors for the fiscal year preceding the date of vesting, unless such performance share units have been cancelled in accordance with the terms and conditions of the share incentive plan of the Company or the employment terms of Mr. Waisman. In the event a portion of the performance share units fails to vest, such portion will be carried forward to the fourth vesting date and will vest if the Company's average annual return on equity based on net income during the previous four (4) years will be no less than ten percent (10%).

On July 1, 2024, per the approval at the 2024 annual general meeting of shareholders, Mr. Waisman was granted an additional 5,930 restricted share units that vest over a period of four (4) years, in equal annual installments, unless such restricted share units have been cancelled in accordance with the terms and conditions of the share incentive plan of the Company or the employment terms of Mr. Waisman. In addition, Mr. Waisman was granted with 5,930 performance-based restricted units that vest over a period of four (4) years, in four equal annual installments, provided with respect to 50% of the units, the Company meets or exceeds the revenue budget as set forth in the Company's budget as approved by the board of directors for the fiscal year preceding the date of vesting, and with respect to the other 50% of the units, provided that the Company meets or exceeds the non-GAAP operating profit as set forth in the Company's budget as approved by the board of directors for the fiscal year preceding the date of vesting unless such performance share units have been cancelled in accordance with the terms and conditions of the share incentive plan of the Company or the employment terms of Mr. Waisman. In the event a portion of the performance share units fails to vest, such portion will be carried forward to the fourth vesting date and will vest if the Company's average annual return on equity based on net income during the previous four (4) years will be no less than ten percent (10%).

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On July 1, 2025, per the approval at the 2025 annual general meeting of shareholders, Mr. Waisman was granted an additional 6,710 restricted share units that vest over a period of four (4) years, in equal annual installments, unless such restricted share units have been cancelled in accordance with the terms and conditions of the share incentive plan of the Company or the employment terms of Mr. Waisman. In addition, Mr. Waisman was granted with 6,710 performance-based restricted units that vest over a period of four (4) years, in four equal annual installments, provided with respect to 50% of the units, the Company meets or exceeds the revenue budget as set forth in the Company's budget as approved by the board of directors for the fiscal year preceding the date of vesting, and with respect to the other 50% of the units, provided that the Company meets or exceeds the non-GAAP operating profit as set forth in the Company's budget as approved by the board of directors for the fiscal year preceding the date of vesting unless such performance share units have been cancelled in accordance with the terms and conditions of the share incentive plan of the Company or the employment terms of Mr. Waisman. In the event a portion of the performance share units fails to vest, such portion will be carried forward to the fourth vesting date and will vest if the Company's average annual return on equity based on net income during the previous four (4) years will be no less than ten percent (10%).

*Compensation upon Significant Event*

In the event that prior to the completion of the vesting of equity awards granted to Mr. Waisman an acquisition of the Company or asset transfer of all or substantially all the assets of the Company (collectively, "M&A Event") will occur while Mr. Waisman is employed by the Company and holds the position of the Company's Chief Executive Officer & President, then immediately prior to, and contingent upon, the closing of such M&A Event, all of Mr. Waisman unvested equity awards will become fully vested and exercisable, or substituted for equity awards in a successor company.

In the event an M&A Event will occur while Mr. Waisman is employed by the Company and holds the position of the Company's Chief Executive Officer & President, the compensation committee and the Board may grant to Mr. Waisman a special bonus of up to 12 monthly salaries.

*Compensation upon Acquisition*

In the event the Company acquires another business (whether by merger, share or asset purchase) while Mr. Waisman is employed by the Company and holds the position of the Company's Chief Executive Officer & President, Mr. Waisman may be granted a special bonus of up to 12 monthly salaries, subject to the compensation committee and board of director's discretion. In accordance with this entitlement, on February 2025 our compensation committee and board approved a bonus of 12 monthly salaries for the acquisition of Sentronics which was paid to Mr. Waisman in April 2025.

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*Directors and Officers Equity Based Compensation*

As of February 5, 2026, a total of 4,010 options to purchase our ordinary shares and 87,667 RSU's were outstanding and held by certain directors and senior management members listed in Item 6.A in this Annual Report (consisting of 13 persons), of which 4,010 options are currently exercisable or exercisable within 60 days of February 5, 2026. 47,824 shares are held by trustee due to vested RSUs and 607 RSU's will vest within 60 days of February 5, 2026. See "Item 6E. Share Ownership" in this Annual Report.

In accordance with our current equity-based compensation policy, the exercise price of granted options is equal to the closing sale price of the Company's ordinary shares on Nasdaq on the day of grant.

*Compensation of Directors*

The compensation scheme for our non-executive directors (other than the chairperson of the board of directors), which does not include any pay per meeting, as approved by our shareholders in June 2025, is as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) an annual payment of $60,000 with additional annual payment for service on board committees as follows: $12,000 (or $20,000 for the chairperson) for each member of the audit committee; $12,000 (or $18,000 for the chairperson) for each member of the compensation committee; and $8,500 (or $12,500 for the chairperson) for each member of the nominating committee or any other Board Committee; and (b) for services as the chairperson of our Board, an additional $60,000; *provided*, that in the event payments are made in NIS, the amounts will be calculated on the average exchange rate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) in the event of a director appointed by our board of directors, a one-time equity award of restricted share units of $255,000 which will vest annually over a period of three (3) years (subject to such director's continued service through such date); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) an equity award of restricted share units, on an annual basis on the date of the annual general meeting of the Company's shareholders (subject to such director's continued service) at a value of $192,000 (or $600,000 for the chairperson of the Board), which will vest on the first anniversary of the date of grant, subject to such director's continued service through such date; <u>provided</u>, <u>however</u>, that the director must have served on the Board for at least one (1) year prior to the date of the annual general meeting of the Company's shareholders in order to be eligible for such award; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) a director whose service as a director ends (other than in the case the director is removed by the Company's shareholders or disqualified under the Companies Law) following at least eight (8) years of directorship will be entitled to the acceleration of vesting of any equity awards, including options and restricted share units, subject to vesting within three (3) months of his or her last date of service, so such equity awards will be fully vested as of such date.

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On June 18, 2025, our shareholders approved our current compensation policy.

The full text of our current compensation policy is filed hereto as Exhibit 4.3 and is incorporated by reference. Furthermore, following the SEC approval of Nasdaq's proposed clawback listing standards, under Rule 10D-1 (the "Clawback Listing Rules"), which directed companies to adopt and comply with a written clawback policy, to disclose and file the policy as an exhibit to its annual report, we adopted as of October 2, 2023, a clawback policy as contemplated pursuant to the Clawback Listing Rules, as filed as Exhibit 97 to the 2023 Annual Report and is incorporated by reference.

**6. C**&nbsp;&nbsp;&nbsp;&nbsp; **Board Practices**

Our Amended and Restated Articles of Association, as adopted by the Company's shareholders on June 20, 2024, or the Articles, provide that we may have between five and nine directors. Our board of directors currently consists of seven directors, two of which are female directors.

Under the Companies Law, companies incorporated under the laws of the State of Israel that are "public companies," including companies with shares listed on the Nasdaq Global Select Market, are required to appoint at least two external directors.

Pursuant to regulations promulgated under the Companies Law, companies with shares traded on a U.S. stock exchange, including the Nasdaq Global Select Market, may, subject to certain conditions, "opt out" from the Companies Law requirements to appoint external directors and related Companies Law rules concerning the composition of the audit committee and compensation committee of the board of directors. In accordance with these regulations, in May 2018, we elected to "opt out" from the Companies Law requirements to appoint external directors and related Companies Law rules concerning the composition of the audit committee and compensation committee of the board of directors.

Under these regulations, the exemptions from such Companies Law requirements will continue to be available to us so long as: (i) we do not have a "controlling shareholder" (as such term is defined under the Companies Law), (ii) our shares are traded on a U.S. stock exchange, including the Nasdaq Global Select Market, and (iii) we comply with the director independence requirements, the audit committee and the compensation committee composition requirements, under U.S. laws (including applicable Nasdaq Rules) applicable to U.S. domestic issuers.

Our board of directors has determined that all of our directors, except for Mr. Oppenhaim, qualify as ''independent directors'' as defined by the Nasdaq Stock Market Rules.

&nbsp;&nbsp;&nbsp;&nbsp;Our Articles provide that directors may be elected at our annual general meeting of shareholders by a vote of the holders of more than 50% of the total number of votes represented at such meeting, not taking into consideration abstention votes. In addition, our board of directors is authorized to appoint directors, at its discretion, provided that the total number of directors does not exceed the maximum number of directors permitted by the Articles. Our directors serve as such until the next annual general meeting of our shareholders.

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According to the Companies Law, the board of directors of a public company must establish the minimum number of board members that are to have accounting and financial expertise while considering, *inter alia*, the nature of the company, its size, the scope and complexity of its operations and the number of directors stated in the Articles.

Our board of directors resolved that the minimum number of board members that need to have accounting and financial expertise is one (1).

Our board of directors determined that Ms. Sarit Sagiv has accounting and financial expertise as described in the regulations promulgated pursuant to the Companies Law, and that, therefore, the requirement of the minimum number of board members that need to have accounting and financial expertise, as set by the board of directors, has been met.

Our board of directors has adopted a training program for newly appointed directors. Once appointed and following the completion of their onboard training, our directors continue to receive ongoing training as part of our directors training and development efforts.

*Family Relationships*

There are no family relationships between any members of our executive management and our directors.

#### Board of Directors' Committees
The Company's board of directors has appointed the following committees:

#### Audit Committee
Our Audit Committee is comprised of Sarit Sagiv (Chairperson), Zehava Simon and Avi Cohen. The audit committee is responsible to provide oversight of the accounting and financial reporting process of the Company and the audits of the financial statements of the Company, and assist the Board in its oversight of (i) the integrity of the Company's financial statements and other published financial information, (ii) the Company's compliance with applicable financial and accounting related standards, rules and regulations, (iii) the selection, engagement and termination, subject to shareholder approval, of the Company's independent auditor, (iv) the pre-approval of all audit, audit-related and all permitted non-audit services, if any, by the Company's independent auditor, and the compensation therefor, (v) the Company's internal controls over financial reporting, and (vi) risk assessment and risk management, including cyber risks.

Under the Companies Law, the audit committee is responsible, among others, for (i) identifying deficiencies in the business management practices of the Company, including by consulting with the internal auditor, and recommending remedial actions with respect to such deficiencies; (ii) reviewing and approving related party transactions, including, among others, determining whether or not such transactions are deemed material actions or extraordinary transactions; (iii) ensuring that a competitive process is conducted for related party transactions with a controlling shareholder (regardless of whether or not such transactions are deemed extraordinary transactions), optionally based on criteria which may be determined by the audit committee annually in advance; (iv) setting forth the approval process for transactions that are 'non-negligible' (i.e., transactions with a controlling shareholder that are classified by the audit committee as non-negligible, even though they are not deemed extraordinary transactions), as well as determining which types of transactions would require the approval of the audit committee, optionally based on criteria which may be determined annually in advance by the audit committee; (v) evaluating the Company's internal audit program and the performance of the Company's internal auditor and the resources at his/her disposal; (vi) reviewing the scope of work of the Company's external auditor and making recommendations regarding his/her salary; and (vii) creating procedures relating to the employees' complaints regarding deficiencies in the administration of the Company as well as adopting against retaliation. The audit committee is also responsible for reviewing and approving any material change or waiver in the Company's Corporate Code of Conduct regarding directors or executive officers, and disclosures made in the Company's annual report in such regard. The audit committee operates under a charter duly adopted by the board of directors.

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Our board of directors has determined that each member of our audit committee is independent as such term is defined in Rule 10A-3 under the Exchange Act, and that each member of our audit committee satisfies the additional requirements applicable under the Nasdaq rules to members of an audit committee.

Our audit committee also acts as our investment committee, monitoring our cash reserves investment policy.

#### Compensation Committee
Our Compensation Committee is comprised of Zehava Simon (Chairperson), Avi Cohen, Raanan Cohen and Sarit Sagiv. The function of the compensation committee is described in the approved charter of the committee and includes assisting the board of directors in discharging its responsibilities relating to compensation of the Company's officers, directors and executives and the overall compensation programs and reviewing and approving, or if required by law, approving and recommending for approval by the board of directors, grants and awards under the Company's equity incentive plans. The primary objective of the committee is to oversee the development and implementation of the compensation policies and plans that are appropriate for the Company in light of all relevant circumstances, and which provide incentives that fit the Company's long-term strategic plans and are consistent with the culture of the Company and the overall goal of enhancing shareholder's value.

Our board of directors has determined that each member of our compensation committee is independent under the Nasdaq rules, including the additional independence requirements applicable to the members of a compensation committee.

Under the Companies Law and our compensation committee charter, our compensation committee is responsible, among others, for (i) recommending to the board of directors regarding its approval of a compensation policy in accordance with the requirements of the Companies Law, and any other compensation policies, incentive-based compensation plans and equity-based plans; (ii) overseeing the development and implementation of such compensation plans and policies that are appropriate in light of all relevant circumstances and recommending to the board of directors regarding any amendments or modifications that the compensation committee deems appropriate; (iii) determining whether to approve transactions concerning the terms of engagement and employment of our officers and directors that require compensation committee approval under the Companies Law or our compensation plans and policies; (iv) oversees the administration of our clawback policy with respect to executive compensation, in line with our charter, including as required pursuant to SEC and Nasdaq rules; and (v) taking any further actions as the compensation committee is required or allowed to under the Companies Law or the compensation plans and policies.

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#### Nominating Governance and Sustainability Committee
Our *Nominating Governance and Sustainability Committee* is comprised of Raanan Cohen (Chairperson), Zehava Simon and Yaniv Garty. The function of the nominating committee is described in the approved charter of the committee and includes responsibility for identifying individuals qualified to become board members and recommending that the board of directors consider the director nominees for election at the general meeting of shareholders. In June 2022, our board of directors expanded the committee's responsibilities to also include recommending to the board of directors on governance matters and for developing and recommending to our board of directors business conduct and ethics guidelines, applicable to the Company, including overseeing the Company's policies, programs and strategies related to environmental, social and governance ("ESG") matters, periodically reviewing such guidelines and recommending any changes thereto, and overseeing the evaluation of our board of directors and management.

#### Strategy and M&A Committee
In August 2023, our board of directors established our Strategy and M&A Committee, which is comprised of Yaniv Garty (Chairperson), Eitan Oppenhaim, Avi Cohen, Zehava Simon and Rami Hadar. The function of the strategy and M&A committee is described in the approved charter of the committee, and includes responsibility for providing the board of directors with recommendations, in relation to: (i) the development and execution of the Company's strategy, including its strategic plans and initiatives; and (ii) the identification and analysis of acquisition, merger, joint venture, and investment opportunities. The committee shall also maintain a cooperative, interactive planning process with management, including but not limited to, identifying and prioritizing strategic goals.

All committees are acting according to written charters that were approved by our board of directors. Additionally, we adopted an internal enforcement plan which was approved by our board of directors. The internal enforcement plan, as part of which we adopted and implementing procedures and policies in order to comply with the provisions of the Israeli Securities Law, 5728-1968 (the "Israeli Securities Law"), the Companies Law, and the regulations promulgated thereunder. The internal enforcement plan includes, among others, the board committees' charters and the internal auditor charter, procedures with respect to related party transactions, insider trading, which prohibits hedging activities, equity-based compensation policy, reporting and complaints, anti-bribery and anti-fraud policies and a code of conduct. Each of our committees has the power to retain, terminate and approve the related fees and other retention terms, as it deems appropriate, outside counsel and other experts and consultants to assist the committee in connection with its responsibilities without our board of directors' approval and at the Company's expense.

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#### Approval of Related Party Transaction
The Companies Law requires that office holders of a company, including directors and executive officers, promptly disclose to the board of directors any personal interest they may have and all related material information known to them about any existing or proposed transaction with such company. The approval of the board of directors is required for 'non-extraordinary' transactions between a company and its office holders, or between a company and other persons in which an office holder has a personal interest, unless such company's articles of association provide otherwise. Under the Companies Law, a 'non-extraordinary' transaction between a company or between the company and a third party in which an office holder of a company has a personal interest, will require the approval of the board of directors or a committee authorized by the board of directors, unless such company's articles of association provide otherwise. Our Articles do not provide otherwise, and therefore such transaction requires the approval of our board of directors. If a transaction is an "extraordinary transaction", it is subject to the approval of the audit committee prior to its approval by the board of directors. For information regarding the necessary approvals under the Companies Law for transactions with office holders and directors regarding their terms of engagement with the company, see "— Compensation of Officers and Directors" in this Item below.

In addition, an extraordinary transaction between a public company and a controlling shareholder (i.e. a shareholder who has the ability to direct the activities of a company, including a shareholder that owns 25% or more of the voting rights if no other shareholder owns more than 50% of the voting rights, but excluding a shareholder whose power derives solely from its position on the board of directors or any other position with the company), or in which a controlling shareholder has a personal interest, including a private placement in which the controlling shareholder has a personal interest, a transaction between a public company and a controlling shareholder, the controlling shareholders' relative, or entities under its control, directly or indirectly, with respect to services to be provided to the public company, and a transaction concerning the terms of compensation of the controlling shareholder or the controlling shareholder's relative, who is an office holder or an employee, requires the approval of the audit committee or, in some cases, the compensation committee (see "— Compensation of Officers and Directors" in this Item below), the board of directors and a majority of the shares voted by the shareholders of the company participating and voting on the matter in a shareholders' meeting. In addition, the shareholder approval must fulfill one of the following requirements: (i) the majority must include at least a majority of the shares of the voting shareholders who have no personal interest in the transaction (in counting the total votes of such shareholders, abstentions are not taken into account); or (ii) the total of opposition votes among the shareholders who have no personal interest in the transaction may not exceed 2% of the aggregate voting rights in the company. Any such transaction the term of which is more than three years, must be approved in the same manner every three years, unless with respect to certain transactions as permitted by the Companies Law, the audit committee has determined that longer term is reasonable under the circumstances.

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According to the Companies Law, if an extraordinary transaction is discussed by the board of directors or the audit committee, directors and office holders that have personal interest in the proposed transaction, may not participate in the discussion or vote. However, if the majority of the members of the audit committee or the board of directors (as applicable) have personal interest in the proposed transaction, then all directors (including those with personal interest) may participate in the discussion and vote, provided that in the event the majority of the members of the board of directors have personal interest in the transaction, said transaction will also be subject to the approval of the Company's shareholders.

#### Compensation of Officers and Directors
Under the Companies Law, Israeli public companies are required to establish a compensation committee and adopt a policy regarding the compensation and terms of employment of their directors and officers. For information on the composition, roles and objectives of the compensation committee pursuant to the Companies Law and our compensation committee charter, see above "—Board of Directors' Committees — Compensation Committee" in this Annual Report.

Pursuant to the Companies Law, the compensation policy must be approved by the company's board of directors after reviewing the recommendations of the compensation committee. The compensation policy also requires the approval of the general meeting of the shareholders, which approval must satisfy one of the following (the "Majority Requirement"): (i) the majority should include at least a majority of the shares of the voting shareholders who are non-controlling shareholders or do not have a personal interest in the approval of the compensation policy (in counting the total votes of such shareholders, abstentions are not be taken into account) or (ii) the total number of votes against the proposal among the shareholders mentioned in paragraph (i) does not exceed two percent of the aggregate voting power in the company. Under certain circumstances and subject to certain exceptions, the board of directors may approve the compensation policy despite the objection of the shareholders, provided that both the compensation committee and the board of directors determine that it is for the benefit of the company, following an additional discussion and based on detailed arguments.

The Companies Law provides that the compensation policy must be re-approved (and re-considered) every three years, in the manner described above. Moreover, the board of directors is responsible for reviewing from time to time the compensation policy and deciding whether or not there are any circumstances that require an adjustment to the company's compensation policy. When approving the compensation policy, the relevant organs must take into consideration the goals and objectives listed in the Companies Law, and include reference to specific issues listed in the Companies Law. Such issues include, among others (the "Compensation Policy Mandatory Criteria"): (i) the relevant person's education, qualifications, professional experience and achievements; (ii) such person's position within the company, the scope of his responsibilities and previous compensation arrangements with the company; (iii) the proportionality of the employer cost of such person in relation to the employer cost of other employees of the company, and in particular, the average and median pay of other employees in the company, including contract workers, and the impact of the differences between such person's compensation and the other employees' compensation on the labor relations in the company; (iv) the authority, at the board of director's sole discretion, to lower any variable compensation components or set a maximum limit (cap) on the actual value of the non-cash variable components, when paid; and (v) in the event that the terms of engagement include any termination payments - the term of employment of the departing person, the company's performance during that term, and the departing person's contribution to the performance of the company.

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In addition, the Companies Law provides that the following matters must be included in the compensation policy (the "Compensation Policy Mandatory Provisions"): (i) the award of variable components must be based on long term and measurable performance criteria (other than non-material variable components, which may be based on non-measurable criteria taking into account the relevant person's contribution to the performance of the company); (ii) the company must set a ratio between fixed and variable pay, set a cap on the payment of any cash variable compensation components as of the payment of such components, and set a cap on the maximum cash value all non-cash variable components as of their grant date; (iii) the compensation policy must include a provision requiring the relevant person to return to the company any compensation that was awarded on the basis of financial figures that were subsequently restated; (iv) equity based variable compensation components should have an appropriate minimum vesting periods, which should be linked to long term performance objectives; and (v) the company must set a clear limit on termination payments.

Furthermore, our Compensation Policy contains a compensation recovery provision which enables us under certain circumstances to recover bonuses paid in excess due to an accounting restatement, allows our chief executive officer to approve immaterial changes in the terms of employment of executive officers, provided such changes are in accordance with our Compensation Policy, and enables us to exculpate, indemnify and insure our directors and executive officers subject to certain limitations as set forth therein.

Pursuant to the Companies Law, any transaction with an office holder (except directors and the chief executive officer of the company) with respect to such office holder's compensation arrangements and terms of engagement, requires the approval of the compensation committee and the board of directors. Such transaction must be consistent with the provisions of the company's compensation policy, provided that the compensation committee and the board of directors may, under special circumstances, approve such transaction that is not in accordance with the company's compensation policy, if both of the following conditions are met: (i) the compensation committee and the board of directors discussed the transaction in light of the roles and objectives of the compensation committee (also see above "—Board of Directors' Committees — Compensation Committee" in this Annual Report) and after taking into consideration the Compensation Policy Mandatory Criteria and including in such transaction the Compensation Policy Mandatory Provisions; and (ii) the company's shareholders approved the transaction, provided that in public companies the approval must satisfy the Majority Requirement. Notwithstanding the above, the compensation committee and the board of directors may, under special circumstances, approve such transaction even if the shareholders' meeting objected to its approval, provided that (i) both the compensation committee and the board of directors re-discussed the transactions and decided to approve it despite the shareholder's objection, based on detailed arguments, and (ii) the company is not a 'Public Pyramid Held Company'. For the purpose hereof, a "Public Pyramid Held Company" is a public company that is controlled by another public company (including companies that issued only debentures to the public), which is also controlled by another public company (including companies that issued only debentures to the public) that has a controlling shareholder.

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Transactions between public companies (including companies that have issued only debentures to the public) and their chief executive officer, with respect to his or her compensation arrangement and terms of engagement, require the approval of the compensation committee, the board of directors and the shareholder's meeting, provided that the approval of the shareholders' meeting must satisfy the Majority Requirement. Notwithstanding the above, the compensation committee and the board of directors may, under special circumstances, approve such transaction with the chief executive officer even if the shareholders' meeting objected to its approval, provided that (i) both the compensation committee and the board of directors re-discussed the transactions and decided to approve it despite the shareholder's objection, based on detailed arguments, and (ii) the company is not a Public Pyramid Held Company. Such transaction with the chief executive officer must be consistent with the provisions of the company's compensation policy, provided that the compensation committee and the board of directors may, under special circumstances, approve such transaction that is not in accordance with the company's compensation policy, if both of the following conditions are met: (i) the compensation committee and the board of directors discussed the transaction in light of the roles and objectives of the compensation committee (see above —"Board of Directors' Committees – Compensation Committee" in this Annual Report) and after taking into consideration the Compensation Policy Mandatory Criteria and including in such transaction the Compensation Policy Mandatory Provisions; and (ii) the company's shareholders approved the transaction, provided that in public companies the approval must satisfy the Majority Requirement. In addition, the compensation committee may determine that such transaction with the chief executive officer of the company does not have to be approved by the shareholders of the company, provided that: (i) the chief executive officer is independent based on criteria set forth in the Companies Law; (ii) the compensation committee determined, based on detailed arguments, that bringing the transaction to the approval of the shareholders may compromise the chances of entering into the transaction; and (iii) the terms of the transaction are consistent with the provisions of the company's compensation policy. Under the Companies Law, non-material amendments of transactions relating to the compensation arrangement or terms of engagement of office holders (including the chief executive officer), require only the approval of the compensation committee.

With respect to transactions relating to the compensation arrangement and terms of engagements of directors in public companies (including companies that have issued only debentures to the public), the Companies Law provides that such transaction is subject to the approval of the compensation committee, the board of directors and the shareholders' meeting. Such transaction must be consistent with the provisions of the company's compensation policy, provided that the compensation committee and the board of directors may, under special circumstances, approve such transaction that is not in accordance with the company's compensation policy, if both of the following conditions are met: (i) the compensation committee and the board of directors discussed the transaction in light of the roles and objectives of the compensation committee (see above "—Board Practices –Board of Directors' Committees – Compensation Committee" in this Annual Report) and after taking into consideration the Compensation Policy Mandatory Criteria and including in such transaction the Compensation Policy Mandatory Provisions; and (ii) the company's shareholders approved the transaction, provided that in public companies the approval must satisfy the Majority Requirement.

Pursuant to the Companies Law, a compensation policy must be re-approved (and re-considered) at least once every three years. The current compensation policy was approved by our shareholders on June 18, 2025.

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#### Internal Auditor
Under the Companies Law, the board of directors must also appoint an internal auditor nominated by the audit committee. Our internal auditor is Ms. Sharon Cohen, CPA (Isr.) of Deloitte Brightman Almagor, an independent registered accounting firm which is a part of the Deloitte Touche Tohmatsu Limited accounting firm. The role of the internal auditor is to examine whether a company's actions comply with the law and proper business procedure. The internal auditor may not be an interested party or office holder, or a relative of any interested party or office holder, and may not be a member of the company's independent accounting firm or its representative. The Companies Law defines an interested party as a holder of 5% or more of the shares or voting rights of a company, any person or entity that has the right to nominate or appoint at least one director or the general manager of the company or any person who serves as a director or as the general manager of a company. Our internal auditor is working based on a risk survey and audit plan, which is determined by our audit committee and approved by our board of directors.

**6. D**&nbsp;&nbsp;&nbsp;&nbsp; **Employees**

Set forth below is a chart showing the number of people we employed at the times indicated:

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| | | | |
|:---|:---|:---|:---|
| As of December 31, | 2023 | 2024 | 2025 |
| Total Personnel | 1202 | 1383 | 1612 |
| Located in Israel | 516 | 586 | 604 |
| Located abroad | 686 | 797 | 1008 |
| In operations | 287 | 293 | 344 |
| In research and development | 477 | 585 | 682 |
| In global business | 318 | 375 | 449 |
| In general and administration | 120 | 130 | 137 |

---

The numbers of employees set forth in this table do not include contractors but includes an insignificant number of temporary employees retained by the Company from time to time.

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In the high-tech industry in general and specifically in the semiconductors industry, there is intense competition for high-skilled employees. We believe that the company's future success will depend, by a large part, on our continued ability to attract, hire and retain qualified and highly motivated employees in every role and seniority level.

Under applicable Israeli law, we and our employees are subject to protective labor provisions such as restrictions on working hours, minimum wages, paid vacation, sick pay, severance pay and advance notice of termination of employment as well as equal opportunity and anti-discrimination laws. Orders issued by the Israeli Ministry of Economy and Industry make certain industry-wide collective bargaining agreements applicable to us. These agreements affect matters such as cost of living adjustments to salaries, length of working hours and week, recuperation and travel expenses. In Israel, we are subject to the instructions of the Extension Order in the Industrial Field for Extensive Pension Insurance 2006 according to the Israeli Collective Bargaining Agreements Law, 1957 (the "Extension Order"). The Extension Order determines the pension terms of the employees which fall under its criteria.

**6. E**&nbsp;&nbsp;&nbsp;&nbsp; **Share Ownership**

Based on information provided to us, our 13 directors and senior management members listed in Item 6.A in this Annual Report, have had, as a group, sole voting and investment power for 52,441 shares beneficially owned by them as of February 5, 2026 (representing approximately 0.2% of the 31,782,972 issued and outstanding ordinary shares of our company as of such date). Such number includes 4,010 shares subject to options that are immediately exercisable or exercisable within 60 days of February 5, 2026 (with expiration dates ranging between 2026 and 2029; exercise prices ($/share) ranging between $48.20 and $102.35), 47,824 shares held by the trustee due to vested RSUs, and 607 RSUs to be vested within 60 days as of February 5, 2026.

Beneficial ownership of shares is determined in accordance with the rules of the SEC and generally includes any shares over which a person exercises sole or shared voting or investment power. Ordinary shares that are subject to warrants or options that are presently exercisable or exercisable within 60 days of the date of February 5, 2026 are deemed to be outstanding and beneficially owned by the person holding the options for the purpose of computing the percentage ownership of that person, but are not treated as outstanding for the purpose of computing the percentage of any other person.

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#### Employee Benefit Plans
The share option plan under which we have outstanding equity grants, are described below:

2017 Share Incentive Plan - The maximum number of ordinary shares to be issued under the plan, which was adopted by our board of directors on August 1, 2017, is 2,500,000, subject to future increases or decreases by the Company. As of December 31, 2025, options to purchase 635,877 ordinary shares at an exercise prices which range from $22.56 to $102.35, the closing price of the Company's ordinary shares on Nasdaq on the day of grant, were granted under this plan of which, as of December 31, 2025, 369,655 options were exercised, 12,879 options were outstanding and exercisable, 253,343 options had been cancelled and no options were outstanding and unvested. As of December 31, 2025, 1,663,298 RSU's had been granted, of which 1,110,091 RSU's had vested, 156,945 had been cancelled and 396,262 RSU's were outstanding.

On June 18, 2025, our shareholders (following approval by our compensation committee and board of directors), approved the Company's compensation policy, which includes, among others, provisions relating to equity-based compensation for Nova's executive officers.

The compensation policy provides, among others, that: (i) such equity based compensation is intended to be in a form of share options and/or other equity based awards, such as RSUs, in accordance with the Company's equity incentive plan in place as may be updated from time to time; (ii) all equity-based incentives granted to executive officers will be subject to vesting periods in order to promote long-term retention of the awarded executive officers. Unless determined otherwise in a specific award agreement approved by the compensation committee and the board of directors, grants to executive officers (other than directors) will vest gradually over a period of between three to five years; and (iii) all other terms of the equity awards will be in accordance with Nova's incentive plans and other related practices and policies. The board of directors may, following approval by the compensation committee, extend the period of time for which an award is to remain exercisable and make provisions with respect to the acceleration of the vesting period of any executive officer's awards, including, without limitation, in connection with a corporate transaction involving a change of control, subject to any additional approval as may be required by the Companies Law. The compensation policy also provides that the equity-based compensation will be granted from time to time and be individually determined and awarded according to the performance, educational background, prior business experience, qualifications, role and the personal responsibilities of the executive officer. The fair market value of the equity-based compensation for the executive officers will be determined according to acceptable valuation practices at the time of grant. Our compensation policy provides that equity-based compensation awarded to employees, executive officers or directors shall not be, in the aggregate, in excess of 10% of our share capital on a fully diluted basis at the date of the grant.

Our equity-based compensation policy, provides, among others, that the exercise price for each option will be equal to the closing sale price of the Company's ordinary shares on Nasdaq on the day of grant.

For additional information regarding our employees' incentive plans, see Note 14 of our consolidated financial statements, contained elsewhere in this Annual Report.

**6. F**&nbsp;&nbsp;&nbsp;&nbsp; **Disclosure of Registrant's Action to Recover Erroneously Awarded Compensation.**

Not applicable.

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#### Item 7. Major Shareholder and Related Party Transactions
**7. A**&nbsp;&nbsp;&nbsp;&nbsp; **Major Shareholders**

The following table sets forth certain information regarding the beneficial ownership of our outstanding ordinary shares as of the dates indicated below for each shareholder who we know beneficially owns five percent or more of the outstanding ordinary shares.

Beneficial ownership of shares is determined under rules of the SEC and generally includes any shares over which a person exercises sole or shared voting or investment power. Applicable percentages are based on 31,782,972 ordinary shares outstanding as of February 5, 2026.

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| | | |
|:---|:---|:---|
| **<u>Name</u>** | **Number of Ordinary**<br> **Shares Beneficially**<br> **Owned** | **Percentage of Ordinary**<br> **Shares**<br> **Beneficially Owned** |
| FMR LLC <sup>(1)</sup> | 2899018 | 9.12% |
| Menora Mivtachim Holdings Ltd. <sup>(2)</sup> | 2095542 | 6.59% |
| Migdal Insurance & Financial Holdings Ltd. <sup>(3)</sup> | 2377339 | 7.48% |
| Harel Insurance Investments & Financial Services Ltd. <sup>(4)</sup> | 3153440 | 9.92% |
| BlackRock, Inc. <sup>(5)</sup> | 1604125 | 5.04% |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The information is based upon Amendment no. 5 to Schedule 13G/A filed
 with the SEC by FMR LLC, and subsidiaries on August 6, 2025 regarding holdings as of June 30, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The information is based upon the shareholder notification provided
 to the Company by Menora Mivtachim Holdings Ltd., Menora Mivtachim Pensions and Gemel Ltd., Menora Mivtahim Insurance Ltd., Menora Mivtachim
 Vehistadrut Hamehandesim Nihul Kupot Gemel Ltd. and Shomera Insurance Company Ltd. on January 11, 2026 regarding holdings as of December
 31, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) The information is based upon Schedule 13G filed with the SEC by
 Migdal Insurance & Financial Holdings Ltd., Migdal Insurance Company Ltd., Migdal Sal Domestic Equities, Migdal Mutual Funds Ltd.,
 on November 13, 2025 regarding holdings as of September 30, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) The information is based upon Amendment no. 12 Schedule 13G/A filed
 with the SEC by Harel Insurance Investments & Financial Services Ltd. on February 9, 2026 regarding holdings as of February 5,
 2026.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) The information is based upon the Schedule 13G filed with the SEC
 by BlackRock, Inc. on October 17, 2025 regarding holds as of September 30, 2025.

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All the shareholders of the Company have the same voting rights.

To our knowledge, the significant changes in the percentage of ownership held by our major shareholders during the past three years have been the decrease in the percentage of ownership by Wasatch Advisors Inc. to below 5% in 2025, and the decrease of ownership of Clal Insurance Enterprises Holdings Ltd. to below 5% in 2025.

As of February 5, 2026, our ordinary shares were held by 8 registered holders (not including CEDE & Co.). Based on the information provided to us by our transfer agent, as of February 5, 2026, 7 registered holders were U.S. domicile holders and held approximately 0.01% of our outstanding ordinary shares.

#### Control of Registrant
To the Company's knowledge, it is not owned or controlled by a foreign government. Except for the shareholders identified above owning more than five percent of the Company's ordinary shares, the Company has no knowledge of any corporation or other natural or legal person owning a controlling interest in the Company.

**7. B**&nbsp;&nbsp;&nbsp;&nbsp; **Related Party Transactions**

In November 2025, we obtained directors' and officers' liability insurance for our officers and directors with coverage in an aggregate amount of $85 million (including $20 million Side A DIC). This directors' and officers' liability insurance was presented and approved by our compensation committee in accordance with the framework under our compensation policy.

Our compensation policy authorizes the Company, as long as the compensation policy is in effect, to extend and/or renew the directors' and officers' liability insurance or enter into a new insurance policy, provided however, that the insurance transaction complies with the following conditions: (i) the limit of liability of the insurer will not exceed the greater of $60 million or 30% of our shareholders equity based on our most recent financial statements at the time of approval by the compensation committee; and (ii) the insurance policy, as well as the limit of liability and the premium for each extension or renewal will be approved by the compensation committee (and, if required by law, by the board of directors) which will determine that the sums are reasonable considering our exposures, the scope of coverage and the market conditions and that the insurance policy reflects the current market conditions, and it will not materially affect our profitability, assets or liabilities.

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Further, upon circumstances to be approved by the compensation committee (and, if required by law, by the board of directors), we will be entitled to enter into a "run off" insurance policy of up to seven years, with the same insurer or any other insurance, as follows: (i) the limit of liability of the insurer will not exceed the greater of $60 million or 30% of our shareholders equity based on our most recent financial statements at the time of approval by the compensation committee; and (ii) the insurance policy, as well as the limit of liability and the premium for each extension or renewal will be approved by the compensation committee (and, if required by law, by the board of directors) which shall determine that the sums are reasonable considering our exposures covered under such policy, the scope of cover and the market conditions, and that the insurance policy reflects the current market conditions and that it will not materially affect our profitability, assets or liabilities.

We may also extend the insurance policy in place to include cover for liability pursuant to a future public offering of securities. The insurance policy as well as the additional premium should be approved by the compensation committee (and if required by law, by the board of directors) which will determine that the sums are reasonable considering the exposures pursuant to such public offering of securities, the scope of cover and the market conditions and that the insurance policy reflects the current market conditions, and it does not materially affect our profitability, assets or liabilities.

In addition, following the approval by our shareholders at the annual general meeting held on June 24, 2021, we undertook to indemnify our officers and directors up to the greater of (a) twenty-five percent (25%) of the Company's total shareholders' equity according to the Company's most recent financial statements as of the time of the actual payment of indemnification; (b) US$200 million; (c) ten percent (10%) of the Company "total market cap" (which shall mean the average closing price of the Company's ordinary shares over the 30 trading days prior to the actual payment of indemnification multiplied by the total number of issued and outstanding shares of the Company as of the date of actual payment); and (d) in connection with or arising out of a public offering of the Company's securities, the aggregate amount of proceeds from the sale by the Company and/or any shareholder of Company's securities in such offering.

Following the approval by our shareholders at the annual general meeting held on June 18, 2025, and as provided in our compensation policy, we have exempted our directors and officers in advance for all or any of their liability for damage in consequence of a breach of the duty of care vis-a-vis our company, to the extent permitted by applicable law.

Pursuant to our amended and restated compensation policy, we may indemnify our directors and officers to the fullest extent permitted by applicable law, for any liability and expense that may be imposed on the director or the officer, as provided in the indemnity agreement between us and such individuals, all subject to applicable law and our Amended and Restated Articles of Association.

For information relating to options granted to officers and directors, see "Item 6E. Share Ownership" in this Annual Report. For information regarding our compensation policy and compensation arrangements with our directors and executive officers (including our chairman and chief executive officer), please refer to "Item 6B. Compensation" in this Annual Report.

**7. C**&nbsp;&nbsp;&nbsp;&nbsp; **Interest of Experts and Counsel**

Not applicable.

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#### Item 8. Financial Information

#### 8.A&nbsp;&nbsp;&nbsp;&nbsp; Consolidated Statements and Other Financial Information
See "Item 17. Financial Statements" in this Annual Report.

#### Legal Proceedings
From time to time, we or our subsidiaries may be a party to legal proceedings and claims in the ordinary course of business. While the outcome of these matters cannot be predicted with certainty, we do not believe they will have a material effect on our consolidated financial position, results of operations, or cash flows. We are currently not involved in any significant proceedings.

#### Dividend Policies
We anticipate that, for the foreseeable future, we will retain any earnings to support operations and to finance the growth and development of our business. Therefore, we do not expect to pay cash dividends for at least the next several years.

The distribution of dividends may be limited by the Companies Law, which permits the distribution of dividends only out of retained earnings or earnings derived over the two most recent fiscal years, whichever is higher, provided that there is no reasonable concern that payment of a dividend will prevent a company from satisfying its existing and foreseeable obligations as they become due. Our Amended and Restated Articles of Association provide that dividends will be paid at the discretion of, and upon resolution by, our board of directors.

In addition, distribution of dividends may be subject to certain tax implications. For additional information regarding tax implication of dividends' distribution, see "Item 10E. Taxation – Israeli Taxation" in this Annual Report.

#### Export Sales
Substantially all of our products are sold to customers located outside Israel.

**8. B**&nbsp;&nbsp;&nbsp;&nbsp; **Significant Changes**

Not applicable.

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#### Item 9. The Offer and Listing
**9. A**&nbsp;&nbsp;&nbsp;&nbsp; **Offer and Listing Details**

Our ordinary shares began trading on Nasdaq on April 11, 2000 under the symbol "NVMI". Our ordinary shares were registered for trading on the Tel Aviv Stock Exchange Ltd. in 2002 under the symbol "נובה".

**9. B**&nbsp;&nbsp;&nbsp;&nbsp; **Plan of Distribution**

Not applicable.

**9. C**&nbsp;&nbsp;&nbsp;&nbsp; **Markets**

Our ordinary shares are quoted on the Nasdaq Global Select Market under the symbol "NVMI" and on the Tel Aviv Stock Exchange Ltd.

**9. D**&nbsp;&nbsp;&nbsp;&nbsp; **Selling Shareholders**

Not applicable.

**9. E**&nbsp;&nbsp;&nbsp;&nbsp; **Dilution**

Not applicable.

**9. F**&nbsp;&nbsp;&nbsp;&nbsp; **Expenses of the Issue**

Not applicable.

#### Item 10. Additional Information
**10. A**Share Capital

Not applicable.

**10. B**Memorandum and Articles of Association

A copy of our Amended and Restated Articles Of Association is attached as Exhibit 1.1 to this Annual Report and is incorporated by reference to this Annual Report. The information called for by this Item is set forth in Exhibit 2.1 to our annual report on Form 20-F for the year ended December 31, 2024, filed with the SEC on February 20, 2025 (the "2024 Annual Report") and is incorporated by reference to this Annual Report.

**10. C**Material Contracts

*Israeli Lease Agreement*

A summary of our Israeli Lease Agreement has been attached as Exhibit 4.7 to our 2022 Annual Report and is incorporated by reference to this Annual Report. See Note 12 to our consolidated financial statements included within this Annual Report.

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*2030 Convertible Senior Notes*

For a description of our issuance of our Convertible Senior Notes due 2030, see Note 11 to our consolidated financial statements included within this Annual Report.

*2020 Convertible Senior Notes*

For a description of our issuance of our 2020 convertible notes, see Note 11 to our consolidated financial statements included within this Annual Report.

**10. D**Exchange Controls

Israeli law and regulations do not impose any material foreign exchange restrictions on non-Israeli holders of our ordinary shares.

Dividends, if any, paid to holders of our ordinary shares, and any amounts payable upon our dissolution, liquidation or winding up, as well as the proceeds of any sale in Israel of our ordinary shares to an Israeli resident, may be paid in non-Israeli currency or, if paid in Israeli currency, may be converted into freely repatriable dollars at the rate of exchange prevailing at the time of conversion.

**10. E**Taxation

#### Israeli Taxation
The following is a summary of the material Israeli tax laws applicable to us, and some Israeli Government programs benefiting us. This section also contains a discussion of some Israeli tax consequences to persons owning our ordinary shares. This summary does not discuss all the aspects of Israeli tax law that may be relevant to a particular investor in light of his or her personal investment circumstances or to some types of investors subject to special treatment under Israeli law. Examples of this kind of investor include, not for profit organizations, pension funds and other exempt institutional investors, traders in securities, partnerships and other transparent entities, individuals under the tax regime for "new immigrants" or "returning residents" and other taxpayers who are subject to special tax regimes not covered in this discussion. Some parts of this discussion are based on a new tax legislation which has not been subject to judicial or administrative interpretation. The discussion should not be construed as legal or professional tax advice and does not cover all possible tax considerations.

SHAREHOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS AS TO THE ISRAELI OR OTHER TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF OUR ORDINARY SHARES, INCLUDING, IN PARTICULAR, THE EFFECT OF ANY FOREIGN, STATE OR LOCAL TAXES.

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#### General Corporate Tax Structure in Israel
Israeli companies are generally subject to corporate tax on their taxable income at the rate of 23% for the 2018 tax year and thereafter. However, the effective tax rate payable by a company that derives income from an Approved Enterprise, a Beneficiary Enterprise, a Preferred Enterprise, a Special Preferred Enterprise, a Preferred Technology Enterprise or Special Preferred Technology Enterprise (as discussed below) may be lower. Capital gains derived by an Israeli company are generally subject to the prevailing regular corporate tax rate.

#### Income Tax Regulations (Rules on Bookkeeping by Foreign Invested Companies and Certain Partnerships and Determination of their Taxable Income), 1986
As a "foreign invested company" (as defined in the Israeli Law for the Encouragement of Capital Investments-1959), the Company's management has elected to apply Income Tax Regulations (Rules for Maintaining Accounting Records of Foreign Invested Companies and Certain Partnerships and Determining Their Taxable Income) - 1986. Accordingly, its taxable income or loss is calculated in US Dollars.

#### Tax Benefits under the Law for the Encouragement of Capital Investments, 1959

#### Tax benefits prior to the 2005 Amendment
The Law for the Encouragement of Capital Investments, 1959, generally referred to as the "Investments Law", provided (prior to the 2005 amendment) that a capital investment in eligible facilities may, upon application to the Israeli Authority for Investments and Development of the Industry and Economy (the "Investment Center"), be granted the status of an Approved Enterprise. Each certificate of approval for an Approved Enterprise relates to a specific investment program delineated both by its financial scope, including sources or funds, and by its physical characteristics or the facility or other assets, e.g., the equipment to be purchased and utilized pursuant to the program.

A company owning an Approved Enterprise is eligible for a combination of grants and tax benefits (the "Grant Track"). The tax benefits under the Grant Track include, among others, accelerated depreciation and amortization for tax purposes. The benefits period is ordinarily seven years commencing with the year in which the Approved Enterprise first generates taxable income. The benefits period is limited to 12 years from the earlier of the commencement of production by the Approved Enterprise or 14 years from the date of approval of the Approved Enterprise.

A company owning an Approved Enterprise may elect to forego its entitlements to grants and tax benefits under the Grant Track and apply for alternative package of tax benefits for a benefit period of between seven and ten years (the "Alternative Track"). Under the Alternative Track, a company's undistributed income derived from the Approved Enterprise will be exempt from corporate tax for a period of between two and ten years, starting from the first year the company derives taxable income under the Approved Enterprise program. The length of this exemption will depend on the geographic location of the Approved Enterprise within Israel. After the exemption period lapses, the company shall be subject to tax at a reduced corporate tax rate between of 10% to 25% depending on the level of foreign investment in the company in each year for the remainder of the benefits period.

------

In the past, we had elected to be taxed under the Alternative Track and in subsequent years elected to forego this tax regime and elected to adopt the Preferred Technological Enterprise regime as mentioned below.

Dividends paid to Shareholders out of any income attributed to an Approved Enterprise (or out of dividends received from a company whose income is attributed to an Approved Enterprise) are generally subject to withholding tax at the rate of 15% or at a lower rate provided under an applicable tax treaty (subject to the receipt in advance of a valid certificate from the ITA allowing for a reduced tax rate). The 15% tax rate is limited to dividends and distributions out of income derived during the benefits period and actually paid at any time up to 12 years thereafter. After this period, the withholding tax is applied at a rate of up to 30%, or at the lower rate under an applicable tax treaty (subject to the receipt in advance of a valid certificate from the Israel Tax Authority allowing for a reduced tax rate). In the case of a company which is considered a Foreign Investment Company as defined in the Investment Law, the 12-year limitation on reduced withholding tax on dividends does not apply.

A dividend distributed or deem distributed from income which was exempt from tax ("**Trapped Profits**") derived from the Approved Enterprise will be subject to tax with respect to the amount distributed (grossed up to reflect such pre-tax income that it would have had to earn in order to distribute the dividend) at the corporate tax rate which would otherwise been applicable, which is at ranged between 10%-25%, depending on the level of foreign investment in the company in each year. Under the Investments Law, the transfer of funds from the company to shareholders and other related parties may be deemed to be regarded as a dividend distribution for this purpose in certain circumstances.

On November 15, 2021 a new amendment of the Investment Law was enacted (i) providing a reduced corporate income tax on the Trapped Profits distributed within a year from such amendment. The reduced corporate income tax is based on a certain formula and subject to reinvestment of certain amounts in enumerated assets/activities; (ii) harshening the rules with respect to determining the profits from which a dividend was distributed and providing that part of any dividend distribution, will be deemed as distributed from the Trapped Profits, according to a certain formula. In 2021, the Company reached a settlement with ITA and released all Trapped Profits pursuant to the aforementioned amendment.

#### Tax benefits under the 2005 Amendment
An amendment to the Investments Law, which was effective as of April 1, 2005, changed certain provisions of the Investments Law, or the 2005 Amendment. An eligible investment program under the 2005 Amendment qualified for benefits as a "Beneficiary Enterprise". According to the 2005 Amendment, only Approved Enterprises receiving cash grants require the prior approval of the Investment Center. As a result, a company was no longer required to obtain the advance approval of the Investment Center in order to receive the tax benefits previously available under the alternative benefits program. Rather, a company may claim the tax benefits offered by the Investment Law directly in its tax returns, provided that its facilities meet the criteria for tax benefits set forth in the 2005 Amendment. A company that had a Beneficiary Enterprise may, at its discretion, approach the ITA for a pre-ruling confirming that it is in compliance with the provisions of the Investment Law.

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The duration of the tax benefits described herein is limited to the earlier of seven (7) or ten (10) years (depending on the geographic location of the Beneficiary Enterprise within Israel) from the Commencement Year (as described below) or 12 or 14 years from the first day of the Year of Election (as described below), depending on the location of the company within Israel. Commencement Year is defined as the later of the first tax year in which a company had derived liable income for tax purposes from the Beneficiary Enterprise, or the Year of Election, which is defined as the year in which a company requested to have the tax benefits apply to the Beneficiary Enterprise. The tax benefits granted to a Beneficiary Enterprise are determined, depending on the geographic location of the Beneficiary Enterprise within Israel.

Similar to the previously available Alternative Track, exemption from corporate tax may be available on undistributed income for a period of two to ten years (i.e., Trapped Profits), depending on the geographic location of the Beneficiary Enterprise within Israel, and a reduced corporate tax rate of 10% to 25% for the remainder of the benefits period, depending on the level of foreign investment in each year. If the company pays a dividend out of income derived from the Beneficiary Enterprise during the benefits period and such dividend is actually paid at any time up to 12 years thereafter, except with respect to a foreign investment company, in which case the 12-year limit does not apply, such income will be subject to withholding tax at the rate of 15% (in case of non-Israeli shareholders – subject to the receipt in advance of valid certificate from the ITA allowing the 15% tax rate, or a lower rate under a tax treaty, if applicable). A Company that pays dividend out of Trapped Profits will be subject to tax with respect to the amount distributed (grossed up to reflect such pre-tax income that it would have had to earn in order to distribute the dividend) at the corporate tax rate which would have otherwise been applicable.

We had three Approved Enterprise plans under the Investments Law, which entitled us to certain tax benefits.

As a result of the 2005 Amendment, tax-exempt income generated under the provisions of the Investments Law, as amended, subjected us to taxes upon distribution or liquidation and we may be required to record deferred tax liability with respect to such tax-exempt income. On November 15, 2021 a new amendment of the Investment Law was enacted (i) providing a reduced corporate income tax on the Trapped Profits distributed within a year from such amendment. The reduced corporate income tax is based on a certain formula and subject to reinvestment of certain amounts in enumerated assets/activities; (ii) harshening the rules with respect to determining the profits from which a dividend was distributed and providing that part of any dividend distribution, will be deemed as distributed from the Trapped Profits, according to a certain formula.

In December 2021, we entered into an elective tax agreement with the Israeli Tax Authorities and opt-in with the new Amendment. The reduced corporate income tax on the Trapped Profits was approximately $5.8M, or 10%, and was provided for in the 2021 financial statements of operations, net of related provisions. Following this elective tax agreement, all of the Trapped Profits were released.

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#### Tax benefits under the 2011 Amendment
On December 29, 2010, the Israeli Parliament approved the 2011 amendment to the Investments Law (the "2011 Amendment"). The 2011 Amendment significantly revised the tax incentive regime in Israel, commencing on January 1, 2011.

The 2011 Amendment introduced a new status of "Preferred Enterprise", replacing the existing status of "Beneficiary Enterprise" and introduced new benefits for income generated by a "Preferred Company" through its Preferred Enterprise. A Preferred Company is an industrial company that meets certain conditions (including a minimum threshold of 25% export). However, under the 2011 Amendment the requirement for a minimum investment in productive assets in order to be eligible for the benefits granted under the Investments Law as with respect to "Beneficiary Enterprise" was cancelled.

A Preferred Company is entitled to a reduced flat tax rate with respect to its preferred income attributed to the Preferred Enterprise, at the following rates:

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| | | |
|:---|:---|:---|
| Tax Year | Development Region "A" | Other Areas within Israel |
| 2011-2012 | 10% | 15% |
| 2013 | 7% | 12.5% |
| 2014-2016 | 9% | 16% |
| 2017 onwards\* | 7.5% | 16% |

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\* In December 2016, the Israeli Parliament (the Knesset) approved an amendment to the Investments Law pursuant to which the tax rate applicable to Preferred Enterprises in Development Region "A" would be reduced to 7.5% as of January 1, 2017.

The classification of income generated from the provision of usage rights in know-how or software that were developed in the Preferred Enterprise, as well as royalty income received with respect to such usage, as preferred income is subject to the issuance of a pre-ruling from the ITA stipulates that such income is associated with the productive activity of the Preferred Enterprise in Israel.

In addition, the 2011 Amendment introduced a new status of "Special Preferred Company" which is an Industrial company meeting, in addition to the conditions prescribed for "Preferred Company" certain additional conditions (including that the total Preferred Enterprise income is at least NIS 1.5 billion in 2016 and NIS 1 billion and part of a group that generates income of at least NIS 10 billion). The tax rate applicable for a period of 10 years to income generated by such an enterprise will be reduced to 5%, if located in Development Region "A", or to 8%, if located in other area within the State of Israel.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Dividends distributed from preferred income which is attributed to a "Preferred Enterprise" or a "Special Preferred Enterprise" will be subject to withholding tax at source at the following rates: (i) Israeli resident corporations – 0% (although, if such dividends are subsequently distributed to individuals or a non-Israeli company, withholding tax at a rate of 20% (with respect to non-Israeli shareholders – subject to the receipt in advance of a valid certificate from the ITA allowing the reduced 20%, or such lower rate as may be provided in an applicable tax treaty), (ii) Israeli resident individuals – 20% (iii) non-Israeli residents - 20% or a lower rate under a tax treaty, if applicable, subject to the receipt in advance of a valid certificate from the ITA allowing for a reduced tax rate.

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The 2011 Amendment also revised the Grant Track to apply only to the approved programs located in Development Region "A" and shall provide not only cash grants (as prior to the 2011 Amendment) but also the granting of loans. The rates for grants and loans shall not be fixed but up to 20% of the amount of the approved investment. In addition, a company owning a Preferred Enterprise under the Grant Track may be entitled also to the tax benefits which are prescribed for a Preferred Enterprise.

The provisions of the 2011 Amendment did not apply to existing "Beneficiary Enterprises" or "Approved Enterprises", which continued to be entitled to the tax benefits under the Investments Law, as has been in effect prior to the 2011 Amendment, unless the company owning such enterprises had made an election to apply the provisions of the 2011 Amendment (such election cannot be later rescinded), which is to be filed with the ITA, not later than the date prescribed for the filing of the company's annual tax return for the respective year. A company owning a Beneficiary Enterprise or Approved Enterprise which made such election by June 30, 2015, was entitled to distribute income generated by the Approved/Beneficiary Enterprise (which is not related to Trapped Profits) to its Israeli corporate shareholders tax free.

Until the end of 2015, we did not utilize tax benefits related to Preferred Enterprises. We utilized such benefits between 2016-2017.

#### The New Technological Enterprise Incentives Regime—the 2017 Amendment
The 2017 Amendment was enacted as part of the Economic Efficiency Law that was published on December 29, 2016, and became effective on January 1, 2017. The 2017 Amendment provides new tax benefits for two types of "Technology Enterprises", as described below, and is in addition to the other existing tax beneficial programs under the Investment Law.

The new incentives regime will apply to "Preferred Technology Enterprises" that meet certain conditions, including: (1) the R&D expenses in the three years preceding the tax year were on average at least 7% out of the company's turnover or exceeded NIS 75 million (approximately $23.5 million) for a year; and (2) one of the following: (a) at least 20% of the workforce (or at least 200 employees) are employees whose full salary has been paid and reported in the Company's financial statements as R&D expenses; (b) a venture capital investment approximately equivalent to at least NIS 8 million (approximately $2.5 million) was previously made in the company and the company did not change its line of business; (c) growth in sales by an average of 25% or more, over the three years preceding the tax year, provided that the turnover was at least NIS 10 million (approximately $3.1 million), in the tax year and in each of the preceding three years; or (d) growth in workforce by an average of 25% or more, over the three years preceding the tax year, provided that the company employed at least 50 employees, in the tax year and in each of the preceding three years.

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A "Special Preferred Technological Enterprise" is an enterprise that meets conditions 1 and 2 above, and in addition is part of a group that has total annual consolidated revenues at least NIS 10 billion.

Preferred Technological Enterprises will be subject to a reduced corporate tax rate of 12% on their income that qualifies as "Preferred Technology Income", as defined in the Investment Law. The tax rate is further reduced to 7.5% for a Preferred Technology Enterprise located in Development Region "A". These corporate tax rates shall apply only with respect to the portion of intellectual property developed in Israel. In addition, a Preferred Technology Company will enjoy a reduced corporate tax rate of 12% on capital gain derived from the sale of certain "Benefited Intangible Assets" (as defined in the Investment Law) to a related foreign company if the Benefited Intangible Assets were acquired from a foreign company on or after January 1, 2017 for at least NIS 200 million (approximately $62.7 million), and the sale receives prior approval from the IIA. Special Preferred Technological Enterprises will be subject to 6% on "Preferred Technology Income" regardless of the company's geographic location within Israel.

In addition, a Special Preferred Technology Enterprise will enjoy a reduced corporate tax rate of 6% on capital gain derived from the sale of certain "Beneficiary Intangible Assets" to a related foreign company if the Beneficiary Intangible Assets were either developed by the Special Preferred Technology Enterprise or acquired from a foreign company on or after January 1, 2017, and the sale received prior approval from the IIA.

A Special Preferred Technology Enterprise that acquires Benefited Intangible Assets from a foreign company for more than NIS 500 million (approximately $157 million), will be eligible for these benefits for at least ten years, subject to certain approvals as specified in the Investment Law.

Dividends distributed by a Preferred Technology Enterprise or a Special Preferred Technology Enterprise, paid out of Preferred Technology Income, are generally subject to withholding tax at source at the rate of 20% (in the case of non-Israeli shareholders - subject to the receipt in advance of a valid certificate from the ITA allowing the 20% reduced tax rate or a reduced rate as may be provided in an applicable tax treaty). However, if such dividends are paid to an Israeli company, no tax is required to be withheld. If such dividends are, distributed to a parent foreign company that holds solely or together with other foreign companies at least 90% of the shares of the distributing company and other conditions are met, the withholding tax rate will be 4% (or a lower rate under a tax treaty, if applicable, and subject to the receipt in advance of a valid certificate from the ITA allowing for a reduced tax rate).

We reviewed the criteria for the tax rate of a "Preferred Technological Enterprise" and a "Special Preferred Technological Enterprise" and concluded that we are entitled to the reduced tax rate under the "Preferred Technological Enterprises" tax incentive regime starting 2017. We have notified the ITA that we elected applying this status starting 2017. As part of these tax incentives, the Company is required to allocate its taxable income between income from preferred technological enterprise and income related to preferred enterprise or regular corporate income.

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#### Law for the Encouragement of Industry (Taxes), 5729-1969
The Law for the Encouragement of Industry (Taxes), 5729–1969, or the Industry Encouragement Law defines an "Industrial Company" as an Israeli resident company which was incorporated in Israel, of which 90% or more of its income in any tax year (exclusive of income from certain government loans) is generated from an "Industrial Enterprise" that it owns and located in Israel or in the "Area", in accordance with the definition under section 3A of the Israeli Income Tax Ordinance (New Version) 1961, or the Ordinance. An "Industrial Enterprise" is defined as an enterprise whose principal activity in any given tax year is industrial manufacturing.

An Industrial Company is entitled to certain tax benefits, including: (i) an amortization of the cost of purchased patent, the right to use a patent or know-how that were purchased in good faith and are used for the development or promotion of the Industrial Enterprise, over an eight-year period, beginning from the year in which such rights were first used, (ii) under limited conditions, the right to elect to file consolidated tax returns with additional Israeli Industrial Companies controlled by it, and (iii) the right to deduct expenses related to public offerings in equal amounts over a period of three years beginning from the year of the offering.

Eligibility for benefits under the Encouragement of Industry Law is not contingent upon approval of any governmental authority.

We believe that we qualify as an "Industrial Company" within the meaning of the Industry Encouragement Law. There is no assurance that we qualify or will continue to qualify as an Industrial Company or that the benefits described above will be available to us in the future.

#### Taxation of the Company Shareholders

#### Capital Gains
Capital gain tax is imposed on the disposition of capital assets by an Israeli resident, and on the disposition of such assets by a non-Israeli resident if those assets are either (i) located in Israel; (ii) are shares or a right to a share in an Israeli resident corporation, or (iii) represent, directly or indirectly, rights to assets located in Israel, unless a tax treaty between Israel and the seller's country of residence provides otherwise. The Ordinance distinguishes between "Real Gain" and the "Inflationary Surplus". Real Gain is the excess of the total capital gain over Inflationary Surplus computed generally on the basis of the increase in the Israeli Consumer Price Index (CPI) or, in certain circumstances, according to the change in the foreign currency exchange rate, between the date of purchase and the date of disposition.

Generally, the capital gain accrued by individuals on the sale of our ordinary shares will be taxed at the rate of 25% (for any asset other than shares that are listed on a stock exchange purchased on or after January 1, 2003 the portion of the gain generated up to December 31, 2011 will be subject to the previous capital gains tax rates - 20% or 25% in case of a Controlling Shareholder as described below). However, if the individual shareholder is a "Controlling Shareholder" (i.e., a person who holds, directly or indirectly, alone or together with such person's relative or another person who collaborates with such person on a permanent basis based on a contract, 10% or more of one of the Israeli resident company's "means of control") at the time of sale or at any time during the preceding twelve (12) months period (or claims a deduction for interest and linkage differences expenses in connection with the purchase and holding of such shares), such gain will be taxed at the rate of 30%.

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The Real Gain derived by corporations will be generally subject to the ordinary corporate tax rate (23% in 2018 and thereafter).

Individual and corporate shareholder dealing in securities in Israel are taxed at the tax rates applicable to business income – 23% for corporations in 2018 and thereafter and a marginal tax rate of up to 47% in 2025 for individuals, unless the benefiting provisions of an applicable treaty applies.

Notwithstanding the foregoing, capital gain derived from the sale of our ordinary shares by a non-Israeli shareholder may be exempt under the Ordinance from Israeli taxation provided that the following cumulative conditions, among other things, are met: (i) the shares were purchased upon or after the registration of the securities on the stock exchange, (ii) the seller does not have a permanent establishment in Israel to which the derived capital gain is attributed; and (iii) with respect to our ordinary shares listed on a recognized stock exchange outside of Israel, so long as neither the shareholder nor the particular capital gain is otherwise subject to the Israeli Income Tax Law (Inflationary Adjustments) 5745-1985. Non-Israeli corporations will not be entitled to the foregoing exemptions if (i) an Israeli resident has a controlling interest, directly or indirectly, alone or together with another (i.e., together with a relative, or together with someone who is not a relative but with whom, according to an agreement, there is regular cooperation in material matters of the company, directly or indirectly), or together with another Israeli resident, exceed 25% in one or more of the "means of control" in such non-Israeli resident corporation or (ii) Israeli residents are the beneficiaries of, or are entitled to, 25% or more of the revenues or profits of such non-Israeli resident corporation, whether directly or indirectly.

In addition, the sale of shares may be exempt from Israeli capital gain tax under the provisions of an applicable tax treaty. For example, the U.S.-Israel Double Tax Treaty exempts U.S. resident from Israeli capital gain tax in connection with such sale, exchange or disposition provided, among others, that (i) the U.S. resident owned, directly or indirectly, less than 10% of an Israeli resident company's voting power at any time within the 12 month period preceding such sale; (ii) the seller, being an individual, is present in Israel for a period or periods of less than 183 days in the aggregate at the taxable year; (iii) the capital gain from the sale was not derived through a permanent establishment of the U.S. resident which is maintained in Israel; (iv) the capital gain arising from such sale, exchange or disposition is not attributed to real estate located in Israel; (v) the capital gains arising from such sale, exchange or disposition is not attributed to royalties; and (vi) the shareholder is a U.S. resident (for purposes of the U.S.-Israel Double Tax Treaty) and is holding the shares as a capital asset. Under the U.S.-Israel Double Tax Treaty, a U.S. resident would be permitted to claim a credit for the Israeli tax against the U.S. federal income tax imposed with respect to the sale, exchange or disposition, subject to the limitations in U.S. laws applicable to foreign tax credits. The U.S.-Israel Double Tax Treaty does not provide such credit against any U.S. state or local taxes.

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Either the purchaser, the stockbrokers or financial institution, through which payment to the seller is made, are obliged, subject to the above-mentioned exemptions, to withhold Israeli tax at source from such payment. Shareholders may be required to demonstrate that they are exempt from tax on their capital gains in order to avoid withholding at source at the time of sale. Specifically, in transactions involving a sale of all of the shares of an Israeli resident company, in the form of a merger or otherwise, the ITA may require from shareholders who are not liable for Israeli tax to sign declarations in forms specified by this authority or obtain a specific exemption from the ITA to confirm their status as non-Israeli resident.

At the sale of securities traded on a stock exchange a detailed return, including a computation of the tax due, must be filed and an advanced payment must be paid on January 31 and July 31 of every tax year in respect of sales of securities made within the previous six months. However, if all tax due was withheld at source according to applicable provisions of the Ordinance and regulations promulgated thereunder the aforementioned return need not be filed and no advance payment must be paid. Capital gain is also reportable on the annual income tax return.

All tax rates indicated exclude any excess tax that may be added to the tax liability pursuant to applicable law. See "Item 10. E – Excess Tax" in this Annual Report.

#### Dividends
A distribution of dividends from income, which is not attributed to an Approved Enterprise/Beneficiary Enterprise/Preferred Enterprise/Preferred Technological Enterprise to an Israeli resident individual, will generally be subject to income tax at a rate of 25%. However, a 30% tax rate will apply if the dividend recipient is a "Controlling Shareholder" (as defined above) at the time of distribution or at any time during the preceding 12 months period. If the recipient of the dividend is an Israeli resident corporation, such dividend will be exempt from income tax provided the income from which such dividend is distributed was derived or accrued within Israel.

Distribution of dividends from income attributed to a Preferred Enterprise or a Preferred Technological Enterprise is generally subject to a withholding tax at source at the rate of 20%. However, if such dividends are distributed to an Israeli company, no withholding tax is imposed, although, if such dividends are subsequently distributed to individuals or a non-Israeli company, withholding tax at a rate of 20% (in case of a non-Israeli shareholder – subject to the receipt in advance of a valid certificate from the ITA allowing the reduced 20% or such lower rate as may be provided in an applicable tax treaty may apply). Dividends distributed from income attributed to an Approved Enterprise and/or a Beneficiary Enterprise are generally subject to a withholding tax at source at the rate of 15% (in the case of non-Israeli shareholders – subject to the receipt in advance of valid certificate from the ITA allowing the reduced 15% tax rate or such a reduced tax rate as may be provided under an applicable tax treaty).

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The Ordinance generally provides that a non-Israeli resident (either individual or corporation) is subject to an Israeli income tax on the receipt of dividends at the rate of 25% (30% if the dividends recipient is a "Controlling Shareholder" (as defined above), at the time of distribution or at any time during the preceding 12 months period); those rates are subject to a reduced tax rate under the provisions of an applicable double tax treaty (subject to the receipt in advance of a valid certificate from the ITA allowing for a reduced tax rate). For example, under the U.S.-Israel Double Tax Treaty the following rates will generally apply in respect of dividends distributed by an Israeli resident company to a U.S. resident: (i) if the U.S. resident is a corporation which holds during that portion of the taxable year which precedes the date of payment of the dividend and during the whole of its prior taxable year (if any), at least 10% of the outstanding shares of the voting stock of the Israeli resident paying corporation and not more than 25% of the gross income of the Israeli resident paying corporation for such prior taxable year (if any) consists of certain type of interest or dividends – the maximum tax rate is 12.5% on dividends, not generated by an Approved Enterprise or a Beneficiary Enterprise, (ii) if both the conditions mentioned in section (i) above are met and the dividend is paid from an Israeli resident company's income which was entitled to a reduced tax rate applicable to an Approved Enterprise or a Beneficiary Enterprise – the tax rate is 15%, and (iii) in all other cases, the tax rate is 25%, or the domestic rate (if such is lower). The aforementioned rates under the U.S.-Israel Double Tax Treaty will not apply if the dividend income was derived through a permanent establishment of the U.S. resident maintained in Israel.

If the dividend is attributable partly to income derived from an Approved Enterprise, a Beneficiary Enterprise a Preferred Enterprise, or a Technological Preferred Enterprise, and partly to other sources of income, the withholding rate will be a blended rate reflecting the relative portions of the two types of income.

Payors of dividends on our shares, including the Israeli stockbroker effectuating the transaction, or the financial institution through which the securities are held, are generally required, subject to any of the foregoing exemption, reduced tax rates and the demonstration of a shareholder of his, her or its foreign residency, to withhold taxes upon the distribution of dividends at a rate of 25%, provided that the shares are registered with a Nominee Company (for corporations and individuals, whether the recipient is a Controlling Shareholder or not).

A non-Israeli resident who receives dividends from which tax was withheld is generally exempt from the obligation to file tax returns in Israel with respect to such income, provided that (i) such income was not generated from business conducted in Israel by the taxpayer, (ii) the taxpayer has no other taxable sources of income in Israel with respect to which a tax return is required to be filed, and (iii) in the case of individuals, the taxpayer is not obligated to pay excess tax (as further explained below).

All tax rates indicated exclude any excess tax that may be added to the tax liability pursuant to applicable law. See "Item 10. E – Excess Tax" in this Annual Report.

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#### Excess Tax
Individuals who are subject to tax in Israel (whether any such individual is an Israeli resident or non-Israeli resident) are also subject to an additional tax at a rate of 3% on annual income exceeding NIS 721,560 (approximately $226 thousand) for 2025, which amount is generally linked to the annual change in the Israeli consumer price index (with the exception that based on Israeli new legislation such amount, and certain other statutory amounts will not be linked to the Israeli consumer price index for the years 2025-2027), including, but not limited to, dividends, interest and capital gain. According to new legislation, set to take effect on January 1, 2025, an ***additional*** 2% excess tax will be imposed on Capital-Sourced Income (defined as income from any source other than employment income, business income or income from "personal effort"), to the extent that the Individual's Capital Sourced Income exceeds the specified threshold of NIS 721,560 (and regardless of the employment/business income amount of such individual). This new excess tax will apply, among other things, to income from capital gains, dividends, interest, rental income, or the sale of real property.

#### Estate and Gift Tax
Israeli law presently does not impose estate or gift taxes.

#### Foreign Exchange Regulations
Non-residents of Israel who hold our ordinary shares are able to receive any dividends, and any amounts payable upon the dissolution, liquidation and winding up of our affairs, repayable in non-Israeli currency at the rate of exchange prevailing at the time of conversion. However, Israeli income tax is generally required to have been paid or withheld on these amounts. In addition, the statutory framework for the potential imposition of currency exchange control has not been eliminated, and may be restored at any time by administrative action.

#### U.S. Taxation
The following discussion describes certain material United States ("U.S.") federal income tax consequences generally applicable to U.S. holders (as defined below) of the purchase, ownership and disposition of our ordinary shares. This summary addresses only holders who acquire and hold ordinary shares as "capital assets" for U.S. federal income tax purposes (generally, assets held for investment purposes).

For purposes of this discussion, a "U.S. holder" is a beneficial owner of ordinary shares who is:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• An individual citizen or resident of the U.S. (as determined under
 U.S. federal income tax rules);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a corporation (or another entity taxable as a corporation for U.S.
 federal income tax purposes) created or organized in or under the laws of the U.S., any state thereof, or the District of Columbia;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• an estate, the income of which is subject to U.S. federal income
 taxation regardless of its source; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a trust, if (a) a U.S. court is able to exercise primary supervision
 over its administration and one or more U.S. persons have the authority to control all of its substantial decisions; or (b) the trust
 has in effect a valid election in effect under applicable Treasury Regulations (as defined below) to be treated as a United States person.

This summary is for general information purposes only and does not purport to be a comprehensive description of all of the U.S. federal income tax considerations that may be relevant to a decision to purchase, hold or dispose of the Company's ordinary shares. In addition, the possible application of U.S. federal estate or gift taxes or any aspect of state, local or non-U.S. tax laws is not considered. This discussion is based on current provisions of the Internal Revenue Code of 1986, as amended (the "Code"), Treasury Regulations promulgated under the Code by the U.S. Treasury Department (including proposed and temporary regulations) (the "Treasury Regulations"), rulings, current administrative interpretations and official pronouncements by the IRS, and judicial decisions, all as currently in effect and all of which are subject to differing interpretations or to change, with a retroactive effect. Such changes could materially and adversely affect the tax consequences described below. No assurance can be given that the IRS would not assert, or that a court would not sustain, a position contrary to any of the tax consequences described below.

This discussion does not address all aspects of U.S. federal income taxation that may be relevant to any particular U.S. holder based on the holder's particular circumstances, including, but not limited to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• persons who own, directly, indirectly or constructively, 10% or more (by voting power
 or value) of our outstanding voting shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• persons who hold the ordinary shares as part of a hedging, straddle or conversion transaction;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• persons whose functional currency is not the U.S. dollar;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• persons who acquire their ordinary shares in a compensatory transaction;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• broker-dealers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• insurance companies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• regulated investment companies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• real estate investment companies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• qualified retirement plans, individual retirement accounts and other
 tax-deferred accounts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• traders who elect to mark-to-market their securities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• tax-exempt organizations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• banks or other financial institutions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• persons subject to special tax accounting rules as a result of any
 item of gross income with respect to ordinary shares being taken into account in an applicable financial statement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• U.S. expatriates and certain former citizens and long-term residents
 of the United States; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Persons subject to any alternative minimum tax.

The tax treatment of a partner in a partnership (or other entity or arrangement classified as a partnership for U.S. federal income tax purposes) may depend on both the partnership's and the partner's status and the activities of the partnership. Partnerships (or other entities or arrangements classified as a partnership for U.S. federal income tax purposes) that are beneficial owners of ordinary shares, and their partners and other owners, should consult their own tax advisers regarding the tax consequences of the acquisition, ownership and disposition of ordinary shares.

THIS SUMMARY OF MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS IS FOR GENERAL INFORMATION ONLY AND IS NOT TAX ADVICE. EACH HOLDER SHOULD CONSULT ITS TAX ADVISOR WITH RESPECT TO THE PARTICULAR TAX CONSEQUENCES TO IT OF AN INVESTMENT IN THE ORDINARY SHARES, INCLUDING THE EFFECTS OF APPLICABLE UNITED STATES FEDERAL INCOME TAX LAWS AS WELL AS ANY TAX CONSEQUENCES ARISING UNDER THE UNITED STATES FEDERAL ESTATE OR GIFT TAX RULES OR UNDER THE LAWS OF ANY FOREIGN, STATE OR LOCAL JURISDICTION OR UNDER ANY APPLICABLE TAX TREATY.

#### Distributions on the Ordinary Shares
We currently do not intend to distribute dividends for at least the next several years. However, if we make any distributions of cash or other property to a U.S. holder of our ordinary shares, the amount of the distribution for U.S. federal income tax purposes will equal the amount of cash and the fair market value of any property distributed and will also include the amount of Israeli taxes withheld, if any, as described above under "[Israel Taxation] — Dividends" above. In general (and subject to the PFIC rules discussed below), any distribution paid by us on the ordinary shares to a U.S. holder will be treated as dividend income to the extent the distribution does not exceed our current and/or accumulated earnings and profits, as determined under U.S. federal income tax principles. The amount of any distribution which exceeds these earnings and profits will be treated first as a non-taxable return of capital, reducing the U.S. holder's tax basis in its ordinary shares to the extent thereof, and then as capital gain income (long-term capital gain if the U.S. holder's holding period exceeds one year), from the deemed disposition of the ordinary shares (subject to the PFIC rules discussed below). Corporate holders generally will not be allowed a deduction for dividends received on the ordinary shares.

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The amount of any dividend paid in NIS (including amounts withheld to pay Israeli withholding taxes) will equal the U.S. dollar value of the NIS calculated by reference to the exchange rate in effect on the date the dividend is received by the U.S. holder, regardless of whether the NIS are converted into U.S. dollars. A U.S. holder will have a tax basis in the NIS equal to their U.S. dollar value on the date of receipt. If the NIS received are converted into U.S. dollars on the date of receipt, the U.S. holder should generally not be required to recognize foreign currency gain or loss in respect of the distribution. If the NIS received are not converted into U.S. dollars on the date of receipt, a U.S. holder may recognize foreign currency gain or loss on a subsequent conversion or other disposition of the NIS. Such gain or loss will be treated as U.S. source ordinary income or loss.

Dividends paid by us generally will be foreign source, "passive income" for U.S. foreign tax credit purposes. U.S. holders may elect to claim as a foreign tax credit against their U.S. federal income tax liability the Israeli income tax withheld from dividends received on the ordinary shares. The Code provides limitations on the amount of foreign tax credits that a U.S. holder may claim. U.S. holders that do not elect to claim a foreign tax credit may instead claim a deduction for Israeli income tax withheld, but only for a year in which these U.S. holders elect to do so for all foreign income taxes. Certain U.S. Treasury regulations that apply to foreign income tax paid or accrued in taxable years beginning on or after December 28, 2021 restrict the availability of any such credit based on the nature of the tax imposed by the foreign jurisdiction (although Notice 2023-55 provides temporary relief from the application of certain aspects of these regulations and such relief has been extended by Notice 2023-80 indefinitely until new guidance or regulations are issued). The rules relating to foreign tax credits are complex (and may also be impacted by the tax treaty between the United States and Israel), and you should consult your tax advisor to determine whether you would be entitled to this credit.

Under current law, certain distributions treated as dividends that are received by an individual U.S. holder from a "qualified foreign corporation" generally qualify for a 20% reduced maximum tax rate so long as certain holding period and other requirements are met. A non-U.S. corporation (other than a corporation that is treated as a PFIC with respect to the U.S. holder for the taxable year in which the dividend is paid or the preceding taxable year) generally will be considered to be a qualified foreign corporation (i) if it is eligible for the benefits of a comprehensive tax treaty with the United States which the Secretary of Treasury of the United States determines is satisfactory for purposes of this provision and which includes an exchange of information program, or (ii) with respect to any dividend it pays on stock which is readily tradable on an established securities market in the United States. Dividends paid by us in a taxable year in which we are not a PFIC and with respect to which we were not a PFIC in the preceding taxable year with respect to the U.S. holder are expected to be eligible for the 20% reduced maximum tax rate, although we can offer no assurances in this regard. However, any dividend paid by us in a taxable year in which we are a PFIC or were a PFIC in the preceding taxable year with respect to the U.S. holder will be subject to tax at regular ordinary income rates (along with any applicable additional PFIC tax liability, as discussed below).

The additional 3.8% tax on "net investment income" (described below) may apply to dividends received by certain U.S. holders who meet certain modified adjusted gross income thresholds.

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#### Sale, Exchange or Other Taxable Disposition of the Ordinary Shares
Upon the sale, exchange or other taxable disposition of the ordinary shares (subject to the PFIC rules discussed below), a U.S. holder generally will recognize capital gain or loss in an amount equal to the difference between the amount realized and the U.S. holder's tax basis in the ordinary shares. The gain or loss recognized on the sale or exchange of the ordinary shares generally will be long-term capital gain (currently taxable at a reduced rate for non-corporate U.S. holders) or loss if the U.S. holder's holding period of the ordinary shares is more than one year at the time of the disposition. The deductibility of capital losses is subject to limitations.

Gain or loss recognized by a U.S. holder on a sale or exchange of ordinary shares generally will be treated as U.S. source income or loss for U.S. foreign tax credit purposes. Under the tax treaty between the United States and Israel, gain derived from the sale, exchange or other taxable disposition of ordinary shares by a holder who is a resident of the U.S. for purposes of the treaty and who sells the ordinary shares within Israel may be treated as foreign source income for U.S. foreign tax credit purposes. However, if a U.S. holder is eligible for the benefit of the income tax convention between the United States and the State of Israel and pays Israeli tax in excess of the amount applicable to such U.S. holder under such convention or if the Israeli tax paid is refundable, the U.S. holder will not be able to claim any foreign tax credit or deduction with respect to such excess portion of Israeli tax paid or the amount of Israeli tax refunded. In addition, pursuant to applicable United States Treasury regulations, if a U.S. holder is not eligible for the benefits of an applicable income tax treaty or does not elect to apply such treaty, then such holder may not be able to claim a foreign tax credit arising from any foreign tax imposed on the disposition of our ordinary shares, depending on the nature of such foreign tax. The rules governing the treatment of foreign taxes imposed on a U.S. holder and foreign tax credits are complex, and U.S. holders should consult their tax advisors as to whether the Israeli tax on gains may be creditable or deductible in light of their particular circumstances, including their eligibility for benefits under an applicable treaty and the potential impact of applicable United States Treasury regulations.

The additional 3.8% tax on "net investment income" (described below) may apply to certain U.S. holders who meet certain modified adjusted gross income thresholds, including capital gains.

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#### Passive Foreign Investment Companies
In general, a foreign (i.e., non-U.S.) corporation will be a PFIC for any taxable year in which, after applying the relevant look-through rules with respect to the income and assets of its subsidiaries, either (1) 75% or more of its gross income in the taxable year is "passive income," or (2) assets held for the production of, or that produce, passive income comprise 50% or more of the average of its total asset value in the taxable year. For purpose of the income test, passive income generally includes dividends, interest, royalties, rents, annuities and net gains from the disposition of assets, which produce passive income. For purposes of the asset test, assets held for the production of passive income includes assets held for the production of, or that produce dividends, interest, royalties, rents, annuities, and other income that are considered passive income for purposes of the income test. In determining whether we meet the asset test, cash is considered a passive asset and the total value of our assets generally will be treated as equal to the sum of the aggregate fair market value of our outstanding stock plus our liabilities. If we own at least 25% (by value) of the stock of another corporation, we will be treated, for purposes of the PFIC tests, as owning our proportionate share of the other corporation's assets and receiving our proportionate share of the other corporation's income. The income test is conducted at the taxable year-end. The asset test is conducted on a quarterly basis and the quarterly results are then averaged together.

If a corporation is treated as a PFIC for any year during a U.S. holder's holding period and the U.S. holder does not timely elect to treat the corporation as a "qualified electing fund" under Section 1295 of the Code or elect to mark its ordinary shares to market (both elections described below), any gain on the disposition of the shares will be treated as ordinary income, rather than capital gain, and the holder will be required to compute its tax liability on that gain, as well as on dividends and other distributions, as if the income had been earned ratably over each day in the U.S. holder's holding period for the shares. The portion of the gain and distributions allocated to prior taxable years in which a corporation was a PFIC will be ineligible for any preferential tax rate otherwise applicable to any "qualified dividend income" or capital gains, and will be taxed at the highest ordinary income tax rate in effect for each taxable year to which this portion is allocated. An interest charge will be imposed on the amount of the tax allocated to these taxable years. A U.S. holder may elect to treat a corporation as a qualified electing fund only if the corporation complies with requirements imposed by the IRS to enable the shareholder and the IRS to determine the corporation's ordinary earnings and net capital gain. Additionally, if a corporation is a PFIC, a U.S. holder who acquires shares in the corporation from a decedent generally will be denied the normally available step-up in tax basis to fair market value for the shares at the date of death of the decedent and instead will have a tax basis equal to the decedent's tax basis if lower than fair market value. These adverse tax consequences associated with PFIC status could result in a material increase in the amount of tax that a U.S. holder would owe and an imposition of tax earlier than would otherwise be imposed and additional tax form filing requirements. Unless otherwise provided by the IRS, if a corporation is classified as a PFIC, a U.S. person that is a direct or indirect holder generally will be required to file IRS Form 8621, Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund, or any applicable successor form, to report its ownership interest in such entity.

If a corporation is treated as a PFIC with respect to a U.S. holder for any taxable year, the U.S. holder will be deemed to own shares in any of the foreign entities in which such corporation holds equity interests that are also PFICs (or "lower-tier PFICs"), and the U.S. holder may be subject to the tax consequences described above with respect to the shares of such lower-tier PFIC such U.S. holder would be deemed to own.

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*Status of Nova as a PFIC.* Under the income test, less than 75% of our gross income was passive income in 2025. Under the asset test, while we continued to have substantial amounts of cash and short-term deposits and the market value of our ordinary shares continued to be volatile, a determination of the value of our assets by reference to the average market value of our ordinary shares and our liabilities results in a conclusion that the average value of our passive assets did not exceed 50% of the average value of our gross assets in 2025. Nonetheless, there is a risk that we were a PFIC in 2025 or we will be a PFIC in 2026 or subsequent years. Additionally, due to the complexity of the PFIC provisions and the limited authority available to interpret such provisions, there can be no assurance that our determination regarding our PFIC status could not be successfully challenged by the IRS.

*Available Elections*. If we become a PFIC for any taxable year, an election to treat us as a "qualified electing fund" or to "mark-to-market" our ordinary shares may mitigate the adverse tax consequences of PFIC status to a U.S. holder.

If a U.S. holder makes a qualified electing fund election (a "QEF election") for its ordinary shares that is effective from the first taxable year that the U.S. holder holds our ordinary shares and during which we are a PFIC, the electing U.S. holder will avoid the adverse consequences of our being classified as a PFIC, but will instead be required to include in income a pro rata share of our net capital gain, if any, and other earnings and profits ("ordinary earnings") as long-term capital gains and ordinary income, respectively, on a current basis, in each case whether or not distributed, in the taxable year of the U.S. holder in which or with which our taxable year ends. A subsequent distribution of amounts that were previously included in the gross income of U.S. holders should not be taxable as a dividend to those U.S. holders who made a QEF election. In the event we incur a net loss for a taxable year, such loss will not be available as a deduction to an electing U.S. holder, and may not be carried forward or back in computing our net capital gain or ordinary earnings in other taxable years. The tax basis of the shares of an electing U.S. holder generally will be increased by amounts that are included in income, and decreased by amounts distributed but not taxed as dividends, under the QEF rules described above. In order to make (or maintain) a QEF election, the U.S. holder must annually complete and file IRS Form 8621, Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund, or any applicable successor form. However, we do not expect that we will prepare or provide to U.S. Holders a "PFIC annual information statement," which would enable a U.S. Holder to make a QEF election.

Alternatively, if a U.S. holder elects to "mark-to-market" its ordinary shares, the U.S. holder generally will include in its income any excess of the fair market value of our ordinary shares at the close of each taxable year over the holder's adjusted basis in such ordinary shares. A U.S. holder generally will be allowed an ordinary deduction for the excess, if any, of the adjusted tax basis of the ordinary shares over the fair market value of the ordinary shares as of the close of the taxable year, or the amount of any net mark-to-market gains recognized for prior taxable years, whichever is less. A U.S. holder's adjusted tax basis in the ordinary shares generally will be adjusted to reflect the amounts included or deducted under the mark-to-market election. Additionally, any gain on the actual sale or other disposition of the ordinary shares generally will be treated as ordinary income. Ordinary loss treatment also will apply to any loss recognized on the actual sale or other disposition of ordinary shares to the extent that the amount of such loss does not exceed the net mark-to-market gains previously included with respect to such ordinary shares. If a U.S. holder makes a valid mark-to-market election with respect to our ordinary shares for the first taxable year of the U.S. holder in which the U.S. holder holds (or is deemed to hold) our ordinary shares and for which we are determined to be a PFIC, such holder generally will not be subject to the PFIC rules described above in respect of its ordinary shares. A mark-to-market election applies to the tax year for which the election is made and to each subsequent year, unless our ordinary shares cease to be marketable, as specifically defined, or the IRS consents to revocation of the election. No view is expressed regarding whether our ordinary shares are marketable for these purposes or whether the election will be available. However, because a mark-to-market election likely cannot be made for any lower-tier PFICs, if we are a PFIC, a U.S. holder will generally continue to be subject to the PFIC rules discussed above with respect to such holder's indirect interest in any investments that we hold that are treated as an equity interest in a PFIC for U.S. federal income tax purposes. As a result, it is possible that any mark-to-market election will be of limited benefit.

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If a U.S. holder makes either the QEF election or the mark-to-market election, distributions and gain will not be recognized ratably over the U.S. holder's holding period or be subject to an interest charge as described above. Further, the denial of basis step-up at death described above will not apply. If a U.S. holder makes the QEF election, gain on the sale of the ordinary shares will be characterized as capital gain. However, U.S. holders making one of these two elections may experience current income recognition, even if we do not distribute any cash. The elections must be made with the U.S. holder's federal income tax return for the year of election, filed by the due date of the return (as it may be extended) or, under certain circumstances provided in applicable Treasury Regulations, subsequent to that date.

The foregoing discussion relating to the QEF election and mark-to-market elections assumes that a U.S. holder makes the applicable election with respect to the first year in which Nova qualifies as a PFIC. If the election is not made for the first year in which Nova qualifies as a PFIC, the procedures for making the election and the consequences of election will be different.

SPECIFIC RULES AND REQUIREMENTS APPLY TO BOTH THE QEF ELECTION AND THE MARK-TO-MARKET ELECTION, AND YOU ARE URGED TO CONSULT YOUR TAX ADVISOR CONCERNING OUR PFIC STATUS AND THE VARIOUS ELECTIONS YOU CAN MAKE.

#### Medicare Tax on Net Investment Income
A U.S. holder that is an individual or estate, or a trust that does not fall into a special class of trusts that is exempt from such tax, will be subject to a 3.8% tax on the lesser of (1) the U.S. holder's "net investment income" for the relevant taxable year and (2) the excess of the U.S. holder's modified adjusted gross income for the taxable year over a certain threshold. A U.S. holder's "net investment income" generally may include its dividend income and its net gains from the disposition of shares, unless such dividends or net gains are derived in the ordinary course of the conduct of a trade or business (other than a trade or business that consists of certain passive or trading activities). If you are a U.S. holder that is an individual, estate or trust, you are urged to consult your tax advisors regarding the applicability of the Medicare tax to your income and gains in respect of your investment in the shares and the interaction of these rules with the rules applicable to income included as a result of the QEF election.

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#### United States Information Reporting and Backup Withholding
In general, U.S. holders may be subject to certain information reporting requirements under the Code relating to their purchase and/or ownership of stock of a foreign corporation such as the Company. Failure to comply with these information reporting requirements may result in substantial penalties.

Specifically, certain U.S. Holders holding specified foreign financial assets, including our ordinary shares, with an aggregate value in excess of the applicable U.S. dollar threshold, are subject to certain exceptions, required to report information relating to our Ordinary Shares by attaching a complete IRS Form 8938, Statement of Specified Foreign Financial Assets, to their tax returns, for each year in which they hold our ordinary shares. U.S. Holders are urged to consult their own tax advisors regarding information reporting requirements relating to the ownership of our Ordinary Shares.

In addition, and as discussed in the section of this Annual Report entitled "U.S. Taxation – Passive Foreign Investment Companies", if a corporation is classified as a PFIC, a U.S. person that is a direct or indirect holder generally will be required to file an informational return annually on IRS Form 8621, Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund, or any applicable successor form, to report its ownership interest in such entity, unless otherwise provided by the IRS.

Dividend payments and proceeds from the sale or disposal of ordinary shares may be subject to information reporting to the IRS and possible U.S. federal backup withholding. Certain holders (including, among others, corporations) generally are not subject to information reporting and backup withholding. A U.S. holder generally will be subject to backup withholding if such holder is not otherwise exempt and such holder:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• fails to furnish its taxpayer identification number, or TIN, which,
 for an individual, is ordinarily his or her social security number;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• furnishes an incorrect TIN;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• is notified by the IRS that it is subject to backup withholding because
 it has previously failed to properly report payments of interest or dividends; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• fails to certify, under penalties of perjury, that it has furnished
 a correct TIN and that the IRS has not notified the U.S. holder that it is subject to backup withholding.

Any U.S. holder who is required to establish exempt status generally must file IRS Form W-9 ("Request for Taxpayer Identification Number and Certification").

Backup withholding is not an additional tax and may be claimed as a refund or a credit against the U.S. federal income tax liability of a U.S. Holder, provided that the required information is timely furnished to the IRS.

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**10. F**Dividends and Paying Agents

Not applicable.

**10. G**Statements by Experts

Not applicable.

**10. H**Documents on Display

As a foreign private issuer, are exempt from the rules under the Exchange Act related to the furnishing and content of proxy statements, and our officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act; however, following recent amendment to Section 16(a) of the Exchange Act, our directors and certain of our officers will become subject to the reporting provisions set forth therein, effective March 18, 2026. Furthermore, as a foreign private issuer, we are also not subject to the requirements of Regulation FD (Fair Disclosure) promulgated under the Exchange Act. In addition, we are not required under the Exchange Act to file annual or other reports and consolidated financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act. Instead, we must file with the SEC, within 120 days after the end of each fiscal year, or such other applicable time as required by the SEC, an Annual Report containing consolidated financial statements audited by an independent registered public accounting firm. We also intend to furnish certain other material information to the SEC under cover of Form 6-K.

We maintain a corporate website at www.novami.com. Information contained on, or that can be accessed through, our website does not constitute a part of this Annual Report. We have included our website address in this Annual Report solely as an inactive textual reference.

**10. I**&nbsp;&nbsp;&nbsp;&nbsp; **Subsidiary Information**

Not applicable.

**10. J**&nbsp;&nbsp;&nbsp;&nbsp; **Annual Report to Security Holders**

Not applicable.

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#### Item 11. Quantitative and Qualitative Disclosures About Market Risk

#### Market Risk
Market risk represents the risk of loss that may impact the consolidated financial position, results of operations or cash flows of the Company. The Company is exposed to market risk in the area of foreign exchange rates, as described below.

The Company does not utilize financial instruments for trading purposes and holds no derivative financial instruments that could expose it to significant market risk.

#### Impact of Currency Fluctuation
Because our results are reported in U.S. Dollars, changes in the rate of exchange between the Dollar and local currencies in those countries in which we operate (primarily NIS and Euro) will affect the results of our operations. The dollar cost of our operations in countries other than the U.S., is negatively influenced by revaluation of the U.S. dollar against other currencies. During 2025, the value of the U.S. dollar devaluated against the NIS by approximately 12.5% and revaluated against the Euro by approximately 11.3%. As of December 31, 2025, the majority of our net monetary assets were denominated in dollars and the remainder was denominated mainly in NIS and Euro. Net monetary assets that are not denominated in dollars or dollar-linked NIS were affected by the currency fluctuations in 2025 and are expected to continue to be affected by such currency fluctuations in 2026. As of December 31, 2025 the Company recorded a NIS and Israel CPI linked lease liability, under the implementation of ASC 842 in the amount of $39 million (including exchange rate differences of $2.9 million).

In 2025, we entered into currency-forward transactions and currency-put options (NIS/dollar) of approximately $123 million with settlement dates through 2025-2026, designed to reduce cash-flow exposure to the impact of exchange-rate fluctuations on firm commitments of approximately $123 million. In accordance with ASC 815-10, we recorded in 2025 a decrease of approximately $3 million in fair market value in "Other Comprehensive Income". Short-term exposures to changing foreign exchange rates are primarily due to operating cash flows denominated in foreign currencies and transactions denominated in non-functional currencies. Our most significant foreign currency exposures are related to our operations in Israel. We have used foreign exchange forward contracts to partially cover known and anticipated exposures. We estimate that an instantaneous 10% depreciation in NIS from its level against the dollar as of December 31, 2025, with all other variables held constant, would decrease the fair value of our net liabilities denominated in NIS, held at December 31, 2025, by approximately $16.1 million.

#### Item 12. Description of Securities Other than Equity Securities
Not applicable.

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#### PART II

#### Item 13. Defaults, Dividend Arrearages and Delinquencies
None.

#### Item 14. Material Modification to the Rights of Security Holders and Use of Proceeds
Not applicable.

#### Item 15. Controls and Procedures
a)&nbsp;&nbsp;&nbsp;&nbsp; Our management, including our chief executive officer and chief financial officer, has evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2025. The term "disclosure controls and procedures", as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the SEC. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to the our management, including our chief executive officer and chief financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Based on the foregoing, each of our chief executive officer and chief financial officer have concluded that, as of December 31, 2025, our disclosure controls and procedures were effective.

b)&nbsp;&nbsp;&nbsp;&nbsp; Our management, under the supervision of our chief executive officer and our chief financial officer, is responsible for establishing and maintaining adequate internal control over our financial reporting. The Company's internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act, means 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. Internal control over financial reporting includes policies and procedures that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• pertain to the maintenance of records that in reasonable detail accurately
 and fairly reflect our transactions and asset dispositions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• provide reasonable assurance that transactions are recorded as necessary
 to permit the preparation of our financial statements in accordance with generally accepted accounting principles, and that our receipts
 and expenditures are being made only in accordance with authorizations of our management and directors; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• provide reasonable assurance regarding the prevention or timely detection
 of unauthorized acquisition, use or disposition of assets that could have a material effect on our financial statements. Due to its inherent
 limitations, internal control over financial reporting may not prevent or detect misstatements. In addition, 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.

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Our management evaluated the effectiveness of our internal control over financial reporting as of December 31, 2025, based on the criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this evaluation, our management concluded that, as of December 31, 2025, the Company's internal control over financial reporting was effective.

In accordance with guidance issued by the Securities and Exchange Commission, companies are permitted to exclude acquisitions from their final assessment of internal control over financial reporting for the first fiscal year in which the acquisition occurred. Our management's evaluation of internal control over financial reporting excluded the internal control activities of Sentronics which we acquired on January 30, 2025. Total assets subject to Sentronics' internal control over financial reporting represented approximately 2% of our consolidated total assets (excluding acquired goodwill and intangible assets) for the fiscal year ended December 31, 2025. Total revenues, subject to Sentronics' internal control over financial reporting represented approximately 6% of our consolidated total revenues for the fiscal year ended December 31, 2025.

c)&nbsp;&nbsp;&nbsp;&nbsp; Kost Forer Gabbay & Kasierer, an independent registered accounting firm and a member of EY Global, has issued an attestation report on the effectiveness of our internal control over financial reporting, as stated in their report included herein. See "Report of Independent Registered Public Accounting Firm" on page F-6.

d)&nbsp;&nbsp;&nbsp;&nbsp; There were no changes in our internal controls over financial reporting identified with the evaluation thereof that occurred during the period covered by this Annual Report that have materially affected, or are reasonable likely to materially affect our internal control over financial reporting.

#### Item 16 [Reserved]

#### Item 16A. Audit Committee Financial Expert
Our board of directors has determined that our audit committee includes one audit committee financial expert, as defined by Item 16A of Form 20-F. Our board of directors has determined that Ms. Sarit Sagiv is an "audit committee financial expert" as defined by the SEC rules as well as an independent director as such term is defined by Rule 5605(a)(2) of the Nasdaq Stock Market and has the requisite financial experience as defined by the Nasdaq rules.

#### Item 16B. Code of Ethics
The Company has adopted a written code of conduct that applies to all Company employees, including the Company's directors, principal executive officer, principal financial officer and principal accounting officer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; You may review our code of conduct on our website: <u>https://www.novami.com/</u>, under "Investors/Corporate Governance". Information contained on, or that can be accessed through, our website does not constitute a part of this Annual Report.

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#### Item 16C. Principal Accountant Fees and Services
Since 2015, Kost Forer Gabbay & Kasierer, an independent registered accounting firm and a member of EY Global ("Kost Forer Gabbay & Kasierer") has acted as our registered public accounting firm and independent auditors. The following table sets out the total amount of services rendered to us by Kost Forer Gabbay & Kasierer, for all services, including audit services, for the years ended December 31, 2024 and 2025:

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| | | |
|:---|:---|:---|
|  | **2024** | **2025** |
| Audit Fees | 776000 | 1296000 |
| Tax Fees | 23000 | 197000 |
| Other Fees | 172000 | 33000 |
| **Total** | 971000 | 1526000 |

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&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"Audit fees" are fees associated with the annual audit of the Company consolidated financial statements and services that generally the independent accountant provides, such as consultations on various accounting issues, performance of local statutory audits, fees associated with the audit of management assessment of internal control over financial reporting, annual tax returns and audit of reports to IIA.

&nbsp;&nbsp;&nbsp;&nbsp; "Tax Fees" are fees related to ad hoc tax consulting services and opinions.

&nbsp;&nbsp;&nbsp;&nbsp; "Other Fees" mainly include services related to SEC regulation consulting and due diligence services.

&nbsp;&nbsp;&nbsp;&nbsp; Our audit committee has adopted a pre-approval policy for the engagement of our independent accountant to perform certain services. Pursuant to this policy, which is designed to assure that such engagements do not impair the independence of our auditors, all audit, audit related and tax services must be specifically approved by the audit committee and certain other non-audit, non-audit related and non-tax services may be approved without consideration of specific case-by-case provided certain terms and procedures are met. The Company's audit committee approved all of the services provided by Kost Forer Gabbay & Kasierer in fiscal years 2024 and 2025.

#### Item 16D. Exemptions from the Listing Standards for Audit Committees
The Company has not obtained any exemption from applicable audit committee listing standards.

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#### Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers
In March 2022, we announced a $100 million repurchase program of our ordinary shares. Through December 31, 2025, we spent an aggregate of $86.53 million to repurchase 560,001 ordinary shares under our share repurchase program. The following table provides information regarding our repurchases of our ordinary shares for each month included in the period covered by this annual report on Form 20-F:

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| | | | | |
|:---|:---|:---|:---|:---|
| Period | (a) Total Number<br> of Ordinary<br> Shares Purchased | (b) Average<br> Price Paid per<br> Ordinary Share | (c) Total Number of<br> Ordinary Shares<br> Purchased as Part<br> of<br> Publicly Announced<br> Plans or Programs | (d) Approximate<br> Dollar<br> Value of Shares<br> that<br> May Yet Be<br> Purchased<br> Under the Plans or<br> Programs (in<br> millions) |
| April 2025 | 93029 | 214.99 | 506530 | 28.47 |
| November 2025 | 53471 | 280.52 | 560001 | 13.47 |

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#### Item 16F. Change in Registrant's Certifying Accountant
None.

#### Item 16G. Corporate Governance
There are no significant ways in which the Company's corporate governance practices differ from those followed by domestic companies listed on the Nasdaq Global Select Market.

#### Item 16H. Mine Safety Disclosure
Not applicable.

#### Item 16I. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.

------

Item 16J. Insider Trading Plans (10b5-1)

We have adopted an insider trading policy that governs the purchase, sale and other dispositions of the Company's securities by senior management, directors and employees that are reasonably designed to promote compliance with applicable insider trading laws, rules and regulations, and any listing standards applicable to the Company. A copy of our insider trading policy is filed as Exhibit 11.1 to this Annual Report.

#### Item 16K. Cybersecurity
Cybersecurity Risk Management and Strategy

We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity, and availability of our critical systems and information. Our cybersecurity risk management program includes a cybersecurity incident response plan, detailing methodologies, reporting channels and governance processes that apply across the organization and refer to strategic, operational, financial, legal and compliance risk areas.

Our cybersecurity risk management program includes:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• risk assessments designed to help identify material cybersecurity risks to our critical systems, information, products, services, and our broader enterprise IT environment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a security team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security controls; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents.

Cybersecurity Governance

Our board of directors considers cybersecurity risk as part of its risk oversight function and has delegated to the Audit Committee (Committee) oversight of cybersecurity and other information technology risks. The Committee oversees management's implementation of our cybersecurity risk management program.

The Committee receives reports from management and internal auditor on our cybersecurity risks. In addition, management updates the Committee and board of directors, as necessary, regarding any material cybersecurity incidents, as well as any incidents with lesser impact potential. In addition, at least once a year, the board of directors receives a report from management on the topic.

Our cyber security management team, including our CEO, COO and CISO reporting to the COO, is responsible for assessing and managing our material risks from cybersecurity threats. The team is primarily responsible for our overall cybersecurity risk management program and supervises both our internal cybersecurity personnel and our retained external cybersecurity consultants. Our management team gained expertise in cybersecurity, each member bringing years of hands-on experience and strategic leadership in the landscape of digital security. Their collective knowledge spans a range of areas, including threat intelligence, risk management, incident response, and compliance. Our CISO, holds a B.Sc. in Computer Science, with over 15 years of cybersecurity experience, actively participates in formal courses and conferences to stay current with evolving threats. Similarly, our COO, who has a rich technological background, attends cybersecurity conferences to align business operations with robust security measures. Additionally, our management team receives training from our IT consultants, to better prepare them to address emerging challenges in the dynamic cybersecurity landscape.

Our cybersecurity management team supervises efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security personnel; threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in the IT environment.

------

#### PART III

#### Item 17. Financial Statements
Not applicable.

#### Item 18. Financial Statements
See pages F-1 through F-43.

#### Item 19. Exhibits
See Exhibit Index.

------

#### NOVA LTD.

#### CONSOLIDATED FINANCIAL STATEMENTS

#### AS OF DECEMBER 31, 2025

------

#### NOVA LTD.

#### CONSOLIDATED FINANCIAL STATEMENTS

#### AS OF DECEMBER 31, 2025

#### Contents

---

| | |
|:---|:---|
|  | **Page** |
| **[Reports of Independent Registered Public Accounting Firm](#audit)** (PCAOB ID No. 1281) | F-3 - F-5 |
| [Consolidated Balance Sheets](#BS) | F-6 |
| [Consolidated Statements of Operations](#OP) | F-7 |
| [Consolidated Statements of Comprehensive Income](#COMP) | F-8 |
| [Consolidated Statements of Changes in Shareholders' Equity](#EQ) | F-9 |
|  [Consolidated Statements of Cash Flows](#CF) | F-10 |
|  [Notes to Consolidated Financial Statements](#Notes) | F-11 - F-43 |

---

F - 2

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---

| | | |
|:---|:---|:---|
| <br> ![image0.jpg](image0.jpg) | **Kost Forer Gabbay & Kasierer**<br> 144 Menachem Begin Road, Building A,<br> Tel-Aviv 6492102, Israel | Tel: +972-3-6232525<br> Fax: +972-3-5622555<br> ey.com |

---

#### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

#### To the Shareholders and the Board of Directors of

#### NOVA LTD.

#### Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Nova Ltd. (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income, 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 17, 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.

F - 3

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#### 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.

---

| | |
|:---|:---|
|  | ***Valuation of excess and obsolete inventory reserve*** |
| *Description of the Matter* | The Company's inventories totaled $183.7 million as of December 31, 2025. As described in Note 2i to the consolidated financial statements, the Company assesses the value of inventories, including raw materials, service inventory, work-in-process and finished goods, in each reporting period, and values its inventories at the lower of cost or net realizable value. Reserves for potential excess and obsolete inventory are made based on management's analysis of inventory levels, future sales forecasts, market conditions and the expected consumption.<br>Auditing management's estimates for valuation of inventories involved subjective auditor judgment due to the significant assumptions made by management about the future salability of the inventories. These assumptions include the assessment, by inventory category (raw materials, service inventory, work-in-process and finished goods), of future usage and market demand for the Company's products. |
| *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 excess and obsolete inventory reserve process, including management's assessment of the underlying assumptions and data.<br>Our substantive audit procedures included evaluating the significant assumptions stated above and the accuracy and completeness of the underlying data management used to value excess and obsolete inventory. We compared the cost of on-hand inventories to management's sales forecast. We also assessed the historical accuracy of management's estimates and performed sensitivity analyses over the significant assumptions to evaluate the changes in the obsolete and excess inventory estimates that would result from changes in the underlying assumptions. |

---

*/s/ KOST FORER GABBAY & KASIERER*

A Member of EY Global

We have served as the Company's auditor since 2015.

Tel-Aviv, Israel

February 17, 2026

F - 4

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---

| | | |
|:---|:---|:---|
| ![image0.jpg](image0.jpg) | **Kost Forer Gabbay & Kasierer**<br> 144 Menachem Begin Road, Building A,<br> Tel-Aviv 6492102, Israel | Tel: +972-3-6232525<br> Fax: +972-3-5622555<br> ey.com |

---

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

#### To the Shareholders and the Board of Directors of

#### NOVA LTD.

#### Opinion on Internal Control Over Financial Reporting
We have audited Nova Ltd.'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) (the COSO criteria). In our opinion, Nova Ltd. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on the COSO criteria.

As indicated in the accompanying Management's Annual Report on Internal Control over Financial Reporting, management's assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of Sentronics Metrology GmbH ("Sentronics"), which is included in the 2025 consolidated financial statements of the Company and constituted 2% of total assets (excluding acquired goodwill and intangible assets) as of December 31, 2025 and 6% of revenues for the year then ended. Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of Sentronics.

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, 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 17, 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 17, 2026

F - 5

------

#### NOVA LTD.

#### CONSOLIDATED BALANCE SHEETS

#### (U.S. dollars in thousands, except share data)

---

| | | |
|:---|:---|:---|
|  | As of December 31, | As of December 31, |
|  | 2 0 2 5 | 2 0 2 4 |
|  **ASSETS** |  |  |
|  **Current assets** |  |  |
| &nbsp;&nbsp; Cash and cash equivalents | 214462 | 157779 |
| &nbsp;&nbsp; Short-term interest-bearing bank deposits | 512250 | 211877 |
| &nbsp;&nbsp; Marketable securities (Note 4) | 321798 | 216910 |
| &nbsp;&nbsp; Trade accounts receivable, net of allowance of $300 and $576 at December 31, 2025 and 2024 , respectively | 151929 | 139318 |
| &nbsp;&nbsp; Inventories (Note 5) | 183671 | 156599 |
| &nbsp;&nbsp; Other current assets (Note 6) | 26692 | 19466 |
|  **Total current assets** | 1410802 | 901949 |
| **Non-current assets** |  |  |
| &nbsp;&nbsp; Marketable securities (Note 4) | 584731 | 225818 |
| &nbsp;&nbsp; Interest-bearing bank deposits and restricted cash | 12508 | 7847 |
| &nbsp;&nbsp; Deferred tax assets (Note 15) | 38819 | 31639 |
| &nbsp;&nbsp; Severance pay funds (Note 10) | 1111 | 1043 |
| &nbsp;&nbsp; Operating lease right-of-use assets (Note 12) | 57731 | 51193 |
| &nbsp;&nbsp; Property, plant and equipment, net (Note 7) | 102625 | 81746 |
| &nbsp;&nbsp; Intangible assets, net (Note 8) | 45819 | 31458 |
| &nbsp;&nbsp; Goodwill | 90807 | 48317 |
| &nbsp;&nbsp; Other long-term assets | 15593 | 9412 |
|  **Total non-current assets** | 949744 | 488473 |
|  **TOTAL ASSETS** | 2360546 | 1390422 |
|  **LIABILITIES AND SHAREHOLDERS' EQUITY** |  |  |
|  **Current liabilities** |  |  |
| &nbsp;&nbsp; Convertible senior notes, net (Note 11) | - | 180564 |
| &nbsp;&nbsp; Trade accounts payable | 46982 | 59578 |
| &nbsp;&nbsp; Deferred revenues | 67163 | 72886 |
| &nbsp;&nbsp; Operating lease current liabilities (Note 12) | 8204 | 7169 |
| &nbsp;&nbsp; Other current liabilities (Note 9) | 102186 | 68033 |
|  **Total current liabilities** | 224535 | 388230 |
|  **Non-Current liabilities** |  |  |
| &nbsp;&nbsp; Convertible senior notes, net (Note 11) | 731680 | - |
| &nbsp;&nbsp; Accrued severance pay (Note 10) | 3831 | 3302 |
| &nbsp;&nbsp; Operating lease long-term liabilities (Note 12) | 59271 | 48363 |
| &nbsp;&nbsp; Deferred tax liability (Note 15) | 10221 | 8495 |
| &nbsp;&nbsp; Other long-term liabilities | 12760 | 14237 |
|  **Total non-current liabilities** | 817763 | 74397 |
|  **Commitments and contingencies** (Note 13) |  |  |
|  **TOTAL LIABILITIES** | 1042298 | 462627 |
|  **SHAREHOLDERS' EQUITY** (Note 14) |  |  |
| &nbsp;&nbsp; Ordinary shares, no par value - Authorized 60,000,000 shares at December 31, 2025 and 2024 ; Issued and Outstanding 31,780,111 and 29,278,401 at December 31, 2025 and 2024, respectively. |  |  |
| &nbsp;&nbsp; Additional paid-in capital | 254329 | 134951 |
| &nbsp;&nbsp; Accumulated other comprehensive loss | 6551 | (5301) |
| &nbsp;&nbsp; Retained earnings | 1057368 | 798145 |
|  **Total shareholders' equity** | 1318248 | 927795 |
|  **Total liabilities and shareholders' equity** | 2360546 | 1390422 |

---

#### The accompanying notes are an integral part of the consolidated financial statements.
F - 6

------

#### NOVA LTD.

#### CONSOLIDATED STATEMENTS OF OPERATIONS

#### (U.S. dollars in thousands, except share and per share data)

---

| | | | |
|:---|:---|:---|:---|
|  | Year ended December 31, | Year ended December 31, | Year ended December 31, |
|  | 2 0 2 5 | 2 0 2 4 | 2 0 2 3 |
|  **Revenues:** |  |  |  |
| &nbsp;&nbsp; Products | 705598 | 538350 | 405037 |
| &nbsp;&nbsp; Services | 174979 | 134046 | 112885 |
|  **Total revenues** | 880577 | 672396 | 517922 |
|  **Cost of revenues:** |  |  |  |
| &nbsp;&nbsp; Products | 282127 | 210639 | 163981 |
| &nbsp;&nbsp; Services | 93250 | 74671 | 60764 |
|  **Total cost of revenues** | 375377 | 285310 | 224745 |
|  **Gross profit** | 505200 | 387086 | 293177 |
|  Operating expenses**:** |  |  |  |
| &nbsp;&nbsp; Research and development, net (Note 2S) | 143392 | 110257 | 88043 |
| &nbsp;&nbsp; Sales and marketing | 82208 | 65090 | 52467 |
| &nbsp;&nbsp; General and administrative | 26132 | 24199 | 20404 |
|  Total operating expenses | 251732 | 199546 | 160914 |
|  **Operating income** | 253468 | 187540 | 132263 |
| &nbsp;&nbsp; Financial income, net (Note 17) | 49818 | 28747 | 22436 |
|  **Income before taxes on income** | 303286 | 216287 | 154699 |
| &nbsp;&nbsp; Income tax expenses (Note 15) | 44063 | 32525 | 18389 |
|  **Net income** | 259223 | 183762 | 136310 |
|  **Earnings per share:** |  |  |  |
| &nbsp;&nbsp; Basic | 8.61 | 6.31 | 4.73 |
| &nbsp;&nbsp; Diluted | 7.96 | 5.75 | 4.28 |
|  **Shares used in calculation of earnings per share (in thousands):** |  |  |  |
| &nbsp;&nbsp; Basic | 30108 | 29113 | 28828 |
| &nbsp;&nbsp; Diluted | 32800 | 32138 | 32089 |

---

#### The accompanying notes are an integral part of the consolidated financial statements.
F - 7

------

#### NOVA LTD.

#### CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

#### (U.S. dollars in thousands)

---

| | | | |
|:---|:---|:---|:---|
|  | Year ended December 31, | Year ended December 31, | Year ended December 31, |
|  | 2 0 2 5 | 2 0 2 4 | 2 0 2 3 |
| Net income | 259223 | 183762 | 136310 |
| Other comprehensive income (loss), net of tax: |  |  |  |
| Cumulative Translation Adjustment | 8048 | (2951) | 2946 |
| Available-for-sale investments (Note 4): |  |  |  |
| Unrealized gain on available-for-sale marketable securities, net | 3366 | 1202 | 5193 |
| Cash flow hedges (Note 17): |  |  |  |
| Unrealized gain (loss) from cash flow hedges | 3458 | (54) | (532) |
| Less: reclassification adjustment for net gain (loss) included in net income | (3020) | (173) | 1576 |
| Other comprehensive income (loss) | 11852 | (1976) | 9183 |
| Total comprehensive income | 271075 | 181786 | 145493 |

---

#### The accompanying notes are an integral part of the consolidated financial statements.
F - 8

------

#### NOVA LTD.

#### CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

#### (U.S. dollars in thousands, except ordinary shares number)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  |<br>**Ordinary**<br>**Shares**<br>Number |<br>**Additional**<br>**Paid-in**<br>Capital | **Accumulated**<br>**Other**<br>**Comprehensive**<br>Income (Loss) |<br>**Retained**<br>Earnings |<br>**Total**<br>**Shareholders'**<br>Equity |
|  **Balance as of January 1, 2023** | 28678476 | 121398 | (12508) | 478073 | 586963 |
|  Issuance of shares upon exercise of options | 133485 | 122 | - | - | 122 |
|  Issuance of shares upon vesting of RSU | 203128 | - | - | - | - |
|  Share based compensation | - | 18286 | - | - | 18286 |
|  Shares repurchase at cost | (1255) | (112) | - | - | (112) |
|  Other comprehensive loss | - | - | 9183 | - | 9183 |
|  Net income | - | - | - | 136310 | 136310 |
|  **Balance as of December 31, 2023** | 29013834 | 139694 | (3325) | 614383 | 750752 |
|  Issuance of shares upon exercise of options | 58217 | 160 | - | - | 160 |
|  Issuance of shares upon vesting of RSU | 212653 | - | - | - | - |
|  Issuance of shares upon conversion of convertible senior notes | 154215 | (112) | - | - | (112) |
|  Share based compensation | - | 25209 | - | - | 25209 |
|  Shares repurchase at cost | (160518) | (30000) | - | - | (30000) |
|  Other comprehensive loss | - | - | (1976) | - | (1976) |
|  Net income | - | - | - | 183762 | 183762 |
|  **Balance as of December 31, 2024** | 29278401 | 134951 | (5301) | 798145 | 927795 |
|  Issuance of shares upon exercise of options | 22563 | - | - | - | - |
|  Issuance of shares upon vesting of RSU | 192844 | - | - | - | - |
|  Issuance of shares upon conversion of convertible senior notes | 2432803 | 181323 | - | - | 181323 |
|  Purchase of capped calls | - | (53233) | - | - | (53233) |
|  Share based compensation | - | 26291 | - | - | 26291 |
|  Shares repurchase at cost | (146500) | (35003) | - | - | (35003) |
|  Other comprehensive loss | - | - | 11852 | - | 11852 |
|  Net income | - | - | - | 259223 | 259223 |
|  **Balance as of December 31, 2025** | 31780111 | 254329 | 6551 | 1057368 | 1318248 |

---

#### The accompanying notes are an integral part of the consolidated financial statements.
F - 9

------

#### NOVA LTD.

#### CONSOLIDATED STATEMENTS OF CASH FLOWS

#### (U.S. dollars in thousands)

---

| | | | |
|:---|:---|:---|:---|
|  | Year ended December 31, | Year ended December 31, | Year ended December 31, |
|  | 2 0 2 5 | 2 0 2 4 | 2 0 2 3 |
|  **Cash flows from operating activities:** |  |  |  |
|  **Net income** | 259223 | 183762 | 136310 |
| Adjustments to reconcile net income to net cash provided by operating activities: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Depreciation of property, plant and equipment | 13469 | 11736 | 10344 |
| &nbsp;&nbsp;&nbsp;&nbsp; Amortization of intangible assets | 8897 | 5643 | 5857 |
| &nbsp;&nbsp;&nbsp;&nbsp; Amortization of premium and accretion of discount on marketable securities, net | (5743) | (7178) | (3001) |
| &nbsp;&nbsp;&nbsp;&nbsp; Amortization of debt issuance costs | 1996 | 1280 | 1284 |
| &nbsp;&nbsp;&nbsp;&nbsp; Share-based compensation | 26291 | 25209 | 18286 |
| &nbsp;&nbsp;&nbsp;&nbsp; Net effect of exchange rate fluctuation | (18647) | 3025 | 1754 |
|  Changes in assets and liabilities: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Trade accounts receivables, net | (7022) | (29051) | (1183) |
| &nbsp;&nbsp;&nbsp;&nbsp; Inventories | (19004) | (23897) | (26000) |
| &nbsp;&nbsp;&nbsp;&nbsp; Other current and long-term assets | (17457) | (9671) | (5752) |
| &nbsp;&nbsp;&nbsp;&nbsp; Deferred tax assets, net | (13787) | (9722) | (6241) |
| &nbsp;&nbsp;&nbsp;&nbsp; Operating lease right-of-use assets | 3660 | 3668 | 3050 |
| &nbsp;&nbsp;&nbsp;&nbsp; Trade accounts payables | (8788) | 17506 | (7807) |
| &nbsp;&nbsp;&nbsp;&nbsp; Deferred revenues | (7894) | 34553 | 11391 |
| &nbsp;&nbsp;&nbsp;&nbsp; Operating lease liabilities | 1745 | (3938) | (3221) |
| &nbsp;&nbsp;&nbsp;&nbsp; Other current and long-term liabilities | 28213 | 32299 | (11352) |
| &nbsp;&nbsp;&nbsp;&nbsp; Accrued severance pay, net | 461 | 42 | (188) |
|  **Net cash provided by operating activities** | 245613 | 235266 | 123531 |
|  **Cash flows from investment activities:** |  |  |  |
|  Acquisition of subsidiary, net of acquired cash | (56355) | - | - |
| Change in short-term and long-term interest-bearing bank deposits | (303674) | (93595) | (29658) |
| Investment in marketable securities | (754833) | (271987) | (273572) |
| Proceed from maturities of marketable securities | 304896 | 243361 | 192585 |
| Proceed from sales of marketable securities | 494 | 3036 | 2502 |
| Purchase of property, plant and equipment | (27698) | (17215) | (17188) |
|  **Net cash used in investing activities** | (837170) | (136400) | (125331) |
|  **Cash flows from financing activities:** |  |  |  |
|  Proceeds from issuance of convertible senior notes | 750000 | - | - |
|  Issuance costs of convertible senior notes | (19551) | - | - |
|  Purchase of capped calls | (51826) | - | - |
|  Issuance costs of capped calls | (1407) | - | - |
|  Conversion of convertible senior notes | (7) | (18506) | - |
|  Shares repurchase | (35003) | (30000) | (112) |
|  Proceeds from exercise of options | - | 160 | 122 |
|  **Net cash provided by (used in) financing activities** | 642206 | (48346) | 10 |
|  Effect of exchange rate fluctuations on cash, cash equivalents and restricted cash | 6352 | (315) | (2357) |
| **Decrease in cash, cash equivalents and restricted cash** | 57001 | 50205 | (4147) |
|  **Cash, cash equivalents and restricted cash - beginning of year** | 157779 | 107574 | 111721 |
|  **Cash, cash equivalents and restricted cash - end of year** | 214780 | 157779 | 107574 |
|  **Supplemental disclosure of non-cash activities:** |  |  |  |
|  Operating right-of-use assets recognized with corresponding operating lease liabilities | 10451 | 13022 | 785 |
|  Accrued purchase of property, plant and equipment | 1617 | 7248 | 70 |
|  **Supplemental disclosure of cash flow information:** |  |  |  |
|  Cash paid during the year for income taxes | 41537 | 29876 | 26842 |

---

#### The accompanying notes are an integral part of the consolidated financial statements.
F - 10

------

#### NOVA LTD.

#### NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(**U.S. dollars in thousands, except share and per share data**)

**NOTE 1 - GENERAL**

#### Business Description:
Nova Ltd. ("Nova" or "the Parent Company") was incorporated and commenced operations in 1993 in the design, development and production of process control systems, used in the manufacturing of semiconductors. Nova has wholly owned subsidiaries in the United States of America (the "U.S."), Japan, Taiwan, Korea, China, Singapore and Germany (together defined as the "Company").

On January 30, 2025, the Company completed the acquisition of 100% shares of Sentronics Metrology GmbH (hereinafter – Sentronics) a privately-held German company.

The ordinary shares of the Company are traded on the NASDAQ Global Market since April 2000 and on the Tel-Aviv Stock Exchange since June 2002.

**NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES**

The Company's consolidated financial statements have been prepared in accordance with generally accepted accounting principles ("GAAP") in the United States of America.

The following is a summary of the significant accounting policies, which were applied in the preparation of these financial statements, on a consistent basis:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.** **Principles of Consolidation and Basis of Presentation** 

The Company's consolidated financial statements include the financial statements of Nova Ltd. and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.** **Use of Estimates in the Preparation of Financial Statements** 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. The Company's management evaluates its estimates on an ongoing basis, including those related to, but not limited to standalone selling price, allowance for credit losses related to marketable securities, inventory write-offs, business combination, fair value and useful lives of intangible assets, income taxes and tax uncertainties income taxes, credit loss related to collectability of trade accounts receivable, goodwill impairment, lease discount rate and lease period. These estimates are based on management's knowledge about current events and expectations about actions the Company may undertake in the future. Actual results could differ from those estimates.

F - 11

------

#### NOVA LTD.

#### NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(**U.S. dollars in thousands, except share and per share data**)

**NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Cont.)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**C.** **Financial Statements in U.S. Dollars** 

The currency of the primary economic environment in which the operations of the Company is conducted is the U.S. dollar ("dollar" or "USD"). Accordingly, the Company uses the dollar as its functional and reporting currency. Certain dollar amounts in the financial statements may represent the dollar equivalent of other currencies, including the New Israeli Shekel ("NIS") and the Euro. Transactions and balances denominated in dollars are presented at their dollar amounts. Non-dollar transactions and balances are re-measured into dollars in accordance with the principles set forth in ASC 830, "Foreign Currency Translation".

All transaction gains and losses of the re-measured monetary balance sheet items are reflected in the statements of operations as financial income or expenses, as appropriate.

On consolidation, the assets and liabilities of foreign operations with functional currency other than dollar are translated into dollars at the rate of exchange prevailing at the reporting date and their statements of profit or loss are translated at exchange rates prevailing at the dates of the transactions. The exchange differences arising on translation for consolidation are recognized in other comprehensive income ("OCI").

Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition are treated as assets and liabilities of the foreign operation and translated at the spot rate of exchange at the reporting date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**D.** **Cash, Cash Equivalents and Restricted Cash** 

Cash and cash equivalents represent short-term highly liquid investments (mainly interest-bearing deposits) with maturity dates not exceeding three months from the date of deposit. Restricted Cash consist primarily of cash used as collateral for the Company's office leases. Any cash that is legally restricted from use is classified as restricted cash.

The following table provides a summary of cash, cash equivalents and restricted cash that constitute the total amounts shown in the consolidated statements of cash flows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** | **As of December 31,** | **As of December 31,** | **As of December 31,** | **As of December 31,** |
|  | **2025** | **2025** | **2024** | **2024** | **2023** | **2023** |
| Cash and cash equivalents |  | 214,462 |  | 157,779 |  | 107,574 |
| Long term restricted cash |  | 318 |  | - |  | - |
| Cash, cash equivalents and restricted cash |  | 214,780 |  | 157,779 |  | 107,574 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**E.** **Short-Term Interest-Bearing Bank Deposits** 

Short-term bank deposits consist of bank deposits with original maturities of more than three months and up to twelve months.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**F.** **Marketable Securities** 

The Company accounts for marketable securities in accordance with ASC Topic 320, "Investments – Debt Securities". The Company's investments in marketable securities consist of high-grade treasury, corporate and municipal bonds.

Investments in marketable securities are classified as available for sale at the time of purchase. Available for sale securities are carried at fair value based on quoted market prices, with unrealized gains and losses, reported in accumulated other comprehensive income (loss) in shareholders' equity. Realized gains and losses on sales of marketable securities, are included in financial income, net. The amortized cost of marketable securities is adjusted for amortization of premium and accretion of discount to maturity, both of which, together with interest, are included in financial income, net.

F - 12

------

#### NOVA LTD.

#### NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(**U.S. dollars in thousands, except share and per share data**)

**NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Cont.)**

The Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost bases.

The Company classifies its marketable securities as either current or non-current based on each instrument's underlying contractual maturity date. Marketable securities with maturities of 12 months or less are classified as current and marketable securities with maturities greater than 12 months are classified as non-current.

The Company accounts for Credit losses in accordance with ASU 2016-13, Topic 326 "Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments". The guidance requires the Company to determine whether a decline in fair value below the amortized cost basis of an available for sale debt security is due to credit related factors or noncredit related factors. A credit related impairment should be recognized as an allowance on the balance sheet with a corresponding adjustment to earnings, however, if the Company intends to sell an impaired available for sale debt security or more likely than not would be required to sell such a security before recovering its amortized cost basis, the entire impairment amount would be recognized in earnings with a corresponding adjustment to the security's amortized cost basis.

The Company did not recognize an allowance for credit losses on marketable securities as there were no expected credit losses for the years ended December 31, 2025 and 2024 .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**G.** **Trade Accounts Receivables** 

Trade accounts receivables are recorded and carried at the original invoiced amount less an allowance for any potential uncollectible amounts, in accordance with ASC 326. The Company makes estimates of expected credit losses for based upon its assessment of various factors, including historical experience, the age of the trade receivable balances, credit quality of its customers, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect its ability to collect from customers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**H.** **Business Combination** 

The results of an acquired business in a business combination are included in the Company's consolidated financial statements from the date of acquisition according to the guidance of ASC Topic 805, "Business Combinations." The Company allocates the purchase price, which is the sum of the consideration provided and may consist of cash, equity or a combination of the two, to the identifiable assets and liabilities of the acquired business at their fair values as of the acquisition date. The excess of the purchase price over the amount allocated to the identifiable assets and liabilities, if any, is recorded as goodwill.

Contingent consideration incurred in a business combination is included as part of the purchase price and recorded at a probability weighted assessment of the fair value as of the acquisition date. The fair value of the contingent consideration is re-measured at each reporting period, with any adjustments in fair value recognized in earnings under general and administrative expenses.

Acquisition related costs incurred by the Company are not included as a component of consideration transferred but are accounted for as an expense in the period in which the costs are incurred.

F - 13

------

#### NOVA LTD.

#### NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(**U.S. dollars in thousands, except share and per share data**)

**NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Cont.)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**I.** **Inventories** 

Inventories are stated at the lower of cost or net realizable value. Inventory write-downs are provided to cover risks arising from slow-moving items, technological obsolescence, excess inventories, discontinued products, and for market prices lower than cost, if any. The Company periodically evaluates the quantities on hand relative to historical and projected sales volume (which is determined based on an assumption of future demand and market conditions), the age of the inventory and the expected consumption of service spare parts. At the point of the loss recognition, a new lower cost basis for that inventory is established. Any adjustments to reduce the cost of inventories to their net realizable value are recognized in earnings in the current period.

Inventory includes costs of products delivered to customers and not recognized as cost of revenues, where revenues in the related arrangements were not recognized.

To support the Company's service operations, the Company maintains service spare parts inventory and reduce the net carrying value of this inventory over the service life.

Cost is determined as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Raw materials - using the moving average cost method, with specific items valued on a first-in, first-out (FIFO) basis.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Service inventory, work in process and finished goods - using the moving average cost method, with specific items valued on a first-in, first-out (FIFO) and actual production cost basis (materials, labor and indirect manufacturing costs).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**J.** **Property, Plant and Equipment** 

Property, plant and equipment are presented at cost, net of accumulated depreciation. Annual depreciation is calculated based on the straight-line method over the estimated useful lives of the related assets. Estimated useful life is as follows:

---

| | |
|:---|:---|
|  | Years |
| Electronic equipment | 3-7 |
| Office furniture and equipment | 3-17 |
| Buildings | 33 |
| Leasehold improvements | Over the shorter of the term of the lease (including its extension periods) or the useful life of the asset |

---

Depreciation methods, useful lives and residual values are reviewed at the end each reporting year and adjusted if appropriate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**K.** **Goodwill and Intangible Assets** 

Goodwill represents the excess of the purchase price in a business combination over the fair value of net tangible and identifiable intangible assets acquired, and related liabilities.

Goodwill is carried at cost and is not amortized, but rather is subject to an impairment test, in accordance with ASC 350, "Intangibles – Goodwill and Other", at least annually (in the fourth quarter), or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. ASC 350 allows the Company to first perform a qualitative assessment to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying value prior to performing the quantitative goodwill impairment test. The Company operates in one operating segment, and this segment comprises one reporting unit.

Any excess of the carrying value of the reporting unit over its fair value is recognized as an impairment loss, and the carrying value of goodwill is written down to the fair value of the reporting unit.

F - 14

------

#### NOVA LTD.

#### NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(**U.S. dollars in thousands, except share and per share data**)

**NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Cont.)**

Intangible assets with finite life (refer to note 2M for impairment assessment of intangible assets with finite life) are amortized over their useful lives using a method that reflects the pattern in which the economic benefits of the intangible assets are consumed or otherwise used, or, if that pattern cannot be reliably determined, using a straight-line amortization method. There was no impairment of goodwill during the periods presented.

---

| | |
|:---|:---|
|  | **Weighted Average Useful Life (Years)** |
| Technology | 5-9 |
| Customer relationships | 7-13 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**L.** **Implementation costs incurred in cloud computing arrangement that is a service contract:** 

The Company's cloud computing arrangement ("CCA") that is a service contract consists of an arrangement with third party vendors for internal use of their software applications that they host. Subscription fees are usually prepaid and recorded in operating expense over the period that the Company has access to use the software. Implementation costs for CCA are capitalized if certain criteria are met and consist of internal and external costs directly attributable to developing and configuring cloud computing software for its intended use. Amortization of capitalized implementation costs is recorded on a straight-line basis over the term of the CCA, which is the non-cancellable period of the agreement, together with periods covered by renewal options which the Company is reasonably certain to exercise.

As of December 31, 2025, the Company has capitalized $16,735 implementation costs in CCA which are included in other long-term and other current assets . As of December 31, 2025, the amortization of these capitalized implementation costs has not yet commenced.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**M.** **Impairment of Long-Lived Assets** 

Long-lived assets (tangible and intangible assets with finite life), held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets (or asset Group) may not be recoverable. In the event that the sum of the expected future cash flows (undiscounted and without interest charges) of the long-lived assets is less than the carrying amount of such assets, an impairment charge would be recognized, and the assets (or asset Group) would be written down to their estimated fair values. During the years 2025, 2024 and 2023 , no impairment losses have been identified.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**N.** **Accrued Warranty Costs** 

Accrued warranty costs are calculated with respect to the warranty period on the Company's products and are based on the Company's prior experience and in accordance with management's estimate. The estimated future warranty obligations are affected by the warranty periods, install base, labor and other related costs incurred in correcting a product failure.

F - 15

------

#### NOVA LTD.

#### NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(**U.S. dollars in thousands, except share and per share data**)

**NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Cont.)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**O.** **Derivative Financial Instruments** 

ASC 815 requires the presentation of all derivatives as either assets or liabilities on the balance sheet and the measurement of those instruments at fair value.

For derivative instruments that are designated and qualify as a cash flow hedge (i.e., hedging the exposure to variability in expected future cash flows that is attributable to a particular risk), the gain or loss on the derivative instrument is reported as a component of other comprehensive income and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings.

In addition to the derivatives that are designated and qualify as a cash flow hedge, the Company enters into certain foreign exchange forward and option transactions to hedge suppliers. Gains and losses related to such derivative instruments are recorded in financial income, net. Cash flows associated with derivative instruments and their related gains and losses are presented in cash flows from operating activities.

See Note 17 for disclosure of the derivative financial instruments in accordance with such pronouncements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**P.** **Leases** 

Under ASC 842, a contract is or contains a lease when the Company has the right to control the use of an identified asset for a period of time. The Company determines if an arrangement is a lease at inception of the contract, which is the date on which the terms of the contract are agreed to, and the agreement creates enforceable rights and obligations. The commencement date of the lease is the date that the lessor makes an underlying asset available for the Company's use. On the commencement date leases are evaluated for classification and assets and liabilities are recognized based on the present value of lease payments over the lease term.

The lease term used to calculate the lease liability includes options to extend or terminate the lease when it is reasonably certain that the option will be exercised. The right-of-use ("ROU") asset is initially measured as the amount of lease liability, adjusted for any initial lease costs, prepaid lease payments and any lease incentives. Costs incurred for common area maintenance, real estate taxes, and insurance are not included in the lease liability and are recognized as they are incurred.

The Company's leases include buildings and car leases, which are all classified as operating leases. Certain lease agreements include rental payments that are adjusted periodically for the consumer price index ("CPI"). The ROU and lease liability were calculated using the CPI as of the commencement date and will not be subsequently adjusted, unless the liability is reassessed for other reasons. Certain leases include renewal options that are under the Company's sole discretion. The renewal options were included in the ROU and liability calculation if it was reasonably assured that the Company will exercise the option.

As the Company's lease arrangements do not provide an implicit rate, the Company uses its incremental estimated borrowing rate at lease commencement to measure ROU assets and lease liabilities. Operating lease expense is generally recognized on a straight-line basis over the lease term. For leases with a term of one year or less, the Company elected not to record the ROU asset or liability.

F - 16

------

#### NOVA LTD.

#### NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(**U.S. dollars in thousands, except share and per share data**)

**NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Cont.)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Q.** **Convertible Senior Notes** 

The Company accounts for its convertible senior notes in accordance with ASC 470-20 "Debt with Conversion and Other Options" including Accounting Standards Update No. 2020-06, "Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity's Own Equity (Subtopic 815-40)" which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity's own equity.

The Company accounts for convertible debt instruments pursuant to ASC 470 as a single liability measured at its amortized cost as long as it was not issued at a substantial premium and no other features require bifurcation and recognition as derivatives pursuant to ASC 815. The debt host is then measured at its amortized cost using the effective interest method.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**R.** **Revenue Recognition** 

#### Revenue Recognition Policy
The Company enters into revenue arrangements that include products and services which are distinct and accounted for as separate performance obligations. The Company determines whether promises are distinct based on whether the customer can benefit from the product or service on its own or together with other resources that are readily available and whether the Company's commitment to transfer the product or service to the customer is separately identifiable from other obligations in the contract.

The Company derives revenue from sales of advanced process control systems, spare parts, labor hours and service contracts.

Revenues derived from sales of advanced process control systems, spare parts and labor hours are recognized at a point in time, when control of the promised goods or services is transferred to the customers, upon fulfillment of the contractual terms (typically upon shipment of the systems and spare parts or when the service is completed for labor hours). Revenue from software licenses is recognized at a point in time, when the software is made available to the customer.

Revenues derived from service contracts, are recognized ratably over time in accordance with the term of the contract since the Company has a stand-ready obligation to provide the services, which are transferred to the customer on a consistent and continuous basis. Such contracts generally include a fixed fee.

Revenues from sales which were not yet determined to be final sales due to certain acceptance provisions are deferred. Payment terms are typically up to twelve months, and vary by the type of customer, country of sale and the products or services offered.

#### Contracts with Multiple Performance Obligations
Contracts with customers may include multiple performance obligations. For such arrangements, the Company allocates revenue to each performance obligation based on its relative Standalone Selling Price ("SSP"). Judgment is required to determine the SSP for each distinct performance obligation. The Company uses a range of amounts to estimate SSP when it sells each of the products and services separately and needs to determine whether there is a discount to be allocated based on the relative SSP of the various products and services.

#### Remaining Performance Obligations
Remaining performance obligations (RPOs) represent contracted revenues that had not yet been recognized and include deferred revenues and invoices that have been issued to customers but were uncollected and have not been recognized as revenues. As of December 31, 2025, the aggregate amount of the RPOs was $93,087, comprised of $72,412 deferred revenues and $20,675 of uncollected amounts that were not yet recognized as revenues. Collected deferred revenue balance presented in current and non-current liabilities. The Company expects substantially all the RPO to be recognized as revenues over the next year.

F - 17

------

#### NOVA LTD.

#### NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(**U.S. dollars in thousands, except share and per share data**)

**NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Cont.)**

#### Contract Balances
Revenues recognized during 2025, 2024 and 2023 from deferred revenues amounts included in the opening balance at the beginning of the period amounted to $61,081, $29,472 and $27,065 respectively.

In certain arrangements, the Company receives payment from a customer either before or after the performance obligation has been satisfied. The expected timing difference between the payment and satisfaction of performance obligations for the Company's contracts is one year or less; therefore, the Company applies a practical expedient and does not consider the effects of the time value of money.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**S.** **Research and Development** 

Research and development costs are charged to operations as incurred. Amounts received or receivable from the Government of Israel through the Israeli Innovation Authority ("IIA") or from the European Community as participation in certain research and development programs are offset against research and development costs. The accrual for grants receivable is determined based on the terms of the programs, provided that the criteria for entitlement are expected to be met. Research and development grants recognized during the years ended December 31, 2025, 2024 and 2023 were $2,399, $2,171 and $3,061 respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**T.** **Income Taxes** 

The Company accounts for income taxes utilizing the asset and liability method in accordance with ASC 740, "Income Taxes". Current tax liabilities are recognized for the estimated taxes payable on tax returns for the current year. Deferred tax liabilities or assets are recognized for the estimated future tax effects attributable to temporary differences between the income tax bases of assets and liabilities and their reported amounts in the financial statements, and for tax loss carryforwards.

Measurement of current and deferred tax liabilities and assets is based on provisions of enacted tax laws, and deferred tax assets are reduced, if necessary, by the amount of tax benefits, the realization of which is not considered more likely than not based on available evidence.

ASC 740-10 requires a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more than 50% likely of being realized upon ultimate settlement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**U.** **Share-Based Compensation** 

The Company accounts for equity-based compensation using ASC 718 "Compensation - Stock Compensation," which requires companies to recognize the cost of employee services received in exchange for awards of equity instruments based upon the grant-date fair value of those awards.

#### Share Options
In 2025, 2024 and 2023 the Company did not grant share options.

The Company policy, under ASC 718, the fair market value of each option grant is estimated on the date of grant using the "Black-Scholes option pricing" method. Expected volatility was calculated based on actual historical share price movements over a term that is equivalent to the expected term of granted options. The expected term of options granted is based on historical experience and represents the period of time that options granted are expected to be outstanding. The risk-free interest rate is based on the yield from U.S. treasury bonds with an equivalent term. The Company has historically not paid dividends and has no foreseeable plans to pay dividends.

F - 18

------

#### NOVA LTD.

#### NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(**U.S. dollars in thousands, except share and per share data**)

**NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Cont.)**

The Company recognizes compensation expenses for the value of awards granted, based on the accelerated method. The Company account for forfeitures as they occur.

#### Restricted Share Units
The Company recognizes the fair value of Restricted Share Units ("RSUs") on the grant date based on the market value of the underlying share and the expense is recognized over the requisite service period for awards using the accelerated method.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**V.** **Earnings per Share** 

Earnings per share are presented in accordance with ASC 260-10, "Earnings per Share". Pursuant to which, basic earnings per share excludes the dilutive effects of convertible securities and is computed by dividing income (loss) available to ordinary shareholders by the weighted-average number of ordinary shares net of treasury shares outstanding for the period. Diluted earnings per share reflect the potential dilutive effect of options and RSUs and full dilutive effect of the Convertible Senior Notes, including adding back of amortization of debt issuance costs related to the Convertible Senior Notes, net of tax. The dilutive potential shares are computed using the treasury stock method or the as-if converted method, as applicable. The number of potentially dilutive options and RSUs excluded from diluted earnings per share due to the anti-dilutive effect of out of the money options amounted to 193,364 in 2025, 108,139 in 2024 and 299,249 in 2023.

Net income per share is shown below (U.S. dollars and share data in thousands, except per share data):

---

| | | | |
|:---|:---|:---|:---|
|  | Year ended December 31, | Year ended December 31, | Year ended December 31, |
|  | **2 0 2 5** | **2 0 2 4** | **2 0 2 3** |
| Net income for basic earnings per share | 259223 | 183762 | 136310 |
| Amortization of debt issuance costs related to the Convertible Notes, net of tax | 1756 | 1109 | 1130 |
| Net income for diluted earnings per share | 260979 | 184871 | 137440 |
| Basic weighted-average shares outstanding | 30108 | 29113 | 28828 |
| Dilutive effect of share-based compensation | 990 | 393 | 580 |
| Dilutive effect of Convertible Senior Notes | 1702 | 2632 | 2681 |
| Diluted weighted average shares outstanding | 32800 | 32138 | 32089 |
| **Earnings per share:** |  |  |  |
| Basic | 8.61 | 6.31 | 4.73 |
| Diluted | 7.96 | 5.75 | 4.28 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**W.** **Concentrations of Credit Risk** 

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, restricted cash, bank deposits, marketable securities, trade accounts receivable and foreign currency derivative contracts.

The majority of the Company's cash and cash equivalents and bank deposits are invested in dollar instruments with major banks in Israel. Management believes that the financial institutions that hold the Company's investments are corporations with high credit standing. Accordingly, management believes that low credit risk exists with respect to these financial investments.

The trade accounts receivable of the Company are derived from sales to customers located primarily in Taiwan R.O.C., China, Korea and USA. The management of the Company performed risk assessment on an ongoing basis and believes it bears low risk.

F - 19

------

#### NOVA LTD.

#### NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(**U.S. dollars in thousands, except share and per share data**)

**NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Cont.)**

The Company entered into options and forward contracts to hedge against the risk of overall changes in future cash flow from payments of payroll and related expenses as well as other expenses denominated in NIS. The derivative instruments hedge a portion of the Company's non-dollar currency exposure. Counterparty to the Company's derivative instruments is major financial institution.

The Company's marketable securities include investments in highly rated corporate debentures and governmental bonds. The financial institutions that hold the Company's marketable securities are major financial institutions located in the United States. The Company believes its marketable securities portfolio is a diverse portfolio of highly rated securities and the Company's investment policy limits the amount the Company may invest in an issuer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**X.** **Fair Value Measurements** 

The fair values of the Company's cash and cash equivalents, short-term interest-bearing bank deposits, trade accounts receivable, and accounts payable approximate their carrying amounts due to their short-term nature.

The Company follows the provisions of ASC No. 820, "Fair Value Measurement" ("ASC 820"), which defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

In determining a fair value, the Company uses various valuation approaches. ASC 820 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing an asset or liability, based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect assumptions that market participants would use in pricing an asset or liability, based on the best information available under given circumstances.

The hierarchy is broken down into three levels, based on the observability of inputs and assumptions, as follows:

<u>Level 1</u> - Observable inputs obtained from independent sources, such as quoted prices for identical assets and liabilities in active markets.

<u>Level 2</u> - Other inputs that are directly or indirectly observable in the market place.

<u>Level 3</u> - Unobservable inputs which are supported by little or no market activity.

In accordance with ASC 820, the Company measures its marketable securities, at fair value using the market approach valuation technique. Marketable securities are classified within Level 2 because these assets are valued using quoted market prices or alternative pricing sources and models utilizing market observable inputs.

The estimated fair values of the derivative instruments are determined based on market rates to settle the instruments. The fair value of the Company's derivative contracts (including forwards and options) is determined using standard valuation models. The significant inputs used in these models are readily available in public markets or can be derived from observable market transactions and, therefore, the Company's derivative contracts have been classified as Level 2.

Inputs used in these standard valuation models include the applicable spot, forward, and discount rates. The standard valuation model for the Company options contracts also includes implied volatility, which is specific to individual options and is based on rates quoted from a widely used third-party resource.

The Company's cash and cash equivalents, restricted cash and interest-bearing bank deposits are classified within level 1. Marketable securities, Derivative instruments and Convertible senior notes classified within Level 2 (see Note 4, Note 6 and Note 11, respectively).

F - 20

------

#### NOVA LTD.

#### NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(**U.S. dollars in thousands, except share and per share data**)

**NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Cont.)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Y.** **New Accounting Pronouncements** 

*Recently issued accounting pronouncements adopted during the period:*

In December 2023, the FASB issued Accounting Standards Update ("ASU") No. 2023-09, Income Taxes (Topic 740) Improvements to Income Tax Disclosure. The ASU requires disclosure of additional information in tax rate reconciliation table about federal, state and foreign income taxes and to provide more details about the reconciling items in some categories. Further, the ASU requires certain disclosures of state versus federal income tax expense and taxes paid. The amendments in this ASU are required to be adopted for fiscal years beginning after December 15, 2024. The Company adopted ASU 2023-09 on a retrospective basis during the year ended December 31, 2025, which resulted in updated income tax disclosures. See Note 15 in the accompanying notes to the consolidated financial statements for further details.

*Recently issued accounting pronouncements not yet adopted:*

In November 2024, the FASB issued Accounting Standards Update No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures: Disaggregation of Income Statement Expenses. This ASU requires to disclose disaggregated information about certain income statement expense line items. Entities are required to disclose purchases of inventory, employee compensation, depreciation, intangible asset amortization and depletion for each income statement line item that contains those expenses. Specified expenses, gains or losses that are already disclosed under existing US GAAP are required to be included in the disaggregated income statement expense line-item disclosures, and any remaining amounts need to be described qualitatively. Separate disclosures of total selling expenses and an entity's definition of those expenses are also required. This ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently assessing the impact of the adoption of this standard on its consolidated financial statements.

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.

In September 2025, the FASB issued ASU 2025-06 Intangibles—Goodwill and Other— Internal-Use Software (Subtopic 350-40). The amendment modernizes the accounting for software costs and enhances the transparency about an entity's software costs. ASU 2025-06 is effective for fiscal years beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted, and may be applied either through a prospective, retrospective or a modified transition approach. The Company is currently evaluating the timing of adoption and impact of this amendment on its Consolidated Financial Statements and related disclosures.

In December 2025, the FASB issued ASU 2025-10 Accounting for Government Grants Received by Business Entities, to establish guidance on the recognition, measurement, presentation and disclosure requirements for government grants received by business entities, including guidance for grants related to an asset and grants related to income. ASU 2025-10 is effective for fiscal years beginning after December 15, 2028, and interim reporting periods within those annual reporting periods. Early adoption is permitted, and may be applied using a modified prospective, modified retrospective, or under a retrospective approach. The Company is currently evaluating the timing of adoption and impact of this amendment on its Consolidated Financial Statements and related disclosures.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting, Narrow-Scope Improvements. The ASU was updated to improve the navigability of the required interim disclosures within ASC No. 270 and to clarify when the guidance applies. This ASU is not intended to change the fundamental nature of interim reporting or expand or reduce current interim disclosure requirements. ASU 2025-11 is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years, with early adoption permitted. Upon adoption, the guidance can be applied prospectively or retrospectively. The Company is currently evaluating the effect of adopting the ASU on its condensed consolidated financial statement disclosures.

F - 21

------

#### NOVA LTD.

#### NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(**U.S. dollars in thousands, except share and per share data**)

**NOTE 3 - BUSINESS COMBINATIONS**

#### Acquisition of Sentronics Metrology GmbH
On January 30, 2025, the Company acquired 100% of the outstanding shares of Sentronics Metrology GmbH ("Sentronics"), a provider of wafer metrology tools for backend semiconductor fabrication for a cash amount of $60,158. The addition of Sentronics' modular dimensional metrology technology to Nova's dimensional metrology portfolio will enable Nova to diversify its offering in the rapidly growing field of advanced wafer level packaging and specialty devices. The results of operations of Sentronics were consolidated in the Company's financial statements commencing the date of acquisition and are not material. In addition, the Pro forma results of operations related to this acquisition have not been presented because they are not material to the Company's consolidated statements.

Acquisition related expenses of $859 and $917 were expensed by the Company in general and administrative expenses for the year ended December 31, 2025 and 2024, respectively.

The transaction was accounted for as a business combination in accordance with ASC 805, "Business Combinations". Under the preliminary purchase price consideration allocation, the Company allocated the purchase price consideration to tangible and identified intangible assets acquired and liabilities assumed based on the preliminary estimates of their fair values (with certain measurement exceptions prescribed by the purchase method such as contract assets, tax balances and other applicable items), which were determined using generally accepted valuation techniques based on estimates and assumptions made by management at the time of the acquisition. Such estimates are subject to change during the measurement period which is limited to up to one year from the acquisition date. Any adjustments to the preliminary purchase price consideration allocation identified during the measurement period will be recognized in the period in which the adjustments are determined.

Goodwill represents the purchase price consideration paid in excess of the net tangible and intangible assets acquired, and is attributable primarily to expected synergies, economies of scale. The goodwill is not deductible for income tax purposes.

The following table summarizes the preliminary value of assets acquired and liabilities assumed as of the acquisition date, subject to subsequent adjustments as the Company may obtain additional information during the measurement period:

---

| | | |
|:---|:---|:---|
|  | **Fair Value** | **Amortization period** |
|  Cash and Cash Equivalents | 3803 |  |
| Trade accounts receivable, net | 2243 |  |
| Inventories | 8297 |  |
| Other current assets | 380 |  |
| Property, plant and equipment, net | 6212 |  |
| Technology | 14540 | 5 years |
| Customer Relationships | 2554 | 7 years |
| Goodwill | 34414 |  |
| Total assets acquired | 72443 |  |
| Deferred Tax Liability | (6076) |  |
| Other liabilities assumed | (6209) |  |
| Total liabilities assumed | (12285) |  |
| Net assets acquired | 60158 |  |

---

F - 22

------

#### NOVA LTD.

#### NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(**U.S. dollars in thousands, except share and per share data**)

**NOTE 4 -** **MARKETABLE SECURITIES**

The following is a summary of marketable securities amortized cost, unrealized gains, unrealized losses, and fair value as of December 31, 2025:

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | Matures within one year: | Matures within one year: | Matures within one year: | Matures after one year: | Matures after one year: | Matures after one year: | Total |
|  | **Corporate**<br>bonds | **Governmental**<br>bonds |<br>**Total** | **Corporate**<br>bonds | **Governmental**<br>bonds |<br>**Total** | |
| **Unrealized Gain** |  |  |  |  |  |  |  |
| Amortized Cost | 149230 | 78716 | 227946 | 384395 | 56209 | 440604 | **668550** |
| Unrealized Gain | 262 | 103 | 365 | 2626 | 431 | 3057 | **3422** |
| **Fair Value** | **149492** | **78819** | **228311** | **387021** | **56640** | **443661** | **671972** |
| **Unrealized Loss Less than 12 months** |  |  |  |  |  |  |  |
| Amortized Cost | 85939 | 1149 | 87088 | 138151 | - | 138151 | **225239** |
| Unrealized Loss | (34) | - | (34) | (191) | - | (191) | **(225**) |
| **Fair Value** | **85905** | **1149** | **87054** | **137960** | **-** | **137960** | **225014** |
| **Unrealized Loss 12 Months or Greater** |  |  |  |  |  |  |  |
| Amortized Cost | 6491 | - | 6491 | 3123 | - | 3123 | **9614** |
| Unrealized Loss | (58) | - | (58) | (13) | - | (13) | **(71)** |
| **Fair Value** | **6433** | **-** | **6433** | **3110** | **-** | **3110** | **9543** |
| **Total** | **241830** | **79968** | **321798** | **528091** | **56640** | **584731** | **906529** |

---

The following is a summary of marketable securities amortized cost, unrealized gains, unrealized losses, and fair value as of December 31, 2024:

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | Matures within one year: | Matures within one year: | Matures within one year: | Matures after one year: | Matures after one year: | Matures after one year: | Total |
|  | **Corporate**<br>bonds | **Governmental**<br>bonds |<br>Total | **Corporate**<br>bonds | **Governmental**<br>bonds |<br>Total | |
| **Unrealized Gain** |  |  |  |  |  |  |  |
| Amortized Cost | 125296 | 39220 | 164516 | 66989 | 20912 | 87901 | **252417** |
| Unrealized Gain | 218 | 75 | 293 | 395 | 90 | 485 | **778** |
| **Fair Value** | **125514** | **39295** | **164809** | **67384** | **21002** | **88386** | **253195** |
| **Unrealized Loss Less than 12 months** |  |  |  |  |  |  |  |
| Amortized Cost | 23535 | 3026 | 26561 | 108786 | 16620 | 125406 | **151967** |
| Unrealized Loss | (10) | (5) | (15) | (871) | (92) | (963) | **(978**) |
| **Fair Value** | **23525** | **3021** | **26546** | **107915** | **16528** | **124443** | **150989** |
| **Unrealized Loss 12 Months or Greater** |  |  |  |  |  |  |  |
| Amortized Cost | 23774 | 2043 | 25817 | 13314 | - | 13314 | **39131** |
| Unrealized Loss | (261) | (1) | (262) | (325) | - | (325) | **(587**) |
| **Fair Value** | **23513** | **2042** | **25555** | **12989** | **-** | **12989** | **38544** |
| **Total** | **172552** | **44358** | **216910** | **188288** | **37530** | **225818** | **442728** |

---

Proceeds from maturity of available-for-sale marketable securities during the year ended December 31, 2025, and 2024 were $304,896 and $243,361, respectively.

Proceeds from sales of available-for sale marketable securities, were $494 and $3,036 which led to $6 and $1 realized losses, during the years ended December 31, 2025 and 2024 , respectively.

F - 23

------

#### NOVA LTD.

#### NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(**U.S. dollars in thousands, except share and per share data**)

**NOTE 5 - INVENTORIES**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.** **Composition:** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | As of December 31, | As of December 31, | As of December 31, | As of December 31, |
|  | 2 0 2 5 | 2 0 2 5 | 2 0 2 4 | 2 0 2 4 |
| Raw materials |  | 58,350 |  | 43,965 |
| Service inventory |  | 43,195 |  | 36,232 |
| Work in process |  | 41,606 |  | 37,036 |
| Finished goods |  | 40,520 |  | 39,366 |
|  |  | 183,671 |  | 156,599 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.** In the years ended December 31, 2025, 2024 and 2023 , the Company wrote down inventories in a total amount of $8,560, $7,821 and $8,748, respectively.

**NOTE 6 - OTHER CURRENT ASSETS**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | As of December 31, | As of December 31, | As of December 31, | As of December 31, |
|  | 2 0 2 5 | 2 0 2 5 | 2 0 2 4 | 2 0 2 4 |
| Prepaid expenses |  | 13,636 |  | 10,732 |
| Governmental institutions |  | 7,788 |  | 6,832 |
| Cloud computing arrangement implementation costs |  | 2,281 |  | - |
| Governments grants receivables |  | 1,001 |  | 782 |
| Hedging derivative |  | 1,487 |  | 617 |
| Other |  | 499 |  | 503 |
|  |  | 26,692 |  | 19,466 |

---

NOTE 7 - PROPERTY, PLANT AND EQUIPMENT, NET

---

| | | |
|:---|:---|:---|
|  | As of December 31, | As of December 31, |
|  | **2 0 2 5** | **2 0 2 4** |
| **Cost:** |  |  |
| Electronic equipment | 71476 | 66304 |
| Office furniture and equipment | 9487 | 6105 |
| Leasehold improvements | 47983 | 41135 |
| Land and building | 38321 | 26683 |
|  | 167267 | 140227 |
| **Accumulated depreciation:** |  |  |
| Electronic equipment | 44551 | 41280 |
| Office furniture and equipment | 3318 | 4461 |
| Leasehold improvements | 15456 | 12701 |
| Land and building | 1317 | 39 |
|  | 64642 | 58481 |
| **Net book value** | 102625 | 81746 |

---

Depreciation expenses amounted to $13,469, $11,736 and $10,344 for the years ended December 31, 2025, 2024 and 2023 , respectively.

F - 24

------

#### NOVA LTD.

#### NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(**U.S. dollars in thousands, except share and per share data**)

**NOTE 8** &nbsp;&nbsp;&nbsp;&nbsp; **- INTANGIBLE ASSETS**

Intangible assets as of December 31, 2025 originated from the acquisition of ancosys on January 25, 2022 and from the acquisition of Sentronics on January 30, 2025. The following is a summary of intangible assets as of December 31, 2025 and 2024:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | As of December 31, | As of December 31, | As of December 31, | As of December 31, |
|  | **2 0 2 5** | **2 0 2 5** | **2 0 2 4** | **2 0 2 4** |
| **Original amount:** | | | | |
| Technology |  | 55,966 |  | 35,054 |
| Customer relationships |  | 7,210 |  | 3,834 |
|  |  | 63,176 |  | 38,888 |
| **Accumulated amortization:** |  |  |  |  |
| Technology |  | 16,046 |  | 6,934 |
| Customer relationships |  | 1,311 |  | 496 |
|  |  | 17,357 |  | 7,430 |
| **Net book value** |  | 45,819 |  | 31,458 |

---

Amortization expenses amounted as following:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | Year ended December 31, | Year ended December 31, | Year ended December 31, | Year ended December 31, | Year ended December 31, | Year ended December 31, |
|  | **2 0 2 5** | **2 0 2 5** | **2 0 2 4** | **2 0 2 4** | **2 0 2 3** | **2 0 2 3** |
| Technology |  | 8,164 |  | 5,284 |  | 5,430 |
| Customer relationships |  | 733 |  | 359 |  | 427 |
|  |  | 8,897 |  | 5,643 |  | 5,857 |

---

Annual amortization expenses are expected as follows:

---

| | |
|:---|:---|
| **Year ending December 31,** | |
| 2026 | 9308 |
| 2027 | 9308 |
| 2028 | 9308 |
| 2029 | 9308 |
| 2030 | 6285 |
| 2031 and thereafter | 2302 |
| Total | 45819 |

---

**NOTE 9**&nbsp;&nbsp;&nbsp;&nbsp; **-&nbsp;&nbsp;&nbsp;&nbsp; OTHER CURRENT LIABILITIES**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.** Consists of:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | As of December 31, | As of December 31, | As of December 31, | As of December 31, |
|  | 2 0 2 5 | 2 0 2 5 | 2 0 2 4 | 2 0 2 4 |
| Accrued salaries and fringe benefits |  | 47,274 |  | 41,024 |
| Accrued warranty costs (See B below) |  | 13,992 |  | 11,238 |
| Governmental institutions |  | 39,148 |  | 14,282 |
| Governments grants payables |  | 1,116 |  | 1,230 |
| Other |  | 656 |  | 259 |
|  |  | 102,186 |  | 68,033 |

---

F - 25

------

#### NOVA LTD.

#### NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(**U.S. dollars in thousands, except share and per share data**)

**NOTE 9**&nbsp;&nbsp;&nbsp;&nbsp; **-&nbsp;&nbsp;&nbsp;&nbsp; OTHER CURRENT LIABILITIES (Cont.)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.** Accrued Warranty Costs:

The Company provides standard warranty coverage on its systems. Parts and labor are covered under the terms of the warranty agreement. The Company accounts for the estimated warranty cost as a charge to costs of revenues when revenue is recognized.

Accrued warranty costs presented in:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | As of December 31, | As of December 31, | As of December 31, | As of December 31, |
|  | 2 0 2 5 | 2 0 2 5 | 2 0 2 4 | 2 0 2 4 |
| Other current liabilities |  | 13,992 |  | 11,238 |
| Other long-term liabilities |  | 577 |  | 564 |
|  |  | 14,569 |  | 11,802 |

---

The following table provides the changes in the product warranty accrual for the fiscal years ended December 31, 2025 and 2024 :

---

| | | |
|:---|:---|:---|
|  | As of December 31, | As of December 31, |
|  | 2 0 2 5 | 2 0 2 4 |
| Balance as of beginning of year | 11802 | 8523 |
| Services provided under warranty | (19308) | (14437) |
| Changes in provision | 22075 | 17716 |
| Balance as of end of year | 14569 | 11802 |

---

**NOTE 10** &nbsp;&nbsp;&nbsp;&nbsp; **-&nbsp;&nbsp;&nbsp;&nbsp; LIABILITY FOR EMPLOYEE SEVERANCE PAY, NET**

Israeli law and labor agreements determine the obligations of the Company to make severance payments to dismissed employees and to employees leaving employment under certain other circumstances. The obligation for severance pay benefits, as determined by Israeli law, is based upon length of service and the employee's most recent salary. The liability is partially covered through insurance policies purchased by the Company and deposits in a severance fund.

The deposited funds include profits accumulated up to the balance sheet date. The deposited funds may be withdrawn only upon the fulfillment of the obligation pursuant to Israel's Severance Pay Law, 1963 or labor agreements.

Since July 2008, the Company's agreements with new Israeli employees are under Section 14 of the Israeli Severance Pay Law, 1963. The Company's contributions for severance pay have replaced its severance obligation.

Upon contribution of the full amount of the employee's monthly salary for each year of service, no additional calculations are conducted between the parties regarding the matter of severance pay and no additional payments are made by the Company to the employee.

Labor agreements in Taiwan determine the obligations of the Company to make severance payments to dismissed employees and to employees leaving employment under certain other circumstances. The obligation for severance pay benefits is based upon length of service and the employee's average salary.

Severance pay expenses for the years ended December 31, 2025, 2024 and 2023, amounted to $1,596 , $782 and $957 , respectively (excluding the Parent Company's contributions for severance pay under section 14 in Israel).

F - 26

------

#### NOVA LTD.

#### NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(**U.S. dollars in thousands, except share and per share data**)

**NOTE 11**&nbsp;&nbsp;&nbsp;&nbsp; **- CONVERTIBLE SENIOR NOTES, NET**

#### 2025 Convertible notes
In October 2020, the Company issued $200,000 aggregate principal amount, 0% coupon rate, of Convertible Senior Notes due 2025 (the "2025 Convertible Notes"). The 2025 Convertible Notes mature on October 15, 2025 unless earlier repurchased or converted.

The Convertible Notes are convertible based upon an initial conversion rate of 13.4048 of the Company's ordinary shares per $1,000 principal amount of Convertible Notes (equivalent to a conversion price of approximately $74.60 per ordinary share). The conversion rate is subject to adjustment upon the occurrence of certain specified events. The Convertible Notes are senior unsecured obligations of the Company.

The Convertible Notes will mature on October 15, 2025, (the "Maturity Date"), unless earlier repurchased, redeemed or converted. Prior to July 15, 2025, a holder may convert all or a portion of its Convertible Notes only under the following circumstances:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. During any calendar quarter commencing after the calendar quarter ending on March 31, 2021 (and only during such calendar quarter), if the last reported sale price of the Company's ordinary shares for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. During the five business day period after any 10 consecutive trading day period ("measurement period") in which the trading price, determined pursuant to the terms of the Convertible Notes, per $1,000 principal amount of Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the ordinary shares and the conversion rate on each such trading day;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. If the Company calls such Convertible Notes for redemption in certain circumstances, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Upon the occurrence of specified corporate events.

On or after July 15, 2025 until the close of business on the second scheduled trading day immediately preceding the Maturity Date, a holder may convert its Convertible Notes at any time, regardless of the foregoing circumstances.

Upon conversion, the Company can pay or deliver cash, ordinary shares or a combination of cash and ordinary shares, at the Company's election.

The Company may not redeem the notes prior to October 20, 2023, except in the event of certain tax law changes. The Company may, at any time and from time to time, redeem for cash all or any portion of the notes, at the Company's option, on or after October 20, 2023, if the last reported sale price of the Company`s ordinary shares has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which it delivers notice of redemption at a redemption price equal to 100% of the principal amount of the notes to be redeemed, (plus accrued and unpaid special interest (if any) to, but excluding, the redemption date).

Upon the occurrence of a Fundamental Change (as defined in the Indenture), holders may require the Company to repurchase for cash all or any portion of their Convertible Notes at a fundamental change repurchase price equal to 100% of the principal amount of the Convertible Notes, (plus accrued and unpaid special interest payable under certain circumstances set forth in the terms of the Convertible Notes (if any) to, but excluding, the fundamental change repurchase date). In addition, in connection with a make-whole fundamental change (as defined in the Indenture), or following the Company's delivery of a notice of redemption, the Company will, in certain circumstances, increase the conversion rate for a holder who elects to convert its notes in connection with such a corporate event or redemption, as the case may be.

F - 27

------

#### NOVA LTD.

#### NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(**U.S. dollars in thousands, except share and per share data**)

**NOTE 11** **-** CONVERTIBLE SENIOR NOTES, NET (Cont.)

During 2025, a principal amount of $181,495 Convertible Notes was converted into 2,432,803 Company's ordinary shares at a conversion rate of 13.4048 and a cash payment of $7.

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

The net carrying amount of the 2025 Convertible Notes as of December 31, 2025 and December 31, 2024 are as follows:

---

| | | |
|:---|:---|:---|
|  | As of December 31, | As of December 31, |
|  | 2 0 2 5 | 2 0 2 4 |
| Principal amount |  | 181495 |
| Unamortized issuance costs |  | (931) |
| Net carrying amount |  | 180564 |

---

Total issuance costs upon issuance were $6,412 and are amortized to interest expense using the effective interest rate method over the contractual term of the notes. Amortization of debt issuance costs related to the Convertible Notes amounted to $765, $1,280 and $1,284 for the years ended December 31, 2025, 2024 and 2023 , respectively.

#### 2030 Convertible notes
In September 2025, the Company issued $750,000 aggregate principal amount, 0% coupon rate of Convertible Senior Notes due 2030 (the "2030 Convertible Notes"). The 2030 Convertible Notes mature on September 15, 2030, unless earlier repurchased or converted. The Company used a portion of the net proceeds from this offering to fund the cost of entering into the capped call transactions, described below.

The Convertible Notes are convertible based upon an initial conversion rate of 3.1234 of the Company's ordinary shares per $1,000 principal amount of Convertible Notes (equivalent to a conversion price of approximately $320.16 per ordinary share). The conversion rate is subject to adjustment upon the occurrence of certain specified events. The Convertible Notes are senior unsecured obligations of the Company.

The Convertible Notes will mature on September 15, 2030, (the "Maturity Date"), unless earlier repurchased, redeemed or converted. Consequently, as of December 31, 2025, the Notes are classified as non-current liability. Prior to June 15, 2030, a holder may convert all or a portion of its Convertible Notes only under the following circumstances:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. During any calendar quarter commencing after the calendar quarter ending on December 31, 2025 (and only during such calendar quarter), if the last reported sale price of the Company's ordinary shares for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. During the five business day period after any 10 consecutive trading day period ("measurement period") in which the trading price, determined pursuant to the terms of the Convertible Notes, per $1,000 principal amount of Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the ordinary shares and the conversion rate on each such trading day;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. If the Company calls such Convertible Notes for redemption in certain circumstances, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Upon the occurrence of specified corporate events.

On or after June 15, 2030 until the close of business on the second scheduled trading day immediately preceding the Maturity Date, a holder may convert its 2030 Convertible Notes at any time, regardless of the foregoing circumstances.

Upon conversion, the Company can pay or deliver cash, ordinary shares or a combination of cash and ordinary shares, at the Company's election.

F - 28

------

#### NOVA LTD.

#### NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(**U.S. dollars in thousands, except share and per share data**)

**NOTE 11** **-** CONVERTIBLE SENIOR NOTES, NET (Cont.)

The Company may not redeem the notes prior to September 20, 2028, except in the event of certain tax law changes. The Company may, at any time and from time to time, redeem for cash all or any portion of the notes, at the Company's option, on or after October 20, 2028, if the last reported sale price of the Company`s ordinary shares has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which it delivers notice of redemption at a redemption price equal to 100% of the principal amount of the notes to be redeemed, (plus accrued and unpaid special interest (if any) to, but excluding, the redemption date).

Upon the occurrence of a Fundamental Change (as defined in the Indenture), holders may require the Company to repurchase for cash all or any portion of their Convertible Notes at a fundamental change repurchase price equal to 100% of the principal amount of the Convertible Notes, (plus accrued and unpaid special interest payable under certain circumstances set forth in the terms of the Convertible Notes (if any) to, but excluding, the fundamental change repurchase date). In addition, in connection with a make-whole fundamental change (as defined in the Indenture), or following the Company's delivery of a notice of redemption, the Company will, in certain circumstances, increase the conversion rate for a holder who elects to convert its notes in connection with such a corporate event or redemption, as the case may be.

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

The net carrying amount of the 2030 Convertible Notes as of December 31, 2025 are as follows:

---

| | |
|:---|:---|
|  | **As of**<br> **December 31,** |
|  | 2 0 2 5 |
| Principal amount | 750000 |
| Unamortized issuance costs | (18320) |
| Net carrying amount | 731680 |

---

Total issuance costs upon issuance were $19,551 and are amortized to interest expense using the effective interest rate method over the contractual term of the notes, which reflects 0.526% effective interest rate of the debt. Amortization of debt issuance costs related to the Convertible Notes amounted to $1,231 for the year ended December 31, 2025.

As of December 31, 2025, the total estimated fair value of the 2030 convertible senior notes was approximately $936,270. The fair value of the convertible senior notes is considered to be Level 2 within the fair value hierarchy and was determined based on quoted price of the convertible senior notes in an over-the-counter market.

#### 2030 Capped Calls
In connection with the issuance of the 2030 Convertible Notes the Company entered into privately negotiated capped call transactions (the "Capped Call Transactions") with certain of the Initial Purchasers (or their affiliates) and other financial institutions (the "Option Counterparties"). The Capped Call Transactions cover, collectively, the number of the Company's ordinary shares underlying the 2030 Convertible Notes, subject to anti-dilution adjustments substantially similar to those applicable to the Convertible Notes. The Company paid an aggregate amount of $51,826 for the Capped Call Transactions and $1,407 for issuance costs.

F - 29

------

#### NOVA LTD.

#### NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(**U.S. dollars in thousands, except share and per share data**)

**NOTE 11** **-** CONVERTIBLE SENIOR NOTES, NET (Cont.)

The Capped Call Transactions are expected generally to reduce the potential dilution to the ordinary shares upon any conversion of the 2030 Convertible Notes and/or offset any cash payments the Company could be required to make in excess of the principal amount upon conversion of the 2030 Convertible Notes in the event that the market price per share of the Company's ordinary shares, as measured under the terms of the Capped Call Transactions, is greater than the strike price of the Capped Call Transactions (which initially corresponds to the initial conversion price of the 2030 Convertible Notes and is subject to certain adjustments under the terms of the Capped Call Transactions), with such reduction and/or offset subject to a cap based on the cap price of the Capped Call Transactions. The cap price of the capped call transactions is initially approximately $415.03 per share, which represents a premium of 75% over the last reported sale price of the Company's ordinary shares of $237.16 on September 2, 2025, and is subject to certain adjustments under the terms of the Capped Call Transactions.

The 2030 Capped Call Transactions are separate transactions and are not part of the terms of the Convertible 2030 Notes. As the Capped Call Transactions are considered indexed to the Company's shares and are considered equity classified, they are not remeasured each reporting period and included as a reduction to additional paid-in-capital within shareholders' equity.

**NOTE 12**&nbsp;&nbsp;&nbsp;&nbsp; **- LEASES**

The Company has operating leases for facilities and vehicles. The Company's leases have remaining terms of 1 to 10 years, some of which include options to extend the leases for up to additional 10 years. The weighted average remaining lease term was 9 and 11.6 years for the years ended December 31, 2025 and 2024 respectively, and the weighted average discount rate was 4.6% and 3.2% for the years ended December 31, 2025 and 2024 respectively.

F - 30

------

#### NOVA LTD.

#### NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(**U.S. dollars in thousands, except share and per share data**)

**NOTE 12**&nbsp;&nbsp;&nbsp;&nbsp; **- LEASES (Cont.)**

Lease expenses amounted to $7,949, $7,296 and $6,636 for the years ended December 31, 2025, 2024 and 2023 , respectively. The expected discounted and undiscounted lease payments under non-cancelable leases as of December 31, 2025, excluding non-lease components, were as follows:

---

| | |
|:---|:---|
| Year |  |
| 2026 | 8204 |
| 2027 | 9374 |
| 2028 | 8260 |
| 2029 | 7195 |
| 2030 | 8097 |
| 2031 and thereafter | 45300 |
| Total lease payments | 86430 |
| Less imputed interest | (18955) |
| Total | 67475 |

---

Operating cash flows for operating leases amounted to $8,254, $7,081 and $6,138 for the years ended December 31, 2025, 2024 and 2023 , respectively.

**NOTE 13** &nbsp;&nbsp;&nbsp;&nbsp; **-&nbsp;&nbsp;&nbsp;&nbsp; COMMITMENTS AND CONTINGENCIES**

The Company is obligated under certain agreements with its suppliers to purchase specified items of inventory which are expected to be utilized during the years 2026-2028. As of December 31, 2025, non-cancelable purchase obligations were approximately $152,965.

From time to time, the Company may be involved in various claims and legal proceedings. The Company reviews the status of each matter and assesses its potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated the Company would accrue a liability for the estimated loss. As of December 31, 2025 and 2024 , the Company was not involved in any material claims or legal proceedings which require accrual of liability for the estimated loss.

**NOTE 14 - SHAREHOLDERS' EQUITY**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.** **Rights of Shares:** 

Holders of ordinary shares are entitled to participate equally in the payment of cash dividends and bonus shares (stock dividends) and, in the event of the liquidation of the Company, in the distribution of assets after satisfaction of liabilities to creditors. Each ordinary share is entitled to one vote on all matters to be voted on by shareholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.** **Share Repurchase:** 

In March 2022, the Company announced a $100 million repurchase program of the Company's ordinary shares. Through December 31, 2025, the Company spent an aggregate of $86.531 million to repurchase 560,001 ordinary shares under the Company's share repurchase program.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**C.** **Equity Based Incentive Plans:** 

The Company's Board of directors approves, from time to time, equity-based incentive plans, the last of which was approved in August 2017. Equity-based incentive plans include stock options, restricted share units and restricted stock awards to employees, officers and directors.

F - 31

------

#### NOVA LTD.

#### NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(**U.S. dollars in thousands, except share and per share data**)

NOTE 14 - SHAREHOLDERS' EQUITY (Cont.)

#### Share-based compensation
The following table summarizes the effects of share-based compensation resulting from the application of ASC 718 included in the Statements of Operations as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | Year ended December 31, | Year ended December 31, | Year ended December 31, |
|  | 2 0 2 5 | 2 0 2 4 | 2 0 2 3 |
| Cost of Revenues: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Product | 4408 | 4113 | 3193 |
| &nbsp;&nbsp;&nbsp;&nbsp;Service | 3099 | 2900 | 1753 |
| Research and Development | 11129 | 11179 | 7736 |
| Sales and Marketing | 5280 | 4864 | 3437 |
| General and Administrative | 2375 | 2153 | 2167 |
| Total | 26291 | 25209 | 18286 |

---

As of December 31, 2025, there was no unrecognized compensation cost related to non-vested employee options and $42,683 of total unrecognized compensation cost related to non-vested employee RSUs. These costs are generally expected to be recognized over a period of four years.

#### Shares Options
Share options vest over four years and their contractual term may not exceed 10 years. The exercise price is the market price at the date of each grant.

During 2025, 2024 and 2023, the Company did not grant share options

Summary of the status of the Company's share option plans as of December 31, 2025, as well as changes during the year then ended, is presented below:

---

| | | |
|:---|:---|:---|
|  | 2025 | 2025 |
|  | **Share**<br> **Options** | **Weighted Average**<br> **Exercise Price** |
| Outstanding - beginning of year | 38550 | 35.45 |
| Exercised | (22563) | 29.76 |
| Cancelled | (3108) | 35.36 |
| Outstanding - year end | 12879 | 45.44 |
| Options exercisable at year end | 12879 | 45.44 |

---

The aggregate intrinsic value represents the total intrinsic value (the difference between the Company's closing share market price on the last trading day of the fiscal year and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on the last trading day of the fiscal year. This amount changes based on the fair market value of the Company's shares.

The total intrinsic value of options outstanding as of December 31, 2025 and 2024 was $3,644 and $6,226, respectively. The total intrinsic value of options exercisable as of December 31, 2025 and 2024 was $3,644 and $6,158, respectively. The total intrinsic value of options exercised during the years 2025, 2024 and 2023 was $5,192, $9,268, and $11,149 respectively.

The total fair value of options vested during the years 2025, 2024 and 2023 was $26, $90 and $407, respectively.

The weighted-average remaining contractual term of options exercisable at year end is 0.995.

The weighted-average remaining contractual term of options outstanding at year end is 0.995.

F - 32

------

#### NOVA LTD.

#### NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(**U.S. dollars in thousands, except share and per share data**)

NOTE 14 - SHAREHOLDERS' EQUITY (Cont.)

The following table summarizes information about share options outstanding as of December 31, 2025:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Range of**<br> **Exercise Prices** | **Number**<br> **Outstanding** | **Weighted**<br> **Average**<br> **Remaining**<br> **Contractual**<br> **Life** | **Weighted**<br> **Average**<br> **Exercise**<br> **Price** | **Number**<br> **Exercisable** | **Weighted**<br> **Average**<br> **Exercise**<br> **Price** |
| (US dollars) |  | (in years) | (US dollars) |  | (US dollars) |
| 20.00-35.00 | 5824 | 0.43 | 26.30 | 5824 | 26.30 |
| 35.01-50.00 | 4164 | 1.42 | 44.08 | 4164 | 44.08 |
| 50.01-70.00 | 971 | 1.59 | 53.61 | 971 | 53.61 |
| 70.01-102.35 | 1920 | 1.48 | 102.35 | 1920 | 102.35 |
|  | 12879 |  | 45.44 | 12879 | 45.44 |

---

#### Restricted Share Units
Restricted Share Units ("RSU") grants are rights to receive shares of the Company's ordinary shares on a one-for-one basis and are not entitled to dividends or voting rights, if any, until they are vested. RSUs vesting schedules are 25% on each of the first, second, third and fourth anniversaries of the grant date, or, 33% on each of the first, second, and third anniversaries of the grant date. The fair value of such RSU grants is being recognized based on the accelerated method over the vesting period. Performance based RSU grants vest over a period of 3 years and are subject to certain performance criteria; accordingly, compensation expense is recognized for such awards when it becomes probable that the related performance condition will be satisfied.

---

| | | |
|:---|:---|:---|
|  | 2025 | 2025 |
|  | Number of RSUs | Weighted average grant date fair value (USD) |
| Unvested - beginning of year | 496536 | 127.39 |
| Granted | 113789 | 296.25 |
| Vested | (192844) | 116.20 |
| Canceled | (21219) | 142.70 |
| Unvested at year end | 396262 | 180.50 |

---

Weighted-average grant-date fair value (USD) of RSU granted during the year of 2025 and 2024 was 296.25 and 196.83, respectively.

The total intrinsic value of RSUs vested during the years 2025, 2024 and 2023 was $54,271, $42,449 and $22,649, respectively.

The total fair value of RSU vested during the years 2025, 2024 and 2023 was $22,491, $20,054 and $14,412, respectively.

F - 33

------

#### NOVA LTD.

#### NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(**U.S. dollars in thousands, except share and per share data**)

**NOTE 15** **-** INCOME TAXES

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.** **Israeli Taxation** 

#### Income Tax Regulations (Rules on Bookkeeping by Foreign Invested Companies and Certain Partnerships and Determination of their Taxable Income), 1986:
As a "Controlled Foreign Cooperation" (as defined in the Israeli Law for the Encouragement of Capital Investments-1959), the Company's management has elected to apply Income Tax Regulations (Rules for Maintaining Accounting Records of Foreign Invested Companies and Certain Partnerships and Determining Their Taxable Income)-1986. Accordingly, its taxable income or loss is calculated in US Dollars.

#### Law for the Encouragement of Capital Investments-1959:
Part of the Company's investment in equipment has received approvals in accordance with the Law for the Encouragement of Capital Investments, 1959 ("Approved Enterprise" status) in three separate investment plans. The Company has chosen to receive its benefits through the "Alternative Benefits" track, and, as such, was eligible for various benefits. These benefits included accelerated depreciation of fixed assets used in the investment program, as well as a full tax exemption on undistributed income in relation to income derived from the first plan for a period of 4 years and for the second and third plans for a period of 2 years. Thereafter a reduced tax rate of 25% was applicable for an additional period of up to 3 years for the first plan and 5 years for the second and third plans, commencing with the date on which taxable income was first earned but not later than certain dates. The benefit period of the second and third plan ended in 2015.

On April 1, 2005, an amendment to the Investment Law came into effect ("the Amendment") and has significantly changed the provisions of the Investment Law. The Amendment limited the scope of enterprises which may be approved by the Investment Center by setting criteria for the approval of a facility as a Privileged Enterprise, such as provisions generally requiring that at least 25% of the Privileged Enterprise's Income will be derived from export. Additionally, the Amendment enacted major changes in the manner in which tax benefits are awarded under the Investment Law so that companies no longer require Investment Center approval in order to qualify for tax benefits.

However, the Investment Law provided that terms and benefits included in any certificate of approval already granted will remain subject to the provisions of the law as they were on the date of such approval. Therefore, the Israeli companies with Approved Enterprise status were generally not subject to the provisions of the Amendment.

The entitlement to the above benefits was conditional upon the Company fulfilling the conditions stipulated by the above law, regulations published thereunder and the instruments of approval for the specific investments in "Approved Enterprises". In the event of failure to comply with these conditions, the benefits may be canceled, and the Company may be required to refund the amount of the benefits, in whole or in part, including interest.

In the event of distribution by the Company of a cash dividend out of retained earnings that were tax exempt due to its Approved Enterprise status, the Company would have to pay corporate tax of 10% - 25% on the income from which the dividend was distributed based on the extent to which non-Israeli shareholders hold Company's shares. A 15% withholding tax may be deducted from dividends distributed to the recipients.

F - 34

------

#### NOVA LTD.

#### NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(**U.S. dollars in thousands, except share and per share data**)

**NOTE 15** **-** INCOME TAXES (Cont.)

In 2011, new legislation amending to the Investment Law was adopted("2011 Amendment"). Under this new legislation, a uniform corporate tax rate will apply to all qualifying income of certain Industrial Companies (Requirement of a minimum export of 25% of the company's total turnover), as opposed to the current law's incentives, which are limited to income from Approved Enterprises during their benefits period. Under the new law, the uniform tax rate was 10% in areas in Israel designated as Development Zone A and 15% elsewhere in Israel during 2011-2012, 7% and 12.5%, respectively, in 2013-2014, and 6% and 12%, respectively thereafter. The profits of these Industrial Companies may be freely distributable as dividends, subject to a 15% withholding tax (or lower, under an applicable tax treaty).

Under the transition provisions of the new legislation, the Company may decide to irrevocably implement the new law while waiving benefits provided under the current law or to remain subject to the current law.

In August 2013 "The Arrangements Law" (hereinafter—"the Law") was officially published. The following significant changes affecting taxation were approved:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The tax rate on a company in Development area A, effective January 1, 2014 is 9% (instead of 7% in 2014 and 6% in 2015 and thereafter), and the tax rate for companies in all other areas will be 16% (instead of 12.5% in 2014 and 12% in 2015 and thereafter).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The tax rate on dividend distributed, generated from "preferred income" or by a company that has an approved enterprise increased effective January 1, 2014 from 15% to 20%.

#### The New Technological Enterprise Incentives Regime - Amendment 73 to the Investment Law
In December 2016, the Economic Efficiency Law (Legislative Amendments for Applying the Economic Policy for the 2017 and 2018 Budget Years), 2016 which includes Amendment 73 to the Law for the Encouragement of Capital Investments ("the 2017 Amendment") was published. According to the 2017 Amendment, Technological preferred enterprise, as defined in the Law for the Encouragement of Capital Investments, 1959 ("the Encouragement Law"), with total consolidated revenues of less than NIS 10 billion, shall be subject to 12% tax rate on income deriving from intellectual property (in development area A - a tax rate of 7.5%).

Any dividends distributed deriving from income from the preferred technological enterprises will be subject to tax at a rate of 20%. The 2017 Amendment further provides that, in certain circumstances, a dividend distributed to a foreign corporate shareholder, would be subject to a 4% tax rate (if the percentage of foreign investors exceeds 90%).

The Company assessed the criteria for qualifying to a "Preferred Technological Enterprise," status and concluded that the Israeli entity is entitled to the above-mentioned benefits. The Company implemented the new incentives in its tax calculations starting 2017.

On November 15, 2021 a new amendment of the Investment Law ("the Amendment') was enacted (i) providing a reduced corporate income tax on the Trapped Profits distributed within a year from such amendment. The reduced corporate income tax was based on a certain formula and subject to reinvestment of certain amounts in enumerated assets/activities; (ii) harshening the rules with respect to determining the profits from which a dividend was distributed and providing that part of any dividend distribution, will be deemed as distributed from the Trapped Profits, according to a certain formula.

During December 2021, as part of the Tax Assessment audit for the years 2016-2019, the Company entered into an agreement with the Israeli Tax Authorities and opted-in with the new Amendment. The reduced corporate income tax on the Trapped Profits resulted in income tax expenses (net of reductions of uncertain tax positions provisions) of approximately $3.7M, and was included in the 2021 consolidated statements of operations.

F - 35

------

#### NOVA LTD.

#### NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(**U.S. dollars in thousands, except share and per share data**)

**NOTE 15** **-** INCOME TAXES (Cont.)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.** **U.S. Taxation** 

*The Tax Cuts and Jobs Act, 2017:*

On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the "US Tax Act") that instituted fundamental changes to the taxation of multinational corporations. The Tax Act includes significant changes to the U.S. corporate income tax system, including a Federal corporate rate reduction from 35% to 21%, adjustments to rules relating to limitations on the deductibility of interest expense and executive compensation, the transition of U.S. international taxation from a worldwide tax system to a territorial tax system, foreign derived intangible income deduction, rules that impact the utilization of US NOLs and other corporate tax provisions**.**

#### Foreign-Derived Intangible Income:
The 2017 Tax Act provides tax incentives to U.S. companies to earn income from the sale, lease or license of goods and services abroad (i.e., the portion of a domestic corporation's intangible income that is derived from serving foreign markets) in the form of a deduction for foreign-derived intangible income ("FDII"). FDII is taxed at an effective rate of 13.125% for taxable years beginning after December 31, 2017 and at an effective rate of 16.406% for taxable years beginning after December 31, 2025. The accounting for the deduction for FDII is similar to a special deduction and should be accounted for based on the guidance in ASC 740-10-25-37. The tax benefits for special deductions ordinarily are recognized no earlier than the year in which they are deductible on a tax return.

#### The Creating Helpful Incentives to Produce Semiconductors (CHIPS) and Science Act:
On August 9, 2022, the Creating Helpful Incentives to Produce Semiconductors and Science Act ("the CHIPS Act") was signed into law. The CHIPS Act provides various tax incentives and credits to encourage investment in semiconductor manufacturing facilities and related research and development activities, including the Advanced Manufacturing Investment Credit ("AMIC"), which equals 25% of qualified investments in an advanced manufacturing facility. The tax credit is available for property placed in service after December 31, 2022, and for which construction begins before January 1, 2027. The effects of the CHIPS Act are included in the 2025, 2024 and 2023 statements of operations.

#### The One Big Beautiful Bill Act
On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was signed into law. The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation, domestic research cost expensing, and the business interest expense limitation. ASC 740 requires the effects of changes in tax rates and laws to be recognized in the period in which the legislation is enacted. The effects of the OBBBA are included in the 2025 statements of operations.

F - 36

------

#### NOVA LTD.

#### NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(**U.S. dollars in thousands, except share and per share data**)

**NOTE 15** **-** INCOME TAXES (Cont.)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**C.** Deferred Taxes:

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

Significant components of the deferred tax assets and liabilities are as follows:

---

| | | |
|:---|:---|:---|
|  | As of December 31, | As of December 31, |
|  | 2 0 2 5 | 2 0 2 4 |
| Deferred tax assets: |  |  |
| Net operating loss carryforwards | 830 | 346 |
| Tax credits carryforward | 4189 | 3198 |
| Reserve and allowances | 14032 | 12872 |
| Operating lease liabilities | 5232 | 5704 |
| Research and development | 27600 | 20649 |
| Gross tax assets | 51833 | 42769 |
| Valuation allowance | (4718) | (3574) |
| Total tax assets | 47165 | 39195 |
| Deferred tax liabilities: |  |  |
| Intangible assets acquired | (12984) | (9399) |
| Operating lease right-of-use assets | (4449) | (5102) |
| Reserve and allowances | (1134) | (1550) |
| Total deferred tax liabilities | (18567) | (16051) |
| Net deferred tax assets | 28598 | 23144 |

---

Net deferred tax assets (liabilities) by domestic and foreign are as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | Year ended December 31, | Year ended December 31, | Year ended December 31, | Year ended December 31, |
|  | **2 0 2 5** | **2 0 2 5** | **2 0 2 4** | **2 0 2 4** |
| Domestic |  | 10,233 |  | 9,201 |
| Foreign |  | 18,365 |  | 13,943 |
|  |  | 28,598 |  | 23,144 |

---

Under ASC 740-10, deferred tax assets are to be recognized for the anticipated tax benefits associated with net operating loss and tax credits carry-forwards and deductible temporary differences, unless it is more-likely-than-not that some or all of the deferred tax assets will not be realized.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**D.** **Income before taxes on income included in the consolidated statements of operations:** 

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | Year ended December 31, | Year ended December 31, | Year ended December 31, | Year ended December 31, | Year ended December 31, | Year ended December 31, |
|  | **2 0 2 5** | **2 0 2 5** | **2 0 2 4** | **2 0 2 4** | **2 0 2 3** | **2 0 2 3** |
| Domestic |  | 206,057 |  | 138,270 |  | 117,936 |
| Foreign (mainly US and Germany) |  | 97,229 |  | 78,017 |  | 36,763 |
|  |  | 303,286 |  | 216,287 |  | 154,699 |

---

F - 37

------

#### NOVA LTD.

#### NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(**U.S. dollars in thousands, except share and per share data**)

**NOTE 15** **-** INCOME TAXES (Cont.)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**E.** **Income tax expenses (tax benefits) included in the consolidated statements of operations:** 

---

| | | | |
|:---|:---|:---|:---|
|  | Year ended December 31, | Year ended December 31, | Year ended December 31, |
|  | **2 0 2 5** | **2 0 2 4** | **2 0 2 3** |
| Domestic | 27268 | 20268 | 17363 |
| Foreign (mainly US and Germany) | 16795 | 12257 | 1026 |
|  | 44063 | 32525 | 18389 |
| Current | 56371 | 42488 | 24845 |
| Deferred | (12308) | (9963) | (6456) |
|  | 44063 | 32525 | 18389 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**F.** Tax Reconciliation:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | Year Ended December 31, | Year Ended December 31, | Year Ended December 31, | Year Ended December 31, | Year Ended December 31, | Year Ended December 31, |
|  | 2 0 2 5 | 2 0 2 5 | 2 0 2 4 | 2 0 2 4 | 2 0 2 3 | 2 0 2 3 |
|  | Amount | Percent | Amount | Percent | Amount | Percent |
| Income before taxes on income | **303286** | **100%** | **216287** | **100%** | **154699** | **100%** |
| Israel Statutory Tax Rate | **69756** | 23.00<br>**%** | **49746** | 23.00<br>**%** | **35581** | 23.00<br>**%** |
| Foreign tax effects: | **(5606)** | **(1.85)%** | **(5712)** | **(2.64)%** | **(4910)** | **(3.18)%** |
| &nbsp;&nbsp; United States |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Foreign Derived Intangible Income benefit | (4335) | (1.43)% | (3559) | (1.65)% | (2497) | (1.61)% |
| &nbsp;&nbsp;&nbsp; Tax credits | (4458) | (1.47)% | (2450) | (1.13)% | (1756) | (1.14)% |
| &nbsp;&nbsp;&nbsp; Other | (26) | (0.01)% | (1023) | (0.47)% | 128 | 0.08% |
| &nbsp;&nbsp; Other foreign jurisdictions | 3213 | 1.06% | 1320 | 0.61% | (785) | (0.51)% |
| Effect of benefited income New Technological in Israel | **(20377)** | **(6.72)%** | **(15282)** | **(7.07)%** | **(12256)** | **(7.92)%** |
| Non-taxable or Non-deductible Items | **682** | **0.22%** | **(93)** | **(0.04)%** | **601** | **0.40%** |
| Changes in Unrecognized Tax Benefits | **(392)** | **(0.13)%** | **3866** | 1.79<br> **%** | **(627)** | **(0.40)%** |
| Effective Tax Rate | **44063** | **14.52%** | **32525** | **15.04%** | **18389** | **11.89**% |

---

F - 38

------

#### NOVA LTD.

#### NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(**U.S. dollars in thousands, except share and per share data**)

**NOTE 15 - INCOME TAXES (Cont.)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**G.** Tax Paid:

---

| | | | |
|:---|:---|:---|:---|
|  | Year ended December 31, | Year ended December 31, | Year ended December 31, |
|  | **2 0 2 5** | **2 0 2 4** | **2 0 2 3** |
| Domestic (Israel) | **27199** | **20039** | **14696** |
| Foreign: |  |  |  |
| United States | 9265 | 9308 | 8743 |
| Germany | 4415 | 40 | 3054 |
| Other | 658 | 489 | 349 |
| Total | 41537 | 29876 | 26842 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**H.** **Effective Tax Rates:** 

The Company's effective tax rates differ from the New Technological Enterprise Laws rates applicable to the Company for tax year 2025 and 2024, primarily due to stock-based compensation deductible expenses and due to tax credits and foreign derived intangible income benefit in the US.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**I.** **Tax Assessments:** 

In December 2025 the Parent Company has received final tax assessments for the years 2020-2024 from the Israeli Tax Authorities.

For the US subsidiary, any tax years starting 2022 and any tax attributes carryforwards from prior periods remain subject to Federal tax examination in future periods (under the standard US statute of limitation and subject to tax filing).

The other subsidiaries received final tax assessments through tax years 2017 until 2022.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**J.** **Undistributed earnings of foreign subsidiaries:** 

The Company considers the earnings of certain subsidiaries to be indefinitely invested outside Israel on the basis of estimates that future domestic cash generation will be sufficient to meet future domestic cash needs and the Company's specific plans for reinvestment of those subsidiary earnings. Should the Company decide to repatriate the foreign earnings, the Company would need to adjust the Company's income tax provision in the period the Company determined that the earnings will no longer be indefinitely invested outside Israel.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**K.** **Uncertain Tax Positions:** 

The taxation of the Company's business is subject to the application of multiple and sometimes conflicting tax laws and regulations as well as multinational tax conventions. The application of tax laws and regulations is subject to legal and factual interpretation, judgment and uncertainty.

In addition, the Company classifies interest and penalties recognized in the financial statements relating to uncertain tax position under the income taxes line item.

Tax laws themselves are subject to change as a result of changes in fiscal policy, changes in legislation and the evolution of regulations and court rulings. Consequently, taxing authorities may impose tax assessments or judgments against the Company that could materially impact its tax liability and/or its effective income tax rate.

The Company believes that it has adequately provided for any reasonably foreseeable outcomes related to tax audits and settlement. The final tax outcome of its tax audits could be different from that which is reflected in the Company's income tax provisions and accruals. Such differences could have a material effect on the Company's income tax provision and net income in the period in which such determination is made.

F - 39

------

#### NOVA LTD.

#### NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(**U.S. dollars in thousands, except share and per share data**)

**NOTE 15** **-** INCOME TAXES (Cont.)

The following table summarizes the changes in uncertain tax positions:

---

| | | | |
|:---|:---|:---|:---|
|  | As of December 31, | As of December 31, | As of December 31, |
|  | **2 0 2 5** | **2 0 2 4** | **2 0 2 3** |
| Balance at the beginning of the year | 13781 | 9422 | 9276 |
| Increase (decrease) related to prior year tax positions | (8356) | 3 | (2884) |
| Increase related to current year tax positions | 5335 | 4356 | 3030 |
| Balance at the end of the year\* | 10760 | 13781 | 9422 |

---

\* The amounts for the years ended December 31, 2025 and 2024 include $4,036 and $3,852 unrecognized tax benefits, respectively, which are presented as a reduction from deferred tax assets, see Note 15c.

The Company recognizes interest and penalties related to unrecognized tax benefits as a component of income tax expenses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**L.** Income from Other Sources in Israel:

Income not eligible for benefits under the New Technological Enterprise Laws mentioned in "C" above are taxed at the corporate tax rate of 23%.

**NOTE 16 -** SEGMENTS, GEOGRAPHIC AREAS AND MAJOR CUSTOMERS

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.** **Segments** 

The Company operates as one operating segment. The Company's chief operating decision maker ("CODM") is the Company's president and CEO, who review financial information presented on a consolidated basis. The CODM uses consolidated operating margin and net income to assess financial performance and allocate resources. Further, the CODM reviews and utilizes functional expenses (cost of revenues, sales and marketing, research and development net, and general and administrative) at the consolidated level to manage the Company's operations. These financial metrics are used by the CODM to make key operating decisions and to allocate resources.

See the consolidated financial statements for financial information regarding the Company's operating segment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.** **Sales by Geographic Area (as Percentage of Total Sales):** 

---

| | | | |
|:---|:---|:---|:---|
|  | Year ended December 31, | Year ended December 31, | Year ended December 31, |
|  | 2 0 2 5 | 2 0 2 4 | 2 0 2 3 |
|  | % | % | % |
| China | 33 | 39 | 36 |
| Taiwan, R.O.C. | 29 | 20 | 18 |
| Korea | 16 | 18 | 20 |
| USA | 9 | 14 | 13 |
| Other | 13 | 9 | 13 |
| **Total** | 100 | 100 | 100 |

---

Revenues are attributed to countries based on the geographic location of the customer.

F - 40

------

#### NOVA LTD.

#### NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(**U.S. dollars in thousands, except share and per share data**)

**NOTE 16 -** SEGMENTS, GEOGRAPHIC AREAS AND MAJOR CUSTOMERS (Cont.)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**C.** Sales by Major Customers (as Percentage of Total Sales):

---

| | | | |
|:---|:---|:---|:---|
|  | Year ended December 31, | Year ended December 31, | Year ended December 31, |
|  | 2 0 2 5 | 2 0 2 4 | 2 0 2 3 |
|  | % | % | % |
| Customer A | 23 | 18 | 19 |
| Customer B | 10 | 14 | 18 |

---

F - 41

------

#### NOVA LTD.

#### NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(**U.S. dollars in thousands, except share and per share data**)

**NOTE 16 -** SEGMENTS, GEOGRAPHIC AREAS AND MAJOR CUSTOMERS (Cont.)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**D.** **Long-lived assets by geographic location:** 

---

| | | |
|:---|:---|:---|
|  | As of December 31, | As of December 31, |
|  | 2 0 2 5 | 2 0 2 4 |
|  | % | % |
| Israel | 43 | 48 |
| US | 24 | 24 |
| Germany | 28 | 22 |
| Other | 5 | 6 |
| Total long-lived assets (\*) | 100 | 100 |

---

(\*) Long-lived assets are comprised of property, plant and equipment, net and operating lease right-of-use assets.

**NOTE 17 -** FINANCIAL INSTRUMENTS

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.** **Hedging Activities** 

The Company enters into forward contracts, and currency options to hedge its balance sheet exposure as well as certain future cash flows in connection with certain operating expenses (mainly payroll and related expenses) and forecast transactions which are expected to be denominated mainly in NIS. The Company is exposed to losses in the event of non-performance by counterparties to financial instruments; however, as the counterparties are major Israeli banks, credit risk is considered immaterial. The Company does not hold or issue derivatives for trading purposes. The notional amounts of the hedging instruments as of December 31, 2025 and December 31, 2024 were $46,803 and $48,321 respectively. The terms of all of these currency derivatives are less than one year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.** **Derivative Instruments** 

The fair value of derivative contracts as of December 31, 2025 and December 31, 2024 was as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Derivative Assets Reported in Other Current Assets** | **Derivative Assets Reported in Other Current Assets** | **Derivative Liabilities Reported in Other Current Liabilities** | **Derivative Liabilities Reported in Other Current Liabilities** |
|  | December 31, | December 31, | December 31, | December 31, |
|  | 2 0 2 5 | 2 0 2 4 | 2 0 2 5 | 2 0 2 4 |
| Derivatives designated as hedging instruments in cash flow hedge | 1486 | 617 |  |  |

---

F - 42

------

#### NOVA LTD.

#### NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(**U.S. dollars in thousands, except share and per share data**)

**NOTE 17 -** FINANCIAL INSTRUMENTS (Cont.)

The impact of derivative instruments on operating income in the year ended December 31, 2025, 2024 and 2023 was:

---

| | | | |
|:---|:---|:---|:---|
|  | Year ended December 31, | Year ended December 31, | Year ended December 31, |
|  | **2 0 2 5** | **2 0 2 4** | **2 0 2 3** |
| **Cost of revenues:** |  |  |  |
| &nbsp;&nbsp; Products | (483) | (29) | 268 |
| &nbsp;&nbsp; Services | (181) | (10) | 94 |
|  **Total cost of revenues** | (664) | (39) | 362 |
| Operating expenses**:** |  |  |  |
| &nbsp;&nbsp; Research and development, net | (1178) | (66) | 599 |
| &nbsp;&nbsp; Sales and marketing | (362) | (19) | 158 |
| &nbsp;&nbsp; General and administrative | (816) | (49) | 457 |
| **Total operating expenses** | **(2356)** | **(134)** | **1214** |
| Loss (gain) on derivative instruments | (3020) | (173) | 1576 |

---

**NOTE 18 -** FINANCIAL INCOME (EXPENSE), NET

---

| | | | |
|:---|:---|:---|:---|
|  | Year ended December 31, | Year ended December 31, | Year ended December 31, |
|  | **2 0 2 5** | **2 0 2 4** | **2 0 2 3** |
| Interest income | 45672 | 34547 | 22643 |
| Amortization of issuance costs related to the Convertible Senior Notes (Note 10) | (1996) | (1280) | (1284) |
| Exchange rate gain (loss), net | 7443 | (4186) | 1303 |
| Discrete tax reserve release linkage impact | (981) | - | - |
| Bank charges | (320) | (334) | (226) |
| Total | 49818 | 28747 | 22436 |

---

F - 43

------

#### EXHIBIT INDEX

---

| | |
|:---|:---|
| **Number** | **Description** |
| [<u>1.1</u>](https://www.sec.gov/Archives/edgar/data/1109345/000117891325000572/exhibit_1-1.htm) | [<u>Amended and Restated Articles of Association (incorporated by reference to Exhibit 1.1 to the Company's Annual Report on Form 20-F filed with the Securities and Exchange Commission on February 20, 2025).</u>](https://www.sec.gov/Archives/edgar/data/1109345/000117891325000572/exhibit_1-1.htm) |
| [<u>2.1</u>](https://www.sec.gov/Archives/edgar/data/1109345/000117891325000572/exhibit_2-1.htm) | [<u>Description of Securities (incorporated by reference to Exhibit 2.1 to the Company's Annual Report on Form 20-F filed with the Securities and Exchange Commission on February 20, 2025).</u>](https://www.sec.gov/Archives/edgar/data/1109345/000117891325000572/exhibit_2-1.htm) |
| [4.1](https://www.sec.gov/Archives/edgar/data/1109345/000117891317002544/exhibit_99-1.htm) | [2017 Share Incentive Plan (incorporated by reference to Exhibit 99.1 to the Company's Registration Statement on Form S-8 filed with the Securities and Exchange Commission on August 25, 2017 (File No. 333-220158).](https://www.sec.gov/Archives/edgar/data/1109345/000117891317002544/exhibit_99-1.htm) |
| [4.2](https://www.sec.gov/Archives/edgar/data/1109345/000117891323000775/exhibit_4-4.htm) | [Form of Indemnification Agreement between the Company and its present and future directors and officers (incorporated by reference to Exhibit 4.4 to the Company's Annual Report on Form 20-F filed with the Securities and Exchange Commission on February 28, 2023).](https://www.sec.gov/Archives/edgar/data/1109345/000117891323000775/exhibit_4-4.htm) |
| [4.3](exhibit_4-3.htm) | [Compensation Policy for Executive Officers and Directors (filed herewith).](exhibit_4-3.htm) |
| [4.4](https://www.sec.gov/Archives/edgar/data/1109345/000117891317000686/exhibit_4-4.htm) | [Summary of lease agreement dated May 28, 2000, as last amended on May 25, 2016 (incorporated by reference to Exhibit 4.4 to the Company's Annual Report on Form 20-F filed with the Securities and Exchange Commission on March 3, 2017).](https://www.sec.gov/Archives/edgar/data/1109345/000117891317000686/exhibit_4-4.htm)  |
| [4.5](https://www.sec.gov/Archives/edgar/data/1109345/000117891319000711/exhibit_4-7.htm) | [Summary of lease agreement dated May 3, 2018, by and between the Company and Bayside Land Corporation Ltd. (incorporated by reference to Exhibit 4.7 to the Company's Annual Report on Form 20-F filed with the Securities and Exchange Commission on February 28, 2019).](https://www.sec.gov/Archives/edgar/data/1109345/000117891319000711/exhibit_4-7.htm) |
| [<u>8.1</u>](exhibit_8-1.htm) | [<u>List of Subsidiaries (filed herewith).</u>](exhibit_8-1.htm) |
| [<u>11.1</u>](exhibit_11-1.htm) | [<u>Insider Trading Policy (filed herewith).</u>](exhibit_11-1.htm) |
| [<u>12.1</u>](exhibit_12-1.htm) | [<u>Certification required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended (filed herewith).</u>](exhibit_12-1.htm) |
| [<u>12.2</u>](exhibit_12-2.htm) | [<u>Certification required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended (filed herewith).</u>](exhibit_12-2.htm) |
| [<u>13.1</u>](exhibit_13-1.htm) | [<u>Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).</u>](exhibit_13-1.htm) |
| [<u>13.2</u>](exhibit_13-2.htm) | [<u>Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).</u>](exhibit_13-2.htm) |
| [<u>15.1</u>](exhibit_15-1.htm) | [<u>Consent of Kost Forer Gabbay & Kasierer (filed herewith).</u>](exhibit_15-1.htm) |
| [97](https://www.sec.gov/Archives/edgar/data/1109345/000117891324000649/exhibit_97.htm) | [Clawback Policy (incorporated by reference to Exhibit 97 to the Company's Annual Report on Form 20-F filed with the Securities and Exchange Commission on February 20, 2024).](https://www.sec.gov/Archives/edgar/data/1109345/000117891324000649/exhibit_97.htm) |
| 101.INS | Inline XBRL Instance Document—the instance document does not appear in the Interactive Data File as its XBRL tags are embedded within the Inline XBRL document |
| 101.SCH | Inline XBRL Taxonomy Extension Schema |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase |
| 104 | Cover page formatted as Inline XBRL and contained in Exhibit 101 |

---

------

#### SIGNATURES
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and has duly caused and authorized the undersigned to sign this Annual Report on its behalf.

---

| | |
|:---|:---|
| **NOVA LTD.** | **NOVA LTD.** |
| By: | <u>/s/ *Gabriel Waisman*</u><br>Gabriel Waisman<br>President and Chief Executive Officer |

---

Date: February 17, 2026

------

## Exhibit 4.3

------

**<u>Exhibit 4.3</u>**<br>

#### COMPENSATION POLICY

#### NOVA LTD.

#### Compensation Policy for Executive Officers and Directors
(As Adopted by the Shareholders on June 18, 2025)

------

#### **Table of Contents**

#### <br>

---

| | |
|:---|:---|
| [A. Overview and Objectives](#A.OverviewandObjectives) | 3 |
| [B. Base Salary and Benefits](#B.BaseSalaryandBenefits) | 4 |
| [C. Cash Bonuses](#C.CashBonuses) | 5 |
| [D. Equity Based Compensation](#D.EquityBasedCompensation) | 7 |
| [E. Retirement and Termination of Service Arrangements](#E.RetirementandTerminatio) | 8 |
| [F. Exculpation, Indemnification and Insurance](#F.ExculpationIndemnificat) | 9 |
| [G. Arrangements upon Change of Control](#G.ArrangementsuponChangeo) | 9 |
| [H. Board of Directors Compensation](#H.BoardofDirectorsCompens) | 10 |
| [I. Miscellaneous](#I.Miscellaneous) | 10 |

---

------

<u>A. Overview and Objectives</u>

&nbsp;&nbsp;&nbsp;&nbsp;1. **Introduction** 

This document sets forth the Compensation Policy for Executive Officers and Directors (this **"Compensation Policy"** or **"Policy")** of Nova Ltd. **("Nova"** or the **"Company"),** in accordance with the requirements of the Companies Law and the regulations promulgated thereunder, 5759-1999 (the **"Companies Law").**

Compensation is a key component of Nova's overall human capital strategy to attract, retain, reward, and motivate highly skilled individuals that will enhance Nova's value and otherwise assist Nova to reach its business and financial long-term goals. Accordingly, the structure of this Policy is established to tie the compensation of each officer to Nova's goals and performance.

For purposes of this Policy, "Executive Officers" shall mean "Office Holders" as such term is defined in Section 1 of the Companies Law, excluding, unless otherwise expressly indicated herein, Nova's directors.

This policy is subject to applicable law and is not intended, and should not be interpreted as limiting or derogating from, provisions of applicable law to the extent not permitted.

This Policy shall apply to compensation agreements and arrangements which will be approved after the date on which this Policy is adopted and shall serve as Nova's Compensation Policy for three (3) years, commencing as of its adoption.

The Compensation Committee and the Board of Directors of Nova (the "**Compensation Committee**" and the "**Board**", respectively) shall review and reassess the adequacy of this Policy from time to time, as required by the Companies Law.

&nbsp;&nbsp;&nbsp;&nbsp;2. **Objectives** 

Nova's objectives and goals in setting this Policy are to attract, motivate and retain highly experienced leaders who will contribute to Nova's success and enhance shareholder value, while demonstrating professionalism in a highly achievement-oriented culture that is based on merit and rewards excellent performance in the long term, and embedding Nova's core values as part of a motivated behavior. To that end, this Policy is designed, among others:

<br> 2.1. To closely align the interests of the Executive Officers with those of Nova's shareholders in order to enhance shareholder value;

<br> 2.2. To align a significant portion of the Executive Officers' compensation with Nova's short and long-term goals and performance;

---

| | |
|:---|:---|
| 2.3. | To provide the Executive Officers with a structured compensation package, including competitive salaries, performance-motivating cash and equity incentive programs and benefits, and to be able to present to each Executive Officer an opportunity to advance in a growing organization; |

---

<br> 2.4. To strengthen the retention and the motivation of Executive Officers in the long term;

<br> 2.5. To provide appropriate awards in order to incentivize superior individual excellency and corporate performance; and

<br> 2.6. To maintain consistency in the way Executive Officers are compensated.

&nbsp;&nbsp;&nbsp;&nbsp;3. **Compensation Instruments** 

Compensation instruments under this Policy may include the following:

<br> 3.1. Base salary;

<br> 3.2. Benefits;

<br> 3.3. Cash bonuses;

<br> 3.4. Equity based compensation;

------

<br> 3.5. Change of control provision; and

<br> 3.6. Retirement and termination terms.

&nbsp;&nbsp;&nbsp;&nbsp;4. **Overall Compensation - Ratio Between Fixed and Variable Compensation** 

---

| | |
|:---|:---|
| 4.1. | This Policy aims to balance the mix of "Fixed Compensation" (comprised of base salary and benefits) and "Variable Compensation" (comprised of cash bonuses and equity-based compensation) in order to, among other things, appropriately incentivize Executive Officers to meet Nova's short- and long-term goals while taking into consideration the Company's need to manage a variety of business risks. |

---

---

| | |
|:---|:---|
| 4.2. | The total annual bonus and equity-based compensation of each Executive Officer shall not exceed 90% of the total compensation package of such Executive Officer on an annual basis. |

---

&nbsp;&nbsp;&nbsp;&nbsp;5. **Inter-Company Compensation Ratio** 

---

| | |
|:---|:---|
| 5.1. | In the process of drafting and updating this Policy, Nova's Board and Compensation Committee have examined the ratio between employer cost associated with the engagement of the Executive Officers, including directors, and the average and median employer cost associated with the engagement of Nova's other employees (including contractor employees as defined in the Companies Law) (the "**Ratio**"**).** |

---

---

| | |
|:---|:---|
| 5.2. | The possible ramifications of the Ratio on the daily working environment in Nova were examined and will continue to be examined by Nova from time to time in order to ensure that levels of executive compensation, as compared to the overall workforce will not have a negative impact on work relations in Nova. |

---

<u>B. Base Salary</u><u> </u><u>and Benefits<br></u> 

<br> &nbsp;&nbsp;&nbsp;&nbsp;6. **Base Salary** 

---

| | |
|:---|:---|
| 6.1. | A base salary provides stable compensation to Executive Officers and allows Nova to attract and retain competent executive talent and maintain a stable management team. The base salary varies among Executive Officers, and is individually determined **according** to the educational background, prior vocational experience, qualifications, company's role, business responsibilities and the past performance of each Executive Officer. |

---

---

| | |
|:---|:---|
| 6.2. | Since a competitive base salary is essential to Nova's ability to attract and retain highly skilled professionals, Nova will seek to establish a base salary that is competitive with base salaries paid to Executive Officers in a peer group of other companies operating in technology sectors which are similar in their characteristics to Nova's, as much as possible, while considering, among others, such companies' size and characteristics including their revenues, profitability rate, number of employees and operating arena (in Israel or globally), the list of which shall be reviewed and approved by the Compensation Committee at least every two years. To that end, Nova shall utilize as a reference, comparative market data and practices, which will include a compensation survey that compares and analyses the level of the overall compensation package offered to an Executive Officer of the Company with compensation packages in similar positions to that of the relevant officer) in such companies. Such compensation survey may be conducted internally or through an external independent consultant. Information on such compensation survey shall be included in the proxy statement published in connection with the annual general meeting of Nova's shareholders. |

---

---

| | |
|:---|:---|
| 6.3. | The Compensation Committee and the Board may periodically consider and approve base salary adjustments for Executive Officers. The main considerations for salary adjustment are similar to those used in initially determining the base salary, but may also include change of role or responsibilities, recognition for professional achievements, regulatory or contractual requirements, budgetary constraints or market trends. The Compensation Committee and the Board will also consider the previous and existing compensation arrangements of the Executive Officer whose base salary is being considered for adjustment. Any limitation herein based on the base salary shall be calculated based on the monthly base salary applicable at the time of consideration of the respective grant or benefit. |

---

&nbsp;&nbsp;&nbsp;&nbsp;7. **Benefits** 

<br> 7.1. The following benefits may be granted to the Executive Officers in order, among other things, to comply with legal requirements:

<br> 7.1.1. Vacation days in accordance with market practice;

------

<br> 7.1.2. Sick days in accordance with market practice;

<br> 7.1.3. Convalescence pay according to applicable law;

<br> 7.1.4. Monthly remuneration for a study fund, as allowed by applicable law and with reference to Nova's practice and the practice in peer group companies;

<br> 7.1.5. Nova shall contribute on behalf of the Executive Officer to an insurance policy or a pension fund, as allowed by applicable law and with reference to Nova's policies and procedures and the practice in peer group companies; and

<br> 7.1.6. Nova shall contribute on behalf of the Executive Officer towards work disability insurance, as allowed by applicable law and with reference to Nova's policies and procedures and to the practice in peer group companies.

---

| | |
|:---|:---|
| 7.2. | Non-Israeli Executive Officers may receive other similar, comparable or customary benefits as applicable in the relevant jurisdiction in which they are employed. Such customary benefits shall be determined based on the methods described in Section 6.2 of this Policy (with the necessary changes and adjustments). |

---

---

| | |
|:---|:---|
| 7.3. | In the event of relocation of an Executive Officer to another geography, such Executive Officer may receive other similar, comparable or customary benefits as applicable in the relevant jurisdiction in which he or she is employed or additional payments to reflect adjustments in cost of living. Such benefits shall include reimbursement for out of pocket one-time payments and other ongoing expenses, such as housing allowance, car allowance, and home leave visit, etc. |

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| | |
|:---|:---|
| 7.4. | Nova may offer additional benefits to its Executive Officers, which will be comparable to customary market practices, such as, but not limited to: cellular and land line phone benefits, company car and travel benefits, reimbursement of business travel including a daily stipend when traveling and other business related expenses, insurances, other benefits **(such as newspaper subscriptions, academic and professional studies),** etc., provided, however, that such additional benefits shall be determined in accordance with Nova's policies and procedures. |

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<u>C. Cash Bonuses</u>

&nbsp;&nbsp;&nbsp;&nbsp;8. **Annual Cash Bonuses - The Objective** 

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| | |
|:---|:---|
| 8.1. | Compensation in the form of an annual cash bonus is an important element in aligning the Executive Officers' compensation with Nova's objectives and business goals. Therefore, a pay-for-performance element, as payout eligibility and levels are determined based on actual financial and operational results, in addition to other factors the Compensation Committee may determine, as well as individual performance. |

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| | |
|:---|:---|
| 8.2. | An annual cash bonus may be awarded to Executive Officers upon the attainment of pre-set periodical objectives and individual targets determined by the Compensation Committee (and, if required by law, by the Board) at the beginning of each calendar year, or upon engagement, in case of newly hired Executive Officers, taking into account Nova's short and long-term goals, as well as its compliance and risk management policies. The Compensation Committee and the Board shall also determine applicable minimum thresholds (based on annual budget revenue and/or positive non-GAAP operating income) that must be met for entitlement to the annual cash bonus (all or any portion thereof) and the formula for calculating any annual cash bonus payout, with respect to each calendar year, for each Executive Officer. In special circumstances, as determined by the Compensation Committee and the Board (e.g., regulatory changes, significant changes in Nova's business environment, a significant organizational change and a significant merger and acquisition events), the Compensation Committee and the Board may modify the objectives and/or their relative weights during the calendar year. |

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| | |
|:---|:---|
| 8.3. | The total annual cash bonuses awarded to all of Nova's Executive Officers shall not exceed 10% of Nova's non-GAAP operating income. |

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| | |
|:---|:---|
| 8.4. | In the event the employment of an Executive Officer is terminated prior to the end of a fiscal year, the Company may pay such Executive Officer a full annual cash bonus or a prorated one. Such bonus will become due on the same scheduled date for annual cash bonus payments by the Company. |

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<br> 8.5. The actual annual cash bonus to be awarded to Executive Officers shall be approved by the Compensation Committee and the Board.

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&nbsp;&nbsp;&nbsp;&nbsp;9. **Annual Cash Bonuses - The Formula** 

<u>Executive Officers other than the CEO</u>

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| | |
|:---|:---|
| 9.1. | The annual cash bonus of Nova's Executive Officers, other than the chief executive officer (the "**CEO**"), will be based on performance objectives and a discretionary evaluation of the Executive Officer's overall performance by the CEO and subject to minimum thresholds. The performance objectives will be approved by Nova's CEO at the commencement of each calendar year (or upon engagement, in case of newly hired Executive Officers or in special circumstances as indicated in Section 8.2 above) on the basis of, but not limited to, company, division and individual objectives. The performance measurable objectives, which include the objectives and the weight to be assigned to each achievement in the overall evaluation, will be based on: |

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| | |
|:---|:---|
| 9.1.1. | Overall company performance measures, which are based on actual financial and operational results, such as revenues, sales, operating income and cash flow. At least 30% of the annual cash bonus of Nova's Executive Officers will be based on overall company performance measures; and |

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| | |
|:---|:---|
| 9.1.2. | Divisional objectives which may include operational objectives, such as market share, initiation of new markets and products and operational efficiency, customer focus objectives, such as system availability requirements and customer satisfaction, project milestones objectives, such as product implementation in production, product acceptance and new product penetration, and investment in human capital objectives, such as employee satisfaction, employee retention and employee training and leadership programs. |

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| | |
|:---|:---|
| 9.2. | The target annual cash bonus that an Executive Officer, other than the CEO, will be entitled to receive for any given calendar year, will not exceed 100% of such Executive Officer's annual base salary. |

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| | |
|:---|:---|
| 9.3. | The maximum annual cash bonus including for overachievement performance that an Executive Officer, other than the CEO, will be entitled to receive for any given calendar year, will not exceed 150% of such Executive Officer's annual base salary. |

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<u>CEO</u>

---

| | |
|:---|:---|
| 9.4. | The annual cash bonus of Nova's CEO will be mainly based on performance measurable objectives and subject to minimum thresholds as provided in Section 8.2 above. Such performance measurable objectives will be determined annually by Nova's Compensation Committee (and, if required by law, by Nova's Board) at the commencement of each calendar year (or upon engagement, in case of newly hired CEO or in special circumstances as indicated in Section 8.2 above) on the basis of, but not limited to, company and personal objectives. These performance measurable objectives, which include the objectives and the weight to be assigned to each achievement in the overall evaluation, will be categorized as described below: |

---

---

| | |
|:---|:---|
| 9.4.1. | Between 40%-60% will be based on overall company performance measures, which are based on actual financial and operational results, such as revenues, sales, operating income and cash flow; and |

---

---

| | |
|:---|:---|
| 9.4.2. | Between 20%-50% will be based on goals set forth in the Company's annual operating plan and long-term plan, such as expansion of the Company's organic growth engines and achieving strategic technology objectives. |

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---

| | |
|:---|:---|
| 9.5. | The less significant part of the annual cash bonus granted to Nova's CEO, and in any event not more than 30% of the annual cash bonus, may be based on a discretionary evaluation of the CEO's overall performance by the Compensation Committee and the Board based on quantitative and qualitative criteria. |

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<br> 9.6. Information on the CEO's performance measurable objectives shall be included in the proxy statement published in connection with the annual general meeting of Nova's shareholders.

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| | |
|:---|:---|
| 9.7. | The target annual cash bonus that the CEO will be entitled to receive for any given calendar year, will not exceed 150% of his or her annual base salary. |

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---

| | |
|:---|:---|
| 9.8. | The maximum annual cash bonus including for overachievement performance that the CEO will be entitled to receive for any given calendar year, will not exceed 200% of his or her annual base salary. |

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&nbsp;&nbsp;&nbsp;&nbsp;10. **Other Bonuses** 

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| | |
|:---|:---|
| 10.1. | <u>Special Bonus</u>. Nova may grant its Executive Officers a special bonus as an award for special achievements (such as in connection with mergers and acquisitions, offerings, achieving target budget or business plan under exceptional circumstances or special recognition in case of retirement) at the CEO's discretion (and in the CEO's case, at the Board's discretion), subject to any additional approval as may be required by the Companies Law (the "**Special Bonus**"). The Special Bonus will not exceed 30% of the Executive Officer's total compensation package on an annual basis. A Special Bonus can be paid, in whole or in part, in equity in lieu of cash and the value of any such equity component of a Special Bonus shall be determined in accordance with Section 13.3 below. |

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| | |
|:---|:---|
| 10.2. | <u>Signing Bonus</u>. Nova may grant a newly recruited Executive Officer a signing bonus at the CEO's discretion (and in the CEO's case, at the Board's discretion), subject to any additional approval as may be required by the Companies Law (the "**Signing Bonus**"). The Signing Bonus will not exceed twelve (12) monthly entry base salaries of the Executive Officer. |

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| | |
|:---|:---|
| 10.3. | <u>Relocation Bonus</u>. Nova may grant its Executive Officers a special bonus in the event of relocation of an Executive Officer to another geography (the "**Relocation Bonus**"). The Relocation bonus will include customary benefits associated with such relocation and its monetary value will not exceed 30% of the Executive Officer's annual base salary. |

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&nbsp;&nbsp;&nbsp;&nbsp;11. **Compensation Recovery ("Clawback")** 

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| | |
|:---|:---|
| 11.1. | In the event of an accounting restatement, Nova shall be entitled to recover from its Executive Officers the bonus compensation or performance-based equity compensation in accordance with the clawback policy adopted by the Company from time to time under the applicable stock exchange rules. |

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<br> 11.2. Nothing in this Section 11 derogates from any other "Clawback" or similar provisions regarding disgorging of profits imposed on Executive Officers by virtue of applicable securities laws or a separate contractual obligation.

<u>D. Equity Based Compensation</u>

&nbsp;&nbsp;&nbsp;&nbsp;12. **The Objective** 

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| | |
|:---|:---|
| 12.1. | The equity-based compensation for Nova's Executive Officers is designed in a manner consistent with the underlying objectives in determining the base salary and the annual cash bonus, with its main objectives being to enhance the alignment between the Executive Officers' interests with the long-term interests of Nova and its shareholders, and to strengthen the retention and the motivation of Executive Officers in the long term. In addition, since equity-based awards are structured to vest over several years, their incentive value to recipients is aligned with longer-term strategic plans. |

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<br> 12.2. The equity-based compensation offered by Nova is intended to be in a form of share options and/or other equity based awards, such as RSUs, in accordance with the Company's equity incentive plan in place as may be updated from time to time.

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| | |
|:---|:---|
| 12.3. | Equity-based compensation awarded by the Company to employees, Executive Officers or directors shall not be, in the aggregate, in excess of 10% of the Company's share capital on a fully diluted basis at the date of the grant. |

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| | |
|:---|:---|
| 12.4. | All equity-based incentives granted to Executive Officers shall be subject to vesting periods in order to promote long-term retention of the awarded Executive Officers. Unless determined otherwise in a specific award agreement or in a specific compensation plan approved by the Compensation Committee and the Board, grants to Executive Officers other than directors shall vest gradually over a period of between three (3) to five (5) years or based on performance. The exercise price of options shall be determined in accordance with Nova's Equity-Based Compensation Policy, the main terms of which shall be disclosed in the annual report of Nova. |

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| | |
|:---|:---|
| 12.5. | All other terms of the equity awards shall be in accordance with Nova's incentive plans and other related practices and policies. Accordingly, the Board may, following approval by the Compensation Committee, extend the period of time for which an award is to remain exercisable and make provisions with respect to the acceleration of the vesting period of any Executive Officer's awards, including, without limitation, in connection with a corporate transaction involving a change of control, subject to any additional approval as may be required by the Companies Law. |

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&nbsp;&nbsp;&nbsp;&nbsp;13. **General Guidelines for the Grant of Awards** 

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| | |
|:---|:---|
| 13.1. | The equity-based compensation shall be granted from time to time and be individually determined and awarded according to the performance, educational background, prior business experience, qualifications, role and the personal responsibilities of the Executive Officer. |

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| | |
|:---|:---|
| 13.2. | In determining the equity-based compensation granted to each Executive Officer, the Compensation Committee and Board shall consider the factors specified in Section 13.1 above, and in any event the total fair market value of an annual equity-based compensation at the time of grant (not including bonus paid in equity in lieu of cash) shall not exceed: (i) with respect to the CEO – the lower of 650% of the CEO's annual base salary or 0.2% of the market capitalization of the Company; and (ii) with respect to each of the other Executive Officers - 300% of such Executive Officer's annual base salary. |

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<br> 13.3. The fair market value of the equity-based compensation for the Executive Officers will be determined according to acceptable valuation practices at the time of grant.

<br> 13.4. The Company may satisfy tax withholding obligations related to equity-based compensation by net issuance, sale-to-cover or any other mechanism as determined by the Board from time to time.

<u>E. Retirement and Termination of Service Arrangements</u>

&nbsp;&nbsp;&nbsp;&nbsp;14. **Advanced Notice Period** 

Nova may provide an Executive Officer, other than the CEO, according to his/her seniority in the Company, his/her contribution to the Company's goals and achievements and the circumstances of retirement a prior notice of termination of up to six (6) months, during which the Executive Officer may be entitled to all of the compensation elements, and to the continuation of vesting of his/her options and/or other equity based awards.

Nova may provide the CEO a prior notice of termination of up to twelve (12) months, during which the Executive Officer may be entitled to all of the compensation elements, and to the continuation of vesting of his/her options and/or other equity based awards.

&nbsp;&nbsp;&nbsp;&nbsp;15. **Adjustment Period** 

Nova may provide an additional adjustment period of up to nine (9) months to an Executive Officer, other than the CEO, according to his/her seniority in the Company, his/her contribution to the Company's goals and achievements and the circumstances of retirement and to the CEO, during which the Executive Officer may be entitled to all of the compensation elements, and to the continuation of vesting of his/her options and/or other equity based awards.

&nbsp;&nbsp;&nbsp;&nbsp;16. **Additional Retirement and Termination Benefits** 

Nova may provide additional retirement and terminations benefits and payments as may be required by applicable law (e.g., mandatory severance pay under Israeli labor laws), or which will be comparable to customary market practices.

&nbsp;&nbsp;&nbsp;&nbsp;17. **Non-Compete Grant** 

Upon termination of employment and subject to applicable law, Nova may grant to its Executive Officers a non-compete grant as an incentive to refrain from competing with Nova for a defined period of time. The terms and conditions of the non-compete grant shall be decided by the Board and shall not exceed such Executive Officer's monthly base salary multiplied by twelve (12).

&nbsp;&nbsp;&nbsp;&nbsp;18. **Limitation** Retirement and Termination of Service Arrangements

The total non-statutory payments under Sections 14-17 above shall not exceed the Executive Officer's monthly base salary multiplied by twenty-four (24).

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<u>F. Exculpation, Indemnification and Insurance</u>

&nbsp;&nbsp;&nbsp;&nbsp;19. **Exculpation** 

Nova may exempt its directors and Executive Officers in advance for all or any of his/her liability for damage in consequence of a breach of the duty of care vis-a-vis Nova, to the fullest extent permitted by applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;20. **Insurance and Indemnification** 

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| | |
|:---|:---|
| 20.1. | Nova may indemnify its directors and Executive Officers to the fullest extent permitted by applicable law, for any liability and expense that may be imposed on the director or the Executive Officer, as provided in the indemnity agreement between such individuals and Nova, all subject to applicable law and the Company's articles of association. |

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| | |
|:---|:---|
| 20.2. | Nova will provide directors' and officers' liability insurance (the **"Insurance Policy")** for its directors and Executive Officers as follows: |

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| | |
|:---|:---|
| 20.2.1. | The limit of liability of the insurer shall not exceed the greater of $60 million or 30% of the Company's shareholders equity based on the most recent financial statements of the Company at the time of approval by the Compensation Committee; and |

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| | |
|:---|:---|
| 20.2.2. | The Insurance Policy, as well as the limit of liability and the premium for each extension or renewal shall be approved by the Compensation Committee (and, if required by law, by the Board) which shall determine that the sums are reasonable considering Nova's exposures, the scope of coverage and the market conditions and that the Insurance Policy reflects the current market conditions, and it shall not materially affect the Company's profitability, assets or liabilities. |

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<br> 20.3. Upon circumstances to be approved by the Compensation Committee (and, if required by law, by the Board), Nova shall be entitled to enter into a "run off" Insurance Policy of up to seven (7) years, with the same insurer or any other insurance, as follows:

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| | |
|:---|:---|
| 20.3.1. | The limit of liability of the insurer shall not exceed the greater of $60 million or 30% of the Company's shareholders equity based on the most recent financial statements of the Company at the time of approval by the Compensation Committee; and |

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| | |
|:---|:---|
| 20.3.2. | The Insurance Policy, as well as the limit of liability and the premium for each extension or renewal shall be approved by the Compensation Committee (and, if required by law, by the Board) which shall determine that the sums are reasonable considering the Company's exposures covered under such policy, the scope of cover and the market conditions, and that the Insurance Policy reflects the current market conditions and that it shall not materially affect the Company's profitability, assets or liabilities. |

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| | |
|:---|:---|
| 20.4. | Nova may extend the Insurance Policy in place to include cover for liability pursuant to a future public offering of securities. The Insurance Policy, as well as the additional premium shall be approved by the Compensation Committee (and if required by law, by the Board) which shall determine that the sums are reasonable considering the exposures pursuant to such public offering of securities, the scope of cover and the market conditions and that the Insurance Policy reflects the current market conditions, and it does not materially affect the Company's profitability, assets or liabilities. |

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<u>G. Arrangements upon Change of Control</u>

&nbsp;&nbsp;&nbsp;&nbsp;21. The following benefits may be granted to the Executive Officers in addition to, or in lieu of, the benefits applicable in the case of any retirement or termination of service upon a "Change of Control" or, where
 applicable, in the event of a Change of Control following which the employment of the Executive Officer is terminated or adversely adjusted in a material way:

<br> 21.1. Vesting acceleration of outstanding options or other equity-based awards;

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| | |
|:---|:---|
| 21.2. | Extension of the exercising period of options or vesting of other equity-based awards for Nova's Executive Officer for a period of up to one (1) year in case of an Executive Officer other than the CEO and two (2) years in case of the CEO, following the date of employment termination; and |

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| | |
|:---|:---|
| 21.3. | Up to an additional six (6) months of continued base salary and benefits following the date of employment termination (the "**Additional Adjustment Period**"). For avoidance of doubt, such additional Adjustment Period shall be in addition to the advance notice and adjustment periods pursuant to Sections 14 and 15 of this Policy, but subject to the limitation set forth in Section 18 of this Policy. |

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| | |
|:---|:---|
| 21.4. | A cash bonus not to exceed 150% of the Executive Officer's annual base salary in case of an Executive Officer other than the CEO and 200% in case of the CEO. |

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<u>H. Board of Directors Compensation</u>

&nbsp;&nbsp;&nbsp;&nbsp;24. Members of the Board and its chairperson may be entitled to receive an annual cash retainer for their service on the Board. Additional payments may be made to Board members for their service on the audit,
 compensation, nominating, or other committees of the Board, as well as for their service as chairpersons of such committees. Members of the Board and its chairperson may also be granted (i) annual equity-based awards and (ii) welcome
 equity-based awards. Any payment or award under this Section 23 shall be approved as required by applicable law. The compensation of the Company's external directors, if elected, shall be in accordance with the Companies Regulations
 (Rules Regarding the Compensation and Expenses of an External Director), 5760-2000, as amended by the Companies Regulations (Relief for Public Companies Traded on Stock Exchange Outside of Israel), 5760-2000, as such regulations may be
 amended from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;24. The compensation of the Company's external directors, if elected, shall be in accordance with the Companies Regulations (Rules Regarding the Compensation and Expenses of an External Director), 5760-2000, as
 amended by the Companies Regulations (Relief for Public Companies Traded on Stock Exchange Outside of Israel), 5760-2000, as such regulations may be amended from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;25. Notwithstanding the provisions of Section 22 above, in special circumstances, such as in the case of a professional director, an expert director or a director who makes a unique contribution to the Company, such
 director's compensation may be different than the compensation of all other directors.

&nbsp;&nbsp;&nbsp;&nbsp;26. In addition, members of the Board may be entitled to reimbursement of expenses when traveling abroad on behalf of Nova.

&nbsp;&nbsp;&nbsp;&nbsp;27. It is hereby clarified that the compensation stated under Section H will not apply to directors who serve as Executive Officers.

<u>I. Miscellaneous</u>

&nbsp;&nbsp;&nbsp;&nbsp;28. Nothing in this Policy shall be deemed to grant any of Nova's Executive Officers or employees or any third party any right or privilege in connection with their employment by the Company. Such rights and
 privileges shall be governed by the respective personal employment agreements or other separate compensation agreements entered into between Nova and the recipient of such rights and privileges. The Board may determine that none or only
 part of the payments, benefits and perquisites detailed in this Policy shall be granted, and is authorized to cancel or suspend a compensation package or part of it.

&nbsp;&nbsp;&nbsp;&nbsp;29. An Immaterial Change in the Terms of Employment of an Executive Officer other than the CEO may be approved by the CEO, provided that the amended terms of employment are in accordance with this Policy. An
 "Immaterial Change in the Terms of Employment" means a change in the terms of employment of an Executive Officer with an annual total cost to the Company not exceeding an amount equal to two (2) monthly base salaries of such employee.

&nbsp;&nbsp;&nbsp;&nbsp;30. In the event that new regulations or law amendment in connection with Executive Officers and directors compensation will be enacted following the adoption of this Policy, Nova may follow such new regulations or
 law amendments, even if such new regulations are in contradiction to the compensation terms set forth herein.

\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*

This Policy is designed solely for the benefit of Nova and none of the provisions thereof are intended to provide any rights or remedies to any person other than Nova.

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## Exhibit 8.1

------

**<u>Exhibit 8.1</u>**<br>

#### LIST OF SUBSIDIARIES

---

| | |
|:---|:---|
| **As of the end of 2025:** | **As of the end of 2025:** |
| **Name of Subsidiary** | **Country of Incorporation** |
| Nova Measuring Instruments, Inc. | Delaware, U.S. |
| Nova Measuring Instruments K.K. | Japan |
| Nova Measuring Instruments Taiwan Ltd. | Taiwan |
| Nova Measuring Instruments Korea Ltd. | Korea |
| Nova Measuring Instruments GmbH | Germany |
| Nova Measuring Instruments (Shanghai) Co., Ltd | China |
| Nova Measuring Instruments Singapore Pte Ltd | Singapore |
| Sentronics Metrology GmbH\* | Germany |

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\*Wholly owned by Nova Measuring Instruments GmbH.

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## Exhibit 11.1

------

**<u>Exhibit 11.1</u>**<br>

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| |
|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **NOVA LTD.**<br> **** <br>**INSIDER TRADING COMPLIANCE POLICY** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Contents** |

---

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| | |
|:---|:---|
|  | **Page** |
| [I. Introduction and Persons Covered by this Policy](#I.) | 1 |
| [II. Statement of Policies Prohibiting Insider Trading](#II.) | 2 |
| [III.&nbsp;&nbsp;&nbsp;&nbsp; Explanation of Insider Trading](#III.) | 2 |
| [IV. Procedures to Prevent Insider Trading](#IV.) | 5 |
| [V.&nbsp;&nbsp;&nbsp;&nbsp; Additional Prohibited Transactions](#V.) | 7 |
| [VI.&nbsp;&nbsp;&nbsp;&nbsp; Rule 10b5-1 Trading Plans](#VI.) | 8 |
| [VII. Section 16 of the Securities Exchange Act of 1934](#VII.) | 10 |
| [Schedule I Individuals Subject to Pre-Clearance Requirement](#ScheduleI) |  |

---

------

#### NOVA LTD.

#### INSIDER TRADING COMPLIANCE POLICY
U.S. federal and Israeli securities laws prohibit trading in the securities of a company by insiders while in possession of material nonpublic information and disclosure of material nonpublic information. These laws also prohibit any insider who is aware of material nonpublic information from providing this information to others who may trade. Violating such laws can undermine investor trust, harm our company's reputation, and result in your dismissal from Nova Ltd. or any of its subsidiaries (together, the "***Company***") or even serious criminal and civil charges against you and the Company.

This Insider Trading Compliance Policy (this "***Policy***") outlines your responsibilities to avoid insider trading and implements certain procedures to help you avoid even the appearance of insider trading.

**I.** **<u>Introduction and Persons Covered by this Policy</u>**

This Policy applies to all officers, directors, employees of the Company and self-employed Company's personnel. As someone subject to this Policy, you are responsible for ensuring that members of your household (including your spouse, partner or minor child, as well as anyone else to whom you provide significant financial support) also comply with this Policy. This Policy also applies to (i) any entities you or a member of your household control or any entity in which you have or share the power, directly or indirectly, to make investment decisions, including any corporations, limited liability companies, partnerships, or trusts and (ii) any entity or account established or maintained for you with your consent or knowledge and in which you have a financial interest); transactions by such entities should be treated for the purposes of this Policy and applicable securities laws as if they were for your own account. The Company may determine that this Policy applies to additional persons with access to material nonpublic information, such as contractors or consultants. This Policy extends to all activities within and outside your Company duties. Officers, directors, employees and self-employed Company's personnel, and the entities described in this paragraph together with any other person designated as being subject to this Policy, are referred to collectively as "***Covered Persons***." or "***you***". Every Covered Person must review this Policy.

Questions regarding the Policy should be directed to the Company's General Counsel (the "***Compliance Officer***") who shall be responsible for the administration of this Policy; <u>provided</u> <u>that</u> if the General Counsel is unavailable or personally involved in the transaction at issue, the Compliance Officer will be the Company's Chief Financial Officer.

Actions taken by the Company, the Compliance Officer, or any other Company personnel do not constitute legal advice, nor do they insulate you from the consequences of noncompliance with this Policy or with securities laws.

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**<br> II. <u>Statement of Policies Prohibiting Insider Trading</u>**

You shall not purchase or sell any type of security while in possession of material nonpublic information relating to the security or the issuer of such security that you obtained in the course of your employment or service with the Company, whether the issuer of such security is the Company or any other company. Further, you shall not purchase or sell any security of any other company, including another company in the Company's industry, while in possession of material nonpublic information if such information is obtained in the course of your employment or service with the Company.

These prohibitions do not apply to:

<br> ● purchases of the Company's securities from the Company or sales of the Company's securities to the Company;

● exercises of share options or other equity awards or the surrender of shares to the Company in payment of the exercise price or in satisfaction of any tax withholding obligations in a manner permitted by the applicable equity award agreement, or vesting of equity-based awards that, in each case, do not involve a market sale of the Company's securities (the "***cashless exercise***" of a Company share option through a broker *does* involve a market sale of the Company's securities, and therefore would not qualify under this exception); or

● purchases or sales of the Company's securities made pursuant to a plan adopted to comply with the Rule 10b5-1 under Securities Exchange Act of 1934, as amended ("***Rule 10b5-1***" and the "***Exchange Act***", respectively) pursuant to the policies set forth below. For more information about Rule 10b5-1 trading plans, see Section VI below.

No Covered Person will directly or indirectly communicate (or "***tip***") material nonpublic information to anyone outside the Company (except in accordance with the Company's policies regarding confidential information) or to anyone within the Company other than on a "need-to-know" basis.

**III.** **<u>Explanation of Insider Trading</u>**

*"****Insider trading****"* refers to the purchase or sale of a security while in possession **of material nonpublic information relating to the security or the issuer of such security** obtained by a Covered Person in the course of their service to the Company.

*"****Securities****"* includes shares, bonds, notes, debentures, options, warrants, equity and other convertible securities, as well as derivative instruments.

"***Purchase***" and "***sale***" are defined broadly under the U.S. federal securities law. "Purchase" includes not only the actual purchase of a security, but any contract to purchase or otherwise acquire a security. "Sale" includes not only the actual sale of a security, but any contract to sell or otherwise dispose of a security. These definitions extend to a broad range of transactions, including conventional cash-for-shares transactions, conversions, the exercise of share options, transfers, gifts, and acquisitions and exercises of warrants or puts, calls, pledging and margin loans, or other derivative securities. Purchases and sales include elective transactions under 401(k)/ESPP/deferred compensation plans, if any, and the sale of Company shares issued upon exercise of share options.

**A.** **What Information is Material?**

Information is considered "***material***" if there is a substantial likelihood that a reasonable investor would consider it important in making a decision to buy, sell, or hold a security, or if the information is likely to have a significant effect on the market price of the security. Material information can be positive or negative and can relate to virtually any aspect of a company's business or to any type of security, debt, or equity. Also, information that something is likely to happen in the future—or even just that it may happen—could be deemed material.

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Examples of information that could be material include (but are not limited to) information about corporate earnings or earnings forecasts; possible mergers, acquisitions, tender offers, or dispositions; dividends; major new products or product developments; important business developments such as major contract awards or cancellations, developments regarding strategic collaborators, or the status of regulatory submissions; management or control changes; significant borrowing or financing developments, including pending public sales or offerings of debt or equity securities; defaults on borrowings; bankruptcies; cybersecurity or data security incidents; and significant litigation or regulatory actions. Moreover, material information does not have to be related to a company's business. For example, the contents of a forthcoming newspaper column on another company that is expected to affect the market price of a security can be material.

Questions regarding material information should be directed to the Compliance Officer or the Chief Financial Officer.

#### A good rule of thumb: When in doubt, do not trade.
**B.** **What is Nonpublic?**

Information is "***nonpublic***" if it is not available to the general public. In order for information to be considered public, it must be widely disseminated in a manner making it generally available to investors in a Regulation FD-compliant method, such as, through newswire services such as Dow Jones, Reuters, Bloomberg, Business Wire, The Wall Street Journal, Associated Press, or United Press International; broadcasts on widely available radio or television programs; publication in a widely available newspaper, magazine, or news website; a Regulation FD-compliant conference call; or public disclosure documents filed with the US Securities and Exchange Commission (the "***SEC***") that are available on the SEC's website. Note that simply posting information to the Company's website may not be sufficient disclosure to make the information public.

The circulation of rumors, even if accurate and reported in the media, does not constitute effective public dissemination. In addition, even after a public announcement, a reasonable period of time must lapse in order for the market to react to the information. Generally, one should allow two full trading days following publication as a reasonable waiting period before such information is deemed to be public. For purposes of this Policy, a "trading day" is a day on which U.S. national stock exchanges are open for trading. If, for example, the Company were to make an announcement on a Monday prior to 9:30 a.m. Eastern Time, the information would be deemed public after the close of trading on Tuesday. If an announcement were made on a Monday after 9:30 a.m. Eastern time, the information would be deemed public after the close of trading on Wednesday.

**C.** **Who is an Insider?**

"***Insiders***" include officers, directors, employees of the Company and self-employed Company's personnel, or anyone else who has material nonpublic information about a company (including under Israeli Securities Law of 1968 (the "***Israeli Securities Law***"), certain shareholders of a company). Insiders may not trade in the Company's securities while in possession of material nonpublic information relating to the Company they obtained in the course of their service to the Company, nor may they tip such information to anyone outside the Company (except in accordance with the Company's policies regarding the protection or authorized external disclosure of Company information) or to anyone within the Company other than on a "need-to-know" basis. As noted above, Covered Persons for this policy include not just insiders but also certain related persons and entities.

Individuals subject to this Policy are responsible for ensuring that members of their households and their related entities described above also comply with this Policy.

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**D.** **Trading by Persons Other Than Insiders**

Insiders may be liable for communicating or tipping material nonpublic information to a third party ("***tippee***"), and insider trading violations are not limited to trading or tipping by insiders. Persons other than insiders can also be liable for insider trading, including tippees who trade on material nonpublic information tipped to them or individuals who trade on material nonpublic information that has been misappropriated. Insiders may be held liable for tipping even if they receive no personal benefit from tipping and even if no close personal relationship exists between them and the tippee.

Tippees inherit an insider's duties and are liable for trading on material nonpublic information illegally tipped to them by an insider. Similarly, just as insiders are liable for the insider trading of their tippees, so are tippees who pass the information along to others who trade. In other words, a tippee's liability for insider trading is no different from that of an insider. Tippees can obtain material nonpublic information by receiving overt tips from others or through, among other things, conversations at social, business, or other gatherings.

**E.** **Penalties for Engaging in Insider Trading**

Penalties for trading on or tipping material nonpublic information can extend significantly beyond any profits made or losses avoided, both for individuals engaging in such unlawful conduct and their employers. The SEC, U.S. Department of Justice and the Israeli Securities Authority (the "***ISA***") have made the civil and criminal prosecution of insider trading violations a top priority.

Enforcement remedies available to the government or private plaintiffs under the federal and Israeli securities laws include:

<br> ● SEC and ISA administrative sanctions;

<br> ● securities industry self-regulatory organization sanctions;

<br> ● civil injunctions;

<br> ● damage awards to private plaintiffs;

<br> ● disgorgement of all profits;

● civil fines for the violator of up to three times the amount of profit gained or loss avoided;

<br> ● civil fines for the employer or other controlling person of a violator;

<br> ● criminal fines for individual violators; and

<br> ● jail sentences.

In addition, insider trading could result in serious sanctions by the Company, including dismissal. Insider trading violations are not limited to violations of the federal or Israeli securities laws. Other federal and state civil or criminal laws, such as the laws prohibiting mail and wire fraud and the Racketeer Influenced and Corrupt Organizations Act (RICO), may also be violated in connection with insider trading.

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**F.** **Size of Transaction and Reason for Transaction Do Not Matter**

The size of the transaction or the amount of profit received does not have to be significant to result in prosecution. The SEC and the ISA have the ability to monitor even the smallest trades and perform routine market surveillance. Brokers or dealers are required by law to inform the SEC of any possible violations by people who may have material nonpublic information. The SEC aggressively investigates even small insider trading violations.

**G.** **Presumption on Use of Material Nonpublic Information by Key Insiders**

Under Israeli Securities Law, it is presumed that any Key Insider<sup>1</sup> of the Company, who either (i) purchased any of the Company's securities within a three-month period following the sale of Company's securities by such Key Insider, or (ii) sold any of the Company's securities within a three-month period following the purchase of Company's securities by such Key Insider, has used material nonpublic information. Such Key Insider may provide evidence indicating that the aforementioned purchase or sale of Company's securities was in fact not carried out while using material nonpublic information. However, in such case the burden of proof will be shifted to the Key Insider.

**IV.** **<u>Statement of Procedures to Prevent Insider Trading</u>**

The following procedures have been established, and will be maintained and enforced, by the Company to prevent insider trading.

**A.** **Blackout Periods**

The period during which the Company prepares quarterly financials is a sensitive time for insider trading purposes, as Company personnel may be more likely to possess, or be presumed to possess, material nonpublic information. To avoid the appearance of impropriety and assist Company personnel in planning transactions in the Company's securities for appropriate times, **no officer, director, employee, or self-employed Company's personnel (as well as any individual or entity covered by this Policy by virtue of their relationship to such director, officer or employee) will purchase or sell any security of the Company during the period beginning at the close of trading (generally, 4:01 p.m., ET) on the 14th calendar day before the end of any fiscal quarter of the Company and ending upon completion of the first full U.S. trading day after the public release of earnings data for such fiscal quarter or during any other trading suspension period declared by the Company.** For example, if the Company's fourth fiscal quarter ends on December 31, the corresponding blackout period would begin at the close of trading (generally, 4:01 p.m., ET) on December 17 and end at the close of trading (generally, 4:01 p.m., ET) on the first full U.S. trading day after the public release of earnings data for such fiscal quarter.

Exceptions to the blackout period policy may be approved, in limited circumstances, only by the Compliance Officer or, in the case of exceptions for directors, the Board of Directors or Audit Committee of the Board of Directors.

From time to time, the Company, through the Board of Directors or the Compliance Officer, may determine that officers, directors, employees, or others suspend trading in the Company's securities because of developments that have not yet been disclosed to the public. Subject to the exceptions noted above, all those who are notified may not trade in the Company's securities while the suspension is in effect, and should not disclose to others that the Company has suspended trading. <br>

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<sup>1</sup> Under Section 52E(b) of the Israeli Securities Law, a "Key Insider" is either (i) any director, the Chief Executive Officer, deputy general manager, deputy to the Chief Executive Officer, controller and internal auditor, and any person acting at such position, even if his/her position title is different, as well as any main shareholder (a shareholder holding 5% or above of a company or voting rights in the company or has the right to appoint a director); (ii) any household members thereof; or (iii) any entity controlled by any such person in either (i) or (ii).

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**B.** **Pre-Clearance of All Trades by All Officers, Directors and Certain Key Employees**

To provide assistance in preventing inadvertent violations of applicable securities laws and to avoid the appearance of impropriety in connection with the purchase and sale of the Company's securities, all transactions in the Company's securities (including, without limitation, acquisitions and dispositions of Company shares, elective transactions under 401(k)/ESPP/deferred compensation plans, if any, and the sale of Company shares issued upon exercise of share options) by officers, directors, and certain key employees listed on <u>Schedule I</u> (as amended from time to time by the Compliance Officer) (each, a "***Pre-Clearance Person***") must be pre-cleared by the Company's Compliance Officer or the Chief Financial Officer, except for certain exempt transactions as explained in Section VI of this Policy.

A request for pre-clearance must be in writing (including by e-mail), should be made at least two (2) business days in advance of the proposed transaction, and should include the identity of the Pre-Clearance Person, a description of the proposed transaction, the proposed date of the transaction, and the number of shares or other securities to be involved. In addition, the Pre-Clearance Person must execute a certification (in the form approved by the Compliance Officer) that he or she is not aware of material nonpublic information about the Company. The Compliance Officer or the Chief Financial Officer will have sole discretion to decide whether to clear any contemplated transaction. All trades that are pre-cleared must be effected within five (5) U.S. business days of receipt of the pre-clearance, unless a specific exception has been granted by the Compliance Officer. A pre-cleared trade (or any portion of a pre-cleared trade) that has not been effected during the five (5) U.S. business day period must be pre-cleared again prior to execution. Notwithstanding receipt of pre-clearance, if the Pre-Clearance Person becomes aware of material nonpublic information or becomes subject to a blackout period before the transaction is effected, the transaction may not be completed. Transactions under a previously established and approved Rule 10b5-1 trading plan that has been pre-approved in accordance with this Policy are not subject to further **pre-clearance.**

None of the Company, the Compliance Officer, the Chief Financial Officer or the Company's other employees will have any liability for any delay in reviewing, or refusal of, a request for pre-clearance submitted pursuant to this Section IV.B. Notwithstanding any pre-clearance of a transaction pursuant to this Section IV.B, none of the Company, the Compliance Officer, or the Company's other employees are solely responsible for the legality or consequences of such transaction to the person engaging in such transaction.

**C.** **Post-Termination Transactions**

With the exception of the pre-clearance requirement, this Policy continues to apply to transactions in the Company's securities even after termination of service to the Company. If you are in possession of material nonpublic information when your service terminates, you may not trade in the Company's securities until that information has become public or is no longer material.

**D.** **Termination**

The restrictions set forth in this Policy apply to Covered Persons following the termination of their employment or term of office, as applicable, for the longer of the following: (1) if the Insider is aware of material nonpublic information when his or her employment or term of office terminates, until such information ceases to be material or until the close of business on the first U.S. trading day following the date on which such information is properly disclosed to the public, (2) if the termination of employment or term of office occurs outside a trading window, until the next trading window or until such earlier date determined by the Company Corporate Secretary and (3) for such period as the Compliance Officer shall determine such person is likely to be in possession of material nonpublic information.

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**V.** **<u>Additional Prohibited Transactions</u>**

The Company has determined that there is a heightened legal risk and/or the appearance of improper or inappropriate conduct if the persons subject to this Policy engage in certain types of transactions. Therefore, you shall comply with the following policies with respect to certain transactions in the Company securities:

**A.** **Short Sales**

Short sales of the Company's securities evidence an expectation on the part of the seller that the securities will decline in value, and therefore signal to the market that the seller has no confidence in the Company or its short-term prospects. In addition, short sales may reduce the seller's incentive to improve the Company's performance. For these reasons, short sales of the Company's securities by Covered Persons are prohibited by this Policy.

**B.** **Publicly Traded Options**

A transaction in options is, in effect, a bet on the short-term movement of the Company's shares and therefore creates the appearance that an officer, director, employee or self-employed Company's personnel is trading based on material nonpublic information. Transactions in options may also focus a Covered Person's attention on short-term performance at the expense of the Company's long-term objectives. Accordingly, transactions by Covered Persons in puts, calls, or other derivative securities involving the Company's equity securities, on an exchange or in any other organized market, are prohibited by this Policy.

**C.** **Hedging Transactions**

Certain forms of hedging or monetization transactions, such as zero-cost collars and forward sale contracts, allow a Covered Person to lock in much of the value of his or her share holdings, often in exchange for all or part of the potential for upside appreciation in the shares. Such transactions allow the Covered Person to continue to own the covered securities, but without the full risks and rewards of ownership. When that occurs, the Covered Person may no longer have the same objectives as the Company's other shareholders. Therefore, such transactions by Covered Persons involving the Company's equity securities are prohibited by this Policy.

**D.** **Purchases of the Company's Securities on Margin; Pledging the Company's Securities to Secure Margin or Other Loans**

Purchasing on margin means borrowing from a brokerage firm, bank, or other entity in order to purchase the Company's securities (other than in connection with a cashless exercise of share options under the Company's equity plans). Margin purchases of the Company's securities by Covered Persons are prohibited by this Policy. Pledging the Company's securities as collateral to secure loans is also prohibited. This prohibition means, among other things, that you cannot hold the Company's securities in a "margin account" (which would allow you to borrow against your holdings to buy securities).

**E.** **Director and Executive Officer Cashless Exercises**

The Company will not arrange with brokers to administer cashless exercises on behalf of directors and executive officers of the Company. Directors and executive officers of the Company may use the cashless exercise feature of their equity awards; provided however, that the Company's involvement is procedural only to avoid any inference that the Company has "extended credit" in the form of a personal loan to the director or executive officer in violation of applicable law. Questions about cashless exercises should be directed to the Compliance Officer.

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**F.** **Standing Orders**

A standing order placed with a broker to sell or purchase Company securities at a specified price leaves the security-holder with no control over the timing of the transaction. A transaction pursuant to a standing order, which does not meet the standards of a Rule 10b5-1 trading plan (as defined below) approved in compliance with this Policy, executed by the broker when the individual subject to this Policy is aware of material nonpublic information about the Company, may result in unlawful insider trading. Other than in connection with Rule 10b5-1 trading plan under this Policy, entry into or fulfillment of a standing order is prohibited whenever an individual subject to this Policy is in possession of material nonpublic information about the Company (including during a quarterly blackout period for persons subject to the blackout restrictions of this Policy or ad hoc blackout period for those insiders subject to such procedures). All standing orders must be of limited duration, cancelable, and in the case of a person subject to the blackout restrictions of this Policy or a person subject to an ad hoc blackout period, must be immediately canceled upon commencement of quarterly blackout or ad hoc blackout period, as applicable.

**G.** **Partnership Distributions**

Nothing in this Policy is intended to limit the ability of an investment fund, a venture capital partnership or other similar entity with which a director is affiliated to distribute Company securities to its partners, members or other similar persons if such investment fund, partnership or entity has previously provided assurances to the General Counsel that is has implemented policies reasonably designed to avoid insider trading. It is the responsibility of each affected director and the affiliated entity, in consultation with their own counsel (as appropriate), to determine the timing of any distributions, based on all relevant facts and circumstances and applicable securities laws.

**H.** **Gifts**

Unless otherwise approved by the General Counsel in limited circumstances, gifts of Company securities should only be made (i) when a Covered Person is not in possession of material non-public information and (ii) inside a Window. Gifts of Company securities are otherwise subject to this Trading Policy.<br>

**VI.** **<u>Rule 10b5-1 Trading Plans</u>**

The trading restrictions set forth in this Policy, other than those transactions described under "Additional Prohibited Transactions," do not apply to transactions under an established contract, plan or instruction to trade in the Company's securities entered into in accordance with Rule 10b5-1 trading plan that:<br>

● has been submitted to and pre-approved in writing and in advance by (i) both the Chief Executive Officer and the Chief Financial Officer or (i) either the Chief Executive Officer or the Chief Financial Officer and one the Company's directors (the "***Authorized Officers***").

<br> ● includes a "Cooling Off Period" as required under Rule 10b5-1, which are as follows as of the date of adoption of this Policy:

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| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;o | for directors and officers that extends to the later of 90 days after adoption or modification of a Rule 10b5-1 trading plan or two (2) business days after filing the Form 20-F or Form 6-K with financial results covering the fiscal quarter in which the Rule 10b5-1 trading plan was adopted, up to a maximum of 120 days; and |

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<br> o for employees and any other persons, other than the Company, that extends 30 days after adoption or modification of a Rule 10b5-1 trading plan;

● for directors and officers, includes a representation in the Rule 10b5-1 trading plan that the directors or officers is (1) not aware of any material nonpublic information about the Company or its securities; and (2) adopting the Rule 10b5-1 trading plan in good faith and not as part of a plan or scheme to evade Rule 10b-5;

● has been entered into in good faith at a time when the individual was not in possession of material nonpublic information about the Company and not otherwise in a blackout period, and the person who entered into the Rule 10b5-1 trading plan has acted in good faith with respect to the Rule 10b5-1 trading plan;

● either (1) specifies the amounts, prices, and dates of all transactions under the Rule 10b5-1 trading plan; or (2) provides a written formula, algorithm, or computer program for determining the amount, price, and date of the transactions, and (3) prohibits the individual from exercising any subsequent influence over the transactions; and

<br> ● complies with all other applicable requirements of Rule 10b5-1.

The Compliance Officer or Chief Financial Officer may impose such other conditions on the implementation and operation of the Rule 10b5-1 trading plan as the Compliance Officer deems necessary or advisable. Individuals may not adopt more than one Rule 10b5-1 trading plan at a time except under the limited circumstances permitted by Rule 10b5-1 and subject to pre-approval by the Compliance Officer or Chief Financial Officer.

Although non-discretionary Rule 10b5-1 trading plans are preferred, discretionary Rule 10b5-1 trading plans, where the discretion or control over trading is transferred to a broker, are permitted if pre-approved by the Compliance Officer or Chief Financial Officer.

The actual transactions effected pursuant to a pre-approved Rule 10b5-1 trading plan will not be subject to further pre-clearance for transactions in the Company's shares once the Rule 10b5-1 trading plan or other arrangement has been pre-approved.

Revocation of Rule 10b5-1 trading plans should occur only in unusual circumstances. Effectiveness of any revocation or amendment of a Rule 10b5-1 trading plan will be subject to the prior review and approval of the Authorized Officers. Revocation is effected upon written notice to the broker. You should note that revocation of a Rule 10b5-1 trading plan can result in the loss of an affirmative defense for past or future transactions under a Rule 10b5-1 trading plan. You should consult with your own legal counsel before deciding to revoke Rule 10b5-1 trading plan.

An individual may only modify a Rule 10b5-1 trading plan outside of a blackout period and, in any event, when the individual does not possess material nonpublic information. Modifications to and terminations of a Rule 10b5-1 trading plan are subject to pre-approval by the Authorized Officers and modifications of a Rule 10b5-1 trading plan that change the amount, price, or timing of the purchase or sale of the securities underlying a Rule 10b5-1 trading plan will trigger a new Cooling-Off Period.

The Company reserves the right to publicly disclose, announce, or respond to inquiries from the media regarding the adoption, modification, or termination of a Rule 10b5-1 trading plan and non-Rule 10b5-1 trading arrangements, or the execution of transactions made under a Rule 10b5-1 trading plan. The Company also reserves the right from time to time to suspend, discontinue, or otherwise prohibit transactions under a Rule 10b5-1 trading plan if the Compliance Officer or the Board of Directors, in its discretion, determines that such suspension, discontinuation, or other prohibition is in the best interests of the Company.

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Compliance of a Rule 10b5-1 trading plan with the terms of Rule 10b5-1 and the execution of transactions pursuant to the Rule 10b5-1 trading plan are the sole responsibility of the person initiating the Rule 10b5-1 trading plan, and none of the Company, the Compliance Officer, the Authorized Officers, or the Company's other employees assumes any liability for any delay in reviewing and/or refusing to approve a Rule 10b5-1 trading plan submitted for approval, nor the legality or consequences relating to a person entering into, informing the Company of, or trading under, a Rule 10b5-1 trading plan.

If required, an SEC Form 144 will be filled out and filed by the individual/brokerage firm in accordance with the existing rules regarding Form 144 filings. A footnote at the bottom of the Form 144 should indicate that the trades are in accordance with a Rule 10b5-1 trading plan that complies with Rule 10b5-1 and noting the expiration date of such Rule 10b5-1 trading plan.

During an open trading window, trades differing from Rule 10b5-1 trading plan instructions that are already in place are allowed as long as the Rule 10b5-1 trading plan continues to be followed.

The transactions prohibited under this Policy, including among others short sales and hedging transactions, may not be carried out through a Trading Plan or other arrangement or trading instruction involving potential sales or purchases of the Company's securities.

Notwithstanding anything to the contrary herein, all open market dispositions or acquisitions by the following (i) directors and (ii) officers, vice presidents reporting directly to the Chief Executive Officer and headquarter personnel who have access to sensitive group information on a consolidated basis outside of the quarterly blackout periods, in each case under (ii) as identified from time to time by the Chief Financial Officer, must be executed pursuant to an approved a Rule 10b5-1 trading.

<u>Interpretation, Amendment, and Implementation of this Policy</u>

The Compliance Officer shall have the authority to interpret and update this Policy and its Schedules and all related policies and procedures. In particular, such interpretations and updates of this Policy, as authorized by the Compliance Officer, may include amendments or exceptions to the terms of this Policy, to the extent consistent with the general purpose of this Policy and applicable securities laws.

**VII.** **Section 16: Insider Reporting Requirements (Applicable to Directors and Certain Officers)**

<u>Section 16 of the Exchange Act ("</u>***<u>Section 16</u>***<u>") and the related rules and regulations, set forth reporting obligations to directors and certain officers (each, a "</u>***<u>Section 16 insider</u>***<u>"). The Company's Board of Directors has determined and notified those persons who are required to comply with Section 16 and the related rules and regulations by virtue of their positions with the Company.</u> 

<u>Timely reporting of Section 16 transactions requires close coordination with the brokers handling transactions for Section 16 insiders. A knowledgeable, alert broker can also serve as a gatekeeper, helping to ensure compliance with the Company's pre-clearance procedures and helping prevent inadvertent violations. Therefore, in order to facilitate timely compliance with Section 16, each Section 16 insider must ensure that their brokers comply with the following requirements:</u>

• <u>Refrain from entering any trade order in the Company's securities (except for transactions under pre-approved Rule 10b5-1 trading plans) without first verifying with the Company that the transaction was pre-cleared and without complying with any applicable brokerage firm compliance procedures (including, as applicable, Rule 144 procedures).</u>

• <u>Report before the close of business on the day of execution of the transaction to the Company (in writing via e-mail to the Compliance Officer, and if receipt is not verified in writing by the Company, also verify receipt by telephone) the complete details of every transaction involving the Company's securities, including gifts, transfers, pledges and all transactions under Rule 10b5-1 and other trading plans, including: the date of the transaction, the type of transaction, the number of securities involved, and the applicable price.</u>

<u>It is the legal obligation of the Section 16 insider to cause any filings on Form 3, Form 4, Form 5 or Form 144 (or such other forms as may be required) to be made. Therefore, Section 16 insiders are strongly encouraged to confirm following any transaction that their broker has promptly e-mailed the required information to the Company and confirmed the Company's receipt of such information.</u>

<u>Execution and Return of Certification of Compliance</u>

After reading this Policy, all Covered Persons should execute and return to the Company's Compliance Officer the Certification of Compliance in a form to be designated by the Compliance Officer.

AS AMENDED: February 11, 2026

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<u>Schedule I</u>

Individuals Subject to Pre-Clearance Requirement

<br> (i) directors

(ii) officers, Corp vice presidents reporting directly to the Chief Executive Officer and headquarter personnel who have access to sensitive group information on a consolidated basis outside of the quarterly blackout periods, in each case under (ii) as identified from time to time by the Chief Financial Officer must be pre-cleared by the Compliance Officer and in his absence the Chief Financial Officer.

Template form:

#### FORM OF REQUEST FOR PRE-CLEARENCE
I, _________________ hereby request pre-clearance to conduct a transaction involving shares of Nova Ltd. (the "**Company**"), in accordance with the Company's Insider's Trading Compliance Policy currently in effect (the "**Policy**"). The transaction shall consist of a sale or purchase *(please circle)* of up to _________________ shares of the Company's securities traded on Nasdaq.

**I hereby certify that I am not in possession of material nonpublic information and the proposed transaction is in compliance with the Policy. I acknowledge that my possession of such material nonpublic information would cancel my ability to legally trade shares of the Company.**

<u><br> </u> <br> <u><br> </u> <br>

Signature <br>Date <br>

#### Response:
I, _________________ as Compliance Officer/Chief Financial Officer of the Company, as per Company's Insider Trading Policy, having considered your request above and in reliance on the accuracy of your representations, grant you preclearance to conduct the requested transaction. The pre-clearance for your conducting the requested transaction shall cease to be in effect upon the earlier of (1) five (5) U.S. business days of the date below, (2) the commencement of a blackout period or (3) your possession of material nonpublic information.

**This preclearance shall not constitute legal advice and in no way should this pre-clearance be construed as an exemption from the legal obligations to refrain from trading while in possession of material nonpublic information**.

<u><br> </u> <br> <u><br> </u> <br>

Signature <br>Date <br>

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## Exhibit 12.1

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#### Exhibit 12.1
CERTIFICATION

I, Gabriel Waisman, certify that:

<br> 1. I have reviewed this Annual Report of Nova Ltd.

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4. The company's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

c. Evaluated the effectiveness of the company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting; and

5. The company's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company's auditors and the audit committee of company's board of directors (or persons performing the equivalent function):

<br> a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company's ability to record, process, summarize and report financial information; and

<br> b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the company's internal control over financial reporting.

Date: February 17, 2026

/s/ Gabriel Waisman

Gabriel Waisman

President and Chief Executive Officer

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## Exhibit 12.2

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#### Exhibit 12.2
CERTIFICATION

I, Guy Kizner, certify that:

<br> 1. I have reviewed this Annual Report of Nova Ltd.

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4. The company's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

c. Evaluated the effectiveness of the company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting; and

5. The company's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company's auditors and the audit committee of company's board of directors (or persons performing the equivalent function):

<br> a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company's ability to record, process, summarize and report financial information; and

<br> b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the company's internal control over financial reporting.

Date: February 17, 2026

/s/ Guy Kizner

Guy Kizner

Chief Financial Officer

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## Exhibit 13.1

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#### Exhibit 13.1
CERTIFICATION PURSUANT TO SECTION 906<br> OF THE SARBANES-OXLEY ACT OF 2002

I, Gabriel Waisman, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to my knowledge, that:

<br> 1. This Annual Report on Form 20-F of Nova Ltd. (the "Company") for the period ended December 31, 2025 (the "Report") fully complies with the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended; and

<br> 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: February 17, 2026 <br>

<u>/s/ Gabriel Waisman</u><br> Gabriel Waisman<br> President and Chief Executive Officer<br>

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## Exhibit 13.2

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#### Exhibit 13.2
CERTIFICATION PURSUANT TO SECTION 906<br> OF THE SARBANES-OXLEY ACT OF 2002

I, Guy Kizner, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to my knowledge, that:

<br> 1. This Annual Report on Form 20-F of Nova Ltd. (the "Company") for the period ended December 31, 2025 (the "Report") fully complies with the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended; and

<br> 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: February 17, 2026

<u>/s/</u> *<u>Guy Kizner</u>*<br> Guy Kizner<br> Chief Financial Officer<br>

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## Exhibit 15.1

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#### Exhibit 15.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement (Form S-8 No. 333-220158) pertaining to the 2017 Share Incentive Plan of Nova Ltd. of our reports dated February 17, 2026, with respect to the consolidated financial statements of Nova Ltd., and the effectiveness of internal control over financial reporting of Nova Ltd., included in this Annual Report (Form 20-F) for the year ended December 31, 2025.

<u>/s/</u> *<u>Kost Forer Gabbay & Kasierer</u>*

A Member of EY Global

Tel Aviv, Israel

February 17, 2026

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